Stiff opposition from unions could force the government to go slow on plans to bring in a raft of labour reforms during Parliament’s monsoon session.
In April 2015, the government proposed major reforms, including plans to reduce 44 labour laws to just five as part of the ‘Make in India’ initiative to make it easier for companies to operate and turn India into a manufacturing powerhouse.
Four of these proposed laws —the Industrial Relations Code Bill 2016, Wage Code Bill 2016, the Small Factories (Regulation of Employment and Conditions of Services) Bill, and Employees Provident Fund and Miscellaneous Provisions (Amendment) Bill — dealt with industrial relations, wages, safety, and social security and welfare, respectively.
The fifth—the Shops and Establishments (Amendment) Bill — will be a model law for the states to adopt. The objective of the exercise was to relook at laws seen as a hindrance to growth and job creation.
The most important of these proposed laws is the Labour Code on Industrial Relations Bill 2015, which will combine Industrial Disputes Act, 1947, the Trade Unions Act, 1926, and the Industrial Employment (Standing Orders) Act, 1946.
Once enacted, the Labour Code will allow companies to sack as many as 300 employees without prior government approval. Companies are now allowed to let go of up to 100 employees without needing government approval.
The Labour Code is modelled on the lines of a similar law in Rajasthan, where the BJP-led state government approved the plan in 2014.
The 11 central trade unions, however, have termed the proposals anti-labour. They say once adopted, the new laws will allow industries more power to hire and fire at will and hurt workers’ welfare.
Baij Nath Rai, president of the BJP-affiliated Bharatiya Mazdoor Sangh (BMS) said that the proposed legislations have been drafted primarily from an employer’s perspective.
“The government is hurrying through with these measures. What is the purpose of these new laws. Labour laws should be made for the protection of the workers. It appears the proposed laws have been drafted only for investors,” Rai said.
The government constituted a high-level committee to forge a consensus among all stakeholders on the blueprint for such reforms. Finance minister Arun Jaitley, labour minister Bandaru Dattatreya, power minister Piyush Goyal, petroleum minister Dharmendra Pradhan and minister of state in the Prime Minister’s office Jitendra Singh are members of this committee.