The legislative Assembly of Rajasthan on Thursday passed Bills amending four important labour laws, aimed at making it easier for companies and employers to hire, train and dismiss workers, and to stiffen the rules for trade union registration, among other things.
Passed by voice vote were changes to the Factories Act, the Industrial Disputes Act, the Apprenticeship Act and the Contract Labour (Regulation and Abolition) Act. The Vasundhara Raje government had introduced these Bills last week.
Since these are amendments to central legislations, on subjects in the Constitution’s concurrent list (meaning, the Centre and states can both enact laws on these, with central law prevailing in case of a difference, unless approved earlier), they all need the President of India’s assent before becoming law.
The amendments proposed in the Industrial Disputes Act include empowering employers to retrench up to 300 employees without permission of the government. At the moment, the upper limit is 100 employees. Plus, in case of retrenchment, a worker should raise an objection within three months. At present, there is no time limit. The proposed amendment also says a trade union can be formed only if it gets 30 per cent of the total workers as members. The figure is 15 per cent at the moment.
The amendments in the Factories Act propose to increase the threshold limit of employment for factories operating without power from 20 to 40 and from 10 to 20 for factories operating with power. Complaints against the employer about violation of this Act would not receive cognisance by a court without prior written permission from the state government. A provision for compounding of offences has been added.
The Contract Labour Act is now sought to be applicable only to companies that employ more than 50 workers, against the current 20. Amendments to the Apprenticeship Act call for a third-party training provider, along with easing the rules to add more trades.
Presenting the Factories Bill, Yunus Khan, the public works minister, said Rajasthan would now be known as a “labour reform state”. “These changes will create employment and also better the industry atmosphere.” The minister also promised that the government would simplify the procedures for opening of small and medium enterprises.
The development comes a day after the Narendra Modi government at the Centre decided to have three labour laws changed, including two that were the subject of the Rajasthan Bills — the Factories Act, Apprenticeship Act and the Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by Certain Establishments) Act.
Earlier this month, Union labour minister Narendra Singh Tomar had said states could change labour laws according to local need and political conditions. “Our effort at the Centre would be to strike a balance between business and labour communities…If a state goes ahead with amendments apropos to their local, economic, political and social conditions, it is a healthy practice,” he’d told Business Standard on July 2.
Expectedly, business chambers welcomed the Rajasthan change, terming it a positive step to generating jobs.
“We have been recommending these key reforms for bringing in simplification and flexibility in engagement and deployment of labour, which should be the two key cornerstones for any labour law reforms,” stated the Confederation of Indian Industry on Thursday. It said these changes would lead to less ‘inspection raj’, an increase in employment and allow industries to focus on production.
Trade unions are opposed. “The working people through the country are going to face a severe onslaught on their rights and livelihood in the days to come from the corporate-servile polity in power at the Centre. Already, such a move is reported to be afoot in respect of a number of labour laws,” stated the Communist Party of India (Marxist)-supporting Centre of Indian Trade Unions.
The Rajasthan move would encourage others inclined similarly. The Haryana government (ruled by the Congress party) had said it might bring similar changes. The government in Uttar Pradesh had also reportedly begun work on labour law changes.
“Skill development in the labour force is the main issue for us right now,” Raje had earlier said. “This is important to enhance employability in Rajasthan. There is a need to create 1.5 million jobs for youth in our state and nothing is possible without developing skills.”