Government likely to dilute proposed labour reforms

Small Factories Act and Industrial Relations Code likely to be changed under pressure from BMS

Under pressure from the ruling Bharatiya Janatiya Party’s trade union wing, the centre is likely to dilute many provisions of two of its main proposed labour reforms- Small factories Act and Code on Industrial Relations.

Bharatiya mazdoor Sangh (BMS) had held a demonstration last week protesting against the proposed reforms. Following the rally it is learnt that the a core group of ministers led by finance minister Arun Jaitley had given assurance to the union leaders that both the acts will be redrafted for consultations with stake holders. “The ministers present in the meeting assured us that draft of both the acts will be redrafted after proper consultations with trade unions and our objections will be taken into full considerations,” BMS national president Saji Narayan told Business Standard.

Among primary objections raised are that BMS wants the chapter on ease of closure of industry. According to the draft code an establishment that employs upto 300 workers will not require government permission for closure and transfer of units. “ We want complete removal of that section, already due to automation many factories are retrenching workers overnight, we have demanded that it should be mandatory that all establishments should take permission to close unit,” Narayan said.

BMS has also opposed to the proposal to tighten  norms on forming trade unions. Bill aims to restrict presence of outsiders in trade unionsMinistry officials say this will stop politicisation of unionsUnions say this will dilute rights of workers.

BMS say such restrictions on the presence of outsiders in unions might be a tool for the government to restrict legitimate and elected members in unions in future. “ All top trade union leaders have been outsiders, the bill intends to weaken the trade union movement in India,” said Narayan.

BMS has also opposed the proposal to make provident fund and ESI optional for establishment upto 50 workers. “ We want provident fund and ESIC to be mandatory for all workers,” Narayan said. .

The assurances came at a meeting on Friday between the BMS representatives, including its national President Saji Narayanan and three members of the labour-related mineral panel, headed by finance minister Arun Jaitley. Two other members of the panel – labour minister Santosh Singh Gangwar and petroleum minister Dharmendra Pradhan were not present in the meeting

Global rating agency Moodys while upgrading India’s rating cautioned that a further upward movement of rating would depend on the promised land and labour reforms which have been proposed but not carried out.