Govt initiates inter-ministerial discussion on four labour laws

No new labour law amendments to be introduced in the winter session of the Parliament

The Narendra Modi-led National Democratic Alliance government is not ready to bring immediate changes to more labour laws in the Parliament session that begins on Monday.

The Union labour ministry has set up four inter-ministerial groups to recommend changes in the Contract Labour Act, Small Factories Act, Inter-State Migrant Workmen Act and Minimum Wages Act. However, sources said it is not possible to bring these amendments in the winter session.

“Once these laws are reviewed by the inter-ministerial groups, they will be sent for approval to the Cabinet and then introduced in Parliament,” said Arun Kumar Sinha, additional secretary at the Union labour ministry, who heads the committees. Apart from the labour ministry, the committees have officials from other ministries, including commerce and textiles, and the department of industrial policy and promotion.

Changes in the Contract Labour Act seek to bring parity in wages, social security benefits, holidays, and hours of work among contract workers and permanent employees. Also the contract between the worker and the principal employer will mention these aspects.

A senior government official said it was unlikely the definition of workers covered by the Act, as suggested by the Rajasthan government, would be looked into. According to the revised Rajasthan law, the Contract Labour Act will apply to firms hiring 50 or more people, against 20 now. This was intended to allow industries to hire more temporary workers without passing on to them the benefits contract workers are entitled to.

The official, who did not wish to be named, also ruled out setting up of an inter-ministerial group to review the Industrial Dispute Act to ease retrenchment norms.

An inter-ministerial group will look into the draft Bill of the Small Factories Act, which has combined 14 existing labour laws into a single one. Any establishment employing less than 40 workers will be covered by this law. The Bill is aimed for easy compliance by micro, small and medium enterprises (MSMEs). “These changes are aimed at boosting  growth in the MSME sector as laws for small factories should be different and simplified,” said a ministry official. The draft of the Bill was circulated for public opinion till November 10. The committee will look into the suggestions received and make further recommendations.

Changes to the Inter-State Migrant Workmen Act seek to make the law “gender neutral” and offer social security to migrant workers. “The committee will look into suggestions made by the parliamentary standing committee on this law,” said the official.

The United Progressive Alliance government had introduced the Bill in the Rajya Sabha in August 2011 and it was later referred to the standing committee. The committee had sought a review of “substantial issues” like registration, passbook, payment of minimum and equal wages, journey and displacement allowance, free medical facilities, and suitable residential accommodation for migrant workers.

The Union labour ministry had made public the proposed changes to the Minimum Wages Act in June and had sought suggestions. The committee has been asked to look into the responses received. The proposed changes seek to set a statutory national floor on minimum wage for all states. This will be linked to retail inflation and reviewed every five years.