Labour meet to discuss proposal to exempt SMEs from labour laws

ILC organised by Labour Ministry will be inaugurated by Prime Minister Manmohan Singh

A proposed legislation which seeks to exempt the small and micro enterprises from labour laws is to be taken up for discussion at the forthcoming Indian Labour Conference to be held on May 17 and 18.

The ILC organised by the Labour Ministry and to be inaugurated by Prime Minister Manmohan Singh has four issues on the agenda including exemption of SMEs from labour laws, Service conditions, wages and social security for scheme workers like Anganwadi, ASHA, mid-day meal and similar workers,  Social Security with and assured pension for all workers  and lastly skill development.  

The Ministry for small and micro enterprises had in a note to the Labour Ministry suggested that the SMEs be exempted from labour laws and the matter be discussed at the Indian Labour Conference which brings together employees and employers organisation with the Government on a common platform.

The MSME Ministry has proposed a new law that exempts micro and small enterprises which are employing less than 50 workers, from labour laws. This is being done to make them globally competitive and to provide flexibility.

MSME Ministry proposed to apply only ESI Act, Employees Provident Fund Act, Minimum Wages Act and  Payment of wages Act; and remove all other labour laws from the sector. It also proposed to relax provisions of prohibition and regulation of contract labour by amending Contract Labour Act, 1970.

The matter of exemption of SMEs from too many labour laws has been taken up in the Economic Survey as part of a separate chapter that reflects on what has been preventing growth of the manufacturing sector.

Trade unions are gearing up to oppose the legislation tooth and nail. Says Saji Narayanan president of Bharatiya Mazdoor Sangh: We are opposed to the proposal as the Government wants to replace labour inspections with self certification. We will never accept that. We also wont accept exemption of these units from labour laws. It is illegal.

It is a myth that majority of employers in small enterprises are unexploitative. So it is not correct to rely on self certification, he said.

According to D L Sachdeva secretary All India Trade Union Congress, small enterprises have been objecting to the requirement to maintain different registers on the same scale as big entperprises.

"If the provisions are to exempt them from paper work we may consider it, but if they want to be out of all labour laws like Industrial Disputes Act or Minimum Wages Act, who will agree to that?’’ he asks.