Modi govt questions Madhya Pradesh's labour reforms

Madhya Pradesh has drawn several objections from the National Democratic Alliance government at the Centre to its labour reform proposals.

The Union labour ministry has rejected six of about 35 amendments proposed by the Madhya Pradesh government. The state had sent these proposals to the Centre six months ago in the form of an ordinance, incorporating changes in 17 labour laws.

The proposals turned down by the Union labour ministry were unlike those proposed by Rajasthan and cleared in November 2014.

"The government has sent back the amendments after it did not approve certain provisions in two of 17 Acts proposed to be changed. We will send a revised ordinance in a week to the Centre after incorporating the approved proposals," M K Varshney, principal secretary in the Madhya Pradesh labour ministry, told Business Standard over telephone.

PROPOSALS REJECTED

• Micro industries to be exempted from application of 7 central laws
• Inspection in micro industries only with permission of the labour commissioner
• Permission for prosecution under Factories Act only after labour commissioner's consent
• Total number of working hours in a week to be increased to 72 from 60
• No trade unions in micro industries
• Employer to deposit Rs 25,000 in Child Welfare Fund if found guilty of employing child labour

Madhya Pradesh had sought changes in the Industrial Disputes Act on the lines of Rajasthan to allow companies in the state employing up to 300 people to retrench workers and shut the establishment without government approval. The Centre has approved this.

One of the proposals rejected sought permission of the state labour commissioner before filing prosecution in courts related to offences under the Factories Act. This was aimed at "avoiding unnecessary harassment of employers" and required amendments in Section 105 of the Factories Act, which is in the concurrent list of the Constitution, on which both the Centre and state can legislate.

The Rajasthan government had sought approval of the state government before taking cognisance of an offence. Rajasthan's proposal was approved by the Centre and, subsequently, President Pranab Mukherjee. The Union labour ministry has advised Madhya Pradesh to follow Rajasthan on this issue.

Madhya Pradesh's proposal to exempt micro industries, those with investment not exceeding Rs 25 lakh, from application of seven central laws, including the Contract Labour Act and the Factories Act, was also turned down by the Centre.

"Small factories face unnecessary litigation and we had sought changes to an entire chapter of the Micro, Small and Medium Enterprises Development Act," said a state government official.

Another proposal turned down sought extended working hours to 72 a week from the present 60. Sources said this proposal was against the International Labour Organisation's convention that caps the working week at 60 hours.

The state government also sought assent for recovery of Rs 25,000 from employers hiring children to ensure speedy rehabilitation. "The Union labour ministry said it was formulating a new law on child labour which would enhance punishment and, hence, our proposal was turned down," explained a state government official.

Another proposal to exclude trade unions from micro industries was also rejected by the Centre.

The state government is likely to take up the matter with Union Labour Minister Bandaru Dattatreya. "We will try to convince the Centre about the rejected proposals. The union labour minister took the decision on the advice of his administration. Our state labour minister will take up the issue soon," said a senior state government official.

The Madhya Pradesh Cabinet would discuss in a week whether to dispute the Centre's rejections or follow its advice, said another state government official.

"States can amend their own laws. Every state has a different set of conditions. Every state government is looking at Rajasthan. Let state governments first take a decision. If a state wants to adopt that model, you cannot object," Dattatreya had said last November in an interview to Business Standard.

Following Rajasthan, Madhya Pradesh last October sent its proposed amendments to Mukherjee, who sought views from the Union labour ministry. Since the proposed ordinance involves changes to legislation passed by Parliament, the President's prior assent is required.

The Centre has held many rounds of discussions with Madhya Pradesh government officials before sending back the proposed ordinance.

One of the proposals allows an establishment to hire contract workers, inter-state labourers and motor transport workers without approval of the Labour Commissioner 30 days after submitting complete documents. At present, an employer has to wait endlessly for approval. This proposal was approved by the Centre.

However, Madhya Pradesh has not proposed changes in the Contract Labour Act, like Rajasthan, to include firms employing more than 50 workers, instead of the present 20, to be covered under the Act, thus allowing hiring of more temporary workers.

Rajasthan brought the proposed changes to labour laws in the form of bills in the Assembly and subsequently sent the proposals to the President for approval. Mukherjee has approved Rajasthan's amendment of three laws, the Factories Act, the Industrial Disputes Act and the Contract Labour Act.