Within a month of the crippling strike at Maruti Suzuki's Manesar plant, Society of Indian Automobile Manufacturers today favoured reforms in India's labour laws to allow lay-offs of employees during a slowdown, but with adequate unemployment benefits.
"Labour reforms is high on agenda of SIAM for quite some years. We don't have any policy on laying-off during slowdown. Labour problems hamper the employment prospects of permanent staff," Society of Indian Automobile Manufacturers (SIAM) President Pawan Goenka told reporters here.
He said auto companies should be encouraged to have more permanent employees like in the US, where the firms are allowed to fire them in case of a slowdown and a government fund takes care of them for a certain period or till they join a new job.
"So something similar is needed here. Permanent employees have to grow. The law should give the flexibility to handle the number of people during slowdown that means laying off," Goenka said.
SIAM has discussed about labour reforms many times with the government without any positive result, he added.
"We have made several presentations to the Ministry of Heavy Industries, but no serious discussion has happened yet on what could be done.
"One thing is certain that something has to happen. Otherwise, it will have serious impact on the sector," Goenka said.
SIAM Director General Vishnu Mathur said the law should give "flexibility" on taking disciplinary actions even against a single person.
Last month, the country's largest car maker Maruti Suzuki lost production of 12,600 units, valued at about Rs 630 crore, in a 13-day strike at Manesar facility for recognition of a new union at the plant.
Days after this, production was completely affected for four days at tyre maker MRF's Kottayam plant in Kerala and the company had declared a lockout.
Earlier, major manufacturers had called for labour law reforms, while trade unions said existing rules must be implemented strictly to avoid confrontations.
"The rigidity in labour laws has led companies to increasingly resort to outsourcing and contracting of labour. To be very precise, the need of the hour is flexible labour reforms," General Motors India vice president P Balendran had said.
However, national trade union leaders have an opposite view to the problem and insist that formation of a union, or even multiple unions, and getting political affiliations are workers' rights and are allowed under the Indian labour laws.
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