The Bharatiya Janata Party-led Madhya Pradesh government on Thursday said that it had sent proposals for making key labour law changes, which include a move aimed at removing existing smaller units from the ambit of some labour laws in the state, to the Central government for approval.
In a first-of-its kind proposal, the state government said in a press statement that it had proposed making the Factories Act, 1948, applicable to units hiring at least 50 workers, instead of 10 (for electric powered-industrial units) and 20 (for non-electric ones).
“The above amendments will relieve small industries from registering under the Factories Act,” the statement read. In some states, such as Rajasthan, the Factories Act applies to units employing at least 40 workers (with the aid of power) and 20 workers (without the aid of power). The proposals to amend the labour laws were sent to the Central government through the Ordinance route on May 18.
“The law makes a distinction between factories using and not using power to operate and it’s a colonial provision which should never have existed at the first place. But the idea should be to bring more factories under the purview of the law which regulates the occupational health and safety conditions. It will push at least 40% of the factories in the state out of the Factories Act,” labour economist and XLRI professor K R Shyam Sundar said.
In “immense relief to small contractors”, those employing less than 50 workers do not have to register themselves with the authorities. At present, contractors with less than 20 workers do not have to do so under the Contract Labour (Regulation and Abolition) Act 1970. Some state governments have already brought about this change in their labour laws. Since labour is a concurrent subject under the Constitution of India, states can frame their own laws, but need the approval of the President, through the central government, for making amendments to central laws.
While this is planned to be a permanent change, the MP government has also sent another proposal to the Centre to temporarily exempt all manufacturing units from the purview of the Factories Act (except for safety-related provisions) for 1,000 days. This is because the state governments have the power to exempt manufacturing units from the Factories Act during an emergency for a period of three months only.
The state government has proposed compounding of offences to the Central government for key central labour laws, including the Contract Labour Act, Inter-State Migrant Workmen Act, the Motor Transport Workers Act and the Industrial Disputes Act.
The MP government also listed a series of labour law changes it has made which didn’t require the approval of the central government (as these were either state laws or an exemption clause from the central Act was invoked) and have been made effective through executive orders, justifying the need to undertake reforms for driving investments in the state.
“State government has amended the labour laws according to need of the industry. With this, new industries can be easily set up in the state, people will get employment opportunities and the interest of workers will also be protected. This will create an atmosphere of trust in the country,” the MP government said.
Some of the changes already made by the MP government include - a renewal of factory licences in 10 years, instead of one, single registration for start-ups for labour laws without the need for renewal exemption from inspection for all units hiring less than 50 workers and requirement of maintaining only a single register instead of 61. Establishments hiring up to 100 workers (instead of 50) will be exempt from the provisions of the Industrial Employment (Standing Order) Act.