New Delhi: Companies with more than 10 workers on their rolls will have to report job vacancies to employment exchanges, and those not complying with the stipulation will be slapped with a higher penalty if a labour law amendment takes effect.
Not only will the legislation seek to restore the primacy of employment exchanges, it will also enable the government to track job opportunities and trends more closely and help the industry prepare earlier for any shortage of specialized workers.
The move is part of the government’s efforts to modernize 965 employment exchanges (excluding three new ones), whose primary role is to inform jobs seekers about vacancies in the organized sector, keep track of employers’ filings and offer vocational guidance to the unemployed.
The labour and employment ministry, which oversees the exchanges, is seeking a change in the Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959, to raise the number of companies that come under its scrutiny by lowering the employment figure to 10.
The legislation seeks to restore the primacy of employment exchanges, it will also enable the government to track job opportunities and trends more closely. Sandeep Bhatnagar / Mint
Only companies with more than 25 workers are now required to file the reports, but many breach the guidelines because the penalty is not a sufficient deterrent.
Employers have to pay Rs250 and Rs500 for failing to report vacancies and file the quarterly employment report, respectively. They could also be imprisoned for up to three months.
The government plans to raise the penalty steeply from the current Rs250-500 to between Rs5,000 and Rs10,000.
“Companies should not treat employment numbers as fillers. They should come forward and report on vacancies,” labour secretary Sudha Pillai said on the sidelines of a meeting with the press in New Delhi on Monday.
Industry representatives, have, however, expressed their disapproval.
“It will be difficult for small companies to report, as it (the legislation) will increase their paperwork. A dialogue must be initiated with the industry,” Ramesh Datla, former chairman of the Confederation of Indian Industry’s National Small Medium Enterprise Council, said.
The proposal will have to go through a two-step approval process, and will need to be endorsed first by the cabinet and later by Parliament.
Two labour and employment ministry officials, who didn’t want to be named, said the legislative change is expected to coincide with a larger modernization plan to integrate the infrastructure of all existing employment exchanges through advanced communication technology and to improve customer service.
In future, the exchanges also hope to offer online employment news to prospective job seekers and employers across states, unavailable in most regions at present, with the exception of Gujarat and Maharashtra.
The information technology upgrade plan, known as the Mission Mode Project, is one of the 26 projects that are part of the government’s National e-Governance Plan to improve facilities for customers through technology, and is closely monitored by the Prime Minister’s Office.
The modernization process assumes significance because the government hopes it will be able to assess the extent of unemployment more accurately by extending coverage of companies, keeping track of employment patterns, as well as gaining insight into the demands of the current job market.
That will help it plan training formats for the 1,896-odd Industrial Training Institutes where at least Rs5,000 crore is expected to be spent on its recast programme.
At present, the ministry is putting together a detailed information technology plan with the help of consulting firms such as the National Institute for Smart Government and Ernst and Young.
It has also sought a budgetary allocation of Rs35 crore to start the phased facelift plan in five selected states—Orissa, Andhra Pradesh, Rajasthan, Haryana and Assam. About 75% of the cost will be funded by the Centre, and the balance by the states.
What, however, remains open to question is whether the exchanges will be able to seize the opportunity.
Mint reported in February this year about the declining relevance of exchanges, as there are fewer jobs in the government sector following a 1996 Supreme Court ruling which allowed employers to recruit from outside the exchanges, opening up the recruitment market.
Further, job vacancies in the government, in various departments at the Centre and the states, were filled up by staff recruitment boards, bypassing the exchanges.
“Employment exchanges have become non-entities because companies, including PSUs, do not obey the vacancy notification rules,” said Thampan Thomas, president of Hind Mazdoor Sabha, a federation of trade unions that has 5.4 million members employed in the railway, ports and airports.
According to the government’s provisional data, an estimated 39 million candidates applied for jobs at the exchanges in 2008.
During this period, about 570,000 vacant posts were announced by employers and about 305,000 candidates found jobs.
The ministry is still debating on a public-private partnership model and an official had earlier told Mint that the exchanges could partner with private firms, such as job websites Naukri.com and Monster Inc. to expand services.