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Photo: Pradeep Gaur/Mint
Photo: Pradeep Gaur/Mint

No consensus on draft industrial relations law

The law proposes to allow companies to fire as many as 300 workers without prior government permission

New Delhi: In a setback to labour reforms, no consensus was reached on a draft industrial relations law that proposes to allow companies to fire as many as 300 workers without prior government permission.

In a tripartite meeting comprising government officials, trade unions and industry representatives, the labour ministry faced stiff opposition from employee representatives, including the Bharatiya Janata Party-affiliated Bharatiya Mazdoor Sangh (BMS), which accused the government of rushing a key reform agenda without taking into account workers’ views.

The labour ministry also faced criticism for omitting some of the consensus points of an earlier meeting where the government had agreed to give central trade unions representations in an arbitration council as well as in new unions of factories.

A lack of consensus means the bill may not be ready for introduction in the winter session of Parliament and a further delay in consolidation of a clutch of labour laws related to industrial relations.

The Labour Code on Industrial Relations Bill, 2015, proposes to combine the Industrial Disputes Act, 1947; the Trade Unions Act, 1926, and the Industrial Employment (Standing Orders) Act, 1946.

The bill shall consolidate and amend the law relating to registration of trade unions, conditions of employment, investigation and settlement of disputes and “the matters related therewith or incidental thereto".

“It’s not the end of the matter. We will build consensus by speaking to every stakeholder," labour secretary Shankar Agarwal said.

Pawan Kumar, a regional secretary of BMS, said the labour ministry does not want representation from trade unions in the formation of new workers’ unions in a factory. In case of formation of unions in the unorganized sector, there could be a maximum of two “outsiders".

“We have told the ministry and others present in the meeting that BMS completely rejects the bill," said Kumar. “While reform is fine, its can not be just for industry and industrialists," Kumar added. The unions’ strength comes from the factor that after the 2 September nationwide strike, BMS has joined other trade unions in their collective opposition.

“BMS is back with all unions now and all unions are unanimous in the their opposition," said D.L. Sachdeva, national secretary of the All India Trade Union Congress. All trade unions despite their opposing party affiliations regrouped on Tuesday, a month after BMS withdrew from the 2 September nationwide protest. “Allowing retrenchment of up to 300 workers (three times the current ceiling) will lead to more industrial strife," Sachdeva said.

A labour ministry official, who declined to be named, said that despite talks about labour reforms, the reform process has not picked up speed because of the speed brakes put by unions. The official said the labour intensive manufacturing sector needs “reformed labour laws".

Belying hopes, the Nikkei India manufacturing Purchasing Managers’ Index (PMI) shows there has been no improvement in manufacturing employment since the National Democratic Alliance government took charge, Mint had reported on Monday.

“If India wants to create jobs, it has to ease the labour laws and promote manufacturing. The labour ministry has not been able to push through reforms for the last one year. And on this particular draft bill they have been discussing since 6 May," said K.E. Raghunathan, national general secretary of the All India Manufacturing Organisation.

He said that the provision of allowing retrenchment of up to 300 workers has the backing of industry. He said his organisation has advised the ministry to put in provisions where a strike cannot take place without the permission of 75% of the total workers. He also advocated that production loss should not be for more than a week, indicating that strikes should be allowed in a factory for more than seven days.

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