New Delhi: Business-friendly legislation aimed at flexibility in hiring will be introduced in the ongoing Budget session of Parliament, the government said on Thursday, a day after the Union cabinet signed off on the relevant amendments to decades-old laws.

The signal came as Rajasthan’s Bharatiya Janata Party (BJP) government late on Thursday passed amendments to four key labour laws—the Industrial Disputes Act, Factories Act, Contract Labour Act and the Apprentices Act.

With this the BJP-led National Democratic Alliance (NDA) at the centre has not only signalled its willingness to move ahead on a politically sensitive issue, but also set the context for proceeding on more contentious legislation like the Industrial Disputes Act.

On Wednesday, the Union cabinet approved proposals to amend three labour laws to make it easier for businesses to hire workers—the Factories Act, 1948, Apprentices Act, 1961 and Labour Laws (exemption from furnishing returns and maintaining registers by certain establishments) Act, 1988.

While Rajasthan has amended four labour laws, Congress-ruled Haryana too plans a similar proposal, Mint reported on 17 July, implying bi-partisan consensus on the need for labour reforms and increasing the prospects of the amendments winning approval in the Rajya Sabha, where the NDA is in a minority.

Labour and employment minister Narendra Singh Tomar said the NDA is reforming the laws without compromising workers’ welfare and aiming to create better circumstances for employment. “These Bills will come soon in the Parliament and we are hopeful that it will come in this session of the Parliament," he said.

“Labour ministry fundamentally works for the benefit of workers, but when the word labour comes, then it is linked to industry. So all amendments are being done keeping in mind the welfare of workforce and keeping in mind the views of the industries," Tomar said, before clarifying that the changes will “benefit workers significantly and create jobs in a big way".

Without mentioning any targets for job creation, he said, “A lot of jobs will be created and government is committed to this," adding the reforms will show results over time. “People are looking at the government with hope and aspiration, and the way government is taking quick decisions, it will open the job market in every sector."

The government’s move is in keeping with pledges made by the BJP in its manifesto for the general election, which said it promised to “bring together all stakeholders to review our labour laws which are outdated, complicated and even contradictory".

Industry experts welcomed the move to amend the laws—the oldest of which dates back 66 years—saying it will boost manufacturing in India. Sunil Munjal, joint managing director, Hero MotoCorp Ltd, India’s largest two-wheeler company, said the reforms “shall give India a rightful place in the comity of nations".

“India needed this for long and we have been asking for it a long, long time. I have not gone through the details but I can tell you such steps create massive employment. It is not good only from the industry point of view but also from the worker’s point of view. The government should make sure that a right balance is there between an employee and the employer," he said.

The proposed changes to the Factories Act centre on five points—improved safety of workers; doubling the provision of overtime from 50 hours a quarter to 100 hours in some cases and from 75 hours to 125 hours in other work of public interest; increasing the penalty for violation of the Act; relaxing the norms for women to work in some industry segments at night; and reducing to 90 from 240 the number of days an employee needs to work before becoming eligible for benefits like paid leave.

Surinder Kapur, chairman, Sona Group, one of India’s largest auto parts makers said,“This was in the making for long. I am complimenting the government on this. One can debate on whether 100 hours (of overtime) is sufficient or 80 hours but the good part is these amendments will ensure that people will be looked after well and manufacturing will get more competitive."

He said the amendments will please the garment and textiles industry as their demand for allowing women to work at night was being addressed. “This shall improve productivity and flexibility at factories. This is a welcome step but a lot needs to be done," he added.

Regarding the Apprentices Act, the government is seeking to expand the scope of employment for apprentices and is pushing for the induction of more non-engineers as apprentices. It is aimed at allowing young job seekers and students to gain industry-relevant skills on the shop floor. The compensation segment too has been liberalized: in the first year, an apprentice will get 70% of what a semi-skilled worker gets, in the second year 80% and in the third year 90%.

For those employed in small-scale industries, the government and managements will equally share the burden of salaries.

The proposal to amend Labour Laws (exemption from furnishing returns and maintaining registers by certain establishments) Act, 1988, will allow thousands of small industries to file just one return for compliance with 16 labour laws.

“The quick action has demonstrated the government’s strong commitment towards pushing key labour reforms to encourage economic growth and generate employment opportunities in the country," said Chandrajit Banerjee, director general of the Confederation of Indian Industry (CII), a lobby group.

CII had been recommending key reforms in laws like the Factories Act, Industrial Disputes Act and others for bringing in simplification and flexibility in engagement and deployment of labour, which should be the two cornerstones of any labour law reform, Banerjee said.

Meanwhile, Vishnu Sharma, additional labour commissioner in the Rajasthan government, said that the state government’s move on Thursday will improve the investment scenario in the state, boost manufacturing, create more jobs and help the young get skill-trained on the shop floor.

Rajasthan became the first state to approve amendments to labour laws in the first week of June, Mint reported on 9 June. Now the proposed legislation will be sent to the central government for its final approval.

In an interview to Mint, Rajasthan chief minister Vasundhara Raje said: “I believe if you look at reforms in this sector, it doesn’t go towards hurting the labour; it goes towards improving the habitat for employment and that, I think, is very, very important. Like I said in the bus port business, we are not going to hurt them but we are creating opportunities for others."

The Union government’s move was criticised by Left parties and trade unions. D.L. Sachdeva, national secretary of the All India Trade Union Congress (AITUC), said the government was playing into the hands of industries and that all the reforms were anti-workers. He said AITUC is opposed to allowing women to work in night shifts.

“We are opposed to the changes in the labour laws. These amendments have been made without providing for social security for a majority of workers and it is a move that is totally towards the corporates," said Nilotpal Basu, a member of the central committee of the Communist Party of India (Marxist). “Now the opposition will be on the streets. With the number of opposition seats, we will have to oppose outside the Parliament," he added.

Pretika Khanna contributed to this story.

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