New Delhi: Accelerating its labour reforms process, the government on Thursday introduced two Bills in the Lok Sabha seeking to revamp archaic labour laws with proposals aimed at creating millions of jobs and expanding manufacturing.

The Factories (Amendment) Bill, 2014, and the Apprentices (Amendment) Bill, 2014, seek to amend laws that came into force in 1948 and 1961, respectively. Once passed, they are expected to make it easier to do business in India, with provisions to allow flexibility in both hiring and working hours.

The draft laws were introduced by labour and employment minister Narendra Singh Tomar a week after the Union cabinet cleared them. The Narendra Modi-led National Democratic Alliance (NDA) government is making the changes in keeping with a key reformist pledge made in the election manifesto of the ruling Bharatiya Janata Party (BJP).

“Within a week of the cabinet clearance, we have introduced two of the three Bills in Parliament. This indicates two things—one, the government is aware that old laws are creating hurdles in job growth and just 7% of our labour force are in organized sector 60 years after independence, and two, government is serious about reform," a labour ministry official said, requesting anonymity.

The official said the ministry was trying to maintain a balance between reform and labour welfare.

Last week, minister of state for labour Vishnu Deo Sai told the Rajya Sabha that the government was considering changes to the 66-year-old Factories Act to make it “more compatible with the requirement of the present scenario in the industrial sector".

Thursday’s proactive move went down well with businesses.

“We are very happy that India is making changes in labour laws. We are glad to have participated in Indian manufacturing story," said Frederiek Toney, vice-president, global Ford customer service division and corporate officer at auto maker Ford Motor Co.

“When you create job security, people feel that they have a long career and that there is a fair playing field for upward mobility; you can create great loyalty and wonderful employees associated with wonderful companies. At the end of the day, it’s about working together to get things done."

Amendments to the Factories Act centre on five proposed changes—improving workers’ safety, increasing the provision for overtime, increasing the penalty for violations of the Act, relaxing the norms for women to work night shifts in some industry segments, and reducing the number of days an employee needs to work before becoming eligible for benefits such as paid leave.

The Bill seeks to allow women to work at night, provided their work places have sufficient amenities and ensure their safety; prosecution of factory owners to be commuted to penalties for minor offences; doubling the provision of overtime from 50 hours a quarter to 100 hours in some cases, and from 75 hours to 125 hours per quarter in occupations related to public interest with the approval of state governments.

It also proposes to change the eligibility criteria for entitlement of annual leave with pay, cutting the minimum number of days employees must have worked to claim the benefit from 240 to 90 days.

“It is a very balanced Act on behalf of the government. It takes care of overtime, women working in the night, improves safety. It is doing the right thing without affecting labour security. This is common sense, which should have been done a long time back," said Venu Srinivasan, chief managing director at TVS Motor Co. Ltd.

Amendments to the Apprentices Act propose to expand the scope of employment for apprentices and push 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 changes will also allow industries to appoint apprentices from a different state from where the employer is located. In addition, every employer will be allowed to formulate its own policy on recruiting apprentices who have completed training in the employer’s establishment.

Tapan Sen, a Communist Party of India (Marxist) parliamentarian, said the government is “only playing to the gallery of corporate houses".

“We will oppose them on every single platform including in Parliament, on the streets, shop floors, etc.," said Sen, who wrote a letter to the labour minister last week opposing the move. “If the government is thinking that it’s going to be an easy task, then it’s not. It will face stiff opposition," said Sen, a Rajya Sabha MP and general secretary of the Centre of Indian Trade Unions.

Close