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I.
Introduction
1.1 The
Planning Commission, vide its Order No. U-20017/01/2005-LEM/LP dated 8.3.2006
notified the constitution of one Steering Group for Labour and Employment under
the Chairmanship of Prof. B.L. Mungekar and six following Working Groups :-
Working
Group Chairman
i) Labour
Force and Employment Projection Member
(LEM) Planning
Commission
ii) Skill
Development and Vocational Training Secretary,
Labour &
Employment
iii) Labour
Laws and Other Labour Regulations Secretary,
Labour &
Employment
iv) Social
Security Secretary,
Labour &
Employment
v) Child
Labour Secretary,
Labour &
Employment
vi) Occupational
Health and Safety Secretary,
Labour &
Employment
1.2. The
Working Group on “Labour Laws and other Labour Regulations” was
constituted by Planning Commission, vide its Order No U-20017/01/2005-LEM/LP
dated 3.3.2006. The composition and the
terms of reference of the Working Group is enclosed as Annexure-I.
1.3. As
per Para 4 of the Order constituting the Working Group on Labour Laws and other
Labour Regulations, the Chairman of the Working Group may co-opt any other
expert as Member of the Group. The representatives of Hind Mazdoor Sabha,
National Commission for Enterprises in the Unorganized Sector and Labour Commissioner,
Government of Uttar Pradesh were co-opted in the Group.
1.4. The
meeting of the Working Group on “Labour Laws and Labour Regulations” was
held under the Chairmanship of Secretary (L&E) on 8th August,
2006. The Group discussed in details the
Terms of Reference and issues related to amendments of labour laws,
simplifications and other labour regulations. The Principal Adviser, Planning
Commission offered certain suggestion relating to the Minimum Wages Act, 1948,
the Industrial Disputes Act, 1947, the Employees’ State Insurance Act, 1948 and
the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 for being
considered by the Working Group Meeting.
His letter enclosed as Annexure-II was made part of the
Agenda Note for the Meeting of the Working Group. This report is based on the
discussions held by the Working Group. A
copy of the Minutes of the meeting is enclosed as Annexure-III.
2. Historical
Background of Labour Policy & Labour Laws
2.1 India India
3. Constitutional
Framework
3.1. Under the Constitution of
India, Labour is a subject in the concurrent list where both the Central and
State Governments are competent to enact legislations. As a result , a large number of labour laws
have been enacted catering to different
aspects of labour namely, occupational health, safety, employment, training of
apprentices, fixation, review and revision of minimum wages, mode of payment of
wages, payment of compensation to workmen who suffer injuries as a result of
accidents or causing death or disablement, bonded labour, contract labour,
women labour and child labour, resolution and adjudication of industrial
disputes, provision of social security such as provident fund, employees’ state
insurance, gratuity, provision for payment of bonus, regulating the working
conditions of certain specific categories of workmen such as plantation labour,
beedi workers etc. This is how we have a large number of labour legislations,
which can be categorized as follows:
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Sl. No.
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Name of the Act
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(a) Labour
laws enacted by the Central Government, where the Central Government has the
sole responsibility for enforcement
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1.
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The Employees’ State Insurance Act, 1948
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The Employees’ Provident Fund and Miscellaneous
Provisions Act, 1952
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The Dock Workers (Safety, Health and Welfare) Act,
1986
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The Mines Act, 1952
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The Iron
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The Iron
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The Mica Mines Labour Welfare Fund Act, 1946
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The Beedi Workers Welfare Cess Act, 1976
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The Limestone and Dolomite Mines Labour Welfare
Fund Act, 1972
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The Cine
Workers Welfare (Cess) Act, 1981
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The Beedi
Workers Welfare Fund Act, 1976
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The Cine
Workers Welfare Fund Act, 1981
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(b) Labour laws enacted by Central Government
and enforced both by Central and State Governments
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The Child Labour (Prohibition and Regulation) Act,
1986.
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The Building and Other Constructions Workers’
(Regulation of Employment and Conditions of Service) Act, 1996.
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The Contract Labour (Regulation and Abolition)
Act, 1970.
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The Equal Remuneration Act, 1976.
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17.
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The Industrial Disputes Act, 1947.
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18
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The Industrial Employment (Standing Orders) Act,
1946.
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19.
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The Inter-State Migrant Workmen (Regulation of
Employment and Conditions of Service) Act, 1979.
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20.
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The Labour Laws (Exemption from Furnishing Returns
and Maintaining Registers by Certain Establishments) Act, 1988
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21.
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The Maternity Benefit Act, 1961
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22.
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The Minimum Wages Act, 1948
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23.
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The Payment of Bonus Act, 1965
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24.
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The Payment of Gratuity Act, 1972
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25.
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The Payment of Wages Act, 1936
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26.
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The Cine Workers and Cinema Theatre Workers (Regulation
of Employment) Act, 1981
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27.
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The Building and Other Construction Workers Cess
Act, 1996
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28.
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The Apprentices Act, 1961
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(c) Labour
laws enacted by Central Government and enforced by the State Governments
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29.
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The Employers’ Liability Act, 1938
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30.
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The Factories Act, 1948
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31.
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The Motor Transport Workers Act, 1961
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32.
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The Personal Injuries (Compensation Insurance)
Act, 1963
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33.
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The Personal Injuries (Emergency Provisions) Act,
1962
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34.
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The
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35.
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The Sales Promotion Employees (Conditions of
Service) Act, 1976
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36.
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The Trade Unions Act, 1926
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37.
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The Weekly Holidays Act, 1942
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38.
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The Working Journalists and Other Newspapers
Employees (Conditions of Service) and Miscellaneous Provisions Act, 1955
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39.
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The Workmen’s Compensation Act, 1923
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40.
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The Employment Exchange (Compulsory Notification
of Vacancies) Act, 1959
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41.
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The Children (Pledging of Labour) Act 1938
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42.
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The Bonded Labour System (Abolition) Act, 1976
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43.
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The Beedi and Cigar Workers (Conditions of Employment)
Act, 1966
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(d) There
are also Labour laws enacted and enforced by the various State Governments
which apply to respective States.
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3.2. Besides, both Central and
State Governments have formulated Rules to facilitate implementation of these
laws.
3.3. The Ministry of Labour
& Employment is mandated to create a work environment conducive to
achieving a high rate of economic growth with due regard to protecting and
safeguarding the interests of the working class in general and those of the
vulnerable sections of the society in particular. The Ministry has been performing its assigned
duties through the above stated legislations with the help and cooperation of
State Governments.
3.4. It needs to be stated that
in a dynamic context, laws need to be reviewed from time to time. Hence, review
/ updation of labour laws is a continuous process in order to bring them in
tune with the emerging needs of the economy such as attaining higher levels of
productivity & competitiveness, increasing employment opportunities,
attaining more investment both domestic and foreign etc.
4. Important Developments during the Tenth Plan
(a) The Second National Commission on Labour
4.1. The First National Commission on Labour
was constituted on 24.12.1966 which submitted its report in August, 1969 after
detailed examination of all aspects of labour problems, both in the organised
and unorganised sector. The need for
setting up of the Second National Commission on Labour was felt due to vast
changes occurring in the economy during the last three decades especially in
the nineties due to globalization, liberalization and privatization.
4.2. The Second National Commission on Labour
was given two point terms of reference:
i)
to suggest
rationalization of existing laws relating to labour in the organised sector; and
ii)
to suggest
an umbrella legislation for ensuring a minimum level of protection to
the workers in the unorganised sectors;
4.3. The Commission submitted
its Report to the Government on 29.06.2002. The Commission has comprehensively
covered various aspects of labour and given recommendations relating to review of laws, social security, women & child
labour, wages, skill development, labour administration, unorganized sector
etc.
4.4. The recommendations of
Second National Commission on Labour
inter-alia, included – (i) introduction of umbrella legislation for
workers in the unorganized sector and agricultural labour, (ii) emphasis on
up-gradation and development of skill of workforce by training/retraining of workers, (iii)
encouragement of small scale industries, agri-business and rural sector for
higher employment generation, (iv) bringing attitudinal change and change in
the mindset and work culture where the employer and the worker work as partners with emphasis on participative
management, (v) consolidation of social security legislations and establishment
of social security system, (vi) abolition of child labour , etc.
4.5. The Ministry had held
consultations and interactions with the workers representatives, employers’
organizations, experts, professionals etc. The recommendations of the
Commission were discussed in the 38th Session of Indian Labour
Conference held on 28-29 September 2002, a National Seminar on Unorganized
Sector Workers held on 7-8 November 2002, Tripartite Committee meeting held on
18-19 February 2003, and Consultative Committee Meetings of Ministry of Labour
held on 07.02.2003 and 30.4.2003. The recommendations had again been discussed
in the 39th Session of Indian Labour Conference held on 16-18
October, 2003. While carrying out the amendments in labour laws, the
recommendations of Second National Commission on Labour are also taken into
consideration.
(b) Announcements by the Finance Minister
4.6. The
then Finance Minister, in his Budget Speech, 2001, announced amendments to the
Industrial Disputes Act, 1947 and the Contract Labour (Regulation and
Abolition) Act, 1970 , as
reproduced below:
(i)
“Amendment to the provision of Chapter V-B of the
Industrial Disputes Act – prior approval of appropriate Government Authority
for effecting lay-off, retrenchment and closure after following prescribed
procedures to now apply to industrial establishments employing not less than
1000 workers (instead of 100 workers at present) and separation compensation to
be increased from 15 days to 45 days for every completed year of service.
Appropriate legislation to amend the Act to be introduced by the Minister for
Labour within this Session.”
(ii)
“Section 10 of the Contract Labour Act to be amended
to facilitate outsourcing of activities without any restrictions as well as to
offer contract appointments. It would
not differentiate between core and non-core activities and provide protection
to labour engaged in outsourced activities in terms of their health, safety,
welfare, social security, etc. It would provide for larger compensation based
on last drawn wage as retrenchment compensation for every year of service.
Appropriate legislation to amend the Act to be introduced by Ministry of Labour
within this Session.”
4.7. Accordingly,
in respect of the Industrial Disputes Act, 1947 comprehensive amendment
proposals including inter-alia, setting up of Grievance Redressal Authority,
relaxation of qualification of Presiding Officers of Central Government
Industrial Tribunal-cum-Labour Courts (CGITs), direct reference of disputes
connected with termination / dismissal / retrenchment / discharge to Industrial
Tribunals etc. were prepared. In its meeting held on 22.02.2002, the Cabinet
approved the proposals while directing that process of building a consensus to
facilitate the introduction and passage of the Bill in the Parliament would
simultaneously be initiated. Pursuant to
the direction, wide-ranging consultations with all concerned were held to build
up a consensus, including discussions in the Indian Labour Conference,
Tripartite Industrial Committee etc. But it has so far proved elusive.
4.8. Section 10 of the Contract
Labour (Regulation and Abolition) Act, 1970 provides for prohibition of
contract labour under certain circumstances, such as, perennial nature of the
process, operation or work etc. From time to time, workers and their
representatives have been demanding prohibition of employment of contract
labour in various categories of jobs in various establishments whereas there
has been increasing resistance from the employers in the matter. In its
judgment of December, 1996 in the Air India case the Supreme Court, inter-alia,
ruled that where employment of contract labour has been prohibited in a
process, operation or other work in an establishment, contract labour engaged
in such activities would automatically become the employees of the principal
employer. Subsequently, a five-judge Constitution Bench of the Supreme Court in
the matter of SAIL vs. National Union of Waterfront Workers has quashed the Air
India Judgment in August, 2001 prospectively diluting its impact, but the
situation has not undergone much change. The workers have continued to demand
for abolition of contract labour in the hope that they may force the employer
to absorb them on a regular basis as they are entitled to get preference if the
employer intends to take regular workmen in the prohibited job.
4.9. In the wake of economic
liberalization, however, the previous Government had constituted a Group of
Ministers (GoM) to consider the proposals for amending the Act. The GOM had
several meetings between the years 2000 and 2003. One of the proposed
amendments under consideration was to exempt certain activities from the
application of Section 10 of the existing Act. The GOM identified the following
ten (10) activities, which are in the nature of supportive services of an
establishment for exemption:-
(1)
sweeping, cleaning, dusting and
gardening;
(2)
collection and disposal of garbage and
waste;
(3)
security, watch and ward ;
(4)
maintenance and repair of plant,
machinery and equipments;
(5)
house keeping, laundry, canteen and
courier;
(6)
loading and unloading
(7)
information technology;
(8)
support services in respect of an
establishment relating to hospital, educational and training institution, guest
house, club and transport;
(9)
export oriented units established in
Special Economic Zones and Units
exporting more than seventy five percent or more of their production; and
(10)
Construction and maintenance of
buildings, roads and bridges.
4.10. However, there was no
headway due to change in Government and subsequently absence of a consensus.
Only the State Government of Andhra Pradesh has made amendments by defining
core and non-core activity, prohibiting contract labour in all core activities
except those normally done through contractors, part- time work or in case of
sudden increase of work in a core activities. A designated authority enquires
disputes as to whether an activity is core or non-core.
5. National Common Minimum Programme (NCMP)
5.1. The UPA Government has
adopted a National Common Minimum Programme (NCMP). Some of the important points / issues which
have a bearing on labour laws are as follows:
(i)
Comprehensive protective legislation will be enacted
for all agricultural workers.
(ii)
The UPA Government is firmly committed to ensure the
welfare and well being of all workers, particularly those in the unorganized
sector who constitute 93% of our work force.
Social Security, health insurance and other schemes for such workers
like weavers, handloom workers, fishermen and fisherwomen, toddy tappers,
leather workers, plantation labour beedi workers etc. will be expanded.
(iii)
The UPA rejects the idea of automatic hire and fire.
It recognizes that some changes in labour laws may be required but such changes
must fully protect the interests of workers and families and must take place
after full consultation with trade unions. The UPA will pursue a dialogue with
industry and trade unions on this issue before coming up with specific
proposals. However, labour laws other than the Industrial Disputes Act that
creates an Inspector Raj will be re-examined and procedures harmonized and
streamlined. The UPA government firmly believes that labour-management
relations in our country must be marked by consultations, cooperation and
consensus, not confrontation. Tripartite consultations with trade unions and
industry on all proposals concerning them will be actively pursued. Rights and
benefits earned by workers, including the right to strike according to law,
will not be taken away or curtailed.
The position with regard
to the above is as under:
(i) Comprehensive Legislation for
Agricultural Workers:
5.2 The
proposal of legislation of agricultural workers had been under consideration of
the Government since 1975. The draft of the Bill was also prepared in
1997. However, due to lack of consensus
amongst State Governments, the proposal could not be processed further.
Presently, the Government is in the process of enactment of legislation for the
workers in the unorganized sector including the workers in the agriculture
sector. In view of this, the Ministry of
Labour is of the view that the proposal could appropriately be left to the
State Governments to act upon. However, the interests of the agricultural
workers will be addressed in the proposed Unorganized Sector Workers’ Bill,
2005.
(ii) Unorganized Sector Workers’ Bill:
5.3. To ensure the welfare of
workers in the unorganised sector which, inter-alia, include weavers, handloom
workers, fishermen and fisherwomen, toddy tappers, leather workers, plantation
labour, beedi workers, the Government propose to enact a comprehensive
legislation for these workers. The Ministry of Labour & Employment drafted
the ‘'Unorganised Sector Workers Bill, 2004’ which, inter-alia, envisages
provision for safety, social security, health and welfare matters. The
draft Bill has been sent to all stakeholders including National Advisory
Council (NAC) and National Commission for Enterprises in the Unorganised
Sector. The Ministry has received a draft Bill namely, ‘the Unorganised
Sector Workers Social Security Bill, 2005 from NAC. The draft Bill is being
examined in the Ministry in consultation with the State Governments, central
trade unions, employers’ organizations and NGOs and copies of the draft Bill
have been sent to them. The NCEUS has now revised the Bills and
have given two bills i.e. (i) Unorganized Sector Workers (Conditions of Work
& Livelihood Promotion) Bill, 2005 and (ii) the Unorganized Sector Workers
Social Security Bill, 2005 in place of earlier three Bills.
5.4. The draft Bills prepared
by the Ministry of Labour and Employment, National Advisory Council (NAC) and
National Commission for Enterprises in the Unorganized Sector (NCEUS) are still
under examination. The proposal was
discussed in the Meeting presided over by Hon’ble Prime Minister on 18th
November 2005 and Members / Experts of NAC / National Commission for
Enterprises in the Unorganized Sector on 22nd November 2005 .
5.5. As a follow up of the
Minutes of the Meeting presided over by Hon’ble Prime Minister on 18th
November 2005, a meeting was held with LIC under the Chairmanship of Member,
LEM, Planning Commission on 20th January, 2006 in Mumbai in which it
was suggested that LIC should work out the projections of funds required for
the scheme providing for (i) life cover of Rs.5000/ -(ii) accidental cover of
Rs.40,000/- (iii) health insurance @Rs.6000/- (iv) maternity benefit of
Rs.1000/-for two births and (v) minimum pension of Rs.200 or 300 or 400 or 500
per month guaranteed for life.
5.6. Some models for financing
the scheme were also suggested. The LIC has given some projections for
requirement of funds required to implement the scheme. This was also discussed in the Meeting taken
by Hon’ble Minister of State for Labour & Employment with the Chairman and
Senior Officers of LIC on 16th May, 2006. The Consultative Committee
attached to Ministry of Labour and Employment also discussed the proposal on 17th
May 2006 when LIC explained requirement of funds and informed that a “Strategic
Business Group”(SBG) has been constituted to examine various options as to
whether (i) a separate corporation would be required (ii) a subsidy of LIC ; or
(iii) a joint venture of LIC and non-life insurance companies would be required
to undertake such a gigantic task
of implementation of all components of
the scheme. The report of SBG is awaited. The matter is being vigorously
followed up with LIC.
5.7 In the meanwhile, the
National Commission for Enterprises in the Unorganised Sector (NCEUS) has
submitted its report to the Government on the Social Security for the
Unorganized Sector Workers in May, 2006. Amongst its various
recommendations the Commission has recommended old age pension of Rs.200/- per
month to all workers aged 60 years and above and belonging to BPL
families. Similarly, the Commission has also recommended provision of
Provident Fund to all other workers (Above Poverty Line) with a minimum
guaranteed return of ten per cent to the workers, under the proposed provident
fund scheme. The Social Security Scheme, as recommended
by the Commission includes health insurance, maternity benefit, personal
and accident insurance cover.
5.8. A meeting of CoS in this regard has been held on 25.07.2006. As
directed by the CoS , the meeting of the Group
constituted to examine various drafts and proposals was held under the
Chairmanship of Secretary (L&E) on 24.08.2006.
(iii) Tripartism
5.9. The Ministry of Labour
& Employment has always been striving to promote harmonious industrial
relations in the country. The
Government, being committed to the ethos and culture of tripartism, took
measures to revitalize it. The Ministry continues to have consultations with
its social partners to obtain a consensus for enacting new laws or for bringing
about changes in the existing laws.
(iv) Inspector Raj
5.10. The National Common Minimum Programme (NCMP)
states that labour laws other than the Industrial Disputes Act, 1947 that
create an Inspector Raj will be re-examined and procedures harmonized and
streamlined.
5.11. In pursuance of the
deliberations in the meeting of Prime Minister’s Council on Trade &
Industry on 4th December 2004, a Committee was set up under the
Chairmanship of Shri Anwarul Hoda, Member (Industry), Planning Commission to
look into the requirements of multiple inspections and recommend on steps to be
taken to streamline and simplify them. The Committee submitted its
recommendations to the Prime Minister’s Office on 22nd December
2005, the major ones being as follows:
(i)
A system of third party inspection should be
established to give to enterprises an option to get their regulatory compliance
certified by reliable agencies {e.g. ISO 140-01 certification by the Quality
Council of India, Occupational Health and Safety Standard (OHSAS 18001) by the
British Standard Institute UK, Social Accountability Standard (SA 8000) by
Social Accountability International, USA and corresponding standard developed
by Bureau of Indian Standards (BIS)}. Once such certification has been obtained
the unit should be exempted from routine inspection. Special Inspection would
be authorized only on receipt of credible complaints;
(ii)
Mechanisms of joint inspections and joint annual
calendar of inspections to be developed;
(iii)
Introduction of a scheme of self certification.
5.12. The Report also favoured
enactment of the Small Enterprises (Employment Relations) Act for the
establishments having less than 19 workers
with a view to reduce the
pressure on them and supported proposed amendments in the Labour Laws
(Exemption from Furnishing Returns and Maintaining Registers by Certain
Establishments) Act, 1988.
5.13. The action taken is as
follows:
(i) Labour
being a concurrent subject, the copy of the Report has been forwarded to all
State Governments and Union Territories and circulated among all Divisional
Heads and legislative sections inside Ministry of Labour and Employment for
taking appropriate action;
(ii) Some
States like Gujarat , Punjab etc. have already
introduced the system of self certification
(iii) The
Bill to amend the Labour Laws (Exemption from Furnishing Returns and
Maintaining Registers by Certain Establishments) Act, 1988, which intends to
provide relief to a large number of enterprises, especially small and medium
ones by allowing them to maintain only two registers, that too on computer and
send only one return, also by e-mail, has been introduced in the Rajya Sabha on
22.08.2005.
(iv) In
the Central Sphere, the enforcing agencies, viz. Chief Labour Commissioner
(Central), Employees’ Provident Fund Organisation, Employees State Insurance
Corporation have taken steps to reduce arbitrariness in the system of
inspection and make it mostly complaint driven.
(v) The
Ministry has circulated a Discussion Paper on “Making Labour Markets Flexible:
Suggestions for Consideration” among all stakeholders for their consideration,
which, inter-alia, provides for streamlining the inspection regime and use of
Information & Communication
Technology.
(vi) So
far as enactment of Small Enterprises (Employment Relations), Act in pursuance
of Second National Commission on Labour recommendations is concerned, a view
was taken in the Ministry of Labour and Employment that it is not necessary in
view of the proposed amendments as indicated at (iii) above and the Ministry of
Small Scale Industries itself enacting a separate legislation for such
industries. Moreover, as this legislation would be impinging upon the
Industrial Disputes Act, 1947, it appears doubtful whether its enactment would
at all be possible with National Common Minimum Programme disallowing any
tampering with the Industrial Disputes Act, 1947
5.14. It may
be noted that trade union leaders in various fora have criticized any attempt
to dismantle inspector raj , as according to them , it would compromise the
interests of vulnerable workers. So any consensus on this score is bound to
remain elusive.
6. Labour Laws: Amendments under
Consideration / Undertaken
6.1. The
Present Status of amendments in certain Acts is as under:
(i)
The Factories (Amendment)
Bill 2005 has been introduced in the Lok Sabha on 16th August
2005. The Bill proposes to amend the
Section 66 of the Factories Act 1948, so as to provide flexibility in the
matter of employment of women during night shift with adequate safeguards for
their safety, dignity, honour and transportation from the factory premises to
their nearest point of their residence.
(ii) The Payment
of Wages Act, 1936, ensures that wages payable to employed persons are timely
disbursed and no unauthorized deductions are made from their wages. Presently, it covers only those employees
whose wage ceiling is up to Rs.1600/- per month. The Payment of Wages
(Amendment) Bill, 2005 has received the assent of the President on 5th
September, 2005. The Payments of Wages (Amendment) Act, 2005 (41 of 2005) has
been notified by the Ministry of Law and Justice on 6th September,
2005. Subsequently, the Ministry of Labour and Employment has issued
notification No. SO 1577(E) dated the 8th November 2005 to enforce
the amended provisions w.e.f 9th November 2005 . With the
amendments, the wage ceiling for applicability of the Act, gets increased from
Rs.1600/- to Rs.6500/- per month while empowering the Central Government to
further increase the ceiling by way of Notification. It also enhances the penal provisions.
(iii) The Cabinet
had approved a proposal to amend the Labour Laws (Exemption from Furnishing
Returns and Maintaining Registers by Certain Establishments) Act, 1988 on
11.05.2005, which intends to introduce simplified forms of registers to be
maintained by the employees under certain labour laws. The amendments proposed
include applicability of the Act to the establishments employing up to 500
persons instead of 19 persons, as at present. Consequently, establishments,
which employ not more than 500 persons, shall not be required to file multiple
returns and maintain separate registers under various labour laws. This will result in reducing the number of
registers from 53 to 2 and number of returns from 11 to 1 under various labour
laws, allowing maintenance of registers on computers and transmitting the
annual reports or other reports by e-mail, enhancing the applicability of these
provisions from 16 Scheduled Acts instead of 9, at present and prescribing
uniform penalty for obstruction and non-maintenance of records under the
Scheduled Acts. The Bill was introduced in Rajya Sabha on 22.08.2005.
Subsequently it was referred to Parliamentary Standing Committee on Labour for
its examination. As directed by the Committee , two tripartite meetings were
held with the representatives of Employers’ and Employees’ Group on 23rd January, 2006 and 22nd
June, 2006 respectively to arrive at
consensus on the Bill. However, no consensus was reached in these Meetings and
further direction of the committee is awaited.
(iv) Amendment of
the Apprentices Act, 1961 has been introduced in the Rajya on 19th
May, 2006 to provide (i) reservation for Other Backward Classes, (ii) related
instructions to be imparted at the cost of employer and (iii) flexibility in
respect of ratio’s prescribed for Apprenticeship Scheme. The Bill has been
referred to Parliamentary Standing Committee on Labour for examination. The
Parliamentary Standing Committee on Labour examined the Bill on 3rd
July,2006 and decided that after receiving the recommendations of Shri M.
Veerappa Moily Committee in case of reservation for OBC, the Bill be
reviewed again.
6.2. Further
amendments to certain other labour laws like the Payment of Bonus Act, 1965 by
increasing the eligibility and calculation ceilings from Rs.3500/- to Rs.7500/-
per month and from Rs.2500/- to Rs.3500/- per month respectively and the
Minimum Wages Act, 1948 are at various stages of consideration.
7. Attaining Flexibility in Labour Laws
7.1. In line with the NCMP, and
with a focus to spearhead consultation process amongst the stake holders for
carrying out labour reforms, The Hon’ble Labour & Employment Minister held a meeting with the representatives of
industry, economists and academicians on 29.3.2005, wherein following broad
points emerged:-
(i)
In order to compete in this global market, the
management would require operational
flexibility which includes power to right-size the work force;
(ii)
The industry is prepared to consider paying higher
compensation to the retrenched workers; and
(iii)
There is need for having adequately trained
manpower. The training facilities need to be upgraded.
7.2. Similarly, on the same
subject Hon’ble Minister for Labour & Employment held meeting with the
representatives of Central Trade Unions on 31.3.2005 wherein following broad
points emerged:-
(i)
While considering labour reforms, the spirit of the
NCMP, the mandate of the Ministry of Labour and Employment and the interest of
the workers should not be lost sight of / compromised.
(ii)
Any proposal for labour reforms should be
conceptualized only after the trade unions are duly consulted.
7.3. Further, on “Making Labour
Markets Flexible: Suggestions for Consideration”, a Discussion Paper had been circulated
among various stake holders for eliciting their views. The suggestions, inter-alia, included:
(i)
amendment in the Contract Labour (Regulation and
Abolition) Act, 1970 by placing certain activities in a separate schedule so
that provisions of Section 10 may not apply
to them, and by replacing the term “emergency” with the term “public interest” in Section 31 of the Act; and
(ii)
amendment in the Industrial Disputes Act, 1947 by
raising the number filter from 100 to 300 for applicability of chapter VB and
raising the compensation ceiling payable
to workers on retrenchment and on closure of the establishment, from 15
days’ average pay to 45 days’ average pay for every completed year of
continuous service or any part thereof in excess of six months subject to the
condition that such retrenchment compensation shall not be less than 90 days of
average wages and by extending the powers of exemptions in the industrial
Disputes Act, 1947 under Section 36 B to include any Government Undertaking.
7.4. The Ministry of Labour and
Employment had made a presentation on the aforesaid Discussion Paper before the
Hon’ble Prime Minister on 18.11.2005.
The PMO had suggested that the National Commission on Enterprises in
Unorganized Sector (NCEUS), under Prof. Arjun Sengupta should be requested to
prepare the paper by undertaking the review of the Indian labour laws,
consistent with labour rights, in order to improve productivity, ensure greater
competitiveness and generate greater employment in various sectors, like textiles,
IT and SEZs, which would subsequently be considered by the CoS and GoM.
Accordingly the NCEUS was requested to take immediate action in this regard.
The paper from the Commission is awaited.
8. Initiatives Proposed by State Governments to Rationalize Labour Laws
8.1. The
State Governments of Andhra Pradesh, Gujarat, Karnataka, Madhya Pradesh and Maharashtra have proposed to seek relaxation in some
provisions of the Central Laws through State Governments so as to facilitate
setting up of Special Economic Zones and Special Enclaves in their respective
States. These proposals broadly relate to regulating the working hours,
empowering the Development Commissioner to fix for minimum wages, making
provisions for allowing the women workers to work in night shift etc.
8.2. The views of the Central Government on
these bills are generally based on the following principles:
(a)
the
provisions framed for ensuring safety and health aspects of the workers need not be relaxed;
(b)
the
provisions of the Central Acts , which are mostly implemented by the Central
machinery, need not be relaxed by the State Governments;
(c)
the
provisions in the State Bill should not
be in contravention of the provisions in
the Central Bill, presently under consideration , on the same subject , such as provisions for
employment of women in night shift under the Factories Act, 1948;
(d)
the
principles enshrined in the National Common Minimum Programme with regard to
hire and fire and the
amendment of labour laws through consensus should be scrupulously observed; and
(e)
the
powers and functions of the State
Government, where there is no provision
to further delegate such powers and
functions, should not be allowed to be
delegated further.
9. Approach Paper to
the Eleventh Five Year Plan:
9.1. The Approach Paper has suggested that amendments
to the Chapter V B of the Industrial Disputes Act, 1947 and the Contract Labour (Regulation and
Abolition) Act, 1970 be carried out by
arriving at a consensus, the position relating to which has been indicated above
10. Written
Comments
10.1. During the
meeting of the Working Group, the participants were requested to furnish their
observations in writing, if they so desire.
Accordingly, comments have been received from Hind Mazdoor Sabha (HMS) ,
Employees State Insurance Corporation (ESIC), State Government of Uttar
Pradesh, Government of NCT of Delhi and Teamlease Services.
10.2. Briefly stated,
HMS feels that job creation is an important issue at present. But job creation shall be intended for full
employment as well as decent employment.
The principles given in the preamble, fundamental rights and the
directive principles of our constitution and guidelines given in the ILO Conventions
cannot be ignored. The entire intention
of labour legislation is to protect labour from exploitation, as they are the
weaker section. Trade unions are not
bargaining for status quo but are requesting for protection of the existing
rights and from further exploitation.
10.3 The ESIC has
stated that annual phased programme has been drawn up by the Corporation in
consultation with the state Governments for implementation of ESI Scheme in new
areas/centres. The Corporation has since
approved extension of ESI Schemes to educational and private medical
institutions and some State Governments have issued the final
notification. Ministry of Labour &
Employment has issued a notification on 20.07.2006 inviting objections and
suggestions on the proposal to enhance the existing wage ceiling from
Rs.7,500/- per month to Rs.10,000/- per month.
10.4. In their comments, Labour
Commissioner, Government of NCT of Delhi has mentioned that there is need for
reforming the trade union movement by eliminating vested interest. The problem
of inspector raj is perhaps over-exaggerated as the paucity of inspectorate
staff has made inspection almost complaint driven. It can be best tackled by making the laws
more rational, pragmatic and contemporary, providing exemption clauses in
different laws which can be invoked judiciously to provide relief, and
incorporating transparency by resorting to self-certification and placing
employee-related information obtained through this method in the website. The system of giving Failure of Conciliation
(FOC) Report under the Industrial Disputes Act, 1947 should be dispensed with
as the Government has to take decisions in the national interest, even though
no consensus is possible.
10.5. The Government
of Uttar Pradesh has offered a number of suggestions. The Industrial Disputes Act may be amended to
increase the number filter from 100 to 300 for seeking permission for
retrenchment, closure and lay-off.
Simultaneously, the retrenchment compensation should be increased from
15 to 45 days wages for each year of service rendered along with certain
additional benefits. These relate to
three months notice or payment in lieu thereof, all terminal benefits as
stipulated under various laws, making the retrenchment effective only after the
terminal dues are paid, provided further that if there are sufficient reasons,
the appropriate Government may declare the lay-off, closure or retrenchment
illegal. Besides, the Industrial
Disputes Act, 1947 may be amended to incorporate a time limit of three years
for filing claims or taking disputes under conciliation or adjudication. For
promoting healthy industrial relations and increasing productivity among
workers, taking into account the recommendations of the Bipartite Committee on
new Industrial Relations Committee (Ramanujam Committee) and the Second
National Commission on Labour, Section 9 (c) of the Industrial Disputes Act,
1947 relating to Grievance Redressal Authority may be amended as follows:-
(a)
Every establishment employing 50 or more workmen
must have one or more Grievance Redressal Committee.
(b)
The said Committee shall consist of equal number of
representatives from the management and the workmen. The size of the Committee should not be less
than 2 and more than 6.
(c)
Setting up of Grievance Redressal Committee will in
no way affect the right of the workmen to raise disputes under the ID Act.
(d)
The Grievance Redressal Committee shall finalize its
proceedings within 45 days.
10.6. The State
Government also feels that in order to strike a balance between protecting the
interest of labour and the need for providing operational flexibility to
enterprises, it may be necessary to amend certain labour laws (like licence of
a factory of non-hazardous nature may be renewed for five calendar years at a
time, whereas the factories of hazardous nature may be renewed every calendar
year under the Factories Act, 1948), exemption under the existing provisions of
labour laws (like allowing women to work during night time), simplification of
procedure (like amendments proposed to the Labour Laws (Exemption from
Furnishing Returns and Maintaining Registers by Certain Establishments) Act,
1988), and providing special measures for Special Economic Zones, Export houses
etc. which foster creation of large employment opportunities (like
self-certification, declaring them as public utility services, giving
equivalent power of the Labour Commissioner to Development Commissioner of SEZ
while providing latter with support services for effective administration and
enforcement of labour laws). The State Government, however, does not support
third party inspection for the compliance of health and safety provisions in
SEZs. Besides, there is need for providing effective social security cover to
workers engaged in smaller establishments and to contract workers.
10.7. The Teamlease Services has
advocated that the provident fund needs to be paid on basic pay plus D.A,
centralized compliance for Employees State Insurance Corporation and issuance
of identity cards to members by employers may be allowed, there should be State
and nation-wide registration of contractors, default compliance with Employees’
Provident Fund Organisation should be simplified and minimum wages should
taking to account on all types of compensation being paid to workers.
.
11. Recommendations
11.1 Taking into
account the deliberations in the Working Group and the comments received, the
recommendations of the Working Group are stated below:
(i)
As mandated in the National Common Minimum
Programme, the amendments in the labour laws need to be based on a consensus,
taking into account the interests of stakeholders. This applies to any
suggested amendment in respect of the Industrial Disputes Act, 1947 and the
Contract Labour (Regulation and Abolition) Act, 1970 as well.
(ii)
The Report of the National Commission for
Enterprises in the Unorganized Sector, which is preparing a paper by
undertaking the review of Indian Labour
Laws, consistent with labour rights, in order to improve productivity, ensure
greater competitiveness and generate employment in various sectors like
textiles, IT and SEZs, as directed by the Prime Minister’s Office, may be
examined on receipt.
(iii)
In case any sector–specific relaxations in labour
laws is sought, the administrative Ministries/ Departments should first
formulate them, discuss with all stake holders including Central Trade Unions
and refer them for the consideration of Ministry of Labour & Employment
only after a consensus is reached.
(iv)
The unorganised sector workers need social security
cover, preferably through legislation. Especially the interests of the
agricultural workers need to be protected.
(v)
Since inspections are becoming complaint driven, the
problems of inspector raj may not be as formidable as it is made out to be. The
system of inspections cannot be eliminated, as it would compromise with the
interests of workers, especially those who are vulnerable. Hence it would be
more pragmatic to promote transparency by resorting to self-certification
system and placing employee-related information obtained through this method in
the website.
(vi)
The recommendation of the Second National Commission
on Labour, ILO Conventions, tripartite fora like Indian Labour Conference &
Industrial Committees and bipartite bodies like Ramanujam Committee should be
taken into account whole formulating amendment proposals of various labour
laws.
(vii)
Proposals pending consideration for a long time like
the Workers Participation in Management Bill, 1990 amendment to the Payment of
Bonus Act, 1965 and the Minimum Wages Act, 1948 etc. should be expedited.
(viii)
The possibility of expanding the scope of the
Employees’ State Insurance Act, 1948 and the Employees’ Provident Fund and
Miscellaneous Provisions Act, 1952 to cover even certain segments of
unorganised sector workers may be considered.
(ix)
Judiciary is overburdened and valuable time of
inspectors is wasted in visiting courts. The possibility of giving power of
Executive Magistrate to Officers of the Labour Department to dispose of cases
relating to minor offences may be explored.
(x)
More emphasis is to be placed on building up of an
effective labour eco-system. While labour laws should be respected, what cannot
be enforced should not be legislated. It makes effective implementation of
labour laws feasible while making the environment conducive to job creation and
friendly to small scale and unorganised sector enterprises.
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