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India – Government hits pause on labour reforms

26 May 2015

India’s Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) government, has hit pause on reforming the country’s complex labour laws, reports livemint.com.

Several labour reform proposals are under consideration. The labour ministry plans to consolidate 44 laws into five broad laws. It wants to allow women to work night shifts and intends to allow small factories to comply with just one labour law instead of 14 central laws.

The government has appointed a committee to forge consensus among stakeholders on the blueprint for the proposed labour reforms. Among the items on the table is the controversial proposal to allow the retrenchment of up to 300 workers at one go by an enterprise without prior government approval.

The committee will engage national trade unions, industry and political parties, both individually and collectively.

Amit Shah, president of the BJP, commented: “We are in discussion with all labour organisations on the issue of labour reforms. The committee will hold discussions with 11 prominent labour organisations. After that, there will a discussions with industry, then there will be a triangular discussion and following that, there will be a discussion with political parties and only after will the government move towards labour reforms.”

While the consultations may reassure trade unions, including BJP-affiliated Bharatiya Mazdoor Sangh (BMS), it can slow down the reform process in New Delhi and state capitals.

Analysts have stated that the NDA seems to have signalled a subtle rethink on a controversial policy initiative. They view this recalibration as an outcome of the opposition that the NDA encountered in its efforts to get legislative approval for a separate, unrelated bill.

“The government has set up a committee comprising five ministers because it is under severe pressure. It seems to have softened, but how much will only be known after a couple of rounds of discussions,” said D.L. Sachdeva, national secretary of the All India Trade Union Congress, a central trade union.

A labour ministry official, who wished to remain anonymous, said the committee was a welcome move: “Some may say it will slow down the process of reform. It may do so a bit, but the other side is: once you have consensus, amendments won’t face a problem getting Parliament’s nod. We have always maintained that the labour ministry believes in balance—labour reform and workers’ safety.”

Yatindra Singh Sisodia, a professor at the Madhya Pradesh Institute of Social Science Research in Ujjain, said initially the NDA got carried away by its massive mandate. “[The setting up a committee to steer labour law reforms] is in a way a second thought on its part—that it should meet people and try and evolve a consensus.”

“In the latter part of the past year, there has been serious criticism against the government; people have taken a strong stand and that sentiment has reached the government. This is definitely a rethink. Politically, too, labour reform is a sensitive issue; it is dicey for the government and may not be an easy ride,” Mr Sisodia added.

Suresh Kodikunnil, a Congress leader and former minister of state for labour and employment, said the committee could merely be an “eyewash” for the labour class, and added that the government was not serious about protecting the interests of workers.

Mr Kodikunnil said the NDA government had “arbitrarily started labour reforms without much consultation”.

Even the BJP-affiliated BMS was against the proposed changes, he pointed out, adding: “They are changing the labour laws to help the corporates instead of protecting the working class.”

The labour ministry official said that contrary to what trade unions were saying, the ministry had several rounds of consultations with them and industries on several labour reforms. Labour laws need to change with the times, labour secretary Shankar Agarwal said last week.