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India – Industry and labour unions gear up for battle over labour law revamp

09 June 2014

Expectations are running high that India’s newly elected government will simplify the nation's labour laws to boost employment and improve the quality of work, reports The Economic Times of India. The BJP (Bharatiya Janata Party) manifesto, which refers to the labour force as ‘The pillar of our growth’, has promised to promote a harmonious relationship between labour and industry.

Both industry and labour unions, however, have conflicting lists of demands regarding labour law reforms.

Industry bodies such as the Federation of Indian Chambers of Commerce and Industry (Ficci) have already sent the government several proposals on labour laws. According to Ficci, which is battling for more relaxed employment rules, the 44 central labour laws and more than 100 state laws dealing with the labour market: "Protect a few employed at the cost of many unemployed.”

For instance, Ficci wants the Industrial Disputes Act, 1947 to be amended in a way that makes it easier to 'hire and fire' and they want more flexibility in changing service conditions without the usual 21-day notice that needs to be given to employees before any such change is implemented.

It also wants changes to legislation that will make flexible working hours possible, as well as uniformity in the definition of terms to avoid confusion.

Labour unions, however, have a different take.

Tapan Sen, General Secretary of the Centre of Indian Trade Unions, commented: "Labour force is the real contributor to the value-added society so they should be treated as human beings and not as a commodity. Proper enforcement and protection of laws should be there for the labour force.”

"Labour standards are often ignored by the employer and exploitation of worker takes place. These violations should be taken seriously by the government and the violators should be punished," added Mr Sen.

According to DL Sachdev, National Secretary of the All India Trade Union Centre (AITUC), rules should include factors like one month's leave with full pay. An equivalent amount should be given as compensation when leave is not granted. The unions are also demanding more safety measures for workers, social security to all employees including those in the informal sector, and equity at the workplace.

In addition, union officials argue that if laws are amended permitting women workers to work at night, it must also be legally binding that they be given basic facilities like transport to their doorsteps.

According to Manish Sabharwal, Chief Executive of recruitment firm Team-Lease: "The complexities and lack of uniformity in the definitions make it impossible to comply with 100% of the labour laws without violating at least 10% of them.” 

According to a World Bank report in 2008, heavy labour reform in India would be desirable. The report stated: “India's labour regulations - among the most restrictive and complex in the world - have constrained the growth of the formal manufacturing sector where these laws have their widest application. Better designed labour regulations can attract more labour-intensive investment and create jobs for India's unemployed millions and those trapped in poor quality jobs.”


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