Centre Mulls Merger of 44 Labour Laws

Published: 25th August 2015 03:34 AM  |   Last Updated: 25th August 2015 03:34 AM   |  A+A-

NEW DELHI: Even though the Land and Uniform Tax Reform Bills of the NDA Government are stuck in Parliament without a consensus, the Labour Ministry is getting ambitious about pushing through second generation reform legislation in an about-turn of the stated position of Labour Minister Bandaru Dattatreya.

“NDA is pro-worker, but there is a need for labour reforms,” is how Dattatreya puts it. Sure enough, this thinking is reflected in the recent moves being made by his ministry, which has prepared a Cabinet note seeking approval to merge the 44 existing labour laws into a single comprehensive legislation.

Labour Ministry officials say that the thinking “is prompted” by Prime Minister Narendra Modi who “is against keeping the statute book heavy with a plethora of contradictory laws”. Therefore, a new draft legislation is being put together.

The new law will not only be applicable to all establishments in the organised and unorganised sectors but will also ensure minimum wages to all workers. It could be noted here that the trade unions, including the  Bharatiya Mazoor Sangh(BMS), are against such any dilution of the existing labour laws that pave the way for easy hiring and firing and reduces the scope of blue-collar workers forming unions.  The ministry officials say that work has been stepped up since Modi’s Independence Day Address, in which he had clearly indicated that simplification laws were on the anvil. 

But the new law is expected to replace the existing Minimum Wages Act, Payment of Wages Act, Payment of Bonus Act and Equal Remuneration Act, among others, sources said. Under it, the fixation and revision of minimum wages will now be left to the states -- earlier it could have been done by both the Centre and the states. The states will also be empowered to multiply the minimum wages depending on how difficult the task is.

It will also include provisions to punish errant employers, including a fine of Rs 50,000 to 1 lakh for employers who fail to pay the minimum wages. A fine of Rs 10,000 will be imposed on employers who fail to keep records.

In a bid to root out the onerous inspector raj -- or rule of inspectors, which has deluged employers with paperwork and riddled the system with corruption, the word inspector will be changed to facilitator. A number of schemes were announced to simplify the employment rules and smoothen the way for people to move social security funds when they change jobs.

The new law is also expected to bring transgenders into the official labour force, creating a new category for them. A meeting of the PM with all the trade union leaders however did not meet with much success.

key points

■ The move will pave way for easy hiring and firing and reduces the scope of blue-collared workers forming union

■ A fine of Rs 50,000 to 1 lakh for employers who fail to pay minimum wages

■ The new law will be applicable to all establishments in the organised and unorganised sectors

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