After Protests By RSS-Affiliated Labour Unions, Government To Hold Off Labour Reforms

A small factory in India. (Priyanka Parashar/Mint via Getty Images)

The government plans to reform labour laws in a bid to improve the ease of doing business for labour intensive industries may now be on the back-burner, reported Business Standard.

One of the reforms to be introduced, the retrenchment reform, was to ease hiring and firing by industries employing upto 300 people, by exempting them from government permission before the activity. Under the current retrenchment norms, only factories with less than 100 workers are allowed to cut costs, lay off workers and shut shop without government sanction.

However, another proposal which increased the compensation for a fired worker from current 15 days per each year of employment to 45 days is also likely to be shelved.

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The number of days might now be increased to 30 days per year of employment, but in the absence of retrenchment reform, it might be seen as an anti-industry move and hence might not be passed, said a labour ministry official said.

10 central labour unions had protested against the new retrenchment norms outside the Parliament last month with the Bhartiya Mazdoor Sangh (BMS) too organising a protest on 17 November. The RSS-affiliated union’s leaders had then met the ministerial panel led by Arun Jaitley to covey their concerns.

The labour ministry will now focus on pushing a bill that aims to set a national minimum wage for different states and geographical areas instead.

A few states including Gujarat, Maharastra, Andhra Pradesh and Uttar Pradesh, already have the retrenchment norms in place with 300 people as the limit before official sanction is required.

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