GoM finalises roadmap for labour reforms

after much dilly-dallying, the government appears to be finally on the fast track to push through the ticklish labour reforms. the group of ministers on labour reforms has finalised its recommendations and will be placed for cabinet approval soon. this gives union finance minister yashwant sinha a reason to rejoice with a key budget 2001-02 promise poised to see daylight. while a roadmap is ready on amendments to the industrial disputes act and the payment of wages act, some glitches have to be ironed out related to contract labour, sources said. as per the gom recommendations, establishments employing less than 1,000 workers will not need prior permission of the government before layoffs, retrenchment or closure. this will require an amendment to the industrial disputes act. according to some estimates, 95 per cent of indian enterprises will benefit from the proposed legislative change. while the montek singh ahluwalia report on employment opportunities recommended the deletion of chapter vb of the id act, the government has taken a more cautious approach by enhancing the limit of the workers from 100 to 1,000 of establishments which can go in for closure and retrenchment without government approval. the government has sought to balance this measure with additional benefit to labour. it proposes to hike the separation package for workers substantially. the enhanced package has been designed to deter industrial units from going in for retrenchments in a routine fashion. as per the gom recommendations, the separation package will be increased from 15 to 45 days for every completed year of service. changes have also been approved in the payment of wages act related to the upper wage ceiling of workers who get protection under this act. this wage ceiling is now proposed to be increased from rs 1,600 per month to rs 6,500 per month. the gom is expected to go further into the contract labour issue before finalising its recommendations. it has, however, cleared the proposal to allow maharashtra to go ahead with hiring workers on contract in specified areas. the key issue is that there is no need for a distinction between core and non-core activities for outsourcing purposes. certain provisions of the contract and labour regulation and abolition act are seen to restrict employment opportunities particularly in the service sectors. section 10 of the current act prohibits contract labour in operations that are perennial in nature.

GoM finalises roadmap for labour reforms

<img src=/photo.cms?msid=1188080926 align=left>AFTER much dilly-dallying, government seems to be finally on the fast track to push through labour reforms. The Group of Ministers on labour reforms has finalised its recommendations and it will be pl...

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