Modi's vision for labour reforms move a step forward as Cabinet approves amendments to three laws

NEW DELHI: The Narendra Modi government’s vision for labour reforms in the country moved a step forward on Wednesday with the Union Cabinet approving amendments proposed to three key archaic labour laws of the country that will ensure that both employers and employees get a good deal.

These amendments are continuation of a series of measures taken by the government to improve ease of doing business, a matrix on which India scores very poorly. "The Cabinet has cleared all the three amendments proposed by the labour ministry. These will now be tabled in the current session Parliament," a senior government official told ET.

The Narendra Singh Tomar-led ministry of labour and employment had proposed amendments to the Apprenticeship Act of 1961, the Factories Act of 1948 and the Labour Laws (Exemption from furnishing returns and maintaining registers by certain establishments) Act, 1988 in the first series of long-overdue labour reforms in India, within two months of the new government taking office.


While the BJP-led NDA government enjoys majority in the Parliament, the amendments proposed to the above laws may not see any objection from Congress or its allies as well since most of these amendments were taken up by the previous UPA government though none of these could be concluded.

Finance minister Arun Jaitley had in his budget speech hinted towards an amendment of at least the Apprenticeship Act, which was in sync with the vision of Prime Minister Narendra Modi for skilling India.

The key changes proposed in the Apprenticeship Act include dropping the clause that mandates imprisonment of company directors that fail to implement the Apprenticeship Act of 1961 and doing away with an amendment proposed by the UPA mandating employers to absorb at least half of its apprentices in regular jobs besides adding 500 new trades and vocations under the scheme, including skills for services sectors like IT-enabled services.

Proposed changes under the amendment to the Factories Act include improved safety of workers; doubling the provision of overtime from 50 hours a quarter to 100 hours in some cases and from 75 hours to 125 hours in others involving work of public interest; increasing the penalty for violation of the Act; relaxing the norms of female participation in certain industry segments; and reducing to 90 from 240 the number of days that an employee needs to work before becoming eligible for benefits like leave with pay.

The amendments to Labour Laws Act, 1988 will allow companies to hire more employees without having to comply with cumbersome labour law requirements as the ministry has proposed that companies with 10-40 employees will now be exempt from provisions under labour laws that mandate them to furnish and file returns on various aspects.

The current threshold is up to 19 employees.