Study with the several resources on Docsity
Earn points by helping other students or get them with a premium plan
Prepare for your exams
Study with the several resources on Docsity
Earn points to download
Earn points by helping other students or get them with a premium plan
Community
Ask the community for help and clear up your study doubts
Discover the best universities in your country according to Docsity users
Free resources
Download our free guides on studying techniques, anxiety management strategies, and thesis advice from Docsity tutors
Labour law and the reforms which impacted the position of labour in India in different ways
Typology: Assignments
1 / 18
This page cannot be seen from the preview
Don't miss anything!
Rajasthan is the largest state of India. It is primarily an agrarian economy. The state has immense potential for electricity generation through renewable energy sources and wind power. Rajasthan is a suitable location for investments in sectors viz. cement, IT and ITeS, ceramics, tourism, automotive and agro-based industries, mainly because of the availability of natural resources, lucrative policy incentives, strategic location and viable infrastructure. Tremendous opportunities exist in the areas of organic and contract farming as well as in infrastructure developments related to agriculture. Over last years (FY11-FY14), the state has registered an average GSDP growth of 8%, with a strong service sector which has made it an attractive state for trade and investments. The real GDSP of the state has increased significantly from about Rs. 186245crores in FY10 to about Rs. 257432 crores in FY14. The industrial sector’s share in this was about 28%. However the industrial sector presents a dismal picture it registered a growth rate of 1.1% in FY2015 and its share’s GSDP is decelerating. The industrial sector’s share has declined from around 31% in FY2009 to about 28% on FY2015. The declining industrial sector’s share coupled with slow growth rate is worrisome despite state’s promising economic growth outlook. Nonetheless, the state has potential to become an industrial hub in the coming times with its inherent natural resources, rich structure and favourable policy environment in the coming times.
with employees’ representatives to settle terms and conditions of employment. Some employers share decision-making power with workers. (b) Employees: Workers seek to improve the terms and conditions of their employment. They exchange views with management and voice their grievances. They also want to share decision-making powers to management. In their struggle, workers get support form trade unions and labour legislation. Trade unions exert power both at plant level and industry level. (c) Government: Government has come to play an increasing role in employer- employee relations to protect the interests of both employers and employees. The Central and State Government evolve, influence and regulate employer-employee relations through laws, rules, agreements, awards of courts, executive and financial machinery. The Government has played an increasing role in employer-employee relations in part by becoming the biggest employer and partly by regulating working conditions in the private sector. The Government of India has enacted procedural as well substantive laws to regulate employer-employee relations in the country. In addition, the Government has set up wage boards, labour courts, tribunals and other bipartite and tripartite bodies to maintain healthy relations between employers and employees. The requirements of the Welfare State envisaged in the Constitution of India are the major reason for State intervention in employer- employee relations.
When employees have a strong, healthy relationship with their employers, the entire company benefits. Studies show that employees who have mutually respectful relationships with their employers are more likely to be happy, loyal and productive in the long-run. Unfortunately, building a relationship of this nature is easier said than done, and if you are considering taking a second look at your relationship with your employees, here are some reasons to continue doing so.
1. Retain Loyal Employees: Losing an employee to a competitor can be devastating, but unfortunately, employees who do not have an amicable relationship with their employers are more likely to leave. When an employee feels comfortable around their employer, and appreciated, they are far more likely to remain loyal. Companies that encourage positive relationships between workers and managers are generally more successful, and since their employees are more likely to stick around, they don’t spend as much on recruiting, hiring and training new workers. 2. Fewer Workplace Conflicts: Let’s face it – when a person enjoys being around their manager and co-workers, they are less likely to seek out conflicts. A peaceful workplace is just one of the many benefits of strong employee-employer relationships, and if your workplace has been the scene of a conflict recently, you may want to reevaluate how you relate to your workers. Conflicts reduce productivity levels, and increase disharmony, and the energy expended quelling conflicts could be better spent working. 3. Increased Productivity: As mentioned above, an employee who has a positive relationship with their boss is more likely to be productive, and the more productive your employees are, the more revenue your company can generate. When an employee feels happy to work for you, they are more likely to put forth their best effort and maintain a personal stake the projects they work on. “Employer and Employees ” are the two wheels of the engine of the organization, a good and healthy relationship between these two wheels will only take the organization forward.”
Amendment to increase threshold limit for making application for registration of Representative Union a. Section 9(D) of IDA provide that any Union having membership of not less than 15% of total workers employed, may apply for registration as Representative Union. b. Because of this 15% limit, a maximum of 6 Unions become eligible, thereby leading to industrial discord. c. In order to make Unions more representative, in Rajasthan, amendments have been made to increase the 15% limit to 30%. It is felt that 3 Unions are sufficient to safeguard worker interest and will be helpful in stabilizing better /healthy industrial relations. Amendment to prescribed time limit to raise industrial disputes under section-2(A) a. As per section-2(A) of IDA 1947, no time limit is prescribed for disputes related to discharge, dismissal, retrenchment OR termination of a worker. b. Often large number of disputes are raised after lapse of many years leading to problems for units. c. Amendments have been made and now in Rajasthan the time limit for raising such disputes is prescribed to be 3 years. This should bring relief to managements. However, in genuine cases, competent authority may extend this time limit on sufficient grounds. Amendment of Part-II of Schedule-5 of IDA 1947 a. While the term ‘go slow’ finds mention in paragraph 5 of Part-II of Schedule-5 of the act, it had not been defined. b. To reduced difficulties in disposal of matters relating to the disruptive practice of ‘go slow’, the term has now been defined.
2. The Factories Act, 1948 Amendments: Increasing threshold limits for manufacturing units a. Small Units are covered by this Act since there is a threshold limit of 10 workers (in manufacturing units using power) and 20 workers (in manufacturing units not using power).
b. As on date manufacturing activities by small units is on the rise and in order to improve the ease of doing business and creating more employment opportunities the threshold limits have been increased in Rajasthan to 20 and 40 respectively. c. Moreover, Section-85 of the Act has also been amended, thereby allowing the state to impose restrictions on such units, even if they employ a single worker, if dangerous and hazardous manufacturing procedures are used. This will ensure that the safety of workers is not compromised. Cognizance of offences a. To maintain uniformity in similar cases and transparency in implementation, Section 105(1) has been amended and now in Rajasthan, cognizance of any offence under the act shall be taken by a Courts on a complaint made by an Inspector after obtaining prior sanction in writing from the State Government. This should allow uniformity of interpretation and implementation of punitive provisions of Factories Act 1948. Compounding of offences a. Factories Act 1948 does not provide any instruments that allow compounding of offences and as a consequence, there is a high number of pending prosecution cases. b. To minimize litigations and to allow speedy disposal, a new provision has been inserted for compounding of all first time offences under the act.
3. The Contract Labour (Regulation and Abolition) Act, 1970 Amendments: a. This Act becomes applicable if an employer /contractor supplies 20 workers, even for a day in last 12 months. The employer has to be registered and the contractor has to procure a license to do business. b. Because of such low threshold limits, principal employers and contractors find it difficult to execute contracts while hiring personnel or in procuring commodities from tiny and small entrepreneurs and petty suppliers. At present large manufacturing companies, service providers and exporters split up their requirement among number of small manufacturers /suppliers to execute orders timely and competitively. Small units face problems in obtaining licenses and get bogged down in ensuring
Commentators in the business press might believe that Rajasthan's labour amendments constitute a radical push for the state's industrial sector. The chief minister, Vasundhara Raje, herself has claimed that the amendments were badly needed to spur economic growth and employment. But on the ground, there is little to indicate that the amendments could change much. 1: The old law made it impossible for industry to hire and fire workers Before Rajasthan amended its laws, the Industrial Disputes Act mandated that any retrenchment, lay-off, or closure affecting more than 100 workers could be done only with the government's permission. In the last five years, not a single request was made for retrenchment and lay-off. Five requests were made for closure and four were granted. Two were deemed clearances: since the government failed to respond to the requests within 90 days, the proposals were automatically cleared. 2: The amendments will impact thousands of employers The amended act now limits the need for government permission for firing workers to industries that have 300 employees or more. But the employment skew in the industrial sector makes it clear that the vast majority of units, even before the amendment, didn't need permission anyway.
3: The changes were needed to give flexibility to businesses As we reported in a previous story, industry owners claim that they no longer face trouble sacking workers. This has partly to do with the weakening of the labour movement. According to the 2011 Census, 10.6 million people, or 35% of Rajasthan's working population, are employed outside of agriculture and household based industry. Of these, less than a million are enrolled as members of worker’s unions. There were only two industrial strikes last year, involving 753 workers.
5: The old regulatory regime was unfriendly to business The low number of prosecutions could indicate that industry is abiding by all the laws. But if that was the case, it is hard to understand why not a single industrial unit chose to enroll under the self-registration scheme introduced in Rajasthan in 2006. Under the scheme, once a company declared that it was abiding by government regulations, it would not be subject to regular inspections, barring in the instance of a specific complaint made against it. The scheme offered industry owners an exit out of the infamous “inspector raj” but they chose not to take it. This could be because the penalties for violations under the scheme are higher. 6: The new laws will boost small scale industries The amendment to the Factories Act has changed the definition of a factory, ostensibly to promote small scale units by exempting them from cumbersome paper work. But an overwhelming number of small scale units were outside the ambit of the Factories Act anyway since they employed less than 10 workers (see graph above on number of industrial units as per worker strength). Now, another 3,000 units have escaped the legal requirement to safeguard the safety of workers. In the case of an accident, these units will not be liable as earlier.
7: The new laws will add more permanent jobs The government has said that the relaxation in the norms for retrenchment of workers is aimed at encouraging employers to hire more workers. This derives from the view that curbs on retrenchment had forced industry to eschew permanent workers for contract labour. But if the aim of the government were to discourage contractualisation of labour in the economy, it is hard to understand why it would simultaneously amend the Contract Labour Act to exempt those employing less than 50 contract workers from registration. The earlier limit was 20. 8: The new laws will lead to industrial growth in Rajasthan The government has claimed that the change in the labour laws would attract new industry to Rajasthan. But officials and industry owners said that labour was just one input in the industrial process and it wasn’t labour inflexibility but the poor skills of the labour force that posed a roadblock. More important to industrial growth was the cost of credit, the price of land, the availability of infrastructure like power supply and roads. Rajasthan would have to do more than tweak labour laws if it wanted to boost industrial growth.
Amendments have neither attracted big investments and created more jobs nor resulted in exploitation of labour. The impact has by far been ‘symbolic’ in nature, according to a research study published by the VV Giri National Labour Institute. “On their own strength, these amendments in labour laws have neither succeeded in attracting big investments, boost to industrialization or to job creation nor have these amendments singularly resulted in enhancing exploitation of labour and deterioration of service and working conditions of the working population,” says an impact assessment study by Sanjay Upadhyaya and Pankaj Kumar, which was released by Labour Minister Bandaru Dattatreya on May Day this year. The study covered recent labour law amendments by Rajasthan in the Industrial Disputes Act 1947, Factories Act 1948, Contract Labour Act 1970 and a few other
Acts, allowing greater flexibility in closures, hiring and firing, inspection, online registrations, and union recognition, wage compensation, among others. For instance, in Rajasthan, the ‘lab of labour reforms’, industry was ‘euphoric’ with self-certification and removal of other hurdles, such as frequent inspections, but trade unions in the BJP-ruled State said the amendments had led to a rise in casual and contract labour, wage disparity and violation of labour laws. The Rajasthan Chambers of Commerce and Industry was particularly pleased with the amendment in the I.D Act, 1947, which has “helped in removing the resultant time consuming litigative processes.” But, trade unions were upset. Mukesh Mathur of Hind Mazdoor Sabha said “the amendments in Section 25 K of the ID Act and Factories Act have virtually resulted in 90 per cent establishments/units being let-off from coverage of the law.” The RSS- affiliated Bharatiya Mazdoor Sangh was also critical of the new labour inspection policy coupled with self-certification scheme which, it said, had resulted “virtually in stage of no inspection at all.” While accepting that the outcomes of labour law amendments would take more time to show up in rajasthan, the study concluded that: “Vigorous and multifarious efforts are required on so many other levels and fronts before actual gains could materialise and be visible. But the Labour reforms made by State government of Rajasthan has uplifted the condition of both employees/workmans and employers in several ways thus resulting in overall growth of industrial sector of Rajasthan.”
