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Govt revives retrenchment proposal

BS Economy Bureau

After nearly a year, the government has got going on critical labour reforms with the labour ministry agreeing to take the lead in amending the Industrial Disputes Act.

The ministry has also decided to take a tough line on some trade union activities, including 'going slow.'

The ministry has decided to exempt units employing less than 300 workers from the requirement of getting permission from the government for rationalising the workforce.

Labour Minister Sahib Singh Verma told Business Standard that he had got all the major labour unions round to the view of the government and there should not be much of a problem in getting the critical amendment through.

The right to retrench workers has been one of the major demands of industry. Despite several meetings of the group of ministers, there has been no progress on the issue.

Terming the Second Labour Commission's recommendations constructive, Verma said subsequent labour legislation would move in the indicated direction. Protection of labour did not mean the protection of unions, which had often let them down, he added.

He said the amendments to the Chapter VB of the Industrial Disputes Act would come before the changes in the Contract Labour Act.

Verma said his priority would be to formulate a single labour law in place of the over 50 central laws. The Second Labour Commission had also suggested this. He said labour should continue in the Concurrent List.

Verma said he would talk to the state governments to iron out differences. "We may call a meeting between the Centre and the states soon to resolve the differences." He said labour reforms would ensure a better job market for workers.

The amendment to the Industrial Disputes Act was announced in the Budget for 2001-02 by former finance minister Yashwant Sinha. Sinha had said it was almost impossible for industries to rationalise their labour force.

Units employing less than 1,000 workers should be allowed to rationalise their workforce without having to take permission from the government, he had suggested.

But due to opposition, including from former labour minister Sharad Yadav, this could not be implemented.

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