Government needs to move fast on labour reforms, say experts

Written by Aanchal Magazine
| New Delhi |
Published:September 4, 2017 1:15 am

Bandaru Dattatreya at the parliament in the capital New Delhi. (Express Photo by Tashi Tobgyal)

The faltering rate of job creation combined with pending legislative changes necessary to induce changes in labour sector are some of the challenges that the new Minister of State for Labour and Employment Santosh Kumar Gangwar will inherit from his predecessor, Bandaru Dattatreya.

As part of legislative reforms of labour laws, the Centre had started the process of codification and amalgamation of 44 Central labour laws into four codes related to labour, industrial relations, social security and welfare and safety and working conditions. So far, only the Code on Wages Bill that seeks to fix a national minimum wage for all categories of over 40 crore unorganised sector workers has been introduced in the Lok Sabha last month, but now faces the test of passage in Rajya Sabha, where the ruling NDA government lacks majority.

The Code on Wages Bill is an amalgamation of the Minimum Wages Act, 1948, the Payment of Wages Act, 1936, the Payment of Bonus Act, 1965 and the Equal Remuneration Act, 1976. Industry experts said the government needs to move fast on labour reforms lowering the cost of investment, which
will in turn ensure a pickup in job creation.

“When the government started out, their agenda was to push labour reforms and the intent was also there. But, the execution has been slow and has taken a toll on job creation. Longer the gap between policy formulation to execution, the more it creates lack of clarity. Consolidation of labour laws into four codes and the passage of amendments to Factories Act have been in the pipeline for a long time and the government needs to fasten the process,” Sonal Arora, vice-president of Teamlease Services said.

Another industry expert said that the government has been moving slow on labour reforms and a quick transformation should be the key focus area for the new labour minister. “The government should focus on creation of employment, promoting investment, both domestic and foreign, and ensure rationalisation of industry. As of now, for industrial units employing more than 10 workers, they need state governments’ permission to close down a factory. Legislative changes through Factories Act have been pending. It needs to be fast tracked,” an expert at FICCI said, asking not to be quoted.

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