Narendra Modi govt clears proposals to amend Labour Law; what's the Bill?: Explained

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PM Modi too had tacitly endorsed reforms of archaic labour laws.
Narendra Modi Government has on Wednesday cleared proposals to amend three colonial era labour laws.

Highlights of the proposed amendments

  • The Union Cabinet has approved 54 changes in the Factories Act 1948, the Apprenticeship Act 1961, Labour Laws (Exemption from furnishing returns and maintaining of registers by certain establishments 1988). The Government will now table the proposed amendments in the Parliament and given the majority it enjoys it won't be facing any problem to get them approved.
  • The amendment is expected to allow women for night duty with adequate safety and also ensure provision for transport after work.
  • The proposed amendments also aimed to increase the overtime hours from the current limit of 50 hours per quarter to 100 hours per quarter. With the approval of state government, the amendment also proposes this limit to be increased to a maximum of 125 hours per quarter.
  • Ensuring safer working conditions for employees working in hazardous environment as well as provision of canteen facilities.
  • Factories employing 200 or more workers would have to provide canteen facilities instead of the present provision of 250 workers.
  • It also provides for shelters or restrooms and lunchrooms in factories in which 75 or more workers are employed instead of the present stipulation of 150 workers.
  • The changes also aim to prohibit pregnant women and physically handicapped people from being assigned to machinery-in-motion.
  • Reducing the eligibility for entitlement of annual leave-with-wages to 90 days from the existing 240 days.

What are the changes?

The Apprenticeship Act, 1961:

  • Getting rid of the clause that allows arrest of employers for not implementing the Act.
  • Addition of 500 new trades to the list of 238 in the Act.
  • Companies might also be permitted to begin new trades without waiting for the Centre to notify those.

The Factories Act of 1948:

  • Double overtime of workers to 100 hours per quarter from 50 hours per quarter.
  • Ensuring safer working conditions for employees working in hazardous environment
  • Provision of canteen facilities in factories having 75 or more workers.
  • Allow women for night duty with adequate safety and provision for transport after work.
  • Prohibit pregnant women and physically handicapped people from being assigned to machinery-in-motion.

Labour Laws Act 1988:

  • Exemption to small firms with up to 40 workers, against 10 currently from filing compliance reports.
  • The Government is also considering amendments to the Child Labour (Regulation and Abolition) Act, 1986, and the Minimum Wages Act, 1948.

What was dropped?

  • The clause allowing employers' imprisoned for not implementing the Apprenticeship Act is to be dropped; Rs 500 fine per shortfall of apprenticeship month to be imposed.

What was added?

  • E-Records to be maintained in electronic media.
  • Contractual workers, daily wagers, agency workers and casual workers also to come under Apprenticeship Act.
  • Companies could add new trades under the Apprenticeship Act without the Centre's approval.

Impact of the changes:

  • The changes in Factories Act of 1948 will ensure ease in doing business for companies, enhanced benefits for workers as it will double overtime of workers to 100 hours per quarter and improve workers' safety.
  • More companies will hire apprentices this will boost formal skilling of workers.
  • Small firms will hire more workers and lower regulatory compliance burden.

Why was a need for change in these Acts/Laws?

  • The prime reason for amendments in these laws is that they have become outdated and redundant. Amendments in these laws will be giant step towards achieving both political as well as economical innovation in labour reforms. India needs flexible labour laws to ensure freedom from unemployment where as many as 12 million are added to the workforce annually. Labour market reforms will undoubtedly bring down the divide between the formal and informal employment.
  • Changes in labour laws will pave the way for each state to have their own socio-economic background and take decisions to create more jobs within their boundaries.

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