The new labour laws in UP, MP and Gujarat explained

New Delhi, May 11: Several states have announced major labour reforms, which allow businesses to hire and fire people. These reforms have been introduced in the states of Uttar Pradesh, Madhya Pradesh and Gujarat, which are ruled by the BJP.

These reforms appear to be part of the efforts to lure companies that are looking to move out of China.

Let us examine the changes:

Gujarat:

• In Gujarat, the new industrial establishments are exempted from all labour laws except the following:
• Minimum Wages Act
• Industrial Safety Rules
• Employees' Compensation Act
• Ordinance to roll out benefits that would be available for 1,200 days
• 100 per cent online approvals within 15 days
• 33,000 hectares to be set aside and land to be allotted in 7 days

Uttar Pradesh:

• The industry has been exempted from labour laws, except the following:
• Building and other Construction Workers' Act of 1996
• Workmen Compensation Act of 1923
• Bonder Labour (Abolition) System Act of 1976
• A section of Payment of Wages Act will be applicable

Madhya Pradesh:

• Hire, fire
• Establishment with up to 100 workers can hire according to needs
• No registration for contractors with 50 labourers
• No factory inspection for 3 months
• No inspection for firms with less than 50 workers
• Third party inspection allowed
• Registration and licences to be issued within a day
• Renewal of factory licences once in 10 years
• Startups need one time registration and no renewal
• Shift hours raised to 12 hours from 8 hours in a factory
• Overtime of up to 72 hours permitted
• Flexibility in changing shifts
• Shops and establishments can operate from 6 am till midnight

The others:

In Rajasthan, Himachal Pradesh and Punjab, the Factories Act was amended to increase the work time from 12 hours a day and 72 hours a week in place of the 8 hours a day and 48 hours a week.

Rajasthan has amended the Industries Disputes Act to increase the threshold for lay offs and retrenchment to 300 from 100 earlier. The threshold membership of the trade union has been increased from 15 per cent to 30 per cent.

Maharashtra has allowed shops/establishments/factories to submit a consolidated annual returns in lieu of multiple returns under the various labour laws.

Tamil Nadu has permitted the employment of women in night shifts subject to safeguard measures. In Kerala, it has been decided to facilitate new industrial licence within a week after the applications are filed. However, this would be subject to the investor agreeing to complete formalities within a year.

The impact:

• Free hand to hire and fire
• No labour inspection
• No government intervention
• No role of unions

Those who are happy and unhappy:

• India Inc says this will provide flexibility and there would be competition among states for reforms.
• Labour unions say that these would be detrimental to workers and would give too much free hand to employers.
• Unions want Centre to intervene and stop states from implementing such laws.