Cabinet okays amendment to Industrial Disputes Act

The Cabinet on Friday approved amendment to the Industrial Disputes Act to carry forward labour reforms in the country.

The amendments will be brought in the forthcoming Budget session, an official spokesperson said in New Delhi.

The amendment provides for retrenchment of workers in sick units employing upto 1,000 workers without prior permission of the government. The present legislation allows such retrenchments by units employing upto 100 workers.

The amendment is part of the labour reforms announced by Finance Minister Yashwant Sinha in the last Budget.

"The Cabinet today (Friday) discussed and approved amendments to the Industrial Dispute Act 1947, required to bring labour law reforms announced by the Finance Minister Yashwant Sinha in last year's Budget speech," the spokesperson said.

"These and other labour reform measures are likely to be introduced in the Budget session of Parliament," she said, adding amendments related to contract law was under consideration of the Group of Ministers on Labour.

The GoM, which has cleared amendments to the Industrial Disputes Act, has also approved changes in the Payment of Wages Act relating to wage ceiling of workers who get protection. It has proposed to raise the ceiling from Rs 1600 to Rs 6500 per month.

While announcing the government's intention to bring in the amendment during his Budget speech last year, Sinha had said along with increasing the number of laid-off workers from 100 to 1000, the separation compensation would be increased from 15 days to 45 days for every completed year of service.

The measure is also expected to benefit units, which are set up in special economic zones where companies usually employ less than 1000 persons. There is also a proposal to declare EPZs (Export Processing Zone) and SEZs (Special Export Zone) as 'public utilities' under which workers employed would be required to give 45 days notice before going on strike as against the present 30 days.

The enhancement of compensation would act as a deterrent on employers to take recourse to lay-offs, retrenchment and closure in a routine manner, Sinha had said.

On contract labour, Sinha had proposed to bring in an amendment to facilitate outsourcing of activities without any restrictions as well as to offer contract appointments. It would not differentiate core and non-core activities and provide protection to labour engaged in outsourced activities.

PTI

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