Govt plans anti-labour laws to boost India Inc’s profits
26 Jun 2015 12:02 AM GMT
In the biggest overhaul of labour laws, the Indian government proposes to loosen strict hire-and-fire rules, make it tougher for workers to form unions as well as raise by three times the severance package to protect employee interest, Indian Labour Minister Bandaru Dattatreya has said.
As part of plan to make it easier to do business in the country and create jobs, the Labour Ministry has drafted a bill to integrate three laws -- Trade Unions Act, Industrial Disputes Act and Industrial Employment (Standing Orders) Act -- into a single code for industrial relations, the minister said in an interview here.
“Labour reforms are needed in the present context to make <g data-gr-id="34">conducive</g> environment for business to flourish and create <g data-gr-id="35">harmonious</g> atmosphere between industry and workers because our main purpose is that employability should be increased,” he said.
Labour laws, he said, need to be looked with a new perspective. “For that you need to have simplification and rationalisation of laws. But that will not be at the cost of workers’ interest. Workers’ right will be protected. But at the same time for increasing employability, ease of doing business in necessary,” he said.
The <g data-gr-id="33">draft</g> allows companies hiring up to 300 workers to lay them off without seeking official sanction. At present, industries hiring up to 100 workers are allowed to lay off without permission.
But to protect worker interest, the notice period for establishments to fire employees or shut down a unit has been proposed to be raised to three months from one month now, he said. Also, retrenched workers will be paid an average salary of 45 days, three times the current <g data-gr-id="38">15 day</g> limit.
Besides, a worker will be allowed to object to being laid off within three years, against no clear period specified in the law now. Dattatreya said that to take labour unions on board, tripartite consultations are being carried out and the Prime Minister has formed a ministerial committee headed by Finance Minister Arun Jaitley to address issues raised by them.
The Bill is not slated to come in the ensuing monsoon session of Parliament next month as more consultations are needed, he said.
Labour Ministry allows private PF trusts to invest in stocks
The private provident fund trusts which manage their workers PF as well as accounts have been allowed to invest up to 15 <g data-gr-id="76">per cent</g> of their incremental deposits in equity or equity related investments. The Labour Ministry in April had allowed retirement fund body EPFO to park a portion of its funds in stock markets. The ministry now has issued a separate notification for private PF trusts or exempted establishments to allow them to invest in stock markets. As per the practice, same investment pattern for EPFO and exempted organisations is notified separately.The private PF trusts are regulated by the Employees’ Provident Fund Organisation. There are over 3,000 such exempted firms which manage their workers provident fund and account themselves.
The notification provides that the exempted establishment or private PF trusts can invest a minimum of 5 <g data-gr-id="74">per cent</g> or up to 15 <g data-gr-id="75">per cent</g> of their fresh accretions in equity or equity related investments. As in the case of EPFO, these trusts would also invest in “shares of body corporates listed on Bombay Stock Exchange (BSE) or National Stock Exchange (NSE) which have market capitalisation of not less than Rs 5,000 crore as on the date of investment”. These PF trusts will invest in shares of those body corporates which have derivatives with underlying, trade in either of the two stock exchanges of BSE and National Stock Exchange. The retirement fund body can also invest in units of mutual funds regulated by the Securities Exchange Board of India and which have minimum 65 per cent of their investment in shares of body corporates listed on BSE or NSE.
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