Govt mulls major changes in Contract Labour Act
New Delhi: In a move aimed at generating more employment by giving a push to ease of doing business initiative, the government is mulling to bring major changes in the Contract Labour (Regulation and Abolition) Act of 1970 and the Industrial Employment (Standing Orders) Act, 1946.
The decision in this regard has been initiated on a proposal submitted by different stakeholders suggesting that there would be a huge job creation by bringing several jobs of 'permanent' nature under the contractual category.
According to government sources, the process of consultation to finalise changes in both the Acts has been initiated with all concerned stakeholders. "As per the proposal, the amendments have been proposed to allow contract labour for permanent works which is not permissible in the existing laws," the sources said adding that the present law allows workers to work on contract for any given work and time.
"The proposal has also supported issuing a national licence to contractors or hiring firms for better management of workforce. Currently, licensing is being done at the regional level for any specified work," the sources added.
Given that staffing firms generally operate from multiple cities, the government believes that a national licence would help increase formalisation of the contractual workforce. The licence would be based on set criteria that would be renewed after every three years.
The government would also give the option of fixed-term employment to the companies to protect the interest of workers hired on contact. To make it possible, the government has also decided to make changes in the Industrial Employment (Standing Orders) Act, 1946.
As per the move, the companies would be allowed to hire employees directly for a fixed time and on the completion of the contract period; workers would be terminated from their responsibilities. In such a situation, the employer would not be 'mandated' to provide gratuity and other benefits to employees hired on the basis of fixed-term employment category.
With the objective to improve its ranking, the government is targeting 90 measures, including quicker construction permits, simpler registration of new companies and Aadhaar-based identification of directors to achieve a higher ranking in the World Bank's annual listing. Most of the targeted reforms are related to labour workforce.
Notably, India jumped a record 30 place to the 100th spot in the World Bank Doing Business rankings benchmarked to June 2017 and now the government aims to be in the top 50.