Business Today

Coming soon: Standardisation in labour laws

The Narendra Modi government has planned small tweaks in many areas to remove irritants in the 'ease of doing business'.

twitter-logoGoutam Das | April 24, 2015 | Updated 18:58 IST

Goutam Das, Senior Associate Editor, Business Today
Goutam Das, Senior Associate Editor, Business Today
There may not be a big-bang labour reform announcement, of the sorts industry has been clamouring for, in coming months. Nevertheless, the Narendra Modi government has planned small tweaks in many areas to remove irritants in the 'ease of doing business'.

In the next wave of labour reforms, India could see standardisation of conflicting definitions in various labour laws, Gauri Kumar, Secretary, Ministry of Labour and Employment, told Business Today.

The words 'wages' and 'workman', for instance, are defined differently depending on the law.

The Employees' Provident Fund and Miscellaneous Provisions Act 1952 states that PF is payable on basic wages, dearness allowance and retaining allowance. The Employees' State Insurance Act, 1948, however, includes every kind of allowances under 'wages'.

But why should industry care for a single definition? The reason is interpretation. According to BC Prabhakar, an advocate, multiple definitions confuse judges during litigation, besides leaving a window of opportunity for government inspectors to harass companies.

While one has to wait to see what sort of standardisation is achieved, the Ministry of Labour and Employment is working on common registration and reporting between five laws -  the EPF & MP Act, 1952, the ESI Act, 1948, the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996, the Contract Labour (Regulation and Abolition), 1970, and the Inter-State Migrant Workmen Act, 1979.

The government had recently also tweaked how factory inspectors inspect and report - also a move to stem harassment and improve transparency.

Now, a computerised list of inspections are generated randomly based on a risk-based algorithm. And complaints-based inspections are determined after examination based on data and evidence. The inspection reports have to filed online in 72 hours by labour inspectors - the site is called the 'Shram Suvidha Portal'. 

Since the launch of this new labour inspection process last year, 26,482 inspections have been conducted till January 16 this year and 22,833 reports have been uploaded.

All these are encouraging measures but what happens to efforts that can limit labour disputes, which threaten both the public and private sectors?

Five Coal India unions, earlier in January, called a five-day strike protesting a clause in the coal ordinance that would allow private firms to mine coal.

While the strike was called off after two days, it could have crippled the economy - industry body Assocham said that "the entire economy would come to a grinding halt as the country would lose production of over one million tonnes of coal worth about Rs 200 crore per day".

Secretary Gauri Kumar says the government is holding regular tripartite consultations - among companies, labour unions and the government.

The last one was on January 12. Nevertheless, it may be a while before labour disputes subside. "We are yet to reach the maturity where both sides (industry and unions) see value in each other," Kumar says. "Where they see value, they reconcile."

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