-Kalyan Singh Kothari
Jaipur,Heralding a new era of industrial growth, labour welfare and employment generation, the Rajasthan Government has embarked on a series of labour reforms which have not only set an example before other states, but have also won an all-round applause from labour experts and captains of industry, who have called for these steps to be replicated in other parts of the country. As in other spheres of governance, the stellar performance of the State Government has been visible in the field of labour welfare through a number of steps taken during the last one year. The massive mandate with which the State Government was elected last year has enabled the Chief Minister, Mrs. Vasundhara Raje, to address the concerns in the labour sector and bring about the State-level amendments to three critical Central Government legislations, while seeking to liberate the industries and corporate sector from the shackles of stringent requirements of laws.
These amendments were passed through Bills tabled in the State Assembly on July 31, 2013, and have now taken the shape of Acts after receiving the Presidential assent. Ever since the State Government took over in December last year, it was clear that the policy-level changes required political will. While all stakeholders were craving for an overhaul of labour laws for several decades, the achievements of this Government are set to make a paradigm shift in the labour scenario.
The Labour Department in Rajasthan, established in 1950, is responsible for maintenance of indusrial peace, enforcement of as many as 18 labour laws, ensuring minimum wages to workers, settlement of industrial disputes and complaints, publication of awards and judgments passed by the Labour Courts and providing compensation in cases of fatal and non-fatal accidents on the job.
The other tasks of the department include settlement of claim cases under the Payment of Wages Act and payment of gratuity, registration of trade unions, certification of standing orders with regard to conditions of services for the workers, regulation and abolition of contract labour system, registration of shops and commercial establishments, ensuring equal remuneration to female workers, identification, release and rehabilitation of child labourers, abolition of bonded labour system, welfare of unorganised labourers and compilation of the labour statistics.
An industrial housing scheme is operative in eight cities of the State to provide residential houses to workers and labourers on low rent. These cities are Jaipur, Kota, Udaipur, Bhilwara, Pali, Sriganganagar, Sawai Madhopur and Beawar. The State Government had also decided to give ownership of houses to the workers living in them and these targets have been met to a significant extent.
Since the Vasundhara Raje Government took over in the State, a new Labour Department Management System, involving computerisation of all citizen-oriented activities and departmental works, has been prepared through the Department of Information Technology for all district offices. The project will shortly go live.
The Building and Other Construction Workers' Welfare Board registered a total of 1,04,174 construction workers as stakeholders during the period from December 2013 to October 2014, while the benefit of various schemes was extended to 24,890 stakeholders. An amount of Rs. 285.35 crores was collected as cess under the Building and Other Construction Workers Welfare Cess Act, 1996.
As many as 1,648 members of the Vishwakarma Pension Scheme were connected with the Central Government's National Pension System (NPS) during the period. Under the Industrial Disputes Act, 1947, 1,188 complaints, 679 disputes and 644 reports of unsuccessful concilitation proceedings in connection with discharge from service, service conditions, etc., were disposed of.
A total of 107 cases of sanction for litigation and unfair labour practices under the Indusrial Disputes Act, 1947, were disposed of during the period. Besides, the Labour Courts and Industrial Tribunals functioning in different cities of the State provided relief to workers by deciding 1,520 cases.
Orders for payment of compensation worth Rs. 27.99 crores in cases of labourers being rendered disabled as a result of accidents on the job and claims of dependent family members in cases of death were issued following the disposal of 1,215 such matters. Besides, 16 of the applications received for dues to labourers under the Industrial Disputes Act, 1947, were disposed of.
Awards for Rs. 1.24 crores in 324 cases of payment of wages to labourers were passed during the period, while awards for Rs. 33.66 lakhs in 111 matters of payments less than the minimum wages were passed. Besides, orders were passed for payment of Rs. 36.73 lakhs in 62 cases of gratuity of workmen.
As regards the Child Labour (Prohibition and Regulation) Act, 1986, and the National Child Labour Policy, 1987, the State is having 29 National Child Labour Projects (NCLP), of which six were sanctioned in the recent past and are in the process of establishing. Four districts -- Barmer, Sirohi, Rajsamand and Pratapgarh -- are such where the projects are yet to be started. A total of 14,234 child labourres have been mainstreamed so far through NCLPs in Rajasthan.
The State Government has received the President's assent for the amendments in the labour laws governing the Industrial Disputes Act, 1947, Contract Labour Act, 1970, and the Factories Act, 1948. The amendments to the Apprenticeship Act, 1961, are still in the process. The crucial changes in the labour laws will trigger similar effort in other States as well as the Centre and help the government to attract investors.
Under the Industrial Disputes Act, 1947, the companies earlier needed prior Government approval if they wanted to retrench more than 100 workers. That bar has now been raised to 300 workers. Similar limits that govern the applicability of the Factories Act and the Contract Labour Act have been raised.
Other changes affect the way the employees are able to deal with the firms. The amendments will introduce a three-year time limit for any dispute. Crucially, it also impacts the workers’ ability to collectivise, requiring that anyone attempting to register a representative union has to show the support of 30 per cent of the workforce, up from just 15 per cent.
In the Industrial Disputes Act, prior permission is now only needed when retrenching 300 employees or more, up from 100, a three year time limit has been set for raising disputes as against the absence of any such time-frame at present, and the recognised trade unions need support of 30 per cent of the workforce. There will now be the provision for three months' notice and three months' compensation wages for workers, against the previous provisions for one month's notice and 15 days' compensation wages.
After the amendment, the Factories Act is now only applicable to firms with 40 or more employees doing electrified work, up from 20 earlier. In the non-electrified work, the number will be 20 or more employees, up from 10 earlier.
Similarly, the Contract Labour Act will now be applicable to the firms with 50 or more employees, up from 20 earlier. The State Government is clear in its vision that it expects these changes to add flexibility for employers in Rajasthan's job market just in time for an expected boom in infrastructure and manufacturing. With the Central Government planning to push forward on everything from a Golden Quadrilateral to the Delhi-Mumbai Industrial Corridor and a Freight Corridor, Rajasthan is expecting a huge volume of business to come its way.
These far-reaching changes may not be limited to the desert State alone. The Union Ministry of Labour and Employment has signalled its intentions to amend a number of Central laws, while representatives of the corporate world have been pushing for the Centre to follow Rajasthan's lead. The Ministry has invited comments on the proposed amendments to the Factories Act, the Minimum Wages Act and the law that governs child labour. Though the proposed amendments do not include measures that will be tested in Rajasthan, there have been indications that they are looking to see what happens in the State. Commentators and captains of industry, meanwhile, have been calling for the reforms to be replicated in other parts of the country.
The State Government was feeling that the lower limit of workers set in the Contract Labour Act had encouraged non-compliance and restricted the engagement of required labour as per demand. In order to provide more opportunity of employment and to facilitate employers of tiny and small units and petty contractors, it has brought the amendment to enhance the threshold limit from 20 to 50 workmen. In case of the Factories Act, the small units were also covered under the definition of “factory” because of the existing limit. Due to increase in manufacturing activities by small units in the State, the existing threshold limit of 10 and 20 was amended by 20 and 40 respectively, so that establishing of small manufacturing units could be promoted, resulting in the creation of more employment opportunities for workers.
While welcoming the amendments in key labour laws as bold and positive measures, the All India Organisation of Employers has said that it would promote employment generation in the State. Introducing the system of strike notice and strike ballot, which is in vogue in all the developed economies, will curb the number of unwanted and unjustified strikes, causing huge losses to economy. With the national target of employment generation for 10 crore people and increasing the share of manufacturing in the gross domestic product (GDP) from the existing 16 per cent to 25 per cent, these amendments in the labour laws are critical.
Evidently, Rajasthan has not only led the way in skill development and labour reforms, but the steps taken by the State Government will also facilitate flexibility in hiring and bring more workers under the labour legislation. The desert State rightly expects that this move would make it a better investment destination. According to the official estimates, about 85 per cent of the factories in Rajasthan employ less than 100 workers, while the reforms are expected to generate 15 lakh additional jobs, giving credence to the fact that the State is marching ahead in the field of labour welfare.