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Labour law reforms: Narendra Modi government moves afresh for 'makeover' of 1948 Factories Act

Economic Times:  October, 2015

New Delhi: The Narendra Modi-led government is making a fresh attempt at pushing labour law reforms, starting with a 'complete makeover' of the 1948 Factories Act to bring it in sync with the government's plan to boost manufacturing and job creation. 

In the process, the government has indicated that it is not likely to pursue the passage of amendments to the same law that it had introduced in Parliament last August and were reviewed by a parliamentary panel that submitted its report in December 2014. 

On Tuesday, Labour Secretary Shankar Agarwal met employee representatives to make a pitch for a new factories law that would take all units with less than 40 workers out of its purview, running into severe criticism from trade union leaders over some of its new provisions. 

The labour ministry would soon hold tripartite consultations (with both industry and employee representatives), said an official, adding that the government has had a rethink on the Factories Bill of 2014. 

"We had met trade unions in February this year to discuss the 2014 Bill, but it has since been felt that the law needs a complete makeover as provisions were introduced many decades ago while the concept of a factory has changed with the rationale behind many safety provisions," the official said, stressing that a new bill has been drafted with an eye on moving "towards generics from specifics". 

Labour ministry officials told trade union leaders that the focus of the new factories law is to make it easy to create more factories to cope with the "huge backlog of unemployed and under employed youth" through simpler procedures, faster approvals and a move away from 'inspector raj' to 'risk-weighed' inspections and self-certification. 

A new Occupational Safety and Health Board is also mooted to take over as a workplace safety regulator that will set rules for working conditions. 

While BJP-affiliated trade union Bharatiya Mazdoor Sangh skipped the meeting called by the labour ministry at short notice, the trade unions that were present unanimously questioned some of the key provisions, which they argued would take a large chunk of workers out of the purview of the factories law. 

We need forward-looking labour reforms to boost production and exports. For example, in garments, where demand is highly seasonal, a flexible labour market would hugely increase skilled jobs and overall employment. 

In complying with the various provisions of the Act, an inspector raj is eminently avoidable. Instead, we need regular disclosure and transparency so that all stakeholders benefit. The Act itself needs to be updated. 

We can now drop the provision for storing drinking water in earthen pots, and also do away with spittoons, which should have no place in the modern factory.