Thursday, July 4, 2019

Deregulating labour law restrictions -- PIB

Ministry of Finance04-July, 2019 12:11 IST
Deregulating labour law restrictions
The Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman tabled the Economic Survey 2018-19 in Parliament today.
Deregulating labour law restrictions can create significantly more jobs, as seen by the recent changes in Rajasthan when compared to the rest of the states.  The Survey states no major labour reforms were initiated by the states from 2007 to 2014.  In 2014, Rajasthan was the first State that introduced labour reforms in the major Acts.  Thereafter, many States followed Rajasthan.  A comparison between the indicators for labour, capital and productivity of manufacturing firms makes it clear that flexibility labour laws creates a more conducive environment for growth of industry and employment generation.  The States which are rigid in respect of their labour laws are suffering in all dimensions and are unable to create enough employment and cannot attract adequate capital into their States.
On average, plants in labour-intensive industries and in States that have transited towards more flexible markets are 25.4 per cent more productive than their counterparts in States which continue to have labour rigidities.

Size based Limitations posed by Key Labour Legislations

Labour Acts
Applicability of Establishments
Industrial Disputes Act, 1947, Chapter V relating to strikes, lockouts, retrenchment, layoff
Employing 100 or more workers
Trade Union Act, 2001 – Registration of trade unions
Membership of 10 per cent or 100 workmen whichever is less
Industrial Employment (Standing Orders) Act, 1946
100 or more workmen
Factories Act, 1948
10 or more workers with power and 20 or more workers without power
Contract Labour (Regulation & Abolition) Act, 1970
20 or more workers engaged as contract labour
The Minimum Wages Act, 1948
Employment in the schedule having more than 1000 workers in the State
Employees’ State Insurance Act, 1948 – ESI Scheme
10 or more workers and employees monthly wage does not exceed Rs.21000/-
Employees’ Provident Fund & Miscellaneous Provisions Act, 1952
20 or more workers




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