The Telegraph
Since 1st March, 1999
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Roadmap for easier layoffs

New Delhi, Sept. 7: Amendments to the Industrial Disputes Act proposed by the National Labour Commission will make it easy for industrial units of any size to retrench workers.

At present, the Act lays down that units employing more than 100 workers should seek permission from the respective state governments for layoffs, retrenchments and closures.

Releasing the second commission report at a news conference today, labour minister Sahib Singh Verma said: “We will bring a Bill in the winter session of Parliament, which begins in November. During these three months, we will talk to political parties, trade unions and employers to bring about a consensus.”

But a consensus will be hard to come by. Going a step further than the Centre’s suggestion of relaxing the ceiling on units that do not need government permission for shedding workforce, the commission has suggested scrapping the ceiling altogether. The Centre had suggested raising the ceiling from the present 100 workers to 1,000.

The commission has gone with the government’s suggestion on closures, recommending that units employing more than 300 workers should seek state government permission to shut down.

It has also said that employers must clear all dues before retrenching workers or closing down the establishment.

In case of retrenchment, a profit-making unit should pay 60 days’ wages for every completed year of service as compensation, the commission has said. Loss-making units should cough up 45 days’ wages.

In case of closure, units making losses continuously for three years or more should pay 30 days’ wages for every completed year of service as compensation. Establishments not making losses can pay 45 days’ wages for every year of service. Units employing less than 100 workers need only pay 50 per cent of this amount.

A decision for a lockout can only be taken at the highest level in the management, the commission has said. “No strike or lockout should be declared without giving 14 days’ notice. In case of illegal strikes, workers will lose three days’ wages for every day of strike. For illegal lockout, the employers will have to pay three days’ wages for every day of lockout.”

Even after giving the go- ahead to labour law amendments, the Cabinet has not been able to push them through in the face of dogged resistance from many quarters, including former labour ministers Satyanarain Jatiya and Sharad Yadav. Present incumbent Verma appears to be backing the move though.

But even if the Centre pilots the Bill, it has little hope of getting support from the Opposition. The Congress had suggested a ceiling of 300 workers for units that can go ahead with retrenchments, layoffs and closures without permission from state governments. It is unlikely to agree to the recommendation of doing away with the ceiling altogether. The Left parties will oppose all the reforms lock, stock and barrel.

The BJP’s own trade union, the Bharatiya Mazdoor Sangh, has declared along with other unions that it will not accept the labour law reforms.

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