CURRENT AFFAIRS LABOUR REFORMS A. MANGTANI INSIGHT IAS ACADEMY WITH. India's Best Institute for Civil Services Prep.

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1 CURRENT AFFAIRS WITH A. MANGTANI LABOUR REFORMS INSIGHT IAS ACADEMY India's Best Institute for Civil Services Prep. CENTRAL DELHI 60/17, Above Subway Old Rajinder Nagar, New Delhi NORTH DELHI B-18, Main Road, Satija House Dr. Mukherjee Nagar, Delhi insightiasacademydelhi@gmail.com WEBSITE :

2 LABOUR REFORMS UNDERTAKEN BY THE CENTRAL GOVERNMENT Various legislative, administrative and e-governance initiatives have been taken by the Central Government and State Governments to generate employment and to facilitate ease of doing business. The various initiatives taken by the Central Government and State Governments have been compiled and are as follows: LEGISLATIVE INITIATIVES Under Payment of Bonus Amendment Act, eligibility limit for payment of bonus enhanced from Rs 10000/- to Rs /- per month and the Calculation Ceiling from Rs. 3500/- to Rs. 7000/- or the minimum wages. Payment of Wages (Amendment) Act, 2017 enabling payment of Wages to employees by Cash or Cheque or crediting it to their bank account. Child Labour (Prohibition and Regulation) Amendment Act, 2016 provides for complete ban on employment of children below 14 years in any occupation or process. Maternity Benefit Amendment Act, 2017, increases the paid maternity leave from 12 weeks to 26 weeks. The Employee Compensation (Amendment) Act, seeks to rationalize penalties and strengthen the rights of the workers under the Act. GOVERNANCE REFORMS Ministry has notified Ease of Compliance to maintain Registers under various Labour Laws Rules, 2017 on 21 st February 2017 which has in effect replaced the 56 Registers/Forms under 9 Central Labour Laws and Rules made there under in to 5 common Registers/Forms. This will save efforts, costs and lessen the compliance burden by various establishments. A Model Shops and Establishments Bill, 2016 has been circulated to all States/UTs for adoption with appropriate modification. The said Bill inter alia provides for freedom to operate an Establishment for 365 days in a year without any restriction on opening/closing time and enables employment of women during night shifts if adequate safety provisions exist. A category i.e. Fixed Term Employment has been introduced under Industrial Employment (Standing Orders) Act, 1946 to impart flexibility to an establishment to employ people in case of Apparel Manufacturing Sector to meet the fluctuating demands of the sector due to its seasonal nature. Ministry has also notified Rationalization of Forms and Reports under Certain Labour Laws Rules, 2017 on for reduction of number of Forms / Returns under 3 Central Acts / Rules from 36 to 12 by reviewing redundant and overlapping fields.

3 LABOUR REFORMS RELATED SCHEMES DEEN DAYAL UPADHYAYA SHRAMAEV JAYATE KARYAKRAM The Pandit Deendayal Upadhyay Shramev Jayate Karyakram was launched in October 2014 by Government of India. Objective of this scheme is to create conducive environment for industrial development and doing business with ease and also expanding government support to impart skill training for workers. This is an umbrella scheme with five scheme under it as follows: Shram Suvidha Portal Unique labour identification number (LIN) will be allotted to Units to facilitate online registration. Filing of self-certified and simplified Single Online Return by the industry. Now Units will only file a single consolidated Return online instead of filing 16 separate Returns. Mandatory uploading of inspection Reports within 72 hours by the Labour inspectors. Timely redressal of grievances will be ensured with the help of the portal. Random Inspection Scheme Serious matters are to be covered under the mandatory inspection list. A computerized list of inspections will be generated randomly based on pre-determined objective criteria. Complaints based inspections will also be determined centrally after examination based on data and evidence. There will be provision of Emergency List for inspection of serious cases in specific circumstances. Universal Account Number Enables 4.17 crore employees to have their Provident Fund account portable, hassle-free and universally accessible. Apprentice Protsahan Yojana Making the legal framework friendly to both, industry and youth. Enhancing the rate of stipend and indexing it to minimum wages of semi skilled workers. Will support manufacturing units mainly and other establishments by reimbursing 50% of the stipend paid to apprentices during first two years of their training. Revamped Rashtriya Swasthya Bima Yojana Introducing a Smart Card for the workers in the unorganized sector seeded with details of two more social security schemes.

4 NATIONAL APPRENTICESHIP PROMOTION SCHEME The government has launched the National Apprenticeship Promotion Scheme (NAPS) on 19 th August 2016 to promote apprenticeship training and incentivize employers who wish to engage apprentices. NAPS have replaced Apprentice Protsahan Yojana (APY) from 19 th August While APY provided sharing of 50% of the stipend as prescribed by the Government only for the first two years, NAPS has provision for sharing of expenditure incurred in both providing training and stipend to the apprentice as follows: Reimbursement of 25% of prescribed stipend subject to a maximum of Rs. 1500/- per month per apprentice to all apprentices to employers. Sharing of the cost of basic training in respect of fresher apprentices (who come directly for apprenticeship training without formal training) limited to Rs. 7500/- per apprentice for a maximum duration of 500 hours/3 months. NAPS was launched with an ambitious objective of increasing the engagement of apprenticeship from 2.3 Lakhs to 50 Lakhs cumulatively by ATAL PENSION YOJANA The Atal Pension Yojana will provide pensions to workers in the unorganised sector who are not covered by other pension or provident fund schemes. Workers will get a minimum payout of Rs 1,000 per month and a maximum of Rs 5,000 per month at the age of 60 years, depending on how much money they put into the scheme over 20 years. PRADHAN MANTI SURAKSHA BIMA YOJANA (PMSBY) The Pradhan Mantri Suraksha Bima Yojana provides accident and disability cover upto Rs. 2 lakh at an annual premium of Rs.12 and the Pradhan Mantri Jeevan Jyoti Bima Yojana provides life insurance cover of Rs.2 lakh at an annual premium of Rs.330. PRADHAN MANTRI JEEVAN JYOTI BIMA YOJANA (PMJJY) The Pradhan Mantri Jeevan Jyoti Bima Yojana provides life insurance cover of Rs.2 lakh at an annual premium of Rs.330. PRADHAN MANTRI ROZGAR PROTSAHAN YOJANA (PMRPY) Under the Pradhan Mantri Rozgar Protsahan Yojana, the Government provides the 8.33 per cent of employer contribution to the Employees Provident Fund and in the case of textile sector the entire 12 per cent employer contribution of the employer would be paid by the government for all the new accounts opened after April, This is to encourage small firms to take in more workers and provide them social security benefits. This directly benefits employers recruiting fresh unemployed persons or wanting to formalise informal employees.

5 NATIONAL CAREER SERVICE PORTAL (NCSP) The Ministry of Labour and Employment is implementing the National Career Service (NCS) Project as a Mission Mode Project for transformation of the National Employment Service to provide a variety of employment related services like career counseling, vocational guidance, information on skill development courses, apprenticeship, internships, etc. In a parallel exercise, the Ministry is initiating a programme for capacity building of officers of the National Employment Service. In the NCS Project, setting up 61 Model career centres is proposed at different locations in collaboration with States and Other Institutions to provide a variety of employment related services. Twenty-four NCS Centres have been set up in 24 States for scheduled castes and scheduled tribes, offering pre-recruitment training programmes. Simultaneously, 21 NCS Centres have been set up in States for Persons with disabilities including one exclusively for women at Vadodara. SIMPLIFICATION OF MULTPLE LABOUR LAWS The real challenge in the Labour and Employment sector has been the multiplicity of labour laws which keeps away many prospective entrepreneurs from setting up businesses and thereby curtailing the growth of employment opportunities. There are 44 Central Acts on labour issues and States add to this their own. The Second National Commission on Labour has recommended that the existing Labour Laws should be broadly grouped into four or five Labour Codes on functional basis. Accordingly, the Ministry has taken steps for drafting four Labour Codes on Wages; Industrial Relations; Social Security & Welfare; and Safety and Working Conditions respectively, by simplifying, amalgamating and rationalizing the relevant provisions of the existing Central Labour Laws. Code on Wages Code on Industrial Relations Code on Social Security and Welfare Code on Safety and Working Conditions

6 Code on Wages Bill 2017: The Code on Wages Bill 2017 subsumes 4 existing Laws, viz. the Minimum Wages Act, 1948; the Payment of Wages Act, 1936; the Payment of Bonus Act, 1965; and the Equal Remuneration Act, After the enactment of the Code on Wages, all these four Acts will get repealed. The Codification of the labour Laws will remove the multiplicity of definitions and authorities leading to ease of compliance without compromising wage security and social security to the workers. At present, the provisions of the Minimum Wages Act and the Payment of Wages Act do not cover substantial number of workers, as the applicability of both these Acts is restricted to the Scheduled Employments / Establishments. However, the new Code on Wages will ensure minimum wages to one and all and timely payment of wages to all employees irrespective of the sector of employment without any wage ceiling. A concept of statutory National Minimum Wage for different geographical areas has been introduced. It will ensure that no State Government fixes the minimum wage below the National Minimum Wages for that particular area as notified by the Central Government. The proposed payment of wages through cheque or digital/ electronic mode would not only promote digitization but also extend wage and social security to the worker. Provision of an Appellate Authority has been made between the Claim Authority and the Judicial Forum which will lead to speedy, cheaper and efficient redressal of grievances and settlement of claims. Penalties for different types of violations under this Code have been rationalized with the amount of fines varying as per the gravity of violations and repeat of the offences. The Code on Wages Bill 2017, in the clause 9 (3) clearly states that the Central Government, before fixing the national minimum wage, may obtain the advice of the Central Advisory Board, having representatives from employers and employees. Therefore the Code provide for a consultative mechanism before determining the national minimum wage. The minimum wages will vary from place to place depending upon skill required, arduousness of the work assigned and geographical location. Code on Industrial Relations Bill, 2015 The Labour Code on Industrial Relations will similarly amalgamate the Trade Unions Act, 1926, the Industrial Employment (Standing Orders), Act, 1946 and the Industrial Disputes Act, The draft bill increases the employee limit above which the government approval is needed for layoff/retrenchment/closure. A company with less than 300 workers can take decisions on any layoff, retrenchment and closure without the government permission. The present limit is 100 employees. The objective is to meet the fluctuation in demand arising from ebbs and flows of business cycles.

7 The draft code provides that 10 per cent of workers shall apply (be applicant) for registering a trade union. In cases where 10 per cent of workers is less than 7, at least seven workers are required (to apply) for the purpose and where the 10 per cent of workers exceed 100, hundred workers shall be sufficient for registering the trade union. For employers employing less than 50 employees, the requirement to provide a minimum of 1 months notice and retrenchment compensation (severance) is to be removed. The draft code raises the retrenchment/closure compensation payable to workers from 15 days wages to 45 days wages for every completed year of service. LABOUR REFORMS UNDERTAKEN IN DIFFERENT STATES RAJASTHAN Amendment to Industrial Act: Companies can retrench up to 300 employees up from 100 without seeking government permission. Tougher to register labour unions: Now, it requires membership of 30 per cent of the total workforce for a union to obtain recognition. Amendment to Contract Labour Act: The law will now be applicable only to companies that employ more than 50 workers against the previous 20. Amendment to Factories Act: Its applicability has been limited to firms with higher number of workers employed. MADHYA PRADESH The government of Madhya Pradesh has initiated far reaching reforms in several labour related legislations principally with a view to easing the compliance and operational exemption of manufacturers from the application of labour laws. Companies in Madhya Pradesh that employ up to 300 people will be allowed to retrench workers or shut shop without government approval (the current provision is for those employing up to 100 workers) Employers will have to give a higher compensation package and workers will get a three months notice and at least three months salary in the event of retrenchment. In case of dispute, a worker will have to approach the conciliation officer within three years of getting retrenched. Workers will be entitled to benefit of earned leave after 6 months service (presently 8 months), which could be availed of in the same calendar year.

8 Overtime hours in a quarter will be raised from 75 hours to 125 hours. Women can work in night shifts at factories from 8 pm to 6 am in the morning; subject to the state government making necessary provision for their security. The process for registration and grant of licenses has been expedited under several legislations eg, under the Contract Labour Act, Building and Other Construction Workers Act, and Motor Transport Workers Act. If an application is not disposed within 30 days it will be deemed registered or approved license. MAHARASHTRA The Government of Maharashtra is also in the process of making changes in the existing legislations relating to labour and the amendments are designed to improve the operational capability of business and manufacturing units to provide them with greater flexibility in compliance with labour laws. Of course, the changes will go through the process of legislation in the State Assembly and obtaining Presidential approval, as all state amendments are required to do under the Constitution of India. The government has proposed an overtime of 115 hours from the present 75 hours for workers in small-scale industrial units. After Factories Act is amended, the units operating without electricity would be considered a factory if they employ 40 workers and units operating with electricity would be treated as a factory if they employ 20 workers. The old limits were 20 and 10 workers respectively. This will exempt the smaller units from the application of the Factories Act. The amendments aim to exclude more than 14,300 units from the purview of the Factories Act, 1948, and pave the way for women to work in night shifts. Among the notable changes, factories employing up to 300 workers can be closed without government permission, compared with the earlier floor of 100 employees.