Desert state is the labour reforms trendsetter

Rajasthan has apparently become the first state in the country to introduce amendments in the four important national labour laws -Factories Act, 1948, the Industrial Disputes Act, 1947, the Apprenticeship Act, 1961, and the Contract Labour (Regulation and Abolition) Act, 1970.

Aimed at encouraging industrial investment and job creation in the state, the new amendments have made it easier for companies and employers to hire, train and dismiss workers and stiffen the registration rules of new trade unions.The proposed amendments include various innovative measures like registration of labour union with a minimum of 30 per cent employees of a unit, time limit of three years for raising of dispute by the labour, refusal of permission for hiring and retrenchment up to 300 workers and much more. 

Through these amendments, Chief Minister Vasundhara Raje has tried to put an end to the inspector raj. Earlier, one needed the government’s permission to expand or shut down a unit with 100 or more workers. 

Now, the limit has been extended to 300 workers. “With a limit of 300, my resources and work force has increased manifolds. Now, I can hire or fire my work force in accordance with the production and my requirement,” said Tanmay Sharma, a handicraft manufacturer. It will definitely give more breathing space to employer, he added.

A new provision has been introduced under which a compensation of three months’ salary and six months’ bonus has been made mandatory to the employee at the time of his retrenchment. Besides, a time limit of three years for raising dispute by labour has been fixed through amendments in Industrial Dispute Act. It will not only reduce burden on labour courts but will also ensure the timely disposal of cases. 

Small and medium enterprises and units have also got their due with amendments in Contract Labour Act and Factories Act. No permission is now required for hiring up to 50 contract labourers who will no more be treated as employee of principal employer. The Factories Act was earlier applicable to units having 10 or more employees and using electricity or those units which have 20 or more employees but do not use electricity. The number has been increased to 20 and 40 respectively. “It’s a great relief to small and medium scale industries in Rajasthan. The units will be able to hire more workers and size of industry will also grow, without facing any hurdles,” said Ruchir Tiwari, owner of a paper factory. 

After amendments in the Apprentices Act, if a company has less than 250 workers and is hiring apprentices, the government will absorb half the cost and if the company has employees above this ceiling, then the government will absorb a fourth of cost of apprentices. Rules regarding registration of labour unions have also been stiffed. The minimum per cent of employees needed to constitute a labour union has been increased from 10 to 30.