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LATEST NEWS UPDATES | Plan to allow larger firms to shut shop sans govt. nod -Somesh Jha

Plan to allow larger firms to shut shop sans govt. nod -Somesh Jha

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published Published on Feb 25, 2017   modified Modified on Feb 25, 2017
-The Hindu

Labour Ministry to discuss revised guidelines at GoM

The Labour Ministry has proposed that factories with up to 500 workers be allowed to lay off workers or shut shop without seeking government permission, in a bid to give firms flexibility in hiring and firing employees.

The Ministry is set to discuss the proposed Labour Code on Industrial Relations at the next meeting of the Group of Ministers (GoM), scheduled for March 8, a senior Ministry official said.

The GoM is headed by Union Finance Minister Arun Jaitley.

At present, factories with up to 100 workers are allowed to go in for retrenchment, lay-off or closure without seeking government permission, according to the Industrial Disputes Act, 1947.

“There has been demand from the industry to increase the threshold limit for factories to seek permission for retrenchment from 100 workers to 500 workers. We need to discuss the proposal with the GoM before taking a final call,” the official said.

Single code stalled

In May 2015, the Labour Ministry had proposed integrating three labour laws — the Trade Unions Act, the Industrial Disputes Act and the Industrial Employment (Standing Orders) Act — into a single code for industrial relations.

It had then also proposed allowing factories with up to 300 workers to retrench workers or close down without seeking official sanction.

However, the Centre had put the proposals on the back-burner after series of protests from the central trade unions on the proposed labour law reforms.

The Labour Ministry may back its latest proposal to increase the threshold limit for applicability of chapter V-B of the Industrial Disputes Act, citing hard data from Sixth Economic Census report released last year.

The data shows that around 99% of a total of 4.53 crore non-agricultural establishments employed less than 100 workers in 2013-14 and were allowed to retrench workers or close shut shop without government permission.

“Most of the establishments in India needn’t take government permission to retrench workers or close their set up. So, the amendments will only impact a very small proportion of the total establishments in the country. But a political call needs to be taken on increasing the threshold limit for the I-D Act,” the official added.

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The Hindu, 25 February, 2017, http://www.thehindu.com/news/national/plan-to-allow-larger-firms-to-shut-shop-sans-govt-nod/article17363355.ece?homepage=true


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