Centre, unions lock horns over labour law dilution plan for NIMZs

The Centre’s renewed effort to dilute labour laws for the National Investment and Manufacturing Zones for making retrenchment easier is facing opposition from trade unions.

Labour organisations have also rejected the Department of Industrial Policy and Promotion’s suggestion that implementation of labour laws in the zone be looked after by the Special Purpose Vehicle set up for each NIMZ to monitor its activities.

“Central trade unions have rejected the Centre’s proposal for diluting labour laws for NIMZs as we feel that it would go against the interest of workers,” DL Sachdev from the All India Trade Union’s Confederation told Business Line .

The Labour Secretary had called a tripartite meeting with labour unions and employees’ unions to discuss changes in the Industrial Disputes Act to make firing of workers easier in case a unit in the NIMZ folds up.

Other trade unions that attended the meeting include CITU and HMS.

According to the DIPP’s proposal, in case a unit in the NIMZ closes down and alternative employment cannot be provided to workers, the owners can retrench workers without giving notice by paying compensation at the rate of 20 days’ wages for every completed year of continuous service.

This will be a big flexibility for the industry as the current law lays down that companies with over 100 workers have to take permission of the State Government and give three month’s notice if it wanted to terminate the services of workers who have been employed for over a year.

The DIPP has proposed that a sinking fund be set up to fund the compensation package of terminated employees.

“The proposal is vague and inadequate. We don’t know how it will apply to employees with different terms of employment (regular or contract),” Sachdev said.

Labour unions are also not in favour of the SPVs, with representatives from the Centre, State Government and investors, set up to monitor functioning of each NIMZ also implement labour laws. “Labour law is a State subject and should stay that way,” Sachdev said.

The UPA Government which had formulated the National Manufacturing Policy under which the NIMZs are to be set up had tried to weave in labour law flexibilities when the policy was being formulated. But it had been opposed by the Labour Ministry at that time.

This is a second attempt by the DIPP to bring about changes in labour laws for the zones.

The Labour Law will now make a Cabinet note based on its deliberations following which the new BJP-led Government at the Centre will decide if the labour laws are to be made less restrictive for NIMZs.

The Government has already notified 7 NIMZs that will be set up in Gujarat, Maharashtra, Haryana, Rajasthan, Madhya Pradesh and Uttar Pradesh along the Delhi-Mumbai industrial corridor.

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