Sunday, July 3, 2011

Change in labour laws favours employers, say trade unions

V. Sridhar

It is good because it ensures a level playing field: ASSOCHAM
Changing the legal framework governing the industrial workforce, euphemistically called “labour reforms”, has always been contentious. It is not any different in Karnataka, where the Government has, since the beginning of 2011, changed three pieces of crucial legislation governing the terms and conditions of employment.
Between January and March, amendments have been made to the Factories Act, 1948, insofar as it is applicable to the State, the Industrial Employment (Standing Orders) Act, 1946 and the rules of the Contract Labour (regulation and Abolition) Act, 1974 applicable to Karnataka.
Naturally, opinion is divided on the merits of the amendments. While industry representatives have welcomed the move, trade unions allege that the Government, by changing the rules, has tilted the field in favour of employers.
The amendments to the Factories Act, which were passed by the Assembly on March 16, have resulted in the extension of the working day by an additional hour.
The amendment to Section 54 of the Act extends the length of the working day, inclusive of breaks, from nine to 10 hours, without increasing the actual work time beyond eight hours (48 hours in a six-day working week). More significantly, another amendment to the Act changes the “spread-over” of a working day — the time spent by a worker from reporting time till he/she stops work for the day — from 10-and-a-half hours to 11-and-a-half hours.
“The purpose of the amendments is clearly aimed at increasing the duration for which the worker is at the disposal of the employer,” says S. Prasanna Kumar, General Secretary of the Karnataka State Committee of the Centre of Indian Trade Unions.
“This not only gives the employer a free hand to retain a worker without paying, but also ensures that there is a readily available pool of labour at his command,” he said.
Overtime issue
The other amendment to the Factories Act, relating to overtime, now makes it possible for company managements to make employees work for up to 70 hours in a week — 48 hours of normal working hours and overtime of 22 hours. A further amendment to the Act increases the maximum overtime work of a worker from 75 hours to 150 hours, with the approval of the State Government.
Mr. Prasanna Kumar argues that the changes can have serious consequences for employment in Karnataka. “Employers generally prefer to pay overtime because they do not have to pay Provident Fund contributions, gratuity payments and provide leave if they had to recruit new workers to perform the additional work,” he argues.
The changes to the law governing contract labour eliminate a worker's allowances from the calculation of overtime wages. Referring to a large garment export unit at Yeshwantpur, Mr. Prasanna Kumar says, “This is not an insignificant amount. It could be as high as Rs. 36,500 for a woman worker.”
Industry representatives, of course, take a different view of these changes. J. Crasta, co-chair, Southern Regional Council, Associated Chambers of Commerce and Industry (ASSOCHAM), welcomes the amendments. “This is good because our competitors in China can make workers work for up to 12 hours in a day. It sort of levels the field for us,” he said.

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