New Delhi, February 22
Succumbing to pressure from trade organisations and multi-national companies, the government today decided to amend the Industrial Disputes Act, 1947, allowing companies to lay off employees without seeking its permission, if the staff strength is less than 1,000.
Adopting a proposal to this effect, the Union Cabinet also decided to enhance the rate of compensation, to be paid to the employees in case of retrenchment.
The Cabinet approved the Labour Ministry’s proposal and decided to make amendments in the Act by introducing a bill in the coming Budget session of Parliament.
With the government decision, less than 1 per cent of industrial units in the country will remain under the 55-year-old Act and around 74 per cent employees will be out of the purview of the ID Act. This means that these employees can be dismissed without seeking government permission.
According to highly placed sources, the Group of Ministers (GoM) had already conveyed that the Industrial Dispute Act should be amended to allow “easy closure of loss-making units”.
The amendments proposed by Finance Minister Yashwant Sinha in the last Budget speech was subsequently referred to a Group of Minister (GoM) headed by the Deputy Chairperson of Planning Commission K.C. Pant.
GoM had also seconded the Finance Minister’s proposal of increasing the severance compensation package from 15 days to 45 days for every completed year of service.
Briefing newspersons here, the government’s spokesperson said that “these and other labour-related matters are likely to be introduced in the coming session of Parliament”. The timing of the Cabinet approvals to these proposals apparently underscores the opinion that the Centre wanted to avoid any political backlash
during the recent Assembly elections.
Sharad Yadav opposed it
However, seemingly, it was not smooth riding within the government as Labour Minister Sharad Yadav and his predecessor, Dr Satyanarayan Jatiya, voiced strong opposition to the proposals.
Mr Yadav had reportedly informed the GoM during the successive meetings that raising the limit to 1,000 was politically untenable and instead suggested a middle path involving a step by step incremental approach.
This apart, the Cabinet approval could create fresh political problems for the Vajpayee government from trade unions.
On the issue of the contract labour, the spokesperson said it was under consideration of GoM. According to the Budget it proposed to bring necessary amendments to facilitate outsourcing of activities.
The Cabinet also approved the extension of the term of the National Commission to Review the Constitution, by one month up to March 31, 2002.
It also approved the proposed amendments in the Medical Termination Pregnancy Act, 1971, as also the proposed amendments in the Homoeopathy Central Council Act, 1973.
The Cabinet also approved the introduction of the Supreme Court Judges (Salaries and Conditions of Service) Amendment Bill, 2001. This Bill seeks to amend the Supreme Court Judges (Salaries and Conditions of Service) Act 1958. This amendment will provide for addition of five years to the service of a Part 1 — Judge of the Supreme Court for superannuation pension by inserting relevant provisions in the Act.
The Cabinet also approved the amendment the second proviso to Fundamental Rules 56 (d) so as to permit the consideration of eminent scientists of international stature, for extension in service up to the age of 64 years.
