The Sangh Parivar has declared it will support dilution of labour reforms, which the government considers an essential component of second-generation economic reforms.
With the government postponing the disinvestment of public sector oil units, there are signs that labour minister Sahib Singh Verma will try to turn the labour reforms process. Government officials say Verma will seek a review of the Cabinet's decision which in principle endorsed amendments to the Industrial Disputes Act.
Verma has directed ministry officials to draw up a proposal allowing the retrenchment of a certain percentage of inefficient workers in industrial units. "This will keep workers on tenterhooks and urge them to show results," Verma told officials who were asked to draft the proposal.
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Verma feels the proposal will replace the controversial proposed amendment to the Industrial Disputes Act which, if implemented, will allow owners of unprofitable units with 1,000-strong work force to close down and retrench the workers without seeking the government's permission. As of now, the Industrial Disputes Act allows units with a maximum workforce of 100 to close down without the government's permission.
The Cabinet's clearance of the amendment has antagonised all trade unions, including the Bharatiya Majdoor Sangh (BMS). Quick to sound a victorious note against the government's globalisation plans, a BMS delegation met and apprised the labour minister of the apprehensions of workers about recommendations like reducing holidays. Hasubhai Dave, BMS president, said the delegation had informed the minister that some of the recommendations were issues on which the trade unions were already on the war path. The other controversial recommendations include increasing working hours, limiting outsiders in trade unions and introducing strike ballot.
"The government's rethink on disinvestment is a welcome move. The same should follow in other anti-labour reforms," Dave added.
The amendment, considered an essential part of second-generation reforms and crucial to attracting foreign investment, won the support of industrial houses. However, the amendment was not pushed in Parliament because the Congress and the Left parties decided to oppose it in the Rajya Sabha, where the NDA is in a minority.
Verma, however, maintains he will discuss the issue with trade unions, political parties and within the BJP. "I will take this to the Cabinet for final clearance," he said. He did not discount the implicit meaning that the changes proposed in the Industrial Disputes Act would be re-drafted under the present circumstances.