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'Labour reforms must for job creation'
Posted Date: 10 Jul 2008 Resource Type: Articles/Knowledge Sharing Category: News
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Posted By: banwarilal Member Level: Gold
Rating:  Points: 2
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NEW DELHI: Expressing concern over "jobless growth" in the country, government is considering a number of ways to improve employment scenario.
According to a agenda note on "creation of jobs" prepared by the labour ministry, there is an urgent need to improve existing labour legislation to introduce flexibility - some kind of hire and fire in the job market.
However, the note said the government does not want an extreme version of hire and fire but some flexibility in case of export-oriented units.
The note will be considered by a working group on labour, which under chairmanship of secretary, ministry of labour, constituted at the behest of PM Manmohan Singh to suggest ways to move forward in labour issues.
The note said while flexibility like duration of work and location of workplace is required by employers to adjust to changing market conditions, workers need to be provided with basic security in terms of compensation in the event of closure, unemployment allowance and redployment facilities.
The note pointed out that providing flexibility to employers and security to workers might also lead to a conflict scenario of interests.
The note suggested considering some of the amendments proposed by various departments and forums. It discussed the proposal of textile ministry, which had suggested to exempt exporting units, which export 75% of annual production, from the provisions of the chapter VB of the Industrial Disputes Act, provided these units give employment for at least 100 days in a year for workers.
Under Chapter V B, a company requires prior permission from government to effect lay off retrenchment and closure. Textiles and garment manufacturing units are demanding the rights to retrench workers as their orders are cyclical in nature.
They argue if they have flexibility in labour force, their competiveness aborad would improve and they would be able to win large contracts, which would create employment.
However, labour ministry has pointed out that sector specific exemption from Chapter VB is not feasible. But, the concerned state governments can take decision in notifying textile under the public utility services. In that case, some flexibility in labour issues could be introduced.
The working group will also discuss the need for fiscal incentives to be realigned to promote employment objectives.
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