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How Labor laws are affecting implementation of Make in India

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By Abhik Ghosh

What’s the one assurance investors want before setting up a manufacturing base in India? The ease of making workforce adjustments in line with changing market conditions. In this area, Indian labor laws are among the most restrictive.

The Industrial Disputes Act of 1947 has two provisions in the way of workforce adjustments. Chapter VB of the Act requires prior approval of the appropriate government before resorting to any layoff, retrenchment, or closure in establishments employing 100 or more workers.

The draft Labor Code on Industrial Relations currently in circulation seeks to raise the threshold to establishments employing 300 or more workers, but it is still work in progress.

Another major contentious provision is Section 9A of the Act, which mandates 21 days’ notice before affecting any change in established conditions of service of any employee, including any change necessitated by “rationalization, standardization, or improvement of plant or technique”. This is anathema for investors, particularly in this age of fast changing technologies and manufacturing processes.

Contract labor is yet another major area of concern. Investors would surely want to know if engaging workers on temporary contracts would run afoul of the law. The Contract Labour (Regulation and Abolition) Act, 1970, as the name suggests, is enforced to regulate the practice and abolish it in certain cases.

In other words, the practice is not prohibited. Engaging contract workers for temporary, intermittent or seasonal work is allowed, but using them for work of perennial nature violates the letter and spirit of the law.

Why would investors want to engage workers on temporary contracts in the first place? To meet surges in demand for goods and services requiring urgent workforce adjustments. The Immediate deployment of regular workers is not always feasible and pruning them alongside falling demand often meets legal obstacles. Moreover, regular workers are increasingly becoming less productive and more expensive.

The central government has yet to initiate any action in this area. Rajasthan has taken the early lead, raising the threshold for applicability of the law to cover industries or contractors engaging 40 or more contract workers, up from the original 20. Other state governments are expected to follow suit. The move has been welcomed by employers and criticized as anti-worker by trade unions.

But changing the applicability clause is like nibbling at the edges. Plunging into the core, the status of temporary workers must be redefined and extended beyond the present limit of 240 days in a year. That should take care of the persistent demands by the traditional trade union movement for regularization of all contract workers.

On this aspect, the experiment by India’s largest carmaker is innovative and instructive. In 2012, Maruti introduced a new category of directly recruited temporary workers, substantially reducing the role of intermediaries. It has appreciably narrowed the gap in emoluments and allowances between regular and contract workers, which is the main bone of contention.

Temporary workers get on-the-job training as apprentices and become eligible for regular appointment in due course. Maruti pays such workers a stipend for the period they must wait out for regular appointment. This also promotes a sense of belonging and solidarity with the company. It is the habit of institutions to give birth to loyalties. The policy has worked well and has brought industrial peace to what was a volatile workplace.

The big question is: How soon can the central government bring about meaningful changes in the existing laws to facilitate quick workforce adjustments?

For investors, this is the major sticking point. Can the government drive the labor reforms agenda through the legislative route and achieve desirable outcomes?

Given the present party alignments in the Rajya Sabha, this is like building castles in the air. Alternatively, can executive orders be employed to achieve the desired results? Some quick thinking is needed in this direction, followed by swift action.

As the reforms package unfolds, pragmatic solutions will have to be discovered to assure investors that their business interests would not suffer by mindless application of the law, while taking care to ensure that workers’ interests are not compromised.

Labor reforms are critical to the “Make in India” campaign. Investors have been waiting with anticipation. Brand India cannot afford to disappoint.

Abhik Ghosh, IAS (retd), was with the International Labor Organization (ILO) as a senior specialist in industrial relations and labor administration. (IANS)

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Google Acquires No-Code Application Development Platform AppSheet to Help Businesses

"The deal is subject to customary closing conditions, and is expected to close in the coming weeks," said Google

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Google also announced the acquisition of Pointy, a company based in Dublin, Ireland that has helped thousands of local retailers bring their product inventory online. Pixabay

Google has acquired leading no-code application development platform AppSheet to help businesses create and extend applications without coding.

AppSheet is used by a number of enterprises across a variety of industries. The acquisition will help enterprises empower millions of citizen developers to more easily create and extend applications without the need for professional coding skills, Google said in a statement.

“With this acquisition, customers will be able to develop richer applications at scale that leverage not only Google Sheets and Forms which are already popular with customers, but other top Google technologies like Android, Maps and Google Analytics,” said Amit Zavery Vice President, Business Application Platform, Google Cloud.

Founded in 2012 in Seattle, AppSheet’s customers include Pepsi, Toyota, Whirlpool, the Global Cancer Institute, Costco and the University of Michigan, among others. “AppSheet customers can continue to integrate with a number of cloud-hosted data sources including Salesforce, Dropbox, AWS DynamoDB and MySQL,” said Zavery.

AppSheet complements Google Cloud’s strategy to reimagine the application development space with a platform that helps enterprises innovate with no-code development, workflow automation, application integration and API management as they modernise their business processes in the cloud. “As we’ve matured, so has the IT industry, and there is now a tremendous pent-up demand for enterprise automation,” said Praveen Seshadri, AppSheet CEO.

Google
Google has acquired leading no-code application development platform AppSheet to help businesses create and extend applications without coding. Pixabay

“With the rise of low- and no-code platforms, citizen development has emerged as the strategic way for modern organisations to invest, innovate, and compete,” he added. Google also announced the acquisition of Pointy, a company based in Dublin, Ireland that has helped thousands of local retailers bring their product inventory online.

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With Pointy, merchants simply plug a small box into their barcode scanner or install the Pointy app on their point of sale system, which surfaces the products that they sell directly into the “See what’s in store” section of their business profile on Google Search.

“The deal is subject to customary closing conditions, and is expected to close in the coming weeks,” said Google. (IANS)