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Wednesday, December 30, 2015

Labour ministry may soon move cabinet note on labour code on wage and Small Factories Act

ET Bureau | 30 Dec, 2015, 07.05PM IST
Labour ministry may soon move a cabinet note on labour code on wage and the Small Factories Act after an inter-ministerial committee on labour headed by finance minister Arun Jaitley broadly endorsed the proposals.

"There is no in-principle objection to the two bills that we discussed today," a senior labour ministry official told ET after the inter-ministerial committee meeting on Wednesday.

"The idea was to get views of larger audience before we finalise it. Once approved  by the Cabinet the two legislations would be laid in Parliament in the next session," the official added.

The meeting, chaired by finance minister Arun Jaitley, was convened following directions from the Prime Minister's Office that the two important legislations be finalised at the inter-ministerial level before taking it to the Cabinet for approval.

"Labour ministry made an initial presentation on the two bills. More meetings could be held on this if need be," Jaitley said.  

While the wage code bill aims to amalgamate four labour laws related to wages and lay out a common definition for wages, the Small Factories Bill seeks to exempt units employing less than 40 workers from 14 labour laws.

Other than Jaitley, power minister Piyush Goyal, labour minister Bandaru Dattatreya and minister of state for home Jitender Singh attended the meeting.

The committee was set up in May this year after trade unions alleged that the government was unilaterally going ahead with changes in the labour laws that they said were anti-worker.

The Small Factories (Regulation of Employment and Conditions of Services) Bill, 2014, would mainly combine provisions of various labour laws applicable to small factories, facilitating ease of compliance and reporting. The bill also proposes that very small factories employing not more than five workers would be exempt from the compliance burden related to shifts, attendance and late attendance, responsibility to issue appointment letters and provisions on unfair labour practices.

The draft legislation proposes payment of wages through bank accounts and continuing provisions of social security without dilution. It also has a provision for compounding of offences, except for those resulting in death and serious body injury.

Under the code on wages, the labour ministry plans to streamline the definition of wages by amalgamating four wage-related statutes. These include the Minimum Wage Act, 1948, the Payment of Wages Act, 1936, the Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976.

At present, there are about half a dozen definitions of wages in various acts across the Centre and states, which employers have to grapple with.

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