India Inc approaches states on labour law framework, seeks less compliance – The Economic Times

Clipped from: https://economictimes.indiatimes.com/news/economy/policy/india-inc-approaches-states-on-labour-law-framework-seeks-less-compliance/articleshow/83103515.cms

Synopsis–The Centre has been reluctant to dilute the rules under the codes and industry sees interactions with states as an opportunity to drive home its concerns about rise in compliance cost after the implementation of the codes.

India Inc has approached state governments, seeking greater flexibility in operations and reduced compliances, as they firm up rules under the four labour codes.

Several rounds of discussions have been held between the Confederation of Indian Industry (CII) and principal secretaries of labour of Maharashtra, Haryana, Gujarat, KarnatakaTamil Nadu and Uttar Pradesh.

Staffing firms like TeamLease are also in talks with states such as Punjab, Tamil Nadu, Karnataka and Maharashtra as part of efforts to ease the stringent regulatory regime and relax the compliance burden.

“Labour in India is a concurrent subject. Multiple laws in different states act as a challenge for organisations operating pan-India,” the CII said in a representation to the states. “The high cost of compliance compels firms to remain small.”

India Inc Approaches States on Labour Law Framework, Seeks Less Compliance

The Centre has been reluctant to dilute the rules under the codes and industry sees interactions with states as an opportunity to drive home its concerns about rise in compliance cost after the implementation of the codes.

Some of the key changes sought by the industry include doing away with the provisions of a creche facility by employers and introducing grandfathering clauses to prevent higher payout by employers under the new wage definition which caps allowances at not more than 50% of the wages.

“The new definition of wages will lead to a sudden increase in cash flows for the industry. It is recommended to introduce the provision of grandfathering through the rules under the Code on Social Security for gratuity computation,” the CII told the states.

Objecting to the provision of setting up a reskilling fund for retrenched workers, the CII said retrenched workers can be issued “skill vouchers” by employers which can be encashed or redeemed by the workers at any government authorised technical training institute.

Further, employers’ representatives have sought relaxation for services sectors including exemption from standing orders as well as giving them the flexibility to work for four days a week while capping the weekly work hours at 48.

“The IT/ITES/e-commerce sector has robust grievance mechanisms in place and adhere to global work culture practices and hence should be exempted from standing orders,” said the CII. “Considering global client demands (IT/ITeS) and local exigencies of work in e-commerce, powers of state government to exempt to be used.”

The Indian Staffing Federation and TeamLease refused to comment as discussions are at preliminary stages.

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