Center For Workers Education

for building a democratic labour movement in India

A critic of Proposed Labour Law Amendments in Rajasthan

Ashok Khandelwal: The implications of changes in the labour laws proposed by the state of Rajasthan;

The Rajasthan state government has announced to amend five labour laws in favour of employers (See Table 1). As it is all the labour laws have been written from the employers’ point of view, yet five of them are now being further diluted. The number and money filters are common feature of most of our labour laws that deny benefits of the labour laws to a majority of the workers. Through the proposed amendments of the laws these filters are now further widened and deepened with the intent and purpose to deprive the benefits of these laws to more and a larger number of workers already employed and new set of workers.


The amendments also provide a clear message to employers that you can treat your workers as you want. To workers the message is clear that ‘submit to employers’ or ‘remain unemployed’. The workers are left with Hobson’s choice. Since they will have to work to survive they would have to serve the ‘maliks’ as per their dictates.


The proposed changes would lead to:

  1. Replacement of permanent labour with contract labour: Changes in Chapter VB of ID Act would now sets stage for a good number of employers owning enterprises employing 101 to 299 workers to retrench permanent workers working for decades with impunity and replace the costly permanent workers with cheap young contract workers. Also, Companies now would open new production sites with young and cheap labour or may even manipulate number of employees to replace the permanent labour with young cheap labour. The production sites would not have permanent workers.


  1. Promoting uncertainty of jobs as a tool of exploitation:  The above change in the ID Act would now employers’ anti-labour measures like lay off, retrenchment and closure without Government permission legal. Thus, the sword of losing job would hang over the head of much more workers now and thus there would be a phenomenal increase in kind of enslaved/footloose labour which would be severely exploitative. The number of hours would increase, wages would be lower, work conditions would deteriorate, there would be no state interventions to protect interests of the workers for almost entire industrial work force.


  1. Further increase in Invisibility of Labour:The increase in limit from 20 to fifty in case of contract labour would lead to more and more labour being employed or work being done through unscrupulous contractors without any check or fear of being punished or caught. This would lead to spurt in human trafficking for a new type of labour bondage which is already visible at many of the construction sites for instance.


  1. No state protection for workers in larger number of enterprises: A step forward towards jungle Raj- The proposed changes in labour laws would considerably restrict state regulation to protect basic rights of the workers. The conditions at worksite would have no checks in large number of enterprises. Thus there would be increase in inhuman conditions of work places. There would be no legal assurance regarding provisions of basic facilities like toilets, ventilation, safety, etc. as the factories act regulate and ensure working conditions like working hours, pollution, safety, lights, ventilation, adequate space, crèches etc. Since many more enterprises now would not be covered by the Factories Act. The proposed amendments would now leave out all those enterprises employing 20 workers using power and 40 workers in without power from the current stipulations of 10 and 20 respectively. This would now also encourage employers to set-up smaller units or to show only that many labourers on record so as to keep outside of purview of provisions of ID Act, Factories Act, Contract Labour Act etc.


  1. Freedom for erring employers:The employers would now be let out even for the multiple/habitual violations of provisions of Factories Act done earlier as the offences now would be compounded and they would be let free even if they are in jail now just on payment of fine. Prospectively a larger number of the employers would literary get the liberty to violate these provisions with impunity without fear of being prosecuted.


  1. Making a recognized union more difficult in an enterprise:Increasing the percentage of workers to 30 from the present fifteen would make the recognition of the unions in an enterprise more difficult especially in large units. The management as it is uses various techniques not to recognize a union. This would also promote more pro-management unions.  There is already competition among various unions and such a measure would render many unions derecognized. There is no clarity weather unions jointly can be recognized. This means there is infringement on TU Rights.


  1. Delayed and/or denied justice to workers:The justice to workers would be further delayed as for prosecution for violations of the Factories Act the permission of the state government would be required. Earlier the inspector, a government employee could permit to file a case against the erring employer but now permission of the state government would be required. The chances of justice therefore stand delayed/denied.


  1. The ranks of unorganized workers would swell:It is expected that with development the workers would get benefits of job security, social security, health benefits, leaves, humane working conditions, etc.  The present measures would on the contrary now increase the number of unorganized workers. This would happen in two prominent ways. One those permanent workers who have served in enterprises for decades would now lose jobs. Second, the new recruitment would be of unorganized nature without any security of any type.


The labour laws are for the welfare of the laboring people. They are not only the result of the hard fought battle of the workers but also the Constitutional obligations of the welfare elected State. The Article 39 of Constitution of India enjoins the state to ensure “(c) that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment”. The proposed amendments and in fact entire thrust of the budget is going to violate this directive principle in the Constitutions.


The government of Rajasthan has introduced the amendments without giving any informed reasons for the need of such amendments. The likely impact of the measures on the workers and their rights has not been spelt out. The stated purpose is to increase employment and facilitate manufacturing.  But the moot question is can we ignore the welfare of the labour.


It is interesting to note that the State government has shown tremendous enthusiasm and eagerness to take these anti-labour measures but has completely ignored their own state election promises outlined in the Manifesto released at the time of state election in late 2013 on page 44 to promote welfare of the unorganized labour.  Of the several promises made therein like registration of workers, setting-up of a welfare board, increase in the pension from Rs 1000 to 1500, etc has not been even initiated and does not find any mention in the budget. But anti-labour blatantly pro-employer amendments have been articulated in Budget speech.


We therefore demand that:


  1. All the proposed amendments should be immediately withdrawn. No amendment of any sort should be proposed without proper assessment and clear statement of pros and cons especially from the labour point of view. The likely adverse impact must be spelt out clearly.


  1. Nothing should be amended without the approval of the trade unions


  1. Immediately announce labour welfare measures promised at the time of election


Table showing important changes in the labour laws
Sl No Section Existing Provision New Provision Remarks

A: Contract Labour (Regulation and Abolition) Act, 1970

1 Section 1 (4) Applies to (i) establishments with 20 workers and (ii)contractors employing 20 or more workers Would apply to those establishment and contractors who employ 50 or more workers Filter number increased by two and half times to deprive benefits of provisions of act to many more workers

B: Factories Act, 1948

2 Section 2 Sub-clause (i) and (ii) of clause (m) Applies to establishments employing 10 workers with power and 20 without power Applying to establishments employing 20 workers with power and 40 workers without power Filter number doubled to deprive benefits of provisions
3 Setion105   Sub-section (i) Prosecution on violation by Inspector or his written consent Cognizance of offence by a court on complaint by Inspector with written permission of State Government Prosecution made more difficult- anti-worker and pro-employer measure
4 New provision-Section 106B No provision for compounding of offence Inspector can compound any punishable offence before or after institution of prosecution on payment of fine not more than prescribed.

On fine payment (i) no prosecution and if in custody will be set free

(ii) after institution of prosecution compounding would lead to acquittal of the offender

(ii)           Inspector can favour employer


(ii)Employers would be saved from prosecution on payment of small fine.


C: Industrial Disputes Act, 1948

5 Section 2 Sub-clause (iii) of clause (g) Employer is considered owner for employed contract workers Deleted Removed due to separate Act to regulate contract workers now.


A progressive amendment of 1958 stands withdrawn


6 Section 2 Clause (s) Expression “by an employer or by a contractor in relation to the execution of his contract with such employer” Deleted
7 Section 2A (4) New Addition Introduces three year time bar for raising a dispute related to lay off, retrenchment and closure
8 Section 9D Union with membership of 15% workers can get recognition Increased to 30% workers in an enterprise This amounts to infringement of TU rights
9 Section 25K Chapter VB applicable to enterprises with 100 and more workers Limit increased to 300 or more workers Employers now can retrench workers without government permission in more enterprises. State protection stand removed.
10 Section 25N Clause (a) Sub-section (1) Expression “; or the workman has been paid in lieu of such notice, wages for the period of the notice” Deleted
11 Section 25N Clause (a) Sub-section (9) New insertion After expression, “six months” and before punctuation “, ”, insert “and an amount equivalent to his three months average pay”
12 Fifth Schedule after Para 5 of Part II New Addition Go slow has been defined as “any such activity by any number of persons, employed in any industry, acting in combination or with common understanding, to slow down or to delay the process of production or work purposely whether called by work to rule or by any other names, so as to fixed or average or normal level of production or work or output of workman or workmen of the establishment is not achieved” This addition defines the ‘go slow’ in a very broad way which would now make the action against workers easy on any pretext. This leads to complete control over workers by the management in fixing and realization of production targets. This would lead to intensification of work and muffle any kind of protest.



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