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Labour law reforms mooted for export zones

G. Srinivasan

NEW DELHI, Nov. 3

A WORKING group of the Plan panel has favoured a slew of labour law reforms and regulations so as to realise the underlying potentials of the special economic zones (SEZ), export processing zones and export-oriented units (EOUs) as these exclusive export enclaves have been hamstrung by the existing rigours and rigidities of labour laws.

In its report on labour laws and other labour regulations for the Tenth Plan (2002-07) under the Chairmanship of the Secretary (Labour), Mr Vinod Vaish, the group reviewed the extant labour laws with reference to the requirement of employment generation, productivity, competitiveness, economic reforms and with due regard to the needs of special sector such as small-scale industries, information technology, SEZ/EPZ/EOUs. It also reviewed schemes pertaining to social security with particular reference to retrenched workers and implementation of labour laws, including reporting requirements, inspection and simplification.

The group said the review of labour laws must be done in a manner that fosters a conducive climate for investment, which in turn could lead to accelerated growth and thereby additional demand for labour. Labour laws are stated to restrain expansion of em ployment and as such, the reforms in labour laws are urgently called for with a view to achieving sustainable growth and higher employment. Even as there is a dire necessity to execute requisite amendments in the plethora of labour laws, it is equally im portant to ensure adequate safety net for the workers for sustainable growth, it noted.

In the case of SEZ/EPZs/EOUs, it suggested exemption of EOU/EPZ from the provisions of Contract Labour (Regulation and Abolition) Act and delegation of powers of the Labour Commissioner to the Development Commissioners of EPZs. Other suggestions for the export enclaves encompass, among others, declaration of EOU and EPZ units as ``public utility services'', under the Industrial Disputes Act and grant of permission to employ women in night shifts in EOU/EPZs.

The Trade Unions Act could be amended to prohibit outsiders from assuming leadership of trade unions in these units and flexibility could be given to the units to dismiss from service such employees who have gone on illegal strike and setting up exclusiv e Special Industrial Tribunals for SEZs and EPZs so that these could accord top priority to settle the disputes.

On SSIs, it said the enforcement of various labour laws relating to the SSI units fall under the jurisdiction of State Governments. It is noted that the administrative regime in respect of furnishing of reports and inspections has led to "disproportionat e regulatory burden'' being cast on the small scale units. The extant system might be replaced by a system of ``self-certification'' wherein reports submitted on various labour laws by SSI units are self-certified and this might be treated as prima facie compliance.

It has further recommended that a system could be evolved wherein inspection under the labour laws in SSI units could be carried out on the basis of complaints by stakeholders like neighbours, workers or when absolutely needed in the interest of safety o f workers. The system of random inspection of a certain percentage of units on annual basis on a well- identified criteria in a transparent manner could also be followed, it said.

In unequivocal terms, it said the Inspector of Labour Laws should play the role of facilitator to the industry rather than that of policing the industry. The quality of inspection could be improved and the procedure could be simplified by adopting one or more approaches such as selective inspection, inspection on receipt of complaint, self-certification and simplification/ reduction in the number of returns under the labour laws.

The information technology industry should be kept free from inspection related harassments and that inspections should be resorted to only when they are absolutely necessary. Routine and periodic inspections of IT establishments under labour laws might not be necessary.

G. Srinivasan