Madhya Pradesh govt awaits Centre's nod for labour reforms

The wait of the Shivraj Singh Chouhan-led Madhya Pradesh government to usher in labour reforms in the state is far from over, as the Narendra Modi-led regime at the Centre is yet to approve its proposals to amend eight major labour laws. These proposals include easing retrenchment norms, a three-month compensation package to retrenched workers, raising overtime hours and night shifts for women.

The state government had initiated the process of labour reforms by sending the proposals in the form of a draft ordinance to President Pranab Mukherjee in October last year. After failing to secure the Centre's approval through the ordinance route, the Madhya Pradesh Assembly had, in July this year, passed a Bill to amend the labour laws, before sending it to the Centre for approval.

Though the Union labour ministry recently cleared the Bill, it was yet to be approved by the Union home ministry which gave final recommendations to the President, government sources said. As these labour laws fall under the Concurrent List (on which states can legislate, but the final approval rests with the Centre), presidential assent is mandatory.

"We were informed that the labour ministry has given a 'no-objection' to our proposals and forwarded those to the home ministry for approval," said a senior Madhya Pradesh government official. "We have to wait for the president's assent to our proposals, before going ahead with a second set of labour reforms," said a senior labour ministry official in the state government.

State government officials said Madhya Pradesh Chief Secretary Anthony JC DeSa had highlighted the pending labour Bill to Union Cabinet Secretary P K Mishra during a conference call in September.

After the National Democratic Alliance came to power at the Centre in May last year, several Bharatiya Janata Party (BJP)-ruled states proposed changes to their labour laws to create an environment conducive to both industry and workers. Rajasthan took the lead, easing rules for retrenchment, contract workers and strengthening those pertaining to trade unions. It presented these proposals to the state Assembly in August last year and secured the President's nod in November.

Following this, Madhya Pradesh came up with a comprehensive set of proposals to amend 17 labour laws (seven related to compounding provisions) compared to Rajasthan's plans to amend three central labour laws. As the state government was keen to implement the reforms soon, it sent the proposed amendments in the form of an ordinance for the president's assent.

After six months of scrutinising the proposals, the Union labour ministry, in April this year, rejected changes to two labour laws and returned it to the state government. Subsequently, the Madhya Pradesh government presented before its state Assembly changes to only those laws approved by the Centre.

The Union labour ministry rejected the state's proposal to exempt micro industries (investment not exceeding Rs 25 lakh) from the application of seven central laws, as well as a provision to prevent workers in micro industries from setting up trade unions, among others.

In February, Gujarat had passed labour law amendments in its Assembly and, in September, the president approved the Bill. Government officials say two more BJP-ruled states - Haryana and Jharkhand - are also considering changes to their labour laws.