Survey calls for Factories Act amendment

At a time when job losses are on the rise worldwide, the pre-Budget Economic Survey has suggested doing away with the rule of procuring prior government permission to retrench employees and simultaneous increase in compensation for the laid off.

The survey has also suggested amendments to the Factories Act and Contract Law.

Presently, a retrenched employee is given 15 days of wages for every year of service as compensation. Further, a company has to get permission from the government before laying off a person as per the Industrial Disputes Act.

"This (permission from the government) needs to be removed with simultaneous increase in compensation from the present 15 days wages for every year of service," the survey noted.

Moreover, the report has called for amendments in the Factories Act to increase the work week to 60 hours and daily working hours to 12, to meet seasonal demand. At present, the work week is 48 hours.

"Factories Act needs to be amended to increase work week to 60 hours (from 48 hours) and daily limit to 12 hours to meet seasonal demand through overtiime," the report said.

The Economic Survey has suggested that Contract Law should also be amended, which would help in utilising such labour mainly in non-core activities.

In addition, the survey has observed that labour laws should be applicable to companies that pay wages to contract labour.

"Contract Law needs to be amended to allow use of contract labour in non-core activities or when the activity is of intermittent nature during the year.

"Labour laws should be applicable to the contract labour providing company that pay their wages," it said.