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Firms may be allowed to retrench 300 staffers without government permission - NEWS
Maharashtra will likely allow
companies to retrench up to 300 employees without Government permission soon.
In fact, if sources are to be believed, the number could even go up to 1,000.
Earlier, companies were free to retrench only up to 100 employees with Government sanction.
The Government defense is that the State
will encourage investments and growth of industries and will help smaller
companies unable to sustain themselves to shut shop without much hassles.
"If a company which has employed up to 300 workers is not able to sustain,
it can shut shop without Government permission," an official said.
A similar move was recently introduced in the
BJP-ruled Rajasthan as well. The Maharashtra move comes weeks after Prime
Minister Narendra Modi announced a slew of labour reforms at the Centre.
Is the move employee-friendly?
No, say trade unions. They fear it
can have serious implications, given the sky-rocketing real-estate prices in
Mumbai and nearby areas. Annasaheb Desai, Mumbai unit president of Bharatiya
Mazdoor Sangh, believes because of the soaring realty prices, it will be far
more profitable for a factory owner to sell off his factory to a promoter who
might develop a shopping mall there.
How will government protect employees?
A senior Government official said
that the reform may come with certain clauses like 'change of user'. "We
are contemplating putting the clause, so that a plot that is being used for a
factory cannot be used for any other purpose. That can reduce chances of
misuse," he said.
How many small factories are there?
According to Tapan Sen, General Secretary of the Centre of Indian Trade Unions, "almost 71.2% of factories
in the country employ up to 50 workers. Only a handful employ more than 1,000.
This move will only encourage the 'hire and fire' regime in almost 90%
What will be the fall-out in the state?
According to Desai, even a small
factory employing 200 workers stands on a plot measuring a minimum of 10 acres.
Desai fears that once the new reform comes into place, hundreds of factories in
the state may shut. Sen says Government records show Maharashtra has the
highest instances of factory closure, followed by Gujarat.
Will the trade unions protest?
Desai feels though reforms of
certain labour laws are necessary, "they should not be implemented without
consulting us." Sen warns of an eventual backlash from the labour forces
and extremism in workplaces.