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Maharashtra government amends key contract labour law, trade unions upset

In a major reform of a key labour law, the Maharashtra government has issued a notification amending the Contract Labour (Regulation and Abolition) Act 1970 which will substantially reduce the number of establishments covered by this law in the state.

Earlier, the law applied to units with 20 or more workmen. After the amendment in Maharashtra, it will apply to units with 50 or more employees. As a result, smaller units or contracts covering between 20 and 49 workers will no longer come under its purview.

The reform is in keeping with the state's Make in Maharashtra campaign. The new law called the Contract Labour (Regulation and Abolition) Maharashtra Amendment Act 2016 had been passed in the assembly and signed by the governor. The Contract Labour Act regulates working conditions including the payment of wages on time. It also mandates the provision of holidays, hours of work and terms. It demands the provision of canteen, rest-room and creche facilities. It also requires contractors to be licensed and establishments employing contract workers to be registered with the government. Officials say the move will boost ease of business and enhance the employment of informal workers. However, the state's trade union joint action committee says the amendment will erode workers' rights and plans to challenge the amendment in court.

"As a result of the amendment, a large number of smalland medium-scale establishments will be out of the purview of the Act," said Sanjay Wadhavkar from the Hind Mazdoor Sabha. "Larger establishments will also employ four to five sets of 40 contract workers to avoid coming under this law."

This means employers will avoid providing statutory benefits, including provident fund, the minimum wage and leave to contract workers in smaller units, says Vishwas Utagi, convener of the state's trade union joint action committee. "We hope to challenge the amendment soon in the Bombay high court," he said.

The reform of labour laws has been high on the agenda of the Centre's Make in India campaign, with states like BJP-ruled Rajasthan and Madhya Pradesh taking the lead. In 2015, Maharashtra amended the Factories Act 1948 to reduce the number of units coming under its purview. It also introduced self-certification for 16 labour laws, including the Maternity Benefits Act 1961 and Child Labour Act, 1986.