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PM Narendra Modi urges need to modify Labour Legislations via consensus

Seeking to pacify trade unions, which is critical to the proposed sweeping labour reforms, Prime Minister Narendra Modi on Monday said the reforms would be attempted only with the consensus among all stakeholders.

The draft labour code on industrial relations readied by the Modi government, among other things, suggests allowing more establishments to lay off workers without prior government approval, making it tough to form trade unions and bar professional politicians from becoming union leaders.

Finance minister Arun Jaitley, in his address, warned of a threat to job creation if investments were blocked and appealed to the trade unions not to persist with ideas that harm the economic activity. If we stop the fountain of investment, then employment will not increase, then economic activity will also not increase. And it becomes a threat to existing jobs.

Modi, who met leaders of central trade unions on Sunday ahead of the ILC, said talks with the unions on labour reforms would continue as the unanimous objective of all was to ensure welfare of the workforce. Attempting to merge 44 extant labour laws into four codes, the government is trying to improve the ease of doing business in line with the stated objective of turning India into a manufacturing powerhouse. The simplification of the laws, the PM said, was meant to benefit the workers and would ensure that even the poorest are able to understand their rights and seek them.

Modi also pitched for giving importance to innovation among the workers. He asked industrialists to encourage innovative workers to become entrepreneurs.

The government has already set up a high-level ministerial committee, headed by Jaitley, to deliberate on the 10-point charter of demands of the labour unions. The committee had its first meeting on Sunday.

The draft labour code proposes to amalgamate three labour laws, including The Trade Unions Act, 1926, The Industrial Employment (Standing Orders) Act, 1946, and The Industrial Disputes Act, 1947. As per the code, firms employing up to 300 workers would be allowed to lay them off without prior government approval, against the current threshold of 100 workers.

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