India Set to Overhaul Labor Law

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Photo by: sustainable sanitation/flickrMay 21 – The Indian government has announced plans to revamp its labor law to make it easier for both employees and employers to settle disputes.

This may mean that the new law will provide more avenues for resolving labor grievances out of court. Companies with a minimum of 20 employees may be required to have an in-house grievance redressal scheme that should settle disputes within 30 days that adds an extra  management burden for small companies.

India’s current labor law has been in place for 63 years. The new law will be a boon for retrenched employees that will be given direct access to labor tribunals where they can challenge their dismissals within 45 days as opposed to waiting for years, a senior official of the labor ministry, told the Economic Times.

“For industries such as business process outsourcing that have a high turnover rate in human resources, the internal grievance redressal mechanism would be preferred to approaching the government as it would save a lot of time and money,” said Amitava Ghosh, head of the regulatory team at Teamlease Services.

To make the new law effective, labor courts will be given the same authority as civil courts to implement rulings to make it a legitimate alternative dispute area.There are also plans to increase wage limits for supervisors from from Rs. 1,600 to Rs. 10,000 a month.

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