the period of foreign rule, the British introduced industrialisation
and thereby heralded the advent of labour sector in this
country. With the emergence of native industrialists the
labour sector expanded. The pace of industrialization and
the expansion of labour sector was accelerated by the first
and second world wars. In the early years the workers organised
to obtain wages to meet limited needs for livelihood and
convenience to work decently. Labour struggle became a part
of national movement. The concepts of freedom, democracy,
secularism and socialism, were indoctrinated in the labour
movement, thanks to agitations for rights of workers. The
trade union leaders of yesteryears played a glorious role
in this respect.
are still striving to ensure social security measures envisaged
in the directive principles of the Indian Constitution such
as right to work, living wages, security in work place etc.
Today the economy of the nation itself is facing grave crisis
due to the impact of globalization, and the labour sector
is in the dark shadows of economic and social problems.
The threats faced by the economy of the nation, industry,
agriculture and thereby the labour sector are due to the
impact of the global pressures and hence beyond our control.
Yet we are compelled to defend ourselves to protect our
economic and social security. We have to initiate an urgent
action plan in this regard. Labour Policy is a step by this
Government in this context.
LABOUR SECTOR TODAY
1. It is the declared objective of this Government to formulate
a new Labour Policy which is responsive to the changing
needs of the Labour and Industry and to suit the requirements
of economic development.
Governments have formulated Labour policies as a part of
Industrial policy. This has also been a constraint in formulating
labour policies independent of the industrial policy. Consequent
on the grave crisis in the Indian economy, significant reforms
based on liberalisation, globalisation were enforced from
1991. It was these economic reforms that dictated the industrial
policy from then on. Only after a couple of years of reforms
that negative effects on other sectors of polity came to
be felt, the most affected being the Labour .
Though the new industrial policy was aimed at speedy industrial
growth, Kerala has not been able to share in the spurt of
industrial activity. The tardy growth in industrialisation
has accentuated the problem of unemployment and the numbers
have increased to 43 lakhs.
The state has a work force of around 83 lakhs of which 19
lakhs are women workers. The vast majority work in the unorganised,
or informal sector; sometimes in conditions of partial employment,
often without adequate access to decent wages or Social
Security protection. The attention of Government have been
largely focused on protecting the working conditions and
the rights of the relatively privileged minority of workers
in the organised sector.
Unemployment is one of the basic problems confronting the
State, and Government have to spur the creation of new employment
opportunities. There are presently around 43 lakhs of young
people registered on the unemployment rolls of the State.
Productive employment is being created in the States
economy at very low rates. Despite the relatively high skill
and adaptability levels of the States workforce, labour
market has not been perceived as a positive factor by prospective
investors in Kerala.
Labour Sector problems in Kerala are:-
The high rates of unemployment and underemployment.
The low rates of productive employment creation.
The unprotected conditions in the unorganized sector.
The perception of adversarial labour relations.
The inadequate levels of skill creation and training.
The inefficiently targeted Social Security regime.
Labour legislation that is becoming out of tune with the
The competitive market reform policies have turned many
industrial units unviable. The plantation sector is also
facing a grave situation
to unremunerative prices for commodity products like Coffee,
Tea and Rubber. All this has led to retrenchment and closure
of many industrial units and estates in the plantation sector.
The forces of globalization, the dismantling of trade barriers,
the new production paradigms in `sunrise` areas like information
technology and biotechnology, the practice of homeworking,
intangible value addition and other phenomena are making
their presence felt in India also. The organised sector
worldwide is moving away from an employment security regime,
towards an income security regime. The new environment demands
a high degree of adaptability and flexibility in the Labour
market, but the challenge before the government is to ensure
that this flexibility is compatible with Labour market security,
including protection against arbitrary loss of employment,
arbitrary reductions in income and unhealthy work practices.
Hence labour policy initiatives are aimed at creating a
favourable environment for a planned effort, facilitating
industrial promotion and revival along with legislative
and structural changes to bring in an environment devoid
of restrictive labour practices, but protecting the rights
and interests of the workers.
Given this context, the policy objectives of Government
arise from the following strategic goals.
fostering an enabling environment for rapid employment generation
through enhanced private and public investment, in order
to achieve the goal of creating 15 lakhs of new jobs in
the coming five years.
Retraining and rehabilitation of retrenched labour in closed
and sick units.
improving working conditions, providing decent wages and
basic lifeline Social Security for workers, especially in
the unorganized sector.
minimizing adversarial Labour relations and providing Labour
market security, employment security, work security, and
income security for the working population.
Kerala has made considerable progress in extending Social
Security coverage through the mechanism of tripartite welfare
fund boards. However, many of these schemes lack clear perspective,
and need to be restructured. Their delivery mechanisms are
often inefficient and expensive. A Frame Legislation
will be enacted to bring in a degree of perspective and
order for all Social Security initiatives, aimed at consolidating
the current set of enactments, executive orders, provide
guidelines for working out future schemes and obviate the
need for individual legislations, apart from providing
a standards set of basic operating polices and procedures.
Extending the coverage of the social security net to cover
vulnerable workers in the unorganised sector is one of the
major priorities of the Government. New welfare schemes
will be introduced for domestic workers, self-employed workers
in the service sector and other unprotected categories.
These new schemes will be introduced by utilizing existing
administrative structures. The delivery system will be computerized
to facilitate efficient disbursement; and Social Security
cards will be introduced to facilitate universal access
and to prevent leakage and malpractice.
The fund management of the welfare fund boards will be improved
by deploying professional expertise, keeping in view the
twin objectives of fund security and income generation.
An investment policy to maximise income and control expenditure
that would be uniformly applicable to all Boards would be
formulated. A comprehensive membership reverification drive
will be conducted in all the welfare fund boards to identify
and eliminate fraudulent registrations.
The financial resources of Government available to support
the Social Service system are limited. Government will endeavour
to reprioritize the allocation of funds to ensure that vulnerable
workers and essential schemes benefit the most. The welfare
fund boards would also have to be self-sustaining, drawing
upon the resources of community and non-governmental organisations.
III. EMPLOYEE -EMPLOYER RELATIONSHIPS
It is a fact universally acknowledged that one of the impediments
to the growth of investment in Kerala has been the poor
image still subsisting from the years of Kerala`s labour
militancy. Even though this appears to be largely a thing
of the past, this residual perception hampers industrial
development. We are in an era when the various State and
regions are in intense competition for attracting investment.
The State`s youth have paid a heavy price on account of
inadequate employment creation arising from the very low
levels of investment in Kerala. Given the relatively high
knowledge levels, skills and adaptability of the worker
in Kerala, labour should be projected as a positive factor
while considering Kerala as an investment destination. Hence
Government would endeavour to promote ideal employee-employer
relationships and to curb undesirable labour practices and
adversarial labour relations through suitable legislation,
through conscientisation, awareness raising and appropriate
With in the purview of the existing laws, entrepreneur will
have rights for engaging labour and shall not be inhibited
by any claims from sons of the soil, displaced
persons from acquired land, construction, contract labour
and dependents of employees.
All restrictive labour practices including intimidation,
gherao, harassment of managers and their families,
and extortion of any kind will be treated as criminal offences
and dealt with accordingly.
Management will have the prerogative to deploy workers in
any section of the unit as part of a multi craft approach.
Government will endeavour to prevent stoppages of work in
projects on account of industrial disputes; especially during
the first five years of the project. The Government will
also severely discourage deleterious practices such as go-slow.
The new economic policies have substantially reduced the
intervention of government in running business. Government
is actively pursuing steps to make the regulations for setting
up and managing industry simple and transparent in tune
with the new liberalization policies. The state has entrenched
trade unions led by knowledgeable and experienced leaders.
Government will encourage by- partism in industrial disputes.
Necessary amendments will be enacted to ensure presence
of employers and employees in conciliation proceedings.
An arbitration machinery will be constituted to settle disputes
not resolved by conciliation.
Government will also encourage long term settlements in
industries focussing on productivity and sound managerial
To prevent the occurrence of disruptive wildcat strikes
and lockouts, Government will declare certain vital industries
and establishments as public utilities under
the Industrial Disputes Act.
Special conciliation mechanisms will be set up by Government
if, required, exclusively for entrepreneurs and projects
with investment of Rs 150 crores or more in order to ensure
that labour disputes are handled on site in a pro-active
The viability of a project depends on the completion of
construction and commissioning within the time and cost
estimate. Work stoppages whether due to labour dispute or
non-fulfillment of obligations by builders will not be permitted.
Industrial Relations Committees have the pivotal role to
create an atmosphere of complete understanding between labour
and management. Tripartite industrial relations committees
will be set up for key sectors and industries. The Government
will endeavor to accord statutory legitimacy and protection
to these committees.
IV. LABOUR LAW REFORMS
Many of the labour laws which were enacted at a time when
the production paradigm and environment were different,
have become outmoded. The Government of India is amending
seminal labour legislation like The Industrial Disputes
Act, The Trade Unions Act, The Contract Labour (Regulation
and Abolition) Act and others. The Second National Labour
Commission which is looking into the new legal regime in
the sector is expected to submit its report shortly. An
expert committee will be constituted to study and make recommendations
for simplifying and amending labour laws and rules.
Government will attempt to reduce the needless proliferation
of Trade unions in establishments, without detriment to
the rights and interests of the work force. Legislation
will be enacted for conduct of referenda and laying down
norms for the recognition of Trade Unions in industries
There is a need to expedite the industrial dispute resolution
mechanism of the labour judiciary, including the Labour
courts, Industrial Tribunals, Workmens Compensation
Commissioners etc. Government will make requisite amendments
to the rule and procedures governing the functioning of
these bodies to speed up and streamline this process. The
provisions for publication of the awards of Labour Courts
and Tribunals in the Government Gazette will be amended
to expedite enforcement.
The Government will also enact requisite State amendments
to the Industrial Disputes Act to enable workmen or management
to approach Labour Courts/Industrial Tribunals directly,
if the conciliation process proves to be ineffective.
The Kerala Headload Workers Act 1978 is an enactment providing
social security net to a category of workers. However certain
unforeseen practices relating to loading and unloading have
since become an irritant phenomena perceived as a stumbling
block for industrial growth in the State. A separate legislation
to do away with these practices without affecting the rights
and interests of the labour will be enacted.
WORKPLACE SECURITY AND INCOME SECURITY
The rapidly changing economic environment accentuates the
need to fortify the enforcement machinery of the Labour
Department to ensure that workers rights including income
security & work security are adequately protected. Kerala
has a long history of activism for securing the rights of
the working population. The Government will endeavour to
ensure that the working conditions and the rights of workers
are protected by enforcing welfare legislation.
A special monitoring system will be instituted for ensuring
work place security and dignified working conditions for
Enforcement committees will be constituted at district levels
on a sectoral basis for monitoring the enforcement of statutory
rules, welfare measures and safety conditions of workers.
For the effective implementation of the Minimum Wages Act,
Government will expand the category of employments
under the schedule to the Act. Wages shall be revised for
each category of employments without delay and the payment
of minimum wages effectively supervised. Government shall
take initiative to implement minimum wage for South Indian
States, as part of the measures to implement the national
minimum wage policy.
The Child Labour (Prohibition & Regulation) Act will
be aggressively enforced and Government will endeavour to
make Kerala the first State in the country to be free of
Outbound migrant workers, especially women from Kerala require
special attention, especially in sectors like fish processing.
Government will strengthen the monitoring system for migrant
workers to ensure proper implementation of the existing
laws and to minimise the chances of their exploitation by
intermediaries or principal employers.
The quality of medical care made available under the Employees
State Insurance scheme has to be improved. Government will
endeavour to provide better access to modern medical facilities
to insured employees under the Employees State Insurance
Scheme. The ESI coverage will be widened in order to increase
its area of operation.
The enforcement of laws & measures like the Factories
Act and Rules for assuring workplace security and for the
abatement of occupational hazards and diseases will be made
more effective. Enforcement of Acts relating to industrial
safety and prevention of pollution would be strengthened.
Special attention will be focussed to identify hazardous
industries and sectors including those in the unorganized
The labour enforcement machinery is grossly inadequate to
cope with the multitude of labour laws and the various establishments
that require surveillance. The enforcement strategy will
be to reduce the burden on the existing machinery and to
encourage employers and other stakeholders to proactively
participate in the implementation of this strategy on a
voluntary compliance basis.
accounts for 71% of production of plantation crops in the
country. About 14.5 lakh families are dependent on plantation
sector for livelihood. Excluding the marginal farmers the
labour employed in the plantation sector comes to about
4 and a half lakhs, while the total number of factory workers
in the industrial sector is 4.51 lakhs. This points to the
importance of plantation sector. Problems faced by plantation
sector are mainly due to unremunerative prices for products
and lack of productivity. Estates remain closed and those
functioning are not profitable. Increased productivity coupled
with scientific management, technological innovations can
only salvage the plantations from ruin. Government will
encourage and promote Non Resident investment in this sector
will prepare special rehabilitation packages for workers
who are displaced by the closure of industries and sick
sectors. Government is particularly concerned about the
conditions and prospects of workers in sectors that have
been severely affected, including the plantation sector,
the Beedi sector, the Cashew, Coir, Handloom and the Agricultural
sector. This package will include retraining and resettlement
schemes where required.
EMPLOYMENT REGISTRATION AND INDUSTRIAL TRAINING
The functioning of Employment Exchanges needs to be completely
overhauled. These exchanges will be computerised over the
next 5 years and the database updated. It is expected that
private sector employers will also source their requirements
from the employment exchanges when this computerisation
process is completed. The Government will also play a more
proactive role in enabling access to employment opportunities
The quality of industrial training provided through the
network of Industrial Training Institutes / Industrial Training
Centres is out of phase with current employer requirements,
and needs to be revamped. The curriculum and the course
content of these Industrial Training Institutes/ Industrial
Training Centres will be completely restructured in line
with prospective employer requirements.
INSTITUTIONAL AND ADMINISTRATIVE ARRANGEMENTS
The Labour Department will be modernised using the tools
of Information Technology to ensure meaningful labour law
enforcement, efficient delivery of social security, and
harmonious industrial relations. The functioning of the
department will be made transparent. A joint cell of the
Labour Department and Industries Department will be constituted
to study what changes need to be made in laws, rules and
regulations and in the administrative and institutional
arrangements to achieve these objects.
Kerala Institute of Labour & Employment
In the background of a fluid and uncertain scenario emerging
in the industrial scene, labour has to be prepared to face
the challenges ahead. The worker has to be educated. Awareness
of the problems in general and problems of the particular
industry is inevitable for effective and collective bargaining.
The workers as well as the leaders of the trade unions has
to cope with the changing demand. Only an enlightened labour
force can increase productivity and speed up the industrialisation
in the state. Workshops, seminars, orientation sessions
will be conducted. KILE has a very pivotal role to play
in this regard. The scope and functioning of this institute
will be enhanced in tune with the National Institute of
Development Overseas and Employment Promotion Consultants
prime asset of our state is undoubtedly the army of unemployed
youth estimated to be around 60 lakhs. This human resource
available with us has to be channeled to productive sector.
Skilled labour is the prime need in the International labour
market in view of the rapid technological advances. Our
state is blessed with a vast army of skilled and qualified
persons on the look out for suitable placements in India
and abroad. Identifying and placing the candidates is a
very challenging task. Millions of job opportunities are
available in different parts of the world. It is envisaged
that ODEPC will act as the catalyst between the job and
the job seekers.
A policy progress monitoring team will be constituted with
Secretary (Labour) as Convenor to review the implementation
of the policy and consider necessary and appropriate interventions
in accordance with the altering needs and demands of labour
in view of the fast moving changes in the industrial scene.
Review of progress of implementation of the policy will
be prepared by the team for the consideration of the Minister
( Labour and Rehabilitation) and the Council of Ministers.
This policy is the statement of the concerns of this government
for the welfare and protection of labour and to endeavour
to empower them and improve their quality of life. Increased
production, productivity coupled with a harmonious and peaceful
labour relations and a new work culture only will create
a conducive climate for rapid industrial investment and
growth. This will ensure the successful solutions to the
twin problems of retrenchment of labour and creation of
new jobs for the unemployed. Government is also committed
to providing labour market security, income security and
decent working conditions for the working population. This
labour policy aims to carry forward these objectives. These
aims can be attained only if there is tripartite and mutually
beneficial partnership between employers, workers and the
Creative measures to attract public and private investment.
15 lakh new jobs in the coming five years.
A unified and consolidated legislation for social security
New Social security schemes for workers in the unorganised
Social security cards for workers.
Unified and beneficial management of funds of Welfare Boards.
Reprioritisation of allocation of funds to benefit vulnerable
Model employee-employer relationships.
Long term settlements based on productivity.
Vital industries and establishments declared as `public
Special conciliation mechanism for projects with investments
of Rs.150 crores or more.
Industrial Relations committees in more sectors.
Labour Law reforms in tune with the times. Empowered body
of experts to suggest required changes.
Referenda for recognition of trade unions.
Statutory amendments for expediting and streamlining the
mechanism of Labour Judiciary.
Amendments to Industrial Disputes Act in tune with the times.
Efficient functioning of Labour Department.
More labour sectors under Minimum Wages Act.
Child labour act to be aggressively enforced.
Modern medical facilities for workers.
Rehabilitation packages for displaced workers.
Restructuring in functioning of employment exchanges. Computerization
and updating of data base.
Revamping of curriculum and course content in industrial
Joint cell of labour department and industries department
to study changes in laws and rules.
Kerala Institute of Labour & Employment to be upgraded.
Policy progress monitoring team to review progress of implementation