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Karnataka News: Industry body asks Karnataka government to relax rules on layoffs, wages

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BENGALURU: The Karnataka Employers’ Association has urged the state government to relax the rules regarding layoffs and not insist on payment of full salary amid the Covid-19 crisis, saying businesses have suffered due to the lockdown and could face closure without remedial measures.

The industry body, which counts Wipro, Volvo, and Sobha Developers among its more than 800 members, has written to the state labour minister requesting modification of the government’s advisory regarding layoffs and permission to declare layoff as and when necessary. The association represents businesses in the IT/BT, automobile, real estate, manufacturing and other sectors.

“We have placed this request with the government to prevent job losses. If the government does not allow us to cut down on salaries, it will lead to closure of industries and job losses,” association president BC Prabhakar told ET. “The government should modify the previous directives for the industry and the employment to survive.”

Prabhakar explained that in the Indian context, layoff does not mean firing of employees, but expecting them to make do with basic wages, and not insist on full payment in view of the extraordinary situation.

Soon after the announcement of the lockdown, the Centre had issued an advisory to all employers’ associations advising industries and firms to not terminate or deduct salaries of employees. The Karnataka government, too, exercised its powers under the Disaster Management Act 2005 and issued an advisory on similar lines.

The association’s letter to the minister said, “The present situation requires sacrifice not only by the employer, but also by the employees. The government should also extend necessary support to employers. This will enable them to save employment by paying lesser wages during lockdown.”

Labour minister Shivaram Hebbar told ET that he is yet to study the request. “We will take a call after accessing the situation,” he said.

Industry representatives said that while large firms and industries will sail through the situation, small players have been hit hard. “Small-scale industries that were already in trouble, will have no revenue to even pay their employees for April. The production has stopped, exports have stopped. It will take months for small industries to revive or they may just die,” said Nagaraju S, owner of Precision Sheet Metal Works.

Among KEA’s other demands is one to exempt employers from making PF contributions during the lockdown period and three months thereafter, spend ?9,600 crore from the building and other construction workers’ cess to pay salaries to construction labourers, and pay unemployment allowance from ESI Corporation. KEA has also written to the Union minister of labour and employment placing forth its demands.


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