Foxconn Deal: Karnataka Labour Laws in Focus, Tamil Nadu May Follow
Contents News/Article Date: 31st March 2023
Relating to which Act: The Indian Constitution grants the Central and state governments the powers to enact laws to protect the employees and foster a professional work environment. Based on the industry, nature of the work, number of employees in the company, location, and more, there are various legislations like the Industrial Disputes Act 1947 (ID Act), Factories Act 1948 (Factories Act), and Shops and Establishment Acts in relevant states (S&E Act).
Applicable to which State: Acts and Rules are applicable to all States
Type: Rediff news report
Pertains to: Establishments and Employees in all types of Organizations running businesses for profit or non-profit
Relevance of this news: Karma Global is in the business of HR Services, Payroll, Outsourcing, and Regulatory Compliances right from its inception in 2004 and since then, has brought in a lot of efficiencies and technological upgradations with experts on its role, to ease the hassles of Payroll Processing, Temp Staffing, On-boarding, Employee Life Cycle, Statutory, Regulatory, and Payroll compliances by providing customized solutions to all its elite clients.
Now Karma Global is also fully in labour compliance for nearly 18 years and is helping both establishments and workers for the fulfillment of obligations as per the laws of the land. It has over 200 staff, both direct and indirect on its rolls and operates on Pan India basis. Recently, it has diversified into foreign shores as well, into countries like the US, UK, UAE, Canada, and South East Asia for handling payroll, outsourcing, recruitment, compliance, and governance.
Karma Global handles the obligations of all provisions contained in the labour acts and rules. Employees are entitled to several benefits under the Employment Act, including annual paid leave, sick leave, maternity benefits, paid public holidays, etc. Employers must ensure that they meet all of the Act’s standards and that the contract conditions reflect this.
Businesses must comply with the following requirements of the Act in particular:
- Minimum wage
- Maternity benefits
- Revision of wages
- Safer work environment
- Adaptive work culture
- Issuance of employment contracts
- Social contributions
- Health care and insurance
- Holidays and annual leave
- Termination, severance pay, grievance handling, redressal
And in this instance: Allowing 12-hour shifts for all and night-time work for women was meant to benefit software firms, but is said to have clinched Foxconn’s Rs 80 billion investment.
Foxconn’s decision to invest Rs 8,000 crore (Rs 80 billion) in Karnataka, cleared by the state government on March 20, has brought into the limelight the recent changes in the state’s labour laws allowing 12-hour shifts in factories and night-time work for women.
Subject: Foxconn deal: Karnataka Labour Laws in Focus, Tamil Nadu may follow
Appended is the complete news item
Foxconn Deal: Karnataka Labour Laws in Focus, Tamil Nadu May Follow
Source: Redif News
Allowing 12-hour shifts for all and night-time work for women was meant to benefit software firms, but is said to have clinched Foxconn’s Rs 80 billion investment
Foxconn’s decision to invest Rs 8,000 crore (Rs 80 billion) in Karnataka, cleared by the state government on March 20, has brought into the limelight the recent changes in the state’s labour laws allowing 12-hour shifts in factories and night-time work for women.
The changes had gone almost unnoticed when they were passed in the state assembly on February 24 as part of the Factories (Karnataka Amendment) Bill 2023 without a debate as the Opposition walked out in protest.
Earlier, a factory shift could not be more than nine hours and women were not allowed to work night shifts.
The new law also increases the overtime hours allowed in three months from 75 to 145.
“All [labour] laws should be amended to enable working 24/7, which will lead to greater economic activity, more safety for people, better public transport, and a great number of jobs,” he said.
“We are not saying that flexibility should lead to exploitation,” Pai added, “we are saying that people should be able to work 24/7 in certain shifts.”
People in the know say the changes played a vital role in clinching the Foxconn deal.
The world’s largest electronics manufacturer, best known for making Apple’s iPhones, is understood to have been in talks with the state for a while over these laws.
Interestingly, the intended beneficiary of the new laws was the software sector.
“The new rules were targeted at the software industry. These rules are beneficial for people who are working in the software industry as they can wind up six days’ work in four and take three days off every week. This is not to force anybody to work,” Karnataka Labour Minister Shivaram Hebbar told Business Standard.
The state government said the reforms included ensuring the safety of workers, especially women.
The relaxations are subject to a cap of 48 hours of work in a week and the provision of a safe and healthy work environment for women during night shifts: from seven in the evening to six in the morning.
An official in the Karnataka industries ministry said the labour reforms were not meant to woo only Apple and its manufacturing partner, Foxconn.
“The fact is that these reforms were done at least three weeks before the Foxconn investment proposal came to light,” the official said.
On March 20, the 61st meeting of Karnataka’s state high-level clearance committee approved 18 projects with a total investment of Rs 75,393.57 crore (Rs 753 billion), including the Foxconn project.
K Krishna Moorthy, CEO and president of the India Electronics and Semiconductor Association, said that liberalization of labour laws will have a multiplier effect on the start-ups and semiconductor manufacturing ecosystem in the state. He expressed the hope that other states will follow the Karnataka route on labour reforms.
Already, Tamil Nadu, Karnataka’s neighbour, is planning to make its factory shifts more flexible, which may suit Apple contractors such as Foxconn, Pegatron, and Wistron.
Moving to India was part of the strategy by the global majors to become less reliant on manufacturing in China.
Reports say Apple was looking to move at least a quarter of its manufacturing to India by 2025.
“It is true that aggressive lobbying by Apple and its supplier Foxconn and other companies may have resulted in the recent legislation,”.
“Once implemented, the new laws would have a long-term impact on the technology, start-up, and semiconductor ecosystem not only in Karnataka but also in the country overall,”
This could help Karnataka burnish its pro-industry credentials and bring in more investors.
The state has realized 52 percent of the Rs 9.8 trillion investment proposals that came up in the global investors meeting late last year.
This contrasts with the previous realization levels, which never exceeded 15 percent.
Only 14 percent of the Rs 3.94 trillion worth of MoUs signed in 2010 were realized.
In 2012, the strike rate dropped to 8 percent of Rs 6.7 trillion. In 2016, it was 15 percent of Rs 3 trillion.
IT industry veteran and former Infosys director are batting for more flexible working hours.