MUMBAI: The Shiv Sena has changed its stand on the state government's bill to reform the law to ease factory closures and retrenchments, much to the BJP 's chagrin.

The Shiv Sena had initially supported labour reform in a cabinet subcommittee, but later backtracked and opposed it. A meeting of trade unions called by the state labour department this week revealed the depth of resistance to the reform with the unions across party lines threatening a state-wide strike.

The unions opposing the reform include the Shiv Sena's Bharatiya Kamgar Sena. The proposed reform of the Industrial Disputes Act 1947, seeks to allow all 37,234 factories in the state the option of closing down and retrenching workers without state permission. The proposals also offer higher compensation to sacked workers. Industry has supported the reform, saying it will release companies from the burden of keeping loss-making units running. The reforms will also generate more employment as companies will feel encouraged to set up more units, knowing they can pull out of failing ventures, industry representatives said.

However, trade unions across party lines have opposed the reform and plan to take to the streets against it. The trade union joint action committee, which includes the Sena union Bharatiya Kamgar Sena, said the reforms will lead to indiscriminate industrial closures and rising unemployment. Currently, the Industrial Disputes Act 1947, allows factories with less than 100 workers to close down and retrench workers without seeking state clearances. There are 32,443 such factories in the state employing 7.95 lakh workers.

The state labour department has proposed that the exemption be extended to factories less than 300 workers, a reform already in place in Rajasthan and Haryana. This will add 3,426 factories with 5.84 lakh employees to the exempted list. The reforms also suggest raising the current compensation of 15 days per year of continuous service to 45 days. However, the proposed reforms go beyond other states by suggesting that factories with 300 or more workers also be allowed to close down and retrench workers without state clearances if they give 60 days' notice and 60 days' compensation to workers for each year of continuous service.

