The lockdown following the spread of COVID-19 stalled businesses and the ordinance brought out by the State government on June 26 this year completely demolished the confidence of the industry. While industries in the rest of the country are obligated to pay compensation at the rate of 15 days wages, the new ordinance will force all industrial establishments in Goa to pay 45 days wages per annum in case they decide to reduce the strength of workmen by way of retrenchment to save their businesses or close it down due to extreme financial difficulties or for any other genuine reason.
Chairman of the Confederation of Indian Industry (CII), Goa Chapter, Blaise Costabir on the ordinance says, “An ill-conceived, hurriedly passed ordinance despite every association asking for a debate or a rethink. It will affect the investment into the State. No other state has done this and the expected central law is also looking at 15 days. What could be the objective of such an ordinance, especially at such a time is a question mark. No one can understand, especially the haste in which it was done.”
Similarly, president of the Goa State Industries Association (GSIA), Damodar Kochkar said, “I fail to understand why this ordinance in this time of pandemic. All associations of Goa – GSIA, GCCI and CII – had jointly put up our representation and personally met the chief minister twice on this topic. Labour Minister after giving us the appointment and we travelling all the way from South Goa cancelled the meeting at the last minute. Why Goa had to bring this ordinance when no other state in the country has done it, is a big mystery.”
He went on to add that, “there have been tremendous drop in orders, shortfall of raw material supply and MSMEs were not getting paid in time by big companies and even by government. Regular renewals are being made more complicated and expensive and corruption is at its peak.”
Sanjeev Trivedi, managing director, Infinity was equally vocal calling this ordinance, “An absurd amendment at a time like this when industry actually needs support to make it through an unprecedented economic downturn. The industries that are trying to make it through this slump, by cost cutting and downsizing, will probably not afford to downsize and fold up. When this happens, the employees are the worst affected. I cannot understand what the rationale behind this and why rush it through the ordinance route? Goa is the only State in the country that seems to have done this. It is probably to appease a ‘vote-bank’ which actually would hurt the `vote-bank’ the most, in case of an industry or company collapsing.”
President of the Goa Chamber of Commerce and Industries (GCCI), Manoj Caculo said “Small and medium sized industries in Goa cannot afford to pay such a steep compensation at the rate of 45 days wages per completed years of service. Since the Government was never granting permissions for retrenchment of workmen or closure of their businesses in respect of industrial establishments employing 100 and more workmen, the industry was always negotiating a deal with workmen, unions, who would base their demands keeping in mind the base of statutory compensation of 15 days wages and during the course of bargain agreeing to accept additional compensation of 5 to 30 days thereby resolving the difference and dispute amicably for maintaining good industrial relations and peace.”
He further stated that it is now expected that workmen, unions will base their demand for additional compensation over and above the revised statutory compensation of 45 days, which being not affordable will thereby result in more industrial disputes and disturbances in industrial relations and peace in Goa.
“Most other states in the country are relaxing the provisions of the Industrial Disputes Act and Goa Government too have attempted to do the same. However, while other states have kept retrenchment compensation at 15 days, only Goa Government has increased the same to 45 days,” said Caculo.
He went on to say that, “We – GCCI, GSIA, CII – had explained to the Chief Minister that with high retrenchment compensation rates investors will find Goa less attractive and this will deter them from investing in Goa. We had also pointed out that the Government of India has already passed a bill on Industrial Relations Code 2019 amalgamating Industrial Dispute Act among few other labour laws. Even under the provisions of this new code, they have maintained the same 15 days wages per completed year of service as retrenchment and closure compensation. Once this Code becomes the law and comes in force, the Industrial Disputes Act is going to get deleted from statute book. In view of all this, it is difficult to understand Government’s objective.”
President of the Kundaim Industrial Estate Industries Association, Kiran Shirsat said, “The implications of the ordinance promulgated by Goa government increasing the retrenchment compensation from 15 days to 45 days per year of service is not at all acceptable and affordable to any industry. Implication would be that the unit will be burdened by unplanned expenses. Presently the business is down to the extent of 50 per cent due to COVID 19 and in the event when you are forced to retrench the workers, it is not affordable to give compensation of 15 days forget 45 days. Whenever the workers know about this rule they will be more eager for settlement, as the business is down and then there would be strike and law and order problems.”
Former president of GSIA, Sudhin Naik said, “This ordinance is like hitting someone who is in ICU. At present due to COVID-19 etc industry in Goa is already in deep trouble. No workers, no orders and no help from banks in spite of Union government schemes which are being rolled out. There was no need for this ordinance which is non-existent in other states. Goa government is not helping as they say they do not have money. Electricity fixed charges are levied even though power is not being consumed and this is unlike other states. To come out of this it will take minimum of one year but before that many of us will become NPAs.”
