[vc_row][vc_column][vc_column_text]The Karnataka State Cabinet has approved the proposal to raise retirement age of workers in the private sector from 58 years to 60 years. With this, the State
Government will shortly initiate the process to amend the Karnataka Industrial Employment (Standing Orders) (Amendment Rules, 2009) to increase the retirement age. The Order is expected to come into effect in May.
The decision is expected to benefit 21 lac employees in the private sector. There are about 7 lakh workers employed in 6,950 shops and commercial establishments in the state and 14 lakh in the 4,032 manufacturing industries.
Expressing his dismay at the Government’s move to increase the retirement age from 58 to 60 years in the private sector, PIA President Sri R. Krishnamurthy, observed that this might particularly hurt factory owners and industrial establishments. “It is commonly experienced that in factories, the health of a worker as he gets into his late 50s deteriorates and also leads to less productivity. So when the retirement age is pushed ahead by another 2 more years to 60, the business owner will suffer the most,” he said and added that “the issue becomes even more of a problem in the context of high unemployment prevailing in the industry. We should also take note of the fact that today we have a very strong social security for employees like gratuity and PF, among other benefits.”
The PIA President suggested that the State Government could still re-examine the issue after taking into account the views of the industry and business owners in the private sector, who are the most vulnerable and directly affected by this change in the retirement age of workers in the private sector.
Inspections of Factories
The Labour Department will conduct inspections to ensure that Employers implement the State Government’s decision to enhance the retirement age of employees in the private sector from 58 to 60 years. According to reports, the close vigil will continue for two years once the government’s decision comes into effect.
The hike in retirement age will be applicable to all private establishments which have employee strength of 50 and above, irrespective of whether employees are hired on contract or otherwise. It will apply to companies that fall under the Karnataka Factories Act, 1948 and Karnataka Shops and Commercial Establishments Act, 1961. Once the rule is notified, all companies will have to comply with it or face legal action. However, those employed in the information technology (IT) sector are not covered since the IT companies enjoy a blanket exemption from the Industrial Employment Act, and other labour legislations.
The proposal will come into effect from the day the labour department gazettes the final notification by bringing in an amendment to Schedule – 1 of Karnataka Industrial Employment (Standing Orders) Rules, 1961 which pertain to the retirement age. The draft notification was issued by the department on December 7, 2009. The Government is yet to notify the rule. According to media reports, the new rule will not apply to information technology, information technology enabled services, start-ups, animation, gaming, computer graphics, telecom, BPO and other knowledge-based industries at least till January 25, 2019.
MSMEs Unhappy with Hike in Bank Charges
With effect from April 1, banks like the State Bank of India have hiked the bank charges on deposits and withdrawals.
A lot of industries from Peenya have complained to PIA about the hike and said that this is going to erode their margins which are already very thin due to fierce competition in the market. In view of the feedback received from the Members, PIA will take up the issue with the appropriate authorities, the RBI and the Ministry of Finance and represent its case for a reconsideration of the hike.
According to PIA President Sri R. Krishnamurthy, small industries will be the worst hit by the hike in bank charges. “According to my sources, some private banks are charging a minimum Rs.150 per transaction for deposits and withdrawal after four free transactions per month. Even the State Bank of India is reportedly charging Rs 50 per transaction both on current and saving banks account w.e.f. April 1, 2017, while bank deposit rates have come down. The arbitrary levy on cash withdrawals, maintaining minimum balance in bank accounts, operations of ATM etc has become a big nuisance to small industries. We urge the RBI and the Finance Ministry to heed the voice of the small industry and repeal this hike immediately,” he said.[/vc_column_text][/vc_column][/vc_row]
