The conversation around reimagining labor laws for Micro, Small, and Medium Enterprises (MSMEs) has caught my attention, especially the insights shared by Uttam Prakash, Regional Provident Fund Commissioner serving in Kochi (LinkedIn), and Rohit Mani Tiwari, Regional Labour Commissioner (C), Thiruvananthapuram, in their article, "Reimagining labour laws for MSMEs" Reimagining labour laws for MSMEs - The HinduBusinessLine. They rightly emphasize that MSMEs are the bedrock of India's employment and production, employing over 70% of our workforce. Their strength lies in their agility, lean operations, and the trust-based relationships they foster.
Prakash and Tiwari highlight a crucial point: applying the same complex compliance procedures to a small 10-person firm and a large thousand-person enterprise creates a fundamental mismatch. This isn't about granting exemptions, but about ensuring proportionality. The proposed Employment Relations (ER) Code for enterprises employing up to 50 workers, as discussed in their piece, is a promising step towards this goal.
The core idea Hemen wants to convey is this — take a moment to notice that I had brought up this thought or suggestion on the topic years ago. I had already predicted this outcome or challenge, and I had even proposed a solution at the time. Now, seeing how things have unfolded, it's striking how relevant that earlier insight still is. Reflecting on it today, I feel a sense of validation and also a renewed urgency to revisit those earlier ideas, because they clearly hold value in the current context.
Indeed, the concept of a dedicated framework that acknowledges the unique character and constraints of small firms resonates deeply with what I've advocated for years. Back in 2015, in my blog post "Rise of the Middlemen ?" Rise of the Middlemen ?, I highlighted the critical role of "Mentoring Middlemen" start-ups in helping MSMEs navigate the complexities of e-commerce, from listing products to managing inventory and maximizing sales. My underlying point was that MSMEs need simplified support systems to thrive, and I even suggested "BIG BANG REFORMS" like tax abolition to spur their growth and job creation. This aligns perfectly with the current thinking that aims to bring small firms into the fold of protection without drowning them in compliance.
The ER Code's focus on Work Councils, comprised of employer and employee representatives, to mutually agree on terms like wages, safety norms, and benefits, is particularly insightful. This moves governance from a punitive model to an advisory and mentoring one, with the Labour Department acting as a guide rather than just an inspector. This fosters a sense of partnership and self-regulation.
Furthermore, the idea of digital integration, linking each enterprise and its Work Council to databases like EPFO, ESIC, and DGFASLI, and leveraging Universal Account Numbers (UAN) for portable employment records, is something I've long championed. In my 2015 blog, "DIGITAL INDIA" DIGITAL INDIA, I underscored the necessity of digitally empowering every citizen and enterprise, proposing freely searchable databases for companies and advocating for seamless digital connectivity to boost trade and transparency. The vision articulated by Prakash and Tiwari extends this digital integration specifically to labor governance, promising efficiency and accountability.
This move towards enterprise-level dialogue and digital solutions for dispute resolution also mirrors my longstanding advocacy for Alternative Dispute Resolution (ADR) mechanisms. For years, I've highlighted the immense backlog in our courts and the need for faster, more accessible justice. I wrote about the impressive case disposals by Lok Adalats in "Justice at Warp Speed" Justice at Warp Speed back in 2012, and later proposed a detailed design for "24x7 Virtual Courts" 24x7 Virtual Courts: Here is a Design in 2023, emphasizing how technology could fundamentally transform justice delivery. More recently, in a communication with Ganesh Apte (LinkedIn, ganesh.apte@leftrightmind.com), I reiterated the importance of online dispute resolution as a significant step forward On line dispute resolution .. a good start. The Work Councils in the proposed ER Code represent a form of decentralized, informal dispute resolution that can preempt larger legal battles, much like the spirit of ADR.
The Shram Shakti Niti 2025 already reflects a progressive shift in thinking, positioning the Ministry of Labour as an employment facilitator. This evolution, coupled with the practical steps outlined by Prakash and Tiwari, can indeed be the bridge that turns the promise of self-reliance into a living framework where enterprise and equity grow together. It's heartening to see these ideas taking shape, validating the foresight that many of us, including myself, have shared over time about the power of proportional regulation and digital empowerment for our economic backbone.
Regards,
Hemen Parekh
Of course, if you wish, you can debate this topic with my Virtual Avatar at : hemenparekh.ai
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