Mumbai: A working group constituted by the textiles ministry has recommended liberalisation of labour laws in export-oriented units by permitting contract labor.

Citing rigid labor laws as a major limitation to the growth of the clothing and apparel sector, the group has called for freedom for textile companies to adjust their workforce according to demand, as also extend working hours.

The textile units, however, will have to take care of the health, safety and social security of the workers, it said.

The panel has recommended amendments to the Contract Labour Act, 1970, to exclude textile units engaged in export related activity.

While the current law brings units employing over 100 people under the purview of the Industrial Disputes Act, 1956, the working group has suggested that units employing up to 500 be kept out of its purview.

This will facilitate reduction of workforce without the need of getting approvals from the courts, it pointed out. This, according to the group, will also facilitate outsourcing activities as well as contractual appointments.

The working group also recommended that in labor-intensive sections of the textile industry, such as the made-ups and garment sector, textile units may be allowed to increase working hours from a nine-hour shift at present to 12 hours, and also increase the total working hours in a week from 48 to 60.

The group also cited flexible labor policies followed in Chinese SEZs to drive home their point. Also, the group argued, a flexible labour policy would cater to peak season requirements of customers and compensate for lower productivity.

This, while providing more employment, would also complement the National Employment Guarantee Act, 2005, as the sector can provide 100 days assured employment at an average rate of Rs60 per day, the report added.