Newstrack

Factories Act could shut down small businesses - BHA

Gayatri Vijaykumar - Bangalore

The recent decision of the Union Ministry of Labour and Employment to include the hotel industry under the aegis of the Factories Act has been termed as an 'anti-employee Act' by the Bangalore Hotels Association. According to K N Vasudeva Adiga, president, Bangalore Hotels Association, the move would have an adverse effect on the small scale hotel and restaurant owners. "We strongly oppose the move of bringing the hotel industry under the Factories Act. On the other hand, we definitely welcome any move for the betterment of the employees, however the Central Government should also consider framing laws which protect the rights of employers," said Adiga. He added that the decision, which has been considered a welcome move to organise the hotel industry, could lead to many smaller hotels being forced to shut down. "If the Factories Act is implemented, prices of many dishes would shoot up because overhead charges would increase and this would have to be passed on to the customers. We would be faced with a situation where we could lose our customers and this could lead to many smaller businesses perishing," lamented Adiga.

However the Central Government does not have any act in place which protects the rights of employers. "In Dubai, for instance, an employee under contract cannot jump to any other company in the same trade without obtaining permission from the employer. The hotel industry in India is already reeling under acute employee shortage with huge attrition rates," explained Adiga.

Adiga also said that the spiralling commercial LPG rates were already taking a toll on the smaller establishments. "Fuel prices have been fluctuating on a monthly basis, based on international prices. Though this cannot be stopped, the government should reduce the exorbitant taxes on commercial cylinders," he said. According to Adiga, the government provides subsidised domestic cylinders, while taxing commercial cylinders heavily. He added that despite repeated letters sent to the ministry of petroleum and natural gas, and after submitting a memorandum to the governor of Karnataka asking for taxes to be reduced, no response has been received.