Changes In Labour Law
This Blog is written by Nikhil Mishra from Central University of South Bihar, Gaya. Edited by Saumya Tripathi.
The pandemic across the world has been destroying every corner of the earth, as every day passes the situations get worse and, India being the second largest populated and a developing country is facing a downfall in every sector leading to degrade the economy of our country. At these times as the country encounters various situations to deal with the health emergency, the business sectors face troubles too which affects the employees and the labourers while the governments of different states decide to make changes in the labour laws in the name of reforms. The suspension of labour was importantly adopted by the state of Uttar Pradesh which also bought in the major amount of changes in the law followed by various other states such as Madhya Pradesh, Gujarat, Rajasthan, Punjab as well as Odisha, who did make changes in labour but in smaller parts compared to that of Uttar Pradesh, which decided to strike down almost every labour law in the state for next three years. And when the question arises as to why this move was made the answer gained from the respective state political leaders was that they intended to develop the economy and industries of their own state and hence was in mere interests of development but suspending almost every law which also included their basic rights as labourers did not seem much for their benefits. The term reforms tend to conjure the year 1991 when the Indian economy opened to liberalization. Thus, the changes adapted by state laws also will directly or indirectly affect the reforms taken in 1991.
SIGNIFICANCE OF THIS DEVELOPMENT
This pandemic has created the shortage of workers and with less number of workers, industries requires extra working hours and because of this reason overtime becomes necessary. So this move to suspend labour laws seems right in the short run but in long run economic period, deep analysis and better understanding will be needed for good impact.
This move may increase and incentivise the economics activity on the basis that the suspended labour laws were very restrictive and inflexible in nature because the rules followed by the employers to fire an employee were too restrictive and due to the same reason organisation couldn’t hire new employee and this restrict the growth of organisation.
So because of the suspension of labour laws will make easier way for organisation to adopt to the changing market conditions as per the required working hours and working men. But still to have a clear result we have to wait and see whether this move by different state governments will affect positively or adversely to the labourers and industries.
LABOUR LAWS IN INDIA
Our Indian Constitution has around two hundred state and fifty central labour laws, but yet none of them provided a legal definition to labour law in particular, and hence for many such reasons the labour laws of our country are generally characterized as inflexible and are said to need certain reforms. In a report analysed by the World Bank in 2008, stated that India’s labour laws were among the most restrictive and complex in the world and further criticized the lack of modernization and flexibility in Indian labour regulations. The main reason that many firms and enterprises do not hire many labourers is specially because, in case of shutting down their business due to reasons like loss or any other, they cannot do it immediately and fire the employees as they have to get through certain legal requirements and certification to complete before shutting down if they are an employer of more than 100 employees so often many firms do not expand or hire more than 99 employees. If instead India had lesser and little flexible it would be easier for the companies to expand and avail more job opportunities. This thus is one of the examples of India’s labour law’s situations but this did not mean that the state governments suspend almost every labour law which included their basic rights as well, in the name of development especially during a health emergency like this pandemic.
LABOR LAW CHANGES IN DIFFERENT STATES
Some states have suspended most of labour laws in the name of development. Few suspended most of laws while others have exempted some laws. Uttar Pradesh suspended all the labour laws, exempting four laws for a period of three years, Rajasthan for a period of 1000 days, Gujarat for a period of 1,200 days and the other state that followed similar regulations is Himachal Pradesh.
Uttar Pradesh (UP)
The state all the labour laws but excluded four laws for the sake of the workers which are:
Laws that are regulated for women and children will be abided by normally. The UP’s ordinance, called the ‘Uttar Pradesh Temporary Exemption from Certain Labour Laws Ordinance, 2020’ approved the state’s decision and stated that these changes will be applied to new industrial outlets as well as existing establishments.
The state of Madhya Pradesh has now allowed the firms and enterprises to hire and fire employees as per their requirements and also that any new establishments under the Factories Act, 1948 will exempt from the inspections under the labour department. The state further removed the ordinance under the MP Labour Welfare Fund Act, 1982 to pay ₹80 per labourer, per year towards the fund. It also exempted the MP Industrial Employment (Standing Orders) Act, 1961 to factories employing more than a hundred labourers.
The changes made by the Gujarat Government was such that to provide faster approval to investing firms and faster allocation of lands to the others. The state exempted many provisions relating to the weekly and daily working hours, and that it will be made effective from April 20, 2020, with the following conditions until July 19, 2020:
1) No adult worker shall be allowed or required to work in a factory for more than twelve hours a day and seventy-two hours in a week.
2) No worker shall work for more than six hours before he has had an interval for rest for at least half an hour each day.
3) No female worker shall be allowed or required to work in a factory between 7:00 PM to 6:00 AM.
4) Wages shall be in proportion of the existing wages (e.g., if wages for eight hours are ₹80, then the proportionate wages for twelve (hours will be ₹120).
Gujarat provided relief to new industrial units from all related acts for 1200 days. But certain Acts such as the Minimum Wages Act, Industrial Safety Rules, and The Employee Compensation Act are retained. The Chief Minister of Gujarat also issued a statement that labour law relaxations will be made applicable to new projects in the State on the condition that they operate for at least twelve hundred (1200) days and for those already operational in that period. It was clarified that a new ordinance would be brought in to bring this into effect. They reasoned the suspension of these labour laws was to overhaul the investments from China.
All the factories registered under the Factories Act, 1948 has been exempted by the Himachal Pradesh government from provisions relating to weekly, daily, spread hours and interval of rest until July 20, 2020 subject to the following conditions:
1) No worker shall work in a factory for more than twelve hours in any day and seventy-two hours in a week.
2) No worker shall work for more than six hours before he has had an interval for rest for at least half an hour.
3) Wages in respect of increased working hours as a result of the exemption shall be in proportion to existing minimum wages fixed by the Government of HP under the Minimum Wages Act, 1948.
4) Provisions of Section 59 pertaining to overtime wages shall continue to be applicable without any change.
States such as Rajasthan, Maharashtra, Goa, Odisha, Punjab and Haryana have suspended the provisions related to working hours of the labourers and have regardless increased the working hours in their factories and no specifications were given on the period of time as it was only mentioned that these regulations may continue for a few months. Meanwhile, states like Uttarakhand and Karnataka have been considering changes as well.
States like Uttar Pradesh and Madhya Pradesh have suspended all labour laws except few, this move can be understood but the way they have been suspended raises the question that how will it affect the employees and employers.
Suspension of labour laws will somehow lead to the exploitation of the labourers as there will be neither be any lower wage rule nor any rights to them. Because of absence of labour laws employers will employ only fewer labourers and will make them work for extra hours and this will adversely affect the employment as only few people will be employed. Now, trade unions will not be having any legal sanctity and its will no longer be able to represent all the employees and their will. It also raises question that who will hire more employees because organisations are undergoing pay cuts and job cuts. However, Uttar Pradesh still has provisions in relation to minimum wages and safety of workers mentioned under the Factory Act, 1948 and Building act, 1996 and all the organisation needs to follow them. Gujarat too have similar provisions as of yet.
According to the statement of the Finance Minister the government is working on national level wage so that the different minimum wage rates from different can be removed and a universal minimum wage provision would apply all across the country.
Suspension of labour laws will surely help some businesses to grow. Like, in Madhya Pradesh, there is will no inspection of factories having less than 50 workers and fall under non-hazardous category.
It may be true that with lesser labour laws more employments can be generated but health care and safety measures have to be kept in mind for better productivity because in Madhya Pradesh all the provisions regarding hazardous processes, welfare and health measures have been suspended. But to increase productivity employers need to keep few points in mind that labourers should be provided proper health care and occupational safety, because such provisions have been take away by the state like Madhya Pradesh.
In our country organised sector is legally protected but only small population works in this sector while the most of the labourers work in unorganised sector. It means that the step taken by the government will be applicable to only small number of workers whereas most of the labourers will be left unnoticed. This estimation is biggest problem between government’s ordinance and goal. But it will surely affect millions of workers.
The condition of the labourers was pathetic from the initial days of our independence. The difference between the bourgeoisie and proletariats increased with times. Even in this global pandemic situation, the most unsafe people belongs to the proletariat class, who are labourers, and especially belonging to the unorganised sector. These labourers migrated from one place to another in search of food and shelter. But no one thought that they too are the citizens of the state and are the builders or developers of the state. No effective labour laws ever prevailed that would secure the interest of these labourers. And in this global pandemic COVID-19 situation, suspension of labour laws is majorly going to affect the workers belonging to the organised sector. Still, the issues of protection of labourers belonging to unorganised sector remain untouched. Although the population of labourers in unorganised sector is large, this could not become a plea for the government against no measure being taken in favour of labourers belonging unorganised sectors. If the government really wants to make some change then focus should also be placed upon unorganised Sector.
In 2008, Union Parliament passed an Act, ‘Unorganised Workers’ Social Security Act, 2008’ to safeguard the interest of Unorganised Sector workers but till this date, it’s not implemented by any state government in its full essence. Thus these contentions depict the conclusion that labourers belonging to both the organised and unorganised sectors are not legally protected at the fullest. The initiative by the state governments to bring and increase the size of industries may lead to a situation where the Fundamental Right gets grossly violated by the job givers.
Many of these changes might be considered as a benefit to the state for their development but it merely is against the interest of the labourers and this action taken by the state also has not gained any response in particular from the central. During this pandemic, the country does encounter various issues regarding the labourers due to the nationwide lockdown, that has migrated to various states and are not able to return to their home states and in some cases are not even being treated humanely from the states that they have migrated to. But for the sake of development to improve the employment in own states if the action taken was easing up the laws a little might have been very much accepted and appreciated but currently, as almost all the laws of labourers are suspended, it risks their working conditions, safety, health, maintenance facilities such as clean drinking water, canteens, restrooms, etc. for the next three years which is pure discrimination to them and in no way beneficial. Thus, we have to wait further and see if this issue will be legally challenged in our courts.
 Meghna. D. Dhanwani, Suspension of Labor Laws, available at: https://drive.google.com/file/d/1rYcstLduuGZqHN4Ll2mCTpcZpBYqWRoR/view?usp=sharing (last visited on June 01, 2020).
 Bambi Bhalla, Suspension of Labour Laws amidst Covid – 19, available at: https://www.obhanandassociates.com/blog/suspension-of-labour-laws-amidst-covid-19/ (last visited on June 04, 2020).
 Mohammed Kudrati, States Are Suspending Labour Laws: Here’s What You Need To Know, available at: https://www.boomlive.in/fact-file/states-are-suspending-labour-laws-heres-what-you-need-to-know-8069 (last visited on June 05, 2020).
 Ujjawal Jyoti, Suspension of Labour Laws by Uttar Pradesh Govt: A Boon or a Curse, available at: https://lexintelligentia.wordpress.com/2020/05/21/suspension-of-labour-laws-by-uttar-pradesh-govt-a-boon-or-a-curse/ (last visited on June 06, 2020).