Skip navigation

The Suspension of Labour Laws ‘A boon or bane’?

May. 29, 2020   •   anshu sharma

Introduction

The term ‘labour’ means productive work especially physical work done for wages. Labour law also known as ‘Employment law’ is a body of administrative rulings and precedence which has been established for the propose of recognising and addressing the legal rights of working people along with the restrictions imposed on them and their organisations. It also forms the foundation of the links between employers and employees. In other words they define the rights and obligations of workers, employees and union members in a workspace.

Objective of Labour Laws

The Labour Laws which have been framed and modified as per the modern scenarios aims to perform 3 crucial roles:

  1. It forms a legal system to ensure a balance between productivity of an individual and collective employment relationships, thus leading to a productive economy.
  2. It works as an instrument for establishing and maintaining harmonious relationship between the employers and employees.
  3. It provides a guarantee of fundamental principles and rights at work which have been socially accepted and also provides the processes through which these principles and rights can be implemented and enforced.

Labour Laws in India

The laws relating to labour and employment in India were initially recognised under the broad category of "Industrial Law”. The history of Labour laws in India can be traced back to the times of British colonialism with the enactment of the Factories Act, 1883 in order to make the Indian labour costlier than the others. Thus for the first time, through this Act, the Indian labourers received certain relaxations and benefits in the form of eight hours of work, abolition of child labour, restriction of women in night employment and the introduction of overtime wages for work beyond eight hours. Since then the labour laws in India have been constantly evolving in accordance with the need and demand of the changing society.

The labour enactments in India have been broadly classified on the basis of the following heads:-

  • Working Conditions
  • Industrial Relations
  • Wages
  • Welfare
  • Social Securities

Current Position of Labour Laws amid Covid-19

In the light of the on-going circumstances, the Covid-19 pandemic has not only caused world health crisis but has also unleashed an unexpected slowdown in the economy. On one hand where steps for the revival of businesses and economic activity have been set out, on the other hand the interest of labourers are once again set to be sacrificed.

More than 90% of Indian workers engaged in part-time jobs have been left without work, food and shelter. Also due to lack of availability of transportation, mass departure of these migrant workers from big cities to their towns on foot, exposing themselves and their families to a grave danger demonstrates the dreadful impact of the pandemic on them. Though the Government of India is extending their support to these workers by providing free ration and adequate transportation for them yet the condition of these workers tend to remain miserable.

As the Indian economy is struggling amid this crisis, and million firms, employees and workers stare at an uncertain future, some of the state governments have decided to make significant changes in the application of labour laws in order to incentivise economic activity in some states. Though in the course of improving the economy, this move may undermine the interest of labourers, who are one of the most integral and vulnerable sections that have been hit by the pandemic but as per the government this move has become the need of the hour.

Changes in the Labour Laws

The Uttar Pradesh government gave a green signal to the Uttar Pradesh Temporary Exemption from certain Labour Laws Ordinance, 2020 which would result in suspension of all labour laws for a period of three years, except:

  • The Building and Other Construction Workers Act,1996
  • Workmen Compensation Act, 1923
  • Bonded Labour System (Abolition) Act, 1976
  • Section 5 of the Payment of Wages Act, 1936 which provides the right to receive timely wages

On the other hand, the Madhya Pradesh Government has undertaken a plan to give boost to the business and industry by allowing units to be operated without complying with the provisions of The Factories Act, 1948 i.e. increasing the working hours in factories from 8 to 12 hours and grant of permission for imposing a weekly duty of 72 hours, subject to the will of the employees for the next 1000 days, which shall be applicable to both existing businesses as well as new factories which have been set up in the state.

Few other important amendments are:

  1. The procedure of Registration of Factories which required a duration of 30 days, will now be completed in one day
  2. The license for such factories which required renewal after every 1 year, shall be renewed after 10 years
  3. Industrial Units will be discharged from the duty of obeying majority of provisions of the Industrial Disputes Act, 1947
  • Employers are allowed to keep their employees in service as per their convenience
  • The Labour Department or Labour Court shall not interfere in the action taken by industries
  • Contractors employing less than 50 workers will be able to work without registration under the Contract Labour (Regulation and Abolition) Act, 1970

Reasons behind such changes

The rationale put forward by the states behind making such significant and immoral changes in the application of Labour laws are as follow:

  • Ease in the application of Labour Laws would attract investment and encourage industrial activity
  • To provide new employment opportunities to workers who have migrated back to their towns and to protect the existing employment
  • To convert the hurdles of a distressed economy into the opportunities for a growing economy
  • To bring transparency and ease in the administrative procedures
  • To increase the fallen revenues of states due to Covid-19 induced lockdown
  • To help release the investors who are stuck in the clutches of laws and red-tapism

Issues with the Changes

No matter how successful the result of the amendments in Labour laws might be, one cannot ignore that it would also cause certain problems and issues like:

  • The amendments have expanded the scope of exploitation of workers because the scraping of all labour laws will deprive the labours of their basic rights
  • The gap between the formal and informal wage rates would fall leading to a decline in wage rates of the workers
  • It might also lead to ‘Informalization’ i.e. the existing formal workers may turn into informal workers due to lack of social security
  • Scrapping of labour laws would lead to decline in wages which would ultimately result in reduction in consumer demand, thus hurting the recovery process
  • The workers will be deprived of their right to seek redressal

India already is known for the cheapest and most exploited labour forces in the world. According to the Annual Survey of Industries in 2017-18, the wages of workers were less than 3 percent of the total input costs for India as a whole. For decades, the wages in India have continuously been very low as compared to China yet, India has not been able to attract even the smallest portion of FDI made in China.

Thus instead of worsening the conditions of workers with suspension of labour laws, the government should take steps to improve and promote the welfare of these workers because an unhealthy and poorly paid workforce will not attract any foreign investments, but in turn make us loose such opportunities in the future.

Also, the allocation of a package of 20 Lakh Crore made by our Prime Minister Shri. Narendra Modi to revive the economy is just a temporary fix for the current situation. What is required is a concrete and solid long term plan which helps in improving the Economy without the exploitation of any sector of the economy.

Therefore, the government should resort to other plans for improving the economy like allowing 2 shifts in factories so that more people can get jobs, the economy also starts to improve along with protection of the rights of labourers. The government can also enter in a partnership with other industries and allocate 3%-5% of GDP towards reducing the burden of wages and ensuring good health of the labourers.

Conclusion

In order to ensure long term revival of the economy, there is a need for comprehensive labour law reforms, which would not only help the firms to expand but would also help in preserving and keeping the interests of labours intact. Thus any move of the government to repair the economy in the short term would only end up aggravating the vulnerabilities of our workers during this difficult time.

(Priyana Gupta, Vivekananda Institute of Professional Studies, 2nd year)


References

  1. https://www.thehindu.com/opinion/editorial/contempt-for-labour-the-hindu-editorial-on-dilution-of-labour-laws/article31538103.ece
  2. https://timesofindia.indiatimes.com/india/major-labour-laws-suspended-in-up-for-3-years/articleshow/75624732.cms: “ Other labour laws like those related to settling industrial disputes, health and working conditions of workers and trade unions, contract workers and migrant workers will be frozen for three years.”
  3. http://mospi.nic.in/sites/default/files/publication_reports/mospi_Annual_Report_2017-18.pdf

Liked the article ?
Share this: