Relaxation of Labour Laws:- To contain the spread of COVID-19 in India, the Central Government imposed a nationwide lockdown on March 24, 2020. Most economic activities, other than those listed as necessary, were suspended under the lockdown. States also acknowledged that this lack of economic activity has caused many individuals and companies to lose revenue. Some states have provided establishments with relief from their current labour laws to allow certain financial activities to begin. This blog discusses how labour is regulated in India and the different relaxations in labour laws that are declared by different states.
How is labour regulated in India?
Labour falls under the statutory Concurrent List. So, both the legislators of Parliament and the state will make labour regulatory laws. There are currently more than 100 state laws and 40 central laws regulating different aspects of labour, such as industrial dispute resolution, working conditions, social security, and wages. To improve ease of compliance and ensure uniformity in central level labour laws, the central Government is in the process of codifying various labour laws under four Codes on-
(i) industrial relations,
(ii) occupational safety, health and working conditions,
(iii) wages, and
(iv) social security.
These Codes subsume laws such as the Industrial Disputes Act, 1947, the Factories Act, 1948, and the Payment of Wages Act, 1936.
How do state governments regulate labour?
A state may regulate labour by: –
(i) Passing its labour laws,
(ii) Amendment of central-level labour law, as applicable to the Government.
Where central and state laws are incompatible, central laws will prevail, and the laws of the state will become invalid however if it has obtained the President’s assent. This state law is incompatible with central laws that prevail in that state.
For example: In 2014 Rajasthan revised the 1947 Act on Industrial Disputes. Under the Act, some special provisions relate to retrenchment, lay-off and closure of establishments with 100 or more employees. For example, an employer in an institution with 100 or more employees needed the central or state Government’s approval before the employees were retrenched. Rajasthan amended the Act to increase the threshold for the application of these special provisions to establishments with 300 workers.
This amendment to the central Law prevailed in Rajasthan as it received the assent of the President.
Changes in work hours in labour laws
The Factories Act, 1948 requires state governments to exclude factories for three months from laws relating to work hours if factories are faced with an extraordinary amount of work. Further, in the case of public emergencies, state governments can exempt factories from all provisions of the Act.
The Governments of Gujarat, Himachal Pradesh, Rajasthan, Haryana, Assam, Uttar Pradesh, Goa, and Uttarakhand passed notifications to increase the average weekly hours of work from 48 hours to 72 hours, and the regular hours of work from 9 hours to 12 hours for some factories using this provision.
Furthermore, Madhya Pradesh has exempted all factories from the Factories Act, 1948 provisions which regulate working hours. These state governments have noted that an increase in work hours would help address the shortage of workers caused by the lockdown and longer shifts would ensure the fewer number of workers in factories allowing for social distancing to be maintained.
Which states have passed Relaxation of labour laws?
The Uttar Pradesh Cabinet has approved an ordinance, and Madhya Pradesh has promulgated an ordinance, to relax certain aspects of existing labour laws.
Further, Gujarat, Rajasthan, Haryana, Uttarakhand, Himachal Pradesh, Assam, Goa, Uttar Pradesh, and Madhya Pradesh have notified relaxations to labour laws through rules.
1. Relaxation of labour laws in Madhya Pradesh:
On May 6, 2020, The Government of Madhya Pradesh enacted the Madhya Pradesh Labor Laws (Amendment) Ordinance, 2020. The Ordinance amends two state laws: the 1961 Madhya Pradesh Industrial Jobs (Standing Orders) Act and the 1982 Madhya Pradesh Shram Kalyan Nidhi Adhiniyam. The Act of 1961 governs working conditions for workers and extends to all businesses with 50 or more employees. The Ordinance increases this threshold to 100 or more workers.
The Act would no longer extend to establishments which had been previously controlled with between 50 and 100 employees. The 1982 Act provides for the creation of a Fund to support labour-related activities. The Ordinance amends the Act to require state government through a notice to exclude any establishment or class of establishments from the provisions of the Law. These provisions include payment of contributions into the Fund by employers at the rate of three rupees every six months.
Further, The Government of Madhya Pradesh exempted all new factories from some provisions of the 1947 Labor Disputes Act. There will continue to be regulations relating to the lay-off and retrenchment of staff and the closing of establishments. Nevertheless, the other provisions of the Act do not apply, such as those relating to labour dispute settlement, strikes and lockouts, and labour unions. This waiver will remain in effect for the next 1,000 days (33 months). Notice that the 1947 Industrial Disputes Act allows the state government to exclude certain institutions from the provisions of the Act as long as it is assumed that a process for settling and resolving industrial disputes is in place.
2. Relaxation of labour laws in Uttar Pradesh:-
The Uttar Pradesh Cabinet has approved the Uttar Pradesh Temporary Exemption from Certain Labour Laws Ordinance, 2020.
According to news reports, the Ordinance intends to exclude for a term of three years, subject to fulfilment of certain conditions, all factories and establishments engaged in manufacturing processes from all labour laws.
These conditions include in Labour law:
- Wages:
The Ordinance specifies that workers cannot be paid below minimum wage. Further, workers must be paid within the time limit prescribed in the Payment of Wages Act, 1936. The Act specifies that: –
(I) Establishments of fewer than 1,000 employees must pay salaries after the last day of the salary cycle before the seventh day.
(ii) All other institutions shall pay wages before the tenth day after the last day of the wage era. Wages have to be paid into employees’ bank accounts.
2. Health and safety:
The legislation specifies that the health and safety requirements laid down in the Building and Other Employees Act, 1996 and the Factories Act, 1948, will continue to apply. Such laws govern, amongst others, the use of dangerous equipment, inspections and factory maintenance.
3. Work Hours:
Workers can not be expected to work more than 11 hours a day, and there can be no more than 12 hours a day to distribute the work.
4. Compensation:
In the case of accidents leading to death or disability, workers will be compensated as per the Employees Compensation Act, 1923.
5. Bonded Labour:
The termination of the Bonded Labor System Act, 1976, will remain in effect. This calls for the abolition of the practice of slave labour. Bonded labour refers to an arrangement of forced labour, where the debtor signs an agreement with the borrower on certain conditions, such as repaying the debt owing to his caste or culture, or social duty, to his or her kin.
Women and children:
Labour law regulations relating to women’s and children ‘s jobs will continue to apply.
It is unclear if labour laws providing for social security, industrial dispute resolution, trade unions, strikes, among others, will continue to apply for the three-year duration defined in the Ordinance to businesses in Uttar Pradesh. Since the Ordinance prohibits the enforcement of labour laws at the central level, it requires the President’s consent to come into effect.
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