26 July 2020, NIICE Commentary 5651
Sweta Basu
The lockdown restrictions imposed by different countries to curb the rapid spread of the COVID-19 pandemic stifled socio-economic activities across the globe. The continuous phases of lockdown stipulations followed by border blockades enabled states to undertake abrupt regulations for resuming economic ventures. This was the case in India too.
As the government of India decided to lift the lockdown restrictions partially, different states adjudicated tore-commence their occupational pursuits, on the pretext of creating newer employment prospects and to boost investment from the Multinational Corporations or MNCs. The state governments began to change certain regulations of the pre-existing and functional labour laws dealing with wages, working hours, and contractual labour. This decision killed the purpose of these labour laws and proved to be unethical and draconian along the lines of violating the rights of the workers at the forefront.
Elimination of Regulation in Labour Laws
The movement for labour laws in India began way back in the 1870s. Post-independence, with the emergence of the concept of the welfare state, India proposed regulations for stabilising rights for the workers through labour laws like the Minimum Wages Act 1948, Factories Act 1948, Maternity Benefits Act 1961, Payment of Bonus Act 1965, Payment of Wages Act 1936, etc. The concept of labour got incorporated in the Concurrent List of the Indian Constitution to allow the states to adopt these regulations.
On 8 May 2020, The Wire reported that the state governments of Uttar Pradesh and Gujarat invoked Section 5 of the Factories Act, 1948 by increasing the working hours of the labourers without proper intimidation. Uttar Pradesh, further approved an exemption from the labour laws to companies for three years. They also increased the working hours from 10 to 12 hours per day and 48-72 hours per week violating the Section 54 (daily hours which should not exceed 9 hours in a day) and Section 51 (weekly hours should not exceed 48 hours in a week) of the Factories Act.
Section 5 of the Payment of Wages Act, 1936 enables employers to pay wages to the employees as per their labour contributed on time. But due to the exemptions made for the employers, the workers were to receive minimum wages. Even Gujarat decided to open new industrial units which were to exempt from the existing labour legislations apart from the Minimum Wages Act 1948, Industrial Safety and Health Act Labour Compensation Act for 1200 days.
According to the Economic Times, Madhya Pradesh, besides increasing the working hours exempted establishments with less than 100 workers from adhering to the Madhya Pradesh Industrial Empowerment Act 1961 that regulates the working conditions of the workers. Karnataka extended the working hours to 8-10 hours per day and 48-60 hours per week affirming this as a ‘public emergency’ for three months in the wake of the pandemic, under the provision of section 5 of Factories Act that allows the government to make changes in the laws following certain exigency faced by states. The report published by The Avantis stated that Himachal Pradesh followed Karnataka in tandem in increasing the working hours and subsequently exempted Sections 51 (weekly hours which should not extend more than 48 hours in a week), 54 (daily hours which should not extend more than 9 hours in a day), 55 (rest intervals which can only be extended to 6 hours than the normal minimum half an hour), and 56 (spread over pertaining to the intervals for rest which should not be more than 10.5 hours in any day) of the Factories Act following which workers are entitled to wages in proportion to existing minimum wages fixed by the government.
All factories registered under the Factories Act were exempted in Punjab by the government. Similar notifications were also carried out by the state governments of Haryana and Rajasthan where the labourers were asked to work overtime and their mobility to and fro home to their workplaces was restricted.
Labour Laws Exemption: Is it Justified?
The justification behind the dilution of definite regulations in labour laws was to create more investment opportunities and employment generation initiatives especially for returning migrants and also the pre-existing labour force. This in turn, would enhance production to strengthen economic prosperity. These exemptions according to the employers would further help to maintain a balance between the laws and rights of labourers by incentivising industries and even help to resist the shortage of labour. This will also enable the industrial units in India to attract more land pooling to further lure the foreign companies and help in resuscitating economic pursuits stimulating additional investment and employment. With longer working hours, fewer labourers would be going to work. This serves two purposes- industrial units will maintain social distancing norms amid the ongoing pandemic and also maintain the production cycle following a stable growth.
But the problem lies in the difference between eliminating rigid regulation in labour laws and suspending their edifice altogether. Labour reforms were generated to enhance the labourmarket but the decision of suspending the regulations violates the rights of the labourers, as it opposes the international labour regimes and the global standard of labour reforms set by the International LabourOrganisation (ILO).
The provision to get a fixed amount of wage and suitable working conditions refer to Articles 23 and 21 of the Indian Constitution respectively that ensures the rights against exploitation and to live a life with dignity. Even the right to form trade unions and receive social security schemes fall under the purview of International Human Rights under the International Covenant on Economic, Social and Cultural Rights. Therefore, the unscrupulous notifications by the respective state governments in India to diminish the labour laws will increase the supply of labour force in the informal sector.
Due to the unavailability of disposable income among the labour force aggravating, chances of informalization are high i.e. weakening the organised or the formal sector, and enabling the employees to crowd the informal sector by pulling down the wage rate. Further, this decision will also risk the safety of the workers and create insecurity as it will enable the employers to adopt the ‘hire and fire’ policy to get rid of the workers without undergoing the squabble of complying to the protocols like certain statutory requirements such as compensation gratuity or retrenchment procedure owing to the COVID-19 crisis inclusively which again violates their fundamental rights as per Article 23 (Right Against Exploitation).
The notifications and decisions, however, faced sharp criticisms with the labourers protesting and lodging petitions and Public Interest Litigations at the Supreme Court. The trade unions filed written petitions to the International Labour Organisation, which made the government of Uttar Pradesh and Karnataka withdraw their initial notifications but the propositions put forward by other states are unaltered.
Road Ahead
Labour laws and the associated reforms are crucial since they protect the rights and entitlements of the labourers who constitute the base of the economic system of any country. Therefore, the sudden imposition of repudiating the labour reforms will only lead to unrest and oppression. Suppressing wages and worker’s demand will give minimum incentive to companies for making their investments who otherwise will look for a decent infrastructure backed by a productive and stable workforce.
The need of the hour, therefore, resorts to more transparent and accountable social dialogue along with cooperative mechanisms between the employers and labourers. Further enforceable contracts ensuring the rights and privileges of the workers must be incorporated to strengthen labour reforms. There is a need to bring in channelised regulations through consensual amendments in the labour laws providing them security benefits through rationalization of the aforesaid regulations. Labour reforms are needed to pursue the objective of investment and profitable production but that should not cost personal lives but rather use that strength in favour of the national goals before the turmoil leads to bigger problems.
