Changes In Labour Laws To Reduce COVID-19 Impact

Amidst the COVID-19 induced lockdown, many states such as Uttar Pradesh, Madhya Pradesh, Rajasthan, and Gujarat have brought in changes to their labour laws by way of amendments. Recently, Uttar Pradesh government has passed an ordinance by virtue of which businesses and both existing and new industrial units have been exempted from the purview of most labour law provisions for the next three years. The state cabinet cleared the labour law ordinance suspending more than 30 kind of labour laws in the state. Nonetheless, the four laws that will still apply to businesses and industries are the Building and Other Construction Workers Act, Section 5 of Payment of Wages Act, Workmen Compensation Act and Bonded Labour Act.

Other labour laws likes those related to settling industrial disputes, health and working conditions of workers and trade unions, contract workers and migrant workers will be defunct for three years. By such act of the State Government, the owners of the factories have been given more powers to hire and fire without attracting punitive measures from the labour department up to a certain limit. In another departure from the past, the enforcement wing would not raid the premises of factories on minor issues.

Labour minister Swami Prasad Maurya states that suspension of such labour laws would assist in establishment of new industries and ease the problems of existing ones during present catastrophic situations which has created a severe impact on the economy. “The laws will apply to both existing businesses and new industries. We have made sure that labourers do not suffer or are taken advantage of, but we also had to ensure to remove any additional burden on the industrialist,” he said.

Since labour is a concurrent subject, states can frame their own laws but will need the approval of the Centre to enforce them. Therefore, the ordinance will also be sent to the Central government for approval.

Like Uttar Pradesh, State Government of Madhya Pradesh has exempted employers from some obligations under various labour laws, like Madhya Pradesh Industrial Relations Act and Industrial Disputes Act, as well as Contract Labour Act for 1,000 days, allowing employers to hire and fire workers “at their convenience”. The state has also allowed exempted firms flexibility of extension of working hours. Further, it has exempted new factories under the Factories Act, 1948 from inspection from the Labour Department and permitted the flexibility to conduct third party inspections at will. The state has also issued an ordinance to the Madhya Pradesh Labour Welfare Fund Act, 1982, exempting all newly established factories from filing annual returns and paying prescribed nominal amount per labourer per year to the Madhya Pradesh Labour Welfare Board for next 1,000 days. It must be noted that the changes to the Madhya Pradesh Industrial Employment (Standing Orders) Act, 1961 will exempt industries employing up to 100 workers from the law’s provisions.

In a similar attempt, State Government of Rajasthan has raised the working hours from 8 hours per day to 12 hours per day. Moreover, the State Government has also amended the Industrial Disputes Act to increase the threshold for lay-offs and retrenchment to 300 from 100 earlier. Furthermore, in order to recognise the trade union, the threshold membership of the trade union has been increased from 15 per cent to 30 per cent.