Shubhangi Soni and Ayush Pal, both Second year law students from Faculty of law, Banaras Hindu University, discusses the effect of suspension of labour laws amidst the covid pandemic on Indian labourers.

It pours when it rains, are the conditions with the Indian labourers amidst this lockdown which have hit them hard. At this time of crisis when thousands of migrants are travelling back to their place bare feet by barren highways, empty stomach many state governments decide to suspend most of the labour laws in the name of boosting the economy. The plight of Indian labour is such that the decision has acted as the last nail in the coffin of hopes of these labourers.

As during the lockdown the economy has seen a great downfall, states decide to boost it up, the way that they find is the suspension of labour laws as the various state following the lead of Uttar Pradesh where 35 out of 38 labour laws exempting prohibition of bonded labour and regulations regarding the protection of women and children, have been suspended for 1000 day.[1] The state of Madhya Pradesh has also suspended the most of the labour laws exempting certain specified safety and security clauses and other states like Odisha, Gujarat, Rajasthan, Himachal Pradesh, Uttrakhand have also made many changes as well increased the working hours from 8 to 12 hours[2] and sent for the ascent from the president as there are no particular laws which are called labour law. 

The subject “Labour” lies in the concurrent list of Indian constitution under list 22, 23 and 24, which means both state and union government have the authority to amend or suspend the labour laws. Nobody knows what the striping the labours of their basic rights of sanitization and safety will lead to. If labour laws are removed, most of the employment will turn from formal to informal, and wage rate will also take a plunge to the ground. As well, the government has not provided any measures regarding the grievance redressal for the violation of their basic rights.

The ordinance passed by the Uttar Pradesh government regarding the suspension of laws is so ill drafted leaving a room for judicial scrutiny for example, as per the ordinance the factories act have been suspended but (1) it is not clear what will happen to the PF which is accumulated and at what rate the interest will be paid, (2) the award of industrial tribunal only become enforceable under the Industrial Disputes Act, which is suspended! It is evident that none of this has been thought of; the details are missing. This will only give rise to the legal conflicts between the employer and employee. In the end, the employee will have to suffer as the right to form trade and union is also suspended, leaving no other option than to being exploited by the hands of the employer.

The governments advocate their steps in the name of surging the economy. Still, as per the economic theory, the incentives taken by the state governments are ill-trained and retrograded steps. The main aim of these incentives is to open the market for investment, as the lower, the government intervention on the name of rules and regulations, the more the investments. This is an ideal situation. In the present scenario, there are other factors affecting the market such as wage cut of employees; as a result, people have less money to spend reducing the demand which affects the production, that will further reduce the investment. It will only lead to the exploitation of the labour and will result in the natural form of the market and will bring down the wages.

Indian labour laws were often criticized as ‘inflexible’ due to legal requirements, as this has constrained the growth of the firm, and others have also argued that there are too many laws, unnecessarily complicated and not effectively implemented forming a base for corruption. If India had fewer and easy to flow labour, law firms would be able to expand and contract. Is this the long-pending reform of labour laws? Expecting to create a flexible form of the market which will result in investment and expansion of the firms which will increase the employment benefiting the labourers. Experts have objected the view as it will not boost hiring and spur economic growth as there is already too much chaos in the market, firms are shaving off the salary of their employees, the overall demand has fallen. Which firm will hire the employee right now? As the intention of the government was to restore more and more jobs than instead of increasing the shift duration from 8 hours to 12 hours they should have allowed two shifts of 8 hours in this way more number of people can be employed. 

Radhichika Kapoor of Indian Council for Research on International Economic Relations (ICRIER) has stated that measures are taken by the government “are creating an enabling environment for exploitation”. It is because far from reform which essentially means improving the status quo it has deprived the labours of its basic rights and also drives down the wages.[3] Who keeps a check on the firms from not firing his existing employees and hiring them at a lower rate as the government has removed all the provisions binding firms not to fire workers.

Eminent labour economist Dr Shyam Sundar believes that it is an extremely retrograde step that pushes the rights and safety of India labour force at risk. Moreover, these measures are going to result in fall of wages will only further deteriorate the existing conditions of the formal market and economy which will backfire the recovery process.[4] ‘The time for taking such severe steps is not right; we are moving in the exact opposite direction of downfall this will dwindle the economy further.’

When Indian states decide to suspend the labour laws for mushrooming the economy on the other hand in the time of difficulties for supporting their labourers and surging their economy, countries like Vietnam has provided $70/months for workers on unpaid leave and also aid to employers by offering funds and workers with no unemployment insurance and securities to get $40/month for three months. Bangladesh government also launched a package of $89.45million for workers who have lost their income, and UK government has decided to pay 80% of usual wages of employees laid off for four months.[5]

India being a founding member of the International Labour Organisation and Indian parliament, has ratified 47 conventions of the ILO[6] which are deliberately related to working hours, labour inspections, equal remuneration, compensation and cases of injuries as should comply with the norms of the convention and if not then ILO should also intervene in this vandalized situation

The government in this situation of disarray has to understand that as the case behind the downfall of the economy was the sudden and unknown, outbreak of the disease novel virus COVID-19, and the measures are taken to control the epidemic and fight the disease were different, which were never considered in the history. Similarly, now the economy also needs a different perspective which includes every section of society as all have suffered equally whether employees or employer, entrepreneurs, to surge the economy.


Shubhangi Soni and Ayush Pal are Second year law students at Faculty of law, Banaras Hindu University


[1]Beta Sharma, UP Govt’s Suspension Of Labour Laws Could Greenlight Bonded Labour. Here’s Why, HUFFINGTON POST, (May.8,2020), https://www.huffingtonpost.in.

[2]Prashant Krar; Several states extend working hours from 8 to 12 hours in factories, ECONOMIC TIMES, (Apr. 24, 2020), https://m.economictimes.com/news/economy/policy/states-extend-working-hours-from-8-to-12-hours-in-factories/articleshow/75342462.cms.

[3]UditMisra, Nushaiba Iqbal, What labour law changes by states means, THE INDIAN  EXPRESS. (May 16, 2020),https://indianexpress.com/article/explained/what-labour-law-changes-mean-coronavirus

[4]Kundan Pandey, COVID-19 labour laws dilution: ‘Neo-liberal character has eroded welfare state’, DownToEarth,(May 12, 2020), https://www.downtoearth.org.in

[5]Iqbal supra note 3, at 3.

[6]ILO IN INDIA, INTERNATIONAL LABOUR ORGANISATION, https://www.ilo.org/newdelhi/aboutus/WCMS_166809/lang–en/index.html.

IMPORTANT – Opinions expressed in this article are the sole responsibility of the author and do not necessarily reflect the views of IJOSLCA.

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