Scrapping labour laws: whether legitimate or not?

Shailee Mishra, a 2nd year law student from University of Allahabad, reviews the suspension of labour laws amid COVID-19 pandemic by some States in India and its repercussions.

Genesis:

When we hear the word ‘labour’ a picture with distressed, poorly dressed, and carrying enormous responsibilities in his shoulder, etc. comes to one’s mind. This is the person who plays a significant role in pushing the economy of the nation upwards.  However, absurdity is that this person does not get a meal for one time, clothes to cover the body, and a roof for his shelter. As COVID-19 pandemic hit India the plight of generally suppressed labour has deteriorated. Meanwhile, some state’s Government has suspended basic labour laws temporarily which has taken the plight to another level. It has seen as a well-planned endeavor to accomplish economic escalation at the cost of these anguishes, discomfort, and pain of these vulnerable communities. 

The prerequisite: 

On 8th May 2020, the government of Uttar Pradesh has commenced an ordinance called temporary exemption from certain labour laws and exempted businesses from the scope of four basic labour laws viz., Building and Other Construction Workers Act[1]Section 5 of Payment of Wages Act[2]Workmen Compensation Act[3] and Bonded Labour Act[4] for a period of three years. It is also issued an announcement[5] relaxing the provisions concerning  working hours, overtime, intervals for rest, etc. as specified under sections 51, 54, 56, and 59 of the Factories Act. Accordingly, the State government of Madhya Pradesh also proclaimed exemptions of certain labour laws for the period of 1,000 days. Encouraged by these changes, the State government of Gujarat announced[6] exemptions of labour laws for the next 1,200 days and the State government of Assam announced a provision for fixed-term employment. 

During this crisis, the steadiness between demand and supply in the economy has been extremely effectuated. The industrial and manufacturing sectors is facing a serious downfall due to the lockdown measures and inter-state movement of the labourers. The government has taken the foremost step[7] to revive the economy which has been contracted in the wake of the tough situations created by the global pandemic. The object is to boost investment which in turn will balance the demand and supply. The action is taken to ensure ease of doing business. Even if we consider these objectives, the suspension of some laws seems unreasonable and baseless. If we have a look at the ordinance in UP, the government has exempted the employer from providing elementary duties viz., access of drinking water, first aid box, cleanliness, protective kit, etc. This is not the way to boost the economy and any reasonable investor would not be effectuated by these provisions. This would only lead to the affray of the most basic and primary rights of the vulnerable employees by the employers.

The test for legitimacy: 

The Constitution of India is a shred of evidence for establishing equality and liberty and ending the exploitation of the vulnerable. The drafters of the Constitution worked for the interests of many who sacrificed their benefit. The provisions drafted in Fundamentals Rights and Directive Principles of State Policy (DPSPs) clearly specify that the dignity and integrity of each and every individual is sacrosanct and due to the reform in law it is under serious threat. 

The absence of protections like the Minimum Wages Act 1948, Factories Act 1948, and Industrial Disputes Act 1947 would lead to the condition of repression i.e. modern slavery[8] which is in contravention to the Constitution of India. Article 23(1)[9] strictly restricts the forced labour and reads as, “Traffic in human beings and beggar and other similar forms of forced labour are prohibited and any contravention of this provision shall be an offence punishable in accordance with law”. Any wage below the nominal wage is considered as bondage, the Supreme Court has observed further. In the case of Consusmer Education & Research Centre v. Union of India[10], the Supreme Court of India has observed that the employer is obligated to provide a safe and secure conditions of work as the same is a part of his right to life with dignity enshrined under Article 21[11] of the constitution. Hence, highlights the importance of safe and secure working conditions for workers. 

The move to suspend certain labour is seen as a direct contravention of the provisions of DPSPs given in the Constitution. To provide social economic justice to people and maintain social order is the sacred duty of the State. The manipulation of labour laws would further push labours into distress, further aggravating the evils like child labour and beggary. Further, the rights of the medically susceptible have been put to jeopardy, as pregnancy and other medical circumstances would now mean the termination of the employment, thus accumulating insult to the injury. The temporary revocation of some labour laws is not only against DPSPs but also contravenes the most basic and fundamental values enshrined in our constitution as aforementioned above. The values like equality, liberty, and dignity which are the heart of any democratic polity have been put at stake, which indicates that the said revocation is not only anti-social but also unconstitutional. This is the reason why the International Labour Organization, Central government and, Judiciary are taking a hard look at the severe step taken by states like UP, MP, and Gujarat.

Alternatives and Conclusion:

Through Advocates Vinayak Mitthal and Pranjal Shukla, the Uttar Pradesh workers’ front had moved the High Court confronting the legitimacy of temporary labour law exemption ordinance. The bench comprising of Chief Justice Govind Mathur and Justice Siddhartha Verma heard the matter, issued notices to the government and posted it for consideration on 18th May 2020. Unfortunately, the State government of Uttar Pradesh, on 15th May 2020 withdrew its notification on relaxing[12] certain labour laws. In an interview[13], the Vice Chairman of Niti Ayog has mentioned that the Union government of India does not believe that the reform of laws implies the elimination of labour laws in-toto.  Hence, he instructed the State against it. He also suggested an alternative to this i.e. the financial sector and especially the banking sector should now become less risk-averse and convalesce the credit flow to the MSMEs as well other segments of economy which will not only revive the demand but also economic activities in the nation. 

Ensuring top-notch set-up, low-priced credit amenities, and accessibility of trained labour by providing them appropriate training would come handy in providing an incentive to the domestic production of the goods and services. Whatever the purposes may be, such an attempt is not only unlawful but also inhuman. Resorting to inhuman and unlawful approaches like postponement of labour laws may or may not recover the economy but they will, no doubt, destruct the social fabric of the country. Equality, liberty and, dignity are the fundamental values that should not be negotiated in the light of economic growth. The growth in the economy would be of no benefit if its reimbursements do not reach everyone likewise. Such growth would only lead to the concentration of income and wealth. It cannot be denied that the ends are bona fide and for the collective good of all but the means do not take into consideration the greatest good of greatest number as many poor people have been asked to compromise for the good of some rich.


Shailee Mishra is a second year law student from University of Allahabad.


[1]The Building and Other Construction Workers’ (Regulation of Employment and Conditions of Service) Central Rules, 1998 (India). 

[2]Section 5 in The Payment of Wages Act, 1936,  (July 11, 2020, 01:16),Indiankanoon.org, https://indiankanoon.org/doc/1624119/

[3]Workmen Compensation Act, 1923 (India).

[4]Bonded Labour System (Abolition) Act, 1976 Indiacode.nic.in, (July 11, 2020, 01:16), https://indiacode.nic.in/handle/123456789/1491view_type=browse&sam_handle=123456789/1362.

[5]Allahabad HC Issues Notice To UP Govt On PIL Challenging Relaxation Of Labour Laws On Working Hours, Overtime, Etc. Livelaw.in (July 11, 2020, 01:16), https://www.livelaw.in/news-updates/allahabad-hc-issues-notice-to-up-govt-on-pil-challenging-relaxation-of-labour-laws-on-working-hours-overtime-etc-read-order-156763?infinitescroll=1.

[6]Why labour law rejig is no reform Livemint, (July 11, 2020, 01:16),  https://www.livemint.com/news/india/why-labour-law-rejig-is-no-reform-11589300644620.html.

[7]Mazdur : Suspension of Labour Laws Livelaw.in, (July 11, 2020, 01:16), https://www.livelaw.in/columns/mazdur-suspension-of-labour-laws-156637?infinitescroll=1.

[8]Relaxation Of Labour Laws: A Route To Modern Day Slavery Livelaw.in, (July 11, 2020, 12:29) https://www.livelaw.in/columns/relaxation-of-labour-laws-a-route-to-modern-day-slavery-156898.

[9]INDIA CONST. art. 23, cl. 1.

[10]Consumer Education & Research Centre v. Union of India, 1995 AIR 922, 1995 SCC (3) 42 (India).

[11]INDIA CONST.art. 21.

[12]UP Govt Withdraws Controversial Notification For 12-hour Shift For Industrial Workers Livelaw.in, (Jul 11, 2020), https://www.livelaw.in/news-updates/up-govt-withdraws-controversial-notification-for-12-hour-shift-for-industrial-workers-156857.

[13]Reforms do not mean complete abolition of labour laws, says Rajiv Kumar The Economic Times, ( Jul 11, 2020), https://economictimes.indiatimes.com/news/economy/policy/reforms-do-not-mean-complete-abolition-of-labour-laws-says-rajiv-kumar/articleshow/75941042.cms.

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

THE WATERING DOWN OF INDIA’S LABOUR LAWS IN CONTEXT OF THE CONSTITUTION

Sayan Chandra and Shailendra Shukla; both Second year students of Gujarat National Law University, Gandhinagar scrutinize the Ordinance temporarily suspending the labour laws in the States of Uttar Pradesh, Madhya Pradesh and Gujarat in the midst of Covid-19 pandemic.

INTRODUCTION

The coronavirus pandemic, which took the entire world by storm and has brought the global economy to its knees, has shown no signs of stopping. It has been recently warned by the WHO[1] that the virus may be here to stay, in the absence of a vaccine, however with the lockdowns getting over in different nations, it is being assumed that the virus may be a complementary part of the daily lives. Wuhan, the capital of the Hubei province of China, is assumed to be the epicentre of the Covid-19 virus. Owing to the unprecedented crisis which originated from China, global manufacturers have now started looking down[2] South to shift their supply chains to India. India, like every other economy, has suffered major setbacks due to the imposition of an early nation-wide lockdown, which reaches nearly seven weeks as of today.  

Hopeful to kick-start its economy past the flattening of the coronavirus curve, the Central and State governments have already begun to implement actions that seek to attract investment by fostering the ease of business in the sub-continental territory. As a result, three Indian states have relaxed labour laws, ostensibly to minimise red-tapism and bureaucratic inefficiency, which may deter potential investors from relocating from China. However, such actions come at the cost of infringing the fundamental rights of blue-collar workers and daily wage labourers who will now be subject to inhumane working conditions with minimal protection offered by the legislation. The authors, through this submission, seek to analyse how the implemented relaxation of labour laws may adversely affect labourers, and examine the legality and need of the ordinances issued. 

WORKER RIGHTS UNDER THE SCRUTINY OF THE ORDINANCE

Uttar Pradesh, Madhya Pradesh and Gujarat have temporarily eased[3] labour law to boost investment and job growth. Touted as a necessary measure by its proponents, this move seeks to alleviate and push India out of the growth slump it was experiencing before the advent of the pandemic. As per the Ordinance issued by the State of Uttar Pradesh, only 3 out of 38 labour laws will prevail for a period of 3 years. These include the Building and Other Construction Workers Act, 1996, Workmen Compensation Act, 1923, Bonded Labour Act, 1976 and Section 5 of the Payment of Wages Act, 1936.  

Indian labourers are already severely exploited[4] and it is imperative to realise that these legislative actions have effectively minimised employer liability with respect to worker exploitation, and have, in fact, paved a clear path which will accentuate the same. For example, The Industrial Disputes Act and The Trade Unions Act, both were envisaged to be legislative guarantees for the workers to voice their concerns and complaints will become dormant. Factories will also be exempted from The Minimum Wages Act, which mandated governments to fix minimum wages payable to employees and The Equal Remuneration Act, which ensured equal pay for equal work for women. Perhaps the most concerning is the exclusion of The Factories Act, 1948 which regulated the time put in by the workers has been relaxed, and the most obvious consequence of it will be an increase in working hours. With it being watered down, employers have no obligation even to provide toilets or basic water drinking facilities to workers. 

THE VALIDITY OF THE ORDINANCE: A CONSTITUTIONAL EXAMINATION

While the opposition has slammed this move left to right and centre, there also remains a question as to whether an ordinance can be used as a tool for such suspension of laws, especially central laws as well including the Provident Funds Act[5] and the Industrial Disputes Act.[6] Further, the entry of industrial and labour disputes is Entry 22 of List III of concurrent List[7], Wherein a central law, i.e., the Industrial Disputes Act, has been suspended by the Ordinance.

Hence, quite in accordance with the constitutional process, the Ordinance has been reserved for the assent of the President under the provision of Article 213 (1)(a) as well as (3) of the Constitution of India[8]. It is mandated under these articles that Ordinances which requires the assent of the President to be declared valid, such ordinances by the Governor has to be mandatorily sent for presidential assent. This required constitutional mandate is available under article 254 (2) which carves out an exception to the principle of repugnancy laid down in article 254(1) with respect to matters in the Concurrent List. Article 254(2) provides that the State can make a law repugnant to the Central law for matters in the Concurrent List only if the President approves the same. 

However, apart from the competency of the state legislature spearheaded by the Governor in cases of Ordinance making power, there can be further grounds of challenging the viability of the Ordinance.

1) In the process of fostering the economy, the Ordinance has suspended important rights of equal payment, payment of minimum wages, maintenance of working conditions, maternity benefits which flow from article 21 itself and which cannot be suspended even at times of emergency. Further, the lockdown being not synonymous to a proclamation of emergency, the suspension of rights of protests and functioning of associations like the trade unions also curb their rights under article 19 cannot be done except for maintaining public order. This is because public order is one of the only applicable restrictions under article 19(3)-(4) in such a situation. Such an act would have been justified only if public health was mentioned as a limitation to the rights under article 19(1)(b)-(c). 

While one can argue that these rights are not suspended per se, but the statutory laws furthering such rights being suspended indirectly hamper such fundamental rights and hence falls within the vires of Part 3 of the Constitution.

2) The period of 3 years for suspension of laws which is mentioned in the Ordinance can be held to be arbitrary or an un-calculated move. It is needless to reiterate that such a long period of suspension would severely hamper the labour conditions in the State. It may also result in a complete industrial rule in the State with the industries being left out of the shackles of the labour law. Further, the length of time as to when the issue of spread and effect of coronavirus will be continued is still undetermined and hence the term of 3 years can prove counterproductive as well!

3) It is required to be clarified that this Ordinance will not be applied to employees under the Union Government functioning in Uttar Pradesh as they are regulated by the Union List Entry 61.[9] This is because the State cannot suspend any legislation which it does not have the authority to make. As the states do not have the authority to legislate on any matter in the Union List.

Another concern being raised is that the matters being in the Concurrent List, will the central law come into force on a point about which the state law is suspended? This calls for the interpretation of the term “existing law” in article 254. The term as defined in article 366(10) means any law or Ordinance which has been passed by the authoritative legislature. Hence the definition does not require that the law should remain in force at a given point of time to be termed as “existing law”. Therefore, the State has taken a wise decision by suspending the state laws which does not bring the Central laws in force. Though such an act may be wise in the eyes of a quasi-federal parliamentary democracy, still it falls short of the ideology of social and economic justice, which is deeply ingrained in the Preamble and thus our Constitution.

CONCLUSION: THE DILEMMA

The main dilemma which is reflected in this Ordinance is that which is existent worldwide, that is, to promote economy over individual health and civic needs or vice versa. Running the utilitarian reasoning of the greater good principle in India would be indeed going against the constitutional approach of socialism and the idea of a social welfare society. It is undeniably the need of the greater society to further economic growth in the post-coronavirus period to generate employment, for more cash flow, to generate revenue and ultimately to prevent the State from slipping into anything close to economic depression and preventing our GDP from a downward fall. But simultaneously it is also necessary that these labourers and workmen who have suffered the most due to this extensive lockdown don’t suffer more post the lockdown, as that would lead to civic unrest further hampering the economic growth.

A middle ground is indeed the need of the time, a sustainability-oriented step where the ease of doing business needs to increase but not at the cost of basic rights and protections of labourers and workmen. Steps of fast-tracking judicial disposition of cases and suspension of institutional processes of closures and strikes should be prevented, but simultaneously there can be the composition of a grievance redressal committee to solve issues through mediation and negotiation while avoiding judicial settlement and institutional breakdown of business establishments as much as possible. The complete suspension of labour laws is indeed not the best step legally or socially at the moment.


Sayan Chandra and Shailendra Shukla are Second Year Law Students at Gujarat National Law University, Gandhinagar


[1]Coronavirus ‘may never go away’, could become endemic, says WHO”, Scroll.in, (May 14, 2020) https://scroll.in/latest/961890/coronavirus-may-never-go-away-could-become-an-endemic-says-who.

[2]Malyaban Ghosh & Biman Mukherji, “Global firms look to shift from China to India”, Livemint (Apr. 22, 2020) https://www.livemint.com/industry/manufacturing/global-firms-look-to-shift-from-china-to-india-11587494725838.html.

[3]Samrat Sharma, “Gujarat joins UP, MP, other states in easing labour laws; new projects get major relief”,  Financial Express, (May 8, 2020), https://www.financialexpress.com/economy/gujarat-joins-up-mp-other-states-in-easing-labour-laws-new-projects-get-major-relief/1952577/.

[4]Rebecca Ratcliffe, “Major western brands pay Indian garment workers 11p an hour”, The Guardian, (Feb. 1, 2019), https://www.theguardian.com/global-development/2019/feb/01/major-western-brands-pay-indian-garment-workers-11p-an-hour.

[5]The Employees’ Provident Funds And Miscellaneous Provisions Act, 1952, No. 19, Acts of Parliament, 1952 (India).

[6]The Industrial Disputes Act, 1947, No. 14, Acts of Parliament, 1947 (India).

[7]India Const. sch. VII, List III, Item 22.

[8]Id. art. 213.

[9]Id. sch. VII, List I, Item 61.

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