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Suspension of Labour Legislation: The long and short of it

To meet with the exigencies arisen out of Pandemic, State of Uttar Pradesh, Madhya Pradesh and Gujarat have suspended several labour laws, following which some other State governments also made changes in the application of labour laws. The suspension of these laws in U.P., M.P. and Gujarat are of more significance as they are to have bolder consequences. The reason behind this is that nation-wide lockdown has slowed the pace of industrial and economic activities in the state.

While justifying the suspension of all but three labour laws, the state government said in its statement:
For encouraging new investments, setting up new industrial infrastructure and benefit of existing industries and factories, it is imperative that they are provided temporary exempted from the existing labour laws in the state. Therefore, it is important that existing labour laws in Uttar Pradesh are relaxed for a period of three years. To this end 'Uttar Pradesh Temporary Exemption from Certain Labour Laws Ordinance, 2020' has been introduced.

Madhya Pradesh government directed that all labour laws barring some sections of the Factories Act 1948 would be suspended for 1,000 days. Similarly, Gujarat exempted all new units from labour laws with a condition that such units should operate for 1,200 days.

What is the rational of the State governments behind the move?

This move primarily aims at luring industrialists, also focuses on restarting horticultural and economic activities in the state that have been severely affected and slowed down. Attracting foreign companies which are looking to shift base out of China is also one of the motives behind exempting the labour laws.

The relaxations in work timings brought in by various state governments of Gujarat, Himachal Pradesh and Punjab under Factories Act are either in exercise of their powers in case of a public emergency or to address an exceptional press of work. It is therefore evident that the governments wanted to remove the structural hurdles through this decision so that organized workforce could prosper.

What would be the effect of Suspension of these Labour Laws on the workers?

Migrant workers' exodus reveal that they are among the worst hit by the lockdown imposed since March 25, as economic activities ceased leaving them with no jobs and incomes. These workers belong to both the organized and unorganized sector.

The main reason of their plight is the poor implementation of existing labour laws. This move by the State governments may further their miseries. With this relaxation of the labor laws, the states would be depriving this oppressed class from welfare measures at a time when they need it more than ever.

Already there were so many cases when workers worked overtime but were not given their dues. But now without the labour laws, all responsibility and accountability towards the workers will be negated. Out of all these laws, suspension of the The Industrial Disputes Act may have catastrophic results in the sense that employers will be at liberty to hire and fire workers at their own will. The accountability of the the employers can not be done away with to facilitate business, avoiding the labour welfare aspects.

Moreover, the consequence of suspending The Minimum Wages Act would be forcing labourers into bonded labour. Indian jurisprudence acknowledges that payment below minimum wages amounts to a situation of bondage.

There are numerous Supreme Court judgments on bonded labour-Bandhua Mukti Morcha being the landmark case wherein it was held that any payment below the nominal wages amounts to a situation of bondage.

The Articles 21, 23, 24, 38, 39, 39-A, 41, 42, 43, 43-A and 47 of the Constitution, contain the idea of conditions under which labour can be employed for work and also the responsibility of the Government, both Central and State, towards the labour to secure for them social order and living wages, keeping with the economic and political conditions of the country and dignity of the nation. Article 23 of the Constitution prohibits traffic in human beings and beggar and other similar forms of forced labour.

In Sanjit Roy v. State of Rajasthan, it has been held that the payment of wages lower than the minimum wages to the person employed on Famine Relief Work is violative of Art. 23. This decision of the State governments would result in low wage rate, increase in working hours along with adversely impacting their overall working conditions. The governments' contention that this decision will enhance the productivity and will meet the economic challenges is not very promising.

V.V. Giri National Labour Institute in 2017 conducted a study Amendment in Labour Laws and other labour reform initiatives undertaken by state governments of Rajasthan, Andhra Pradesh, Haryana and Uttar Pradesh:
An analytical impact assessment where it found out that even after two years of severe reforms in labour laws, states did not succeed in luring investments or creating more jobs. This was later substantiated by CUTS international where the labour was held to secondary reason for enhancing productivity.

Whether suspension of these Labour Legislations pass the legal test?
This decision of State government is being opposed by the Labour Unions and experts on the subject for number of reasons, primary argument being that it is Unconstitutional and violative of human rights. The centre's approval for the decision is still awaited.

The move has also been challenged in the Supreme Court on the ground that it is violative of fundamental rights and Directive principles of state policy. It is also pertinent to note that since labour is concurrent list subject under the Seventh Schedule of the Indian Constitution, both the centre and the states can make laws on it.

Most central labour laws have provisions that delegate certain powers to the state government, however, while the states do have the powers to exempt several provisions from enforcement in their respective states, in matters where the centre holds the field, the state cannot directly move to make exemptions. Most of these suspended labour legislations are central enactments. There is no provision conferring power on state governments to nullify the central legislations in one go. Section 5 of the Factories Act, 1948 empowers the State governments to exempt only in case of a public emergency which is explained as a grave emergency whereby the security of India or any part of the territory thereof is threatened, whether by war or external aggression or internal disturbance.

This Pandemic can not be counted as threat to the security of India now. The state governments have however, equated the ongoing health crisis with a public emergency to exercise this power. Furthermore, suspension of these laws is also in violation of International Labour Organisation (ILO) convention No 144. India has been a committed and founding member of ILO and is therefore expected to implement the social welfare legislations.

India being the welfare state cannot allow the suspension of these laws as they are part and parcel of social security framework. Even if this relaxation of labour laws passes the legal test and helps in reviving economic activities, it would be at the cost of exploitation of workers in myriad of ways.

Governments are under constitutional duty to ensure humane conditions of work promoting welfare of the labourers and therefore such suspension could result in stripping of human rights of the labourers, in absence of alternative legal framework for their protection.

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