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Suspension of Labour Laws amid Covid-19: Constitutionality Check

In Uttar Pradesh, government suspended almost all labour laws by promulgating ordinance The Uttar Pradesh Temporary Exemption from Certain Labour Laws Ordinance, 2020.
Section 3 of the Ordinance lists down labour laws, sections of labour laws and other rules which will remain in force in this three-year period.

So, the labour laws which continue to be enforceable in the state are as follows:

  • The Building and Other Construction Workers Act, 1996;
  • The Workmen Compensation Act, 1923;
  • The Bonded Labour System (Abolition) Act, 1976;
  • Section 5 of the Payment of Wages Act.

Madhya Pradesh government has promulgated Madhya Pradesh Labour Laws (Amendment) Ordinance, 2020.

It provides for suspension of Industrial Disputes Act, and amended the following state labour laws:

  • Madhya Pradesh Industrial Employment (Standing Orders) Act, 1961
  • Madhya Pradesh Shram Kalyan Nidhi Adhiniyam, 1982.

Similarly, various states are opting to suspend labour laws or drastically reduce protection of labour rights to induce employers to continue their business operations and to attract investors to their states.

This article delves into constitutionality of suspension of labour laws, particularly in the light of situation in Uttar Pradesh.

Can labour laws be suspended by a state?

The major issue is whether states have power to suspend Central labour laws. It is to be noted that states have suspended labour laws, and have not attempted to repeal or override by making any new state law, thereby complexing the situation in legal realms.

To answer this query, firstly a question of constitutional law must be addressed: Can a State suspend Central laws by ordinance?

Firstly, it has been well settled in Rai Sahib Ram Jawaya Kapur v. State of Punjab, AIR 1955 SC 549, that by virtue of Article 162, law making power of legislature is co-extensive with that of executive and executive has power to enact a law in respect of subjects of List II and List III. So if state legislature has power to suspend Central laws, so does have the executive. By way of Entry no. 22 and Entry no. 24 of List III of Seventh Schedule, it has been provided that labour laws are a concurrent subject.

Article 254 deals with repugnancy. It provides that in case of conflict between laws made by Centre and State on a subject of concurrent list, Central law will prevail. Repugnancy can be in the form of direct conflict, occupied field, or intended occupation. However, State law will prevail over Central law if the former is reserved and assented to by President of India. The ordinances promulgated have not received assent of President yet. However, it is case of suspension of laws for a temporary period, and not to invalidate labour laws formulated by the Centre.

In State of Rajasthan and Ors.  v. Union of India and Ors., AIR 1977 SC 1361, it was observed, The declaration of a financial emergency under Article 360(1) carries with it the power to issue directions for reducing the salaries of persons serving in connection with the affairs of the Union, including the Judges of the Supreme Court and the High Court. Clause (2) of Article 360 makes Clause (2) of Article 352 applicable to proclamations of financial emergencies with the result, that anything done or any action taken during the period of two months after the issuance of the proclamation, remains inviolable for that period.

That in fact, is the common thread which runs through Articles 352, 356 and 360. The suspension of the right to move any Court for the enforcement of fundamental rights, the lifting of the prohibition of Article 19 as against the making of laws and taking executive action, the assumption of powers under Clauses (a), (b) and (c) of Article 356 have full effect while the proclamations are in operation during the minimum period of two months.

Action taken during those two months, if irrevocable, remains un-remedied. Therefore, it can be inferred in the present situation, had financial emergency been imposed, even then suspension of labour laws for such long time as envisaged by different state governments could not be exercised. Also, since the suspension is not irrevocable, remedy lies with those affected by suspension of the beneficial legislations.

In D. S. Patel and Co. v. Gujarat State Textile Corporation Ltd., (1972) 0 GLR 33, it was clearly indicated that Suspension does not tantamount to destruction or annihilation, and thus:
when the sub-clause speaks about suspension of a right, it only means suspension of its execution or enforcement.

There is a need to look into intent of law-making body to determine whether by promulgating The Uttar Pradesh Temporary Exemption from Certain Labour Laws Ordinance, 2020 to interpret whether the term exempted from the operation is used in its common parlance, i.e. to deprive the employees of the rights granted by labour laws which are exempted from operation.

In this regard, it is humbly submitted that the courts should try to make beneficial construction of the ordinance since it has been well established in The Workmen of Firestone Tyre and Rubber Co. of India (Pvt.) Ltd. v. The Management and Ors., AIR1973SC1227:
It is well settled that in construing the provisions of a welfare legislation, courts should adopt, what is described as a beneficent rule of construction. If two constructions are reasonably possible to be placed on the section, it follows that the construction which furthers the policy and object of the Act and is more beneficial to the employees, has to be preferred.

The Ordinance has been sent for approval of President. However, this ordinance violates Article 213. The provision mandates President's instructions for promulgating any such ordinance by Governor which if made by state legislature, would require President's assent for becoming enforceable.

Circumstances when labour laws can be suspended

In Jay Engineering Works Ltd. and Ors. v. State of West Bengal and Ors., AIR 1968 Cal 407., when executive suspended state law which imposed duties on various authorities for the maintenance of law and order, thereby declining protection to managerial staff from ‘gherao', the suspension was held to be unlawful.

It was pointed out by B. C. Mitra, J. that the direct result of the suspension would be violation of fundamental rights of the petitioners, who were encircled by the respondents, and breach of statutory duties imposed on public servants.

Section 86 of Factories Act, 1958 empowers state government to exempt public institutions and other institutions connected with public institution which work in the field of education, training research, or information from any or all provisions of the act, except those related to work and holidays. This ordinance seeks to make exemption regardless the unit is attached to public institution working in the field of the aforesaid categories or not.

No circumstance or conditions are laid in statutes or the Constitution regarding temporary suspension, in absence of imposition of National Emergency, President's rule or financial emergency.

Based on the research undertaken by me, I have come to the conclusion that suspension of labour laws is not legally and constitutionally well-founded. Indian courts should be very cautious while adjudicating upon this issue since it implies suspension of laws in absence of emergency. There is a very high risk of misuse of such power, if warranted by judiciary and governments may try to suspend different laws on pretext of various reasonable and unreasonable grounds in future. This will vitiate rule of law and there will be higher possibility of tyranny and destruction of rights of people by State machinery.

Further, I believe that such suspension of law is violative of rule of law and equality, since quantum of rights given in different states to workers varies according to place of their work in the same State. This difference is not based on any intelligible differentia, which could be number of Covid-19 cases in a place or economic status of employer.

Rather, such step will promote movement of labour out of Uttar Pradesh and other states where the laws are suspended to their detriment. This is really undesirable, keeping in mind the surge in Covid-19 cases in India.

In the end, the author finds disabling of remedial statutes an unwelcome move.

Written By: Tanvi Aggarwal

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