With the imposition of a nationwide lockdown [1], thousands of firms and businesses are uncertain of their future prospects with the economy struggling. In recognition of this, fourteen states in India, such as Uttar Pradesh, Gujarat, and Madhya Pradesh, and certain other states have suspended their labor laws. [2] Uttar Pradesh, for instance, by clearing an ordinance, has summarily suspended most of its labor laws for the next three years, with the exception being laws relating to bonded labor, deployment of women and children and timely payment of salaries will not be exempted under the ordinance. [3] This not only curtails the individual rights of many workers but also drives down the wages of the labor.
The motive or the rationale of state governments by relaxation of these laws is that they will attract investment from various Multi-National Corporations, and will revive India’s economy and meet the exigencies that have arisen out of the pandemic, as this would again, restart the horticulture and economic activities in the respected states. The government, by removing structural hurdles for these firms or corporations, would hope that the organized workforce within these firms could prosper, thereby leading to the employment of many people, who have traveled back to their respective states.
This decision, has, however, attracted criticism from trade unions [4] for depriving the labor of their basic human rights.

Effects on Workers 

The suspension of labor laws, promoted in the pretext of reviving businesses, creating better conditions for workers, and increasing foreign investment, has striped the labor of their basic rights. Due to the deceleration of the economy even before COVID-19, there was a huge gap between formal and informal wage rates, which would only increase now and all the labor would constitute a part of the informal sector with the suspension of laws. [5] 
The recent amendment by the UP government involves the suspension of labor laws for three years, including the minimum wage act. This will lead to a huge decrease in wage rate for the workers and deprive them of any social security, for which there will be no grievance redressal mechanism since no law will be available to protect them. [6]
With the increase in working hours to twelve hours and no policy for safety and welfare norms in workplaces, would only expose the workers to a higher risk of industrial accidents and would deteriorate their physical and mental health, and with the Factories Act rendered inoperative, this only exposes the workers to a higher risk of industrial accidents. [7] 
In furtherance, the exemption of imposing labor-friendly measures in companies will drive women out of the workforce and that they will bear the brunt of this amendment, and with the suspension of The Maternity Benefit Act and The Equal Remuneration Act, women are left with no rights in the workplace. [8] 

Constitutionality of These Reforms
This move is unconstitutional as it violated the Fundamental Rights and DPSPs of the labor.  This approach shall be read in the light of judgment rendered by the Supreme Court in the case of PUDR v. UOI[9] wherein the Court held that laws protecting contract labor and inter-state migrant workmen were intended to ensure basic human dignity, and violation of these laws would violate the right to life of these workers under Article 21 of the Constitution. [10] In furtherance, the Court in this case iterated that “forced labor” was prohibited, and the nature of this does not only comply with the physical force but however, also, includes threats for the imposition of fine.[11]
This relaxation of labor laws is also in violation of the Directive Principles of the Constitution, which are supplementary and complementary to the Fundamental Right, as was iterated by the court in the case of Ashok Kumar Thakur v. Union of India. [12] Article 43 of the Indian Constitution [13]  envisages that all the workers should be secured with a living wage, conditions of work, ensuring a decent standard of life. [14]
Now, for instance, in the process of suspending the provision of factories act, the only clause retained is with regards to “safety and security” provisions, excluding the chapter on health and hazardous provisions. [15] This excluded clause includes cleanliness, etc, which is of utmost importance and concern during the pandemic. [16] This is in contempt of the right to health of the labor, which forms a part of the Right to Life of these workers, as iterated in the case of the Occupational Health and Safety Association of India v. UOI[17]
In furtherance, the Factories Act can only be suspended in the case of a public emergency wherein the security of India or any part of the territory thereof is threatened, by war, external aggression, or internal disturbance. [18] It must be noted that until now, the nature of this pandemic cannot be accounted for as a public emergency, with no enforcement of the said provision as mentioned in the Constitution.

International Practices for Protection of Workers During COVID-19

The United States, under Occupational Safety and Health Administration (OSHA) and the US Centers for Disease Control and Prevention (CDC), has issued guidelines for flexible worksites, staggering gifts and maintaining physical spaces amongst employees, and also issued guidelines for maintaining a safe and healthy workspace. There has also been an implementation of the Families First Coronavirus Response Act, wherein the state has taken requisite measures to provide tax-free wages. [19]  The  Pandemic Unemployment Assistance (PUA) program has given unemployed or self-employed workers 600$ and it also expands on temporary eligibility for unemployment insurance. It also guides states to provide for 13 weeks of aid through Pandemic Emergency Unemployment Compensation for additional unemployment insurance. [20] The Federal Reserve Bank, in measures to support the economy, has lowered interest rates to zero and announced it would buy at least USD $700 billion in government and mortgage-related securities, established credit streams for employers, consumers, and businesses totaling USD $300 billion and temporarily changed lending processes to make loans more accessible, amongst the many. [21] 
The European Commission published guidelines [22] to follow and implement practically focusing on the movement of critical workers such as those employed in health care, food sectors, frontier, and seasonal workers across borders and even issued specific measures to be taken by travel and transportation sectors. [23] They also introduced amendments to the Fund for European Aid to the Most Deprived (FEAD) to provide for food and basic amenities to most deprived people indirectly (through vouchers, cards, or by electronic means). [24]  They have also encouraged member states to invest in healthcare and social protection and to mobilize and liquidize unused structural funds to prove financial support for unemployed or self-employed workers affected by this crisis.

Solutions and Recommendations

The Economic surveys of 2019 and 2020 concluded that deregulated and flexible labor laws will pave the way for more jobs, increased growth of MSME’s and accelerated productivity. But these comments stand for the labor laws that focus on companies with few employees, causing size-based limitations [25].
Instead of relaxing the labor laws, a reference must be sought from the Rajasthan government’s change in the law in 2014 which amended Industrial Disputes Act for trade unions to be recognized only if its members made up 30% of the workforce, from the previous 15%. [26] The Contract Labour Regulation and Abolition Act were amended to be applicable to 50 workers from 20 workers and amendments in the Apprentice Act made it mandatory for the government to fund apprentice training. These changes have not only shown a significant spike in the output of firms and numbers of workers per factory in Rajasthan but also abide by the Economic survey conclusion. [27] 
Here, the short term solution would be ensuring laborers would get their job back after this crisis and the long term solution would be reform in labor laws.
In furtherance, healthcare must be the prime focus and immediate steps must be undertaken to uplift the rural structure, specifically through MGNREGA and investing more money in it, and Urban Employment Guarantee Scheme so timely payment of wages is maintained. These schemes will not only help economic revival but also be functional to deal with future pandemics. [28] 
India must also incorporate policies such as transfers, credit guarantee funds, interest rate subventions, liquidity and refinance facilities, loan extension and forbearance, tax relief, deferrals, and regulatory easing, which are being adopted in many countries around the world. [29]  The RBI can finance special Covid-19 bonds while stressing on it being available for a little time since this will take the burden off of bond markets and ease interest rates. [30]  A government credit guarantee will enable banks to undertake greater liquidity infusions. Other solutions include investing money in agriculture to promote sustainable agricultural practices, expand storage spaces. Depriving the workers of their rights in an already troubling time for them is inhumane; instead, food security and social security for them must be enhanced.


[1] Gareth Jones, Modi puts all of India under lockdown for 21 days to fight coronavirus(Reuters, March 24, 2020), Available here
[2] Roli Srivastava,  Anuradha Nagaraj, Thomson, ‘Workers' rights at risk as Indian labor laws face the post-lockdown challenge(Reuters,  May 13, 2020), Available here
[3] Prashasti Awasthi, UP Government suspends all labor laws except three to lure industrialists(The Hindu BusinessLine, May 8, 2020), Available here
[4] Kapil Datta, TradeUnion Workers Protest Against Changes In Labour Laws, Demand Salary For Lockdown Period (Hindustan Times, May 22, 2020),  Available here
[5] Udit Misra and Nushaiba Iqbal, Explained: What labor law changes by states mean(The Indian Express, May 16, 2020), Available here
[6] Samrat Sharma, Labour law reform, or window for exploitation? Debate heats up after UP, others shed labor law (Financial Express, May 11, 2020), Available here
[7] Rahul Suresh Sapkal, Crushing Labour Laws Amidst Successive Industrial Accidents Is Serious Insult to Injury (The Wire, May 12, 2020), Available here
[8] Vasudha Venugopal, Women to bear brunt of new labor laws (Economic Times, May 182020), Available here
[9] PUDR v. Union of India, AIR 1473 (1982).
[10] Id.
[11] Id.
[12] Ashok Kumar Thakur v. Union of India, Writ Petition (civil) 265 of 2006.
[13] Indian Constitution, Art 43.
[14] Id.
[15] Supra note 3
[16] Id.
[17] Occupation Health and Safety Association v Union of India, 3 SCC 547 (2014).
[18] Factories Act 1948, Article 37(5).
[19] Summary of CARES Act and Families First Coronavirus Response Act, Legislative summary, AICPA.
[20] Country Policy Responses (International Labour Organization), Available here
[21] Id.
[22] European Commission, COVID-19 Guidance on the implementation of the temporary restriction on non-essential travel to the EU, on the facilitation of transit arrangements for the repatriation of EU citizens, and on the effects on visa policy, C 2050 final (2020).
[23] Press Release, Coronavirus: Commission presents practical guidance to ensure the free movement of critical workers, (European Commission, March 30, 2020), Available here
[24] Press corner, Questions, and answers on the Coronavirus Response Investment Initiative Plus: New actions to mobilize essential investments and resources (European Commission, April 2, 2020), Available here
[25] Yogima Seth Sharma, Want more jobs, make labor laws easy, says Economic Survey 2019 (The Economic Times, July 42019), Available here
[26] Rituparna Bhuyan, Labour Law puzzle: Yogi, Chouhan Governments can take a leaf out of Rajasthan playbook(CNBCtv18, May 9, 2020), Available here
[27] Id.
[28] Azim Premji, Azim Premji: The interests of workers, businesses are deeply aligned, especially in these times of crisis(The Economic Times, May 16, 2020), Available here
[29] Ashima Goyal, How to revive the economy post lockdown(The Hindu BusinessLine, May 4, 2020), Available here
[30] T K Arun, View: RBI needs to be proactive dealing with Covid-19 economic fallout(The Economic Times, March 18, 2020), Available here

No comments:

Post a Comment