Hot News

Labour Law Rejig

Labour Law Rejig

Besides the dreadful threat of the COVID-19 global pandemic, India is also facing an excruciating labour crisis. Millions of workers in the country have been rendered unemployed and without food, shelter and financial security. The loss of livelihood is further aggravated by the recent suspension of labour laws by some state governments.

Over the past week, several states governments have introduced controversial reform measures in view of the economic turmoil caused by the COVID-19 lockdown. Though aimed at helping industries recoup, these reforms have come under fire for being extremely exploitative as they give employers the power to hire and fire at will, extend working hours, prohibit migrant workers from going back home, determine their wages, and reduce liabilities in terms of providing employee benefits.

Some of the states that made these changes include Uttar Pradesh, Madhya Pradesh, Gujarat, Rajasthan, Punjab and Odisha. In Uttar Pradesh, the application of most labour laws has been summarily suspended for the next three years.

Labour reform has been a long-standing issue, but it still remains unaddressed. Initiatives and implementation steps related to it are majorly at a standstill, with a lot of apprehension attached to the non-agreement among the tripartition of employer, employees and the government.

Now, with several state governments’ move to change/dilute labour laws in an undemocratic and exploitative manner, it is clear that the governments are taking away workers’ dignity and their right to a decent work culture.

As a founder member of the International Labour Organisation (ILO), and a country that has ratified several fundamental conventions of the ILO, India’s long engagement with the ILO has been noticed at a global level. However, the current labour law reform efforts in the name of recovery of economy during coronavirus period raises worries of a possible return to an era of slavery.

Bharatiya Mazdoor Sangh national president C.K. Saji Narayanan explains that the proposed amendments will lead to “a law of the jungle.” Labour economist K.R. Shyam Sundar has observed this reform increases the possibility of labour exploitation.

Since labour falls in the Concurrent List of the Constitution of India, both the central and the state governments are competent to enact legislation for catering to different aspects of labour, viz. occupational health, safety, employment, fixation and review of minimum wages, mode of payment of wages, payment of compensation to workmen who suffer injuries as result of accident or causing death or disablement, bonded labour, contractual labour, women and child labour, and so on.

In addition to this, both central and state governments also retain the duty to facilitate the implementation of labour laws. In this context, the law needs to be reviewed from time to time and its amendment is an ongoing process in tune with the emerging needs of the economy, such as attaining higher levels of productivity, increasing employment opportunities, and securing more investments both from within the country and abroad.

There is an assumption that the damage on economy due to the lockdown can be overcome by attracting investments from companies that are shifting base from China. The arrival of these companies in India would provide more employment opportunities in the country. With the relaxation of existing labour laws, the efforts are to woo businesses and place India at a position where it can take advantage of the disruptions in the global supply chain.

Actually this interpretation is a myth and still needs to be proved. It also sends a conflicting signal across the nation. The timing, manner and implementation of these reform efforts give the impression that the states are using this opportunity to empower industries. However, what is overlooked is that this move takes away from workers their basic rights, such as eight hours of working time, freedom of association, welfare and empowerment facilities.

The reasons are many for saying that the timing of present labour reforms could not have been more wrong. India is already a country where inequalities and deprivations abound and citizens are weak and vulnerable. The 2019 Human Development Index (HDI), released by the United Nations Development Programme (UNDP), ranked India 129th out of 189 countries. This truth has been unfolding on the streets of our country during the lockdown, with migrant workers walking back to their homes while battling loss of livelihood, hunger, financial crunch, exhaustion and fatigue. A report by the Times of India, dated May 12, described the situation thus: “Thousands upon thousands of migrant workers, children in arms, stumbling along, are stretched out in unending lines. Almost every truck that passes by is a refuge on wheels. Exhausted people sleep on the roadside. Children cry in hunger. Mothers cast anguished glances at vehicles that won’t stop.”

As per a May 10 report by The Wire, “378 people had died since the lockdown was imposed due to reasons other than the disease. Of them, 69 people died in rail or road accidents while walking to their homes.” Data compiled by researchers Thejesh G.N., Kanika Sharma and Aman shows that, as of May 14, 58 people died of starvation and financial distress, 29 of exhaustion (walking and standing in queues), and 89 of road or train accidents due to walking/migration.

Another reason why the labour reforms are being called untimely is because it comes at such a time when industries can easily procure workforce for lower rates by exploiting the current crisis migrants are facing. Those who are in dire need of money will take up employment, even at far lesser wages, in order to keep themselves and their families fed and clothed.

India has been seeing a steady increase in the unemployment rate, and in 2019, for the first time in the country’s history, employment collapsed by nine million in six years. This has got even worse during the lockdown crisis, as one out of four employed Indians have lost their jobs in the past two months, as per a report by the Centre for Monitoring Indian Economy. The World Bank reported in April that the lockdown impacted 40 lakh migrant workers. These workers are already going back to their home states due to lack of jobs. A huge number of international migrants have also started to come back to India. As a result, today in India, the availability of low-cost labourers has increased tremendously. In the new labour market scenario, these workers will be further exploited.

The third reason for calling this reform untimely is that it comes at a time when both central and state governments are focussing their efforts on stopping the spread of coronavirus. In such a dire situation, addressing issues of migrants and other informal workers in the country may be overlooked or carried out in a haste manner, thereby making the reform agenda vague and bogus.

From the time of outbreak of COVID-19 and following the lockdown announcements, a question has arose with regards to the unsatisfactory labour reforms – Is it life or livelihood that should be prioritized? Both are important and both are interdependent. As of now, India is experiencing the problem of overwhelming unemployment and high labour supply while the demand for workers is much less. This has led to extreme levels of exhaustion and vulnerability among the people and the lack of proper protection of their rights through the constitutional framework only adds to the worries.

All in all, the reform initiatives by the states are indications of taking away workers’ protection and making low-cost labour underestimate even the Minimum Wages Act .The fact that the government does not seem to care about the workers’ right to work and life is explicit from the move to extend working hours. The government could have instead used this opportunity to provide employment to more people under extra shifts.

The suspension of labour laws, especially the Industrial Disputes Acts and the Industrial Employment (Standing Order) Act, will also hinder resolution of disputes between the employer and the employees. Additionally, the decision to suspend the Trade Unions Act is an attempt to crush freedom of workers’ associations that back decent standard of work.

Moreover, the recent proposals do not have room for a legal framework that supports informal workers, who, at 419 million, are about 90% of the country’s total 465 million workers, according to estimates by the Periodic Labour Force Survey of 2017-18.

From early on, most labour laws in India have been implemented poorly and half-mindedly by state governments. Studies show this is due to lack of proper participation by all stakeholders in the process of labour implementations. When viewed against this background, the recent labour law reforms have been introduced in an autocratic and undemocratic manner.

The effectiveness of current labour law reforms is a major question also because it does not eliminate the informal character of workers. In countries like Denmark, Norway and Sweden, workers’ rights are protected through a well-planned safety net of newer employment opportunities, health and social security system, re-training mechanisms and proper documentation of their work and income. These are steps that our country can also adopt. Let’s not forget studies have sufficiently highlighted that one of the most critical essentials of economic activity is the welfare and security of the workforce.

Furthermore, World Bank surveys have shown that labour law is only the fifth-biggest problem employers face in India. That means governments should first address other key issues like infrastructure, lack of skilled employees, resource flow and good governance, etc., in order to ensure ease of business and economic activity before setting their eyes on reforming labour laws. Or else, India will be at the top in the modern slavery system index.

 (The writer is the founder Director of Workers’ India Federation. He can be reached at:

  (Published on 18th May 2020, Volume XXXII, Issue 21)