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THE INTERPLAY OF LABOUR LAW AND COVID-19

Updated: Jul 29

[Authored by Divya Shukla, 4th year BA LL.B (Hons.) student at School of Law, CHRIST (Deemed to be University), Bangalore.]

In the wake of the infamous pandemic COVID-19, several economies around the globe have been ripped apart because of health, security and financial considerations. Although the nuances surrounding control of the pandemic are multifaceted in nature, this article will focus chiefly on the impact of Covid-19 on labour laws in India.


Like most legal issues which involve striking a balance between two apparently conflicting interests, the debate surrounding governments’ response to COVID-19 and labour law also concerns balancing the right to health and the right to work. With the advent of lockdown in India, there also arose sweeping changes in labour laws. Several state governments including Uttar Pradesh, Gujarat, Rajasthan and Madhya Pradesh have introduced notifications and ordinances which exempt compliance with certain labour law statutes.[1]

By virtue of said notifications and exemptions either the entirety of a statue is suspended or parts thereof are suspended for a considerable period of time.


For instance, on 7th May, the Uttar Pradesh government exempted businesses from the scope of almost all but four labour laws (viz. Building and Other Construction Workers Act, Section 5 of Payment of Wages Act, Workmen Compensation Act and Bonded Labour Act) for the next three years. At least seven states have raised maximum working hours (overtime) from 48 to 72 a week, subject to the will of employees. Factory workers in India may now be required to work 12 hours a day (erstwhile 8 hours), with six-hour shifts spread over 13 hours. While Punjab, Madhya Pradesh and Haryana will pay overtime rates specified under Section 59 of the Factories Act of 1948, Gujarat and Himachal Pradesh have said that they will pay only regular wages. A registration of factory which earlier took 30 days will now be done in a day. New industrial units are also exempted from provisions concerning rights of workers including health and safety, working environment, period of rest, and requirement of keeping registers. In some cases, employers are even exempted from penalties in case of violation of labour laws.


It must be noted that this action of the State Governments comes after the advisories released by the Ministry of Labour and Employment. The ministry had released advisories to inter-alia, the Chief Secretaries of States and Union Territories, Secretary of the Department of Public Enterprises, Workers and Employers’ Organizations about COVID-19.[2] In these, it was advised that the workers should be deemed to be on duty when the workplace is closed, to not terminate the employment or reduce the wages of the workers as doing so would further deepen the crisis and would weaken the morale of workers along with the obvious financial distress that would be caused as a consequence. Imperative to also note is the press statement of the International Labour Organization[3], which has stated that the governments must adhere to the international standards. The ILO advised that any policy response should ensure recovery through fiscal and monetary stimulus measures, support to enterprises, jobs and income through social protection, retention and financial relief to companies along with ensuring that workers’ needs be protected by strengthening occupational safety and health measures. It further said the most important element was “to strengthen the social dialogue, collective bargaining, labour relation institutions and process for implementing solutions”.


The reason that was given for exemption from compliance of labour law is that doing so will help revitalize the economy while attempting to regulate the effects of COVID-19, labelling it as the need of the hour. It is also argued that the States have been doing so to attract investment and encourage industrial activity in such critical time. As has already been argued by many, existing labour law regime was plagued with problems namely that they are inflexible, complicated, too many in number and promoting corruption and rent-seeking behaviour. Since it is believed to promote onerous legal requirement, the move by State governments would seem justified to some as the new flexible character will increase employment and boost economy.[4]


However, there have been multiple criticisms of the action of the state governments. Constitutionally speaking, ‘labour’ is a subject that is included in the Concurrent list[5] and there are many labour laws enacted by the Centre that the State cannot simply brush aside as it has done. Labour Laws are important social security measures, and their suspension raises serious alarm. The move also goes against the fundamental rights of the workers enshrined in the Constitution of India and the various international instruments that India is a party to, particularly various ILO conventions. In addition, while framing this policy, the state governments have also seemingly overlooked the directive principles of state policy including the directive to secure an adequate means of livelihood[6], health and strength of workers[7], right to work[8], and finally securing of a living wage and decent standard of life.[9]


Admittedly, the existing labour law regime covers only formal sector (except the Unorganised Workers Social Security Act, 2008 which itself is burdened with inherent flaws[10] and it is established that the Indian economy has a preponderance of informal and unorganised sector both in terms of number of workers and enterprises. As per reports, the unorganised sector comprises an overwhelming majority of workers in the country. The Economic Survey of 2018-19, released on July 4, 2019, says almost 93% of the total workforce is informal. Now even the organised sector is increasingly employing workers without formal contracts. The unorganised workers work under extreme conditions without any proper benefits.[11] The consequences of the move by State Government will in fact turn the sector informal and bring down the wage rate. Instead of pushing for a greater formalization of the workforce, this move will inevitably plunge the existing formal workforce into informal. Given the already dismal state of affairs, this would create an enabling environment for exploitation as they would be robbed of any social security. Thus, “far from being a reform, which essentially means an improvement from the status quo, the removal of all labour laws will not only strip the labour of its basic rights but also drive down wages.”[12] As expressed by some, if raising the employment was the object, the governments instead of allowing 12 hours of work, could have allowed two shifts of 8 hours each so that more people can get work. Furthermore, the governments could also contribute some percentage of the GDP towards sharing the wage burden.[13]


The Judiciary had taken a pro-active role in securing the rights of workers. In the case of Rural Litigation and Entitlement Kendra, Dehradun v. Uttar Pradesh,[14] the court has held that the right to livelihood is inherent in right to life under Article 21. In Peoples’ Union for Democratic Rights v. Union of India, [15]it was held that taking of labour or service of any person for payment less than the prescribed minimum wages is violation of the fundamental right to such labourer while excising the scope and ambit of Article 23 of the Constitution of India. The same was also reiterated in Sanjit Roy v. State of Rajasthan[16] and Deena v. Union of India[17]. Similarly the Supreme Court in Bandhua Mukti Morcha v. Union of India[18], held that the constitutional obligation of the state to ensure that there is no violation of the fundamental right of any person, particularly when he belongs to the weaker sections of the community and is unable to wage a battle against a strong and powerful opponent who is exploiting him. The court also held that both the Central Government and State Governments are, therefore bound to ensure observance of social welfare and labour laws enacted by parliament for the purpose of securing to the workmen a life of basic human dignity in compliance with the Directive Principles of State policy. In Neeraja Chaudhary v. State of Madhya Pradesh[19], the court observed that any failure of action on the part of the State Government in implementing the provisions of the Minimum wages Act was violative of Article 21 as also 23 of the Constitution.


Recently, India has also evidenced an exodus of migrant workers which revealed a catastrophic impact of lockdown. While they were left to their own devices[20] and we couldn’t come to their aid, we can and we must rescue the rest of the workforce.[21] Even though these were poorly implemented, the protections enshrined in these statutes were the only beacon of hope to the workforce. They served as a weapon for bargaining of rights. A suspension these would leave millions vulnerable given the already existing systematic asymmetry. Perhaps it is time now for us to revaluate the proposed labour law reforms by the State Governments as well as the legislative changes in the pipeline by the Central government[22] and ensure that these are in consonance with the fundamental rights guaranteed to labour, as well as the Directive Principles of the State Policy.

[1] Ashima Obhan & Bambi Bhalla, India: Suspension of Labour Laws Amidst Covid-19, MONDAQ, https://www.mondaq.com/india/employment-and-workforce-wellbeing/935398/suspension-of-labour-laws-amidst-covid-19. [2] Advisories on Covid-19, Ministry of Labour & Employment, Government of India, https://labour.gov.in/advisories-covid-19. [3] Somesh Jha, Ensure that changes to Indian Labour Laws Adhere to Global Standards: ILO, WIRE https://thewire.in/labour/ilo-india-labour-laws-covid-19. [4] Udit Mishra & Nushaiba Iqbal, Explained: What Labour law changes by states men, THE INDIAN EXPRESS, https://indianexpress.com/article/explained/what-labour-law-changes-mean-coronavirus-6403611/. [5] Entry 22-24, List III, VII Schedule, Constitution of India. [6] INDIA CONST. art. 39, cl. a. [7] INDIA CONST. art. 39, cl. e. [8] INDIA CONST. art. 41. [9] INDIA CONST. art. 43. [10] Divya Shukla, Analysis of Laws Relating to unorganized sector in India, LAW COLUMN, https://lawcolumn.in/analysis-of-laws-relating-to-unorganised-sector-in-india/. [11] Supra at 6. [12] Mishra & Iqbal, supra note 4. [13] Relaxation in the Labour laws due to COVID-19 outbreak and their impacts, Civil Daily, https://www.civilsdaily.com/news/relaxation-in-labour-laws-due-to-covid-19-outbreak-and-their-impacts/. [14] Rural Litigation and Entitlement Kendra, Dehradun v. Uttar Pradesh , AIR 1985 SC 652. [15] Union for Democratic Rights v. Union of India , AIR 1982 SC 1473. [16] Sanjit Roy v. State of Rajasthan, AIR 1983 SC 328. [17] Deena v. Union of India , AIR 1983 SC 1155. [18] Bandhua Mukti Morcha v. Union of India, AIR 1984 SC 802. [19] Neeraja Chaudhary v. State of Madya Pradesh, AIR 1984 SC 1099. [20] Alakh Alok Srivastava v. Union of India, Writ Petiton(s) (Civil) No(s). 468/2020. [21] Manu Sebestian, Migrant Workers Cases : SC Failed To Rise To The Occasion, (May 10, 2020), https://www.livelaw.in/columns/migrant-workers-cases-sc-failed-to-rise-to-the-occasion-156541 [22] Labour Reforms, Ministry of Labour & Employment, Government of India, https://labour.gov.in/labour-reforms.

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