Where does India’s workforce stand amid COVID-19 and compromised labour laws?

At a time when the economy is in doldrums because of the halt on all economic activities due to the coronavirus-induced lockdown, some state governments have been over past few days announced or expressed their decision or desire to make significant changes in the application of labour laws to “give a fillip to the economy and attract more investment”. In the face of compromised labour laws, where do India’s workers stand? Will this move serve its purpose? Here’s a look at some of these questions?

Hyderabad:The Employers' associations including CII, Ficci and Assocham on Friday held a webinar with Labour Minister Santosh Gangwar demanding the suspension of labour laws barring some key provisions across the country for next two-three years to help the industry come out of the crisis induced by the lockdown to combat COVID-19 pandemic.

However, before this virtual meeting, Government of Uttar Pradesh had on May 6 decided to suspend 35 of the 38 labour laws in the state for three years, followed by states like Madhya Pradesh, Gujarat, Punjab, Odisha, Maharashtra, Kerala, Himachal Pradesh and Assam, in a bid to give a fillip to the economy and attract more investment as argued by the heads of these states.

In response to these changes or attempted tweaks in labour laws, as many as ten central trade unions said that they are considering approaching the International Labour Organization (ILO) against this move, as they find it to be a “gross violation of the Right to Freedom of Association (ILO Convention 87), Rights to Collective Bargaining (ILO Convention 98) and also the internationally accepted norm of eight hour working day (espoused by Core Conventions of ILO).”

Here are state-wise details of amendments in labour laws:

Uttar Pradesh:Out of all the states, UP, the most populous state, has made the boldest changes as it summarily suspended the application of almost all labour laws in the state for the next three years.

Uttar Pradesh brought an ordinance titled, “Uttar Pradesh Temporary Exemption from Certain Labour Laws Ordinance, 2020” to exempt all establishments, factories, and businesses from the purview of all but four labour laws, for three years.”

Laws connected to industrial disputes – including over layoffs and compensation – and the working conditions of workers, health and safety mandates, maintenance of facilities like drinking water, canteens, restrooms and crèches and inter-state worker regulation are all defunct for the next three years. The list is long.

The four labour laws exempted from this ordinance include:

1. The Building and Other Construction Workers Act, 1996;
2. Workmen Compensation Act, 1923;
3. Bonded Labour System (Abolition) Act, 1976; and
4. Section 5 of the Payment of Wages Act, 1936 that provides the right to receive timely wages.

Madhya Pradesh: MP CM Shivraj Singh Chouhan announced to abolish the requisite to fill 61 registers and 13 returns, instead of only one register and the return will be sufficient to take the license.

He also allowed overtime of up to 72 hours and the period of working shifts in factories to increase from 8 hours to 12 hours. In another major relaxation, the state government said that there will be no inspection in the firms employing less than 50 workers and in the small and medium enterprises, the inspection will take place only with the permission of the labour commissioner or in case of complaint.

Rajasthan:Apart from raising the working hours from 8 hours per day to 12 hours per day, the state has amended Industrial Disputes Act to increase the threshold for lay-offs and retrenchment to 300 from 100 earlier. In order to recognise the trade union, the threshold membership of the trade union has been increased from 15 per cent to 30 per cent.

Maharashtra: All the shops and factories are asked to submit consolidated annual returns instead of multiple returns under various labour laws.

Kerala:Chief Minister Pinarayi Vijayan had said if the investor agrees to complete formalities in a year, the state government would facilitate new industrial licence within a week after the application is filed.

Punjab:Punjab has become the first state to reverse an order announcing a hike in minimum wages of workers, in a bid to help companies overcome the economic crisis caused by the Covid-19 outbreak. It has also amended its Factories Acts in the last month to increase the work time to 12 hours every day and 72 hours every week, compared to 8 hours every day and 48 hours every week.

Karnataka:The Karnataka government is also expected to follow the suit and withdraw its decision to raise the variable DA, according to a state government official.

Himachal Pradesh: The state has issued an executive order allowing shifts of 12 hours’ work a day or 72 hours of work a week with no provision of overtime.

Gujarat: Gujarat is seeking to give any new investor in Gujarat a holiday that makes an investment that lasts at least 1,200 days of all labour legislation with the exception of the Minimum Wages Act and the Workmen’s Compensation Act.

Assam:It has proposed introducing fixed-term employment to help both workers and industries, and seeks to take more firms out of the ambit of laws governing factories and contract workers. The government has further proposed increasing the working hours in factories from a maximum of 8 hours to 12 hours in a day.

Odisha:The Odisha government has temporarily changed the daily eight-hour shift to 12 hours by tweaking the Factories Act, 1948, amid opposition from labour organisations.

Labour laws in India:

There were around 50 central and over 200 state-level labour laws in the country until the Modi government decided to streamline the central laws into four codes on:

1. Industrial relations
2. Wages
3. Social security
4. Occupational safety

The last three have been legislated into law, while the first one remains a work in progress.

Labour is a concurrent subject, in which the Centre and the states can make laws. Where there is any conflict between a central law and a state law on the same subject, the central law will prevail. If some of the laws sought to be suspended have a central counterpart, the suspension is open to legal challenge.

Some important types of labour laws in India

Laws pertaining to conditions of work:

Factories Act, 1948: It seeks to ensure safety measures on factory premises, and promote the health and welfare of workers.

The Shops and Commercial Establishments Act:It aims to regulate hours of work, payment, overtime, a weekly day off with pay, other holidays with pay, annual leave, employment of children and young persons, and employment of women.

The Contract Labour (Regulation &Abolition) Act, 1970: It aimsto prevent exploitation of contract labour and also to introduce better conditions of work

Laws pertaining to wages and Remuneration:

The Minimum Wages Act, 1948:It covers more workers than any other labour legislation.

Payment of Wages Act, 1936:It aims to regulate the payment of wages of certain classes of employed persons

Laws pertaining to employment security and Industrial Relations:

The Industrial Disputes Act, 1947:It relates to terms of service such as layoff, retrenchment, and closure of industrial enterprises and strikes and lockouts.

The Industrial Establishments (Standing Order) Act, 1946: It requires employers in industrial establishments to formally define conditions of employment under them and submit draft standing orders to certifying Authority for its Certification.

Laws pertaining to social security:

Employees’ Provident Fund Act, 1952:It seeks to provide for the institution of provident funds pension fund and deposit-linked insurance fund for employees in factories and other establishments.

Workmen’s Compensation Act, 1923: Itprovides for payment of compensation to workmen and their dependents in case of injury and accident (including certain occupational disease) arising out of and in the course of employment and resulting in disablement or death.

Employees State Insurance Act, 1948:It aims at providing certain benefits to employees in case of sickness, maternity and ‘employment injury ’ and to make provision for certain other matters

How does suspension labour laws affect the working class?

With these labour laws compromised, suspended or done away with, the workers stand extremely vulnerable to be exploited by their employers with no safeguards in place to protect them.

Under such circumstances, most employment will effectively turn informal and bring down the wage rate sharply, leaving no way for any worker to even seek grievance redressal.

It would affect a huge range of worker protections, including laws relating to occupational safety, health and working conditions of workers, settling industrial disputes, and those related to trade unions, contract labourers, and migrant workers.

India already has one of the cheapest and most exploited labour forces in the world.

Labour costs account for a relatively small proportion of total industrial costs in India.

According to the Annual Survey of Industries, in 2017-18, wages to workers were less than 3 per cent of total input costs for India as a whole; in U.P., they came to 2.6 per cent, and in Gujarat and M.P. only 2 per cent.

Labour laws compromised to attract foreign investment and shift it from China to India!

Before Uttar Pradesh chief minister Yogi Adityanath promulgated the ordinance to suspend labour laws in the state, he held a video conference with dozens of US-based firms to try and persuade them to shift their investment from China to the state, promising reforms.

The Central government has also been harping on similar lines, it recently came out strongly in favour of “structural labour reforms to spur economic growth”.

However, only time will tell if such tweaks would divert investment from the second-largest economy in the world to India which has over the last six years seen immense economic mismanagement with the International Monetary Fund (IMF) in its January forecast lowering India's economic growth estimate for the current fiscal to 4.8 per cent, owing to “stress in the non-bank financial sector and weak rural income growth”.

With the country’s economic activity coming to a virtual standstill due to the coronavirus-induced lockdown, economists are forecasting the Indian economy to shrink 0.4% in the year to March, according to the latest survey by Bloomberg News.

What other countries are doing in this time of crisis?

Canada: As part of a temporary wage top up $2.1 bn for low-Income essential workers.$1400 to all workers and self-employed Individual who face Income loss. Govt will contribute towards employers wage bills to reduce layoffs pay cuts.

UK: Govt to pay 80% of usual wages of employees Laid off 4 months firms and claim the sick pay for COVID19 patients ( current or former employees) since March 2020 under coronavirus statutory sick pay rebate scheme.

Vietnam: $70 per month for three months for workers on unpaid leave and aid to employers for paying Severance packages. Workers with no unemployment insurance or social security to get $ 40 a month for three months.

Bangladesh: $ 89.45 million for workers who have lost income... $ 11.77 million for doctors and health workers

With labour laws suspended, India seems to be taking on its workers at a time when people simply don’t have the opportunity to take to the streets to express their opposition, this tells us a lot about how pandemic politics plays out.

Only time will tell if these tweaks are as they say “temporary” or end up being permanent.