Amid the coronavirus-induced lockdown, an increasing number of states that include Uttar Pradesh, Madhya Pradesh, Rajasthan and Gujarat have pushed through changes to their labour laws by way of ordinances or executive orders.
Since labour is a concurrent subject under the Constitution of India, states can frame their own laws but need the approval of the Central government.
The Uttar Pradesh government has approved an Ordinance exempting businesses from the purview of all the labour laws except few for the next three years.
The labour laws related to settling industrial disputes, occupational safety, health and working conditions of workers, and those related to trade unions, contract workers, and migrant labourers will become defunct.
However, laws related to bonded labour, deployment of women and children and timely payment of salaries will not be relaxed.
The changes in the labour laws will apply to both the existing businesses and the new factories being set up in the state.
Similarly, the Madhya Pradesh government has also suspended many labour laws for the next 1000 days. Few important amendments are:
Employers can increase working hours in factories from 8 to 12 hours and are also allowed up to 72 hours a week in overtime, subject to the will of employees.
The factory registration now will be done in a day, instead of 30 days. And the licence should be renewed after 10 years, instead of a year. There is also the provision of penalty on officials not complying with the deadline.
Industrial Units will be exempted from majority of the provisions of the Industrial Disputes Act, 1947.
Organisations will be able to keep workers in service at their convenience.
The Labour Department or the labour court will not interfere in the action taken by industries.
Contractors employing less than 50 workers will be able to work without registration under the Contract Labour (Regulation and Abolition) Act, 1970.
Major relaxations to new industrial units are:
Exempted from provisions on ‘right of workers’, which includes obtaining details of their health and safety at work, to get a better work environment which include drinking water, ventilation, crèches, weekly holidays and interval of rest, etc.
Exempted from the requirement of keeping registers and inspections and can change shifts at their convenience.
Employers are exempt from penalties in case of violation of labour laws.
Rationale Behind the Changes in Labour Laws
States have begun easing labour laws to attract investment and encourage industrial activity.
To protect the existing employment, and to provide employment to workers who have migrated back to their respective states.
Bring about transparency in the administrative procedures and convert the challenges of a distressed economy into opportunities.
To increase the revenue of states which have fallen due to closure of industrial units during Covid-19 lockdown.
Labour reform has been a demand of Industries for a long time. The changes became necessary as investors were stuck in a web of laws and red-tapism.