Suspension of Labour Laws Amid the Pandemic: Are We Pushing the Flexibility Agenda?

labour law
Suspension of critical labour laws amid the pandemic threatens wellbeing of crores of Indian workers.

On 6 May 2020, Uttar Pradesh came up with a notification to pass the Uttar Pradesh Temporary Exemption from Certain Labour Laws Ordinance, 2020 which got the nod from the governor on 14 May, 2020.  The government claimed this to be a measure to tackle economic slowdown and restart businesses amidst Covid 19 pandemic. This action by the UP government to relax labour laws attracted scathing criticisms and a PIL was filed in the Allahabad High Court on behalf of UP Worker’s Front which moved to the court alleging the notification to be unconstitutional. In another series of developments, 12-hour work shift provision set out by the notification is said to be withdrawn with effect from 15 May 2020. The government has yet not made any clarification on the status of the Ordinance and it is yet to be made public. This move to bring Ordinance for temporary suspension of labour laws has been grossly criticized by worker unions across the country including the Bhartiya Majdoor Sangh (the trade union affiliated to the ruling Bhartiya Janata Party).

The Ordinance suspends all existing labour laws in the state barring Bonded Labour Act, 1976, Building and Other Construction Workers Act, 1996 and Workmen Compensation Act, 1923.  The notification also sets out that the timely payment of wages shall be governed by section 5 of the Payment of Wages Act 1936. In a similar stride, we observe Madhya Pradesh has also given leeway to the manufacturing units and only few provisions of the Factories Act, 1948 shall be applicable. Labour in India is subject of the concurrent list, meaning that the centre as well as the states can make laws pertaining to the labour and employment. Over the years, both centre and the states have been enacting and amending multiple legislations either in co-ordination or independently. It is important to note that the present changes and the dismantling of the labour laws at the level of multiple Indian states is not a novel attempt but has a genealogy. For many of us who do not have the background of sudden and aggressive actions of the states to provide large scale exemptions from the mandatory labour law requirement in the world of work, it is necessary to realise the fact that the agenda of labour flexibility is not new or sudden. Since 2014 there have been multiple attempts–many successful and many failed – to launch the so called ‘labour law reforms’, both at the state and centre levels. 

Labour Laws and The Flexibility Agenda

It is imperative to analyse the pattern of the ongoing flexibility agenda, particularly in the unprecedented and uncertain times of the Covid 19 pandemic. While the whole world is fighting the disease as well the grave ramifications of the same, India finds itself in far worse situation. This pandemic has not only brought the economy to shambles but it has also made us realise the percarity and vulnerability faced by large number of working migrant population. None of us are stranger to the immense plight the migrant workers in several states are going through. So much so, that the basic survival question is at the crossroads. The state hosting migrant labour population are facilitating exodus on the premise of lack of resources. The apprehensions of the home states on receiving the migrant workers are also evident. Against this backdrop, it is unfortunate to see that states are rigorously pushing the agenda of labour flexibility, ease of hire and fire by dismantling labour protective legislations.

Labour and employment law in the present context is observed to be surrounded by challenges and existential turmoil in India. With a changing scaffold of the labour market that requires ease of ‘hire and fire’, present scenario constantly strives to attain diffused and all-encompassing definition of what constitutes employment. The efforts to include every casual, temporary and seasonal paid engagement as ‘work’ is a reality. Largely, the attempt has been to establish a flexible labour market, with melting boundaries and wavering trajectories to include the employment relations coherent with the profit motives. Covid 19 Pandemic has certainly created devastating situations in the world of work. According to Centre for Monitoring Indian Economy (CMIE) weekly report released in May second week, approximately 27 million youth lost jobs in the age group of 20-30 years in April 2020.  A recent study conducted by Azim Premji University in collaboration with multiple civil society organizations covering Andhra Pradesh, Bihar, Delhi, Gujarat, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Odisha, Rajasthan, Telangana, and West Bengal in order to assess the impact of the lockdown on employment has revealed – approximately two-thirds, or 67 per cent, of workers have lost their employment during the ongoing lockdown in the wake of Covid 19. While the labour crisis is at pinnacle in the present scenario, it seems the pandemic and the resultant lockdown has been seen as an opportunity for the administration to push the long impending flexibility agenda which have been tried at multiple levels and time to time since 2014. 

The Genealogy

Looking at the some of the attempts by the government in the past, it could be easily understood that the current push to relax labour legislations is an extension to the existing loosening of legislative fabric pertaining to work and employment. In the year 1999, government brought out the Second National Commission on Labour report that talked about ‘rationalization of labour laws’ at length. The key suggestions included a separate Factories Act for Small Factories, Changes in the Trade Union Act 1926 on recognition of unions etc., altering Chapters V A and VB of the Industrial Disputes Act, 1947 which deal with provisions of permissions in case of lay-off, retrenchment or closure, as well as changes in the Contract Labour (Regulation& Abolition) Act, 1970. The report also recommended about the umbrella legislation including both organized and unorganized sector. Such umbrella legislation was envisaged remove the bulky and unnecessary legislative scaffold in the arena of labour and employment.  Though many recommendations of the National Commission on Labour Report could be valid, it was largely criticised on the premise of being based on the logic of global capital procreating principle of competitive capitalism. Competitive capitalism could be understood as a system that creates competition between the capitalist enterprises that seek to secure or expand the base. Competitive capitalism is one of the salient agendas of the globalisation that requires capitalist actors to pursue linkages in order to survive at the global level

The Present Scenario

Ever since 2014, a renewed focus on the recommendation of the Second National Commission on Labour Report could largely be witnessed in India. Many states quickly moved in the direction of liberalising the protectionist legislations owing to the global movements towards flexibility. The states like Gujarat, Rajasthan, Uttar Pradesh, Haryana, Andhra Pradesh, Telangana are significant ones who have brought considerable changes in their labour laws. The amendments in the provisions of the state laws clearly indicate the rework of regulatory framework towards more facilitative environment for the businesses to thrive. One such example is introduction of self-certification schemes. Second, along with the state level amendments, one needs to observe and analyse significant occasions that could mark clear attempts to initiate changes in the regulatory framework of working conditions at a broader level. The introduction of two bills, namely; The Factories (Amendment) Bill, 2016 was which introduced in Lok Sabha on August 10, 2016 and Small Factories (Regulation of Employment and Conditions of Services) Bill in 2014; could be marked as initial steps in order to make conditions of work flexible. The Factories (Amendment) Bill, 2016 mainly proposed flexibility in timings and aimed to alter significant sections of the Factories Act, 1948. Under the draft Small Factories (Regulation of Employment and Conditions of Services) Bill, 2016, all factories employing less than forty workers were to be brought under a common regulatory regime to exempt them from fourteen central labour laws. The relaxation of strict labour laws is seen as a key structural reform that will help boost economic activity and job creation. The bill argues that there has been massive demand from MSME sector to ease up the business opportunities in India. The apprehensions as well as criticism from multiple quarters (trade unions, workers and activists) speculating the Bill to be promoting ways to circumvent regulatory requirements that might cause further segmentation, have led the government to shelve it. Similarly, many states did move in the direction of relaxing many provisions of the main labour legislations. For example, Uttar Pradesh Industrial Disputes Act 1947 already enacted the clause of no requirement of prior permission from the State Government in cases of lay-offs and retrenchments as per section 6-K (lay-off) and section 6-N (retrenchment). In order to allow greater flexibility in the matters of labour adjustments, exemptions have been made to the units employing up to 299 workers from the requirements of prior permission from appropriate Government in case of closure. Similarly, Industrial Disputes (Rajasthan Amendment) Act, 2014 substitutes the existing provisions of Section 25-K with the flexible provisions elucidating, “the provision of chapter shall apply to an industrial establishment (not being an establishment of a seasonal character or in which work is performed intermittently) in which not less than 300 workmen were employed on average per working day for the preceding twelve months. Industrial Establishments pertaining to an Industry wherein less than 300 workmen were employed on an average per working day during the preceding twelve months. It would be seen that there is no requirement of prior permission from the State Government in respect of lay- offs and retrenchments” (2014).

In many states, such as Andhra Pradesh, Rajasthan, Uttar Pradesh and Telangana for example, the amendment the Contract Labour (R&A) Act, 1970 has been pushed for. Whereas Andhra Pradesh and Rajasthan have already adopted the amendment, that raised the threshold limit of the contract workers to fifty against the existing threshold of twenty in case of principal employer as well as the contractors. In Uttar Pradesh proposal to amend the Trade Union Act,1926 with the renewed provision for the purpose of formation of the trade unions 40 per cent workers employed must be members in the units employing up to 500 workers and 30 per cent for the units employing more than 500 workers have been made.

The process of ‘temporary relaxation’ as well as ‘temporary suspension’ of the labour laws in states like Uttar Pradesh and Madhya Pradesh shall certainly be follow suited by many more states in future.  Such decisions may appear to be hasty as we witness them, have always been a part of larger flexibility and ease of hire and fire agenda of the current regime. In the past, urgency showcased by multiple states in enacting the relaxed labour law provision have faced repercussions by means discontent among workers and trade unions in forms of strikes and protests. In the current scenario, however, it is highly unlikely to witness such large unrest and protests by the working population against the precipitous moves on labour laws that largely lack the aspects of real ‘reform’.  The reason for the same is the immense vulnerability and extreme precariousness faced by workers amidst the pandemic. Any such reform when proposed, needs to take into account the concerns of all the stakeholders who are impacted by the transformations. The relaxation and suspension of labour protective laws, unfortunately, appears to be exclusionary as well as showing legislative supremacy and employer focus over workers. Not all proposals of the relaxation of labour laws for economic push could be discarded, yet, a phase-wise, worker focussed implementation would have been a great way to deal with the real problems of redundancy that several parts of such legislations suffer from. 


Shuchi Bharti pursed her Doctorate from Jawaharlal Nehru University and is currently working on issues in the field of labour law.


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