The long-awaited labour law reforms by states may make it easier for factories and businesses to run efficiently amid the coronavirus-led economic crisis, but the relaxation in rules may also put at stake the interest of labourers and workers, with businesses getting a free hand.
At a time when everyone is awaiting an early end to the health and economic crisis caused by the global pandemic, the interests of labourers and workers are once again set to be sacrificed.
The revival of business and economic activity after weeks of forced closure is indeed a key objective to be achieved.
Granting exemptions from Legal provisions by some states:
On one hand, the industry sought to assure that the rule changes will let businesses function and thus generate more employment; on the other hand, social experts said the move may further aggravate the crisis for those who are worst affected.
Given the unprecedented economic fallout from coronavirus, various industry bodies appreciated the labour law relaxations.
However, it is a moral and perverse on the part of some States to address this need by granting sweeping exemptions from legal provisions aimed at protecting labourers and employees in factories, industries and other establishments.
Ordinance by states to suspend all labour laws:
Madhya Pradesh has embarked on a plan to give a boost to business and industry by allowing units to be operated without many of the requirements of the Factories Act working hours may extend to 12 hours, instead of eight, and weekly duty up to 72 hours.
It appears the State has used Section 5 of the Act, which permits exemption from its provisions for three months, in the hope that the Centre would approve such suspension for at least a thousand days.
However, this exemption can be given only during a ‘public emergency’, defined in a limited way as a threat to security due to war or external aggression.
Uttar Pradesh has approved an ordinance suspending for three years all labour laws, save a few ones relating to the abolition of child and bonded labour, women employees, construction workers and payment of wages, besides compensation to workmen for accidents while on duty.
Reports suggest that several States are following their example in the name of boosting economic activity.
Labour Regulations in Emerging and Developed Countries:
Taking into account the features of regulations in India governing flexibility in labour markets, we consider below the main features of corresponding regulations in selected emerging (Brazil, China, and South Africa) and developed countries (France, Germany, Japan, Korea and the US).
On collective bargaining and trade unions we also look at the law and practice in the U.K. and Malaysia, as they provide insights that could be helpful in resolving the problems that are endemic in India, such as multiplicity of trade unions, domination of outsiders in trade unions and industrial action being initiated without the support of the majority of workmen.
The specific aspects we deal with are collective dismissal (downsizing or closure of firms for economic reasons), contract workers, fixed term employees, and collective bargaining.
Salient Features of Labour Regulations in India:
India has a federal government and the Constitution has demarcated law making authority between the centre and the states through the Union list, State List and the Concurrent List.
Regulation of labour is on the Union List but certain aspects such as industrial disputes and social security also figure on the Concurrent List. As a result, both the Parliament and state legislatures have been enacting labour laws and there is multiplicity of such laws.
State amendments provide mostly for minor variations, but sometimes for more significant ones, without departing from the main thrust of the central enactment.
According to the list given in the Annual Report of the Ministry of Labour and Employment for 2013-14, there are at present 44 extant enactments of the central government.
In addition, there are some 160 state level enactments containing supplementary provisions.
A general comment is that the uncertainty caused by complex, overlapping and out-dated laws is influencing ‘labour market outcomes’ in India.
In order to eliminate the widely perceived deficiencies in labour regulations, the National Commission on Labour (2002) had recommended the clubbing of the laws into five or more groups relating to industrial relations, wages, social security, safety, welfare and working conditions etc.
The biggest concern: Exploitation of labour:
Meanwhile, the new labour law changes are also seen as a bane for the workers desperately looking for a job to end their financial nightmare.
Instead of providing protections to the most marginalised and vulnerable, as exposed by the covid crisis, and thus an opportunity to rectify the fractured economic system, these moves will further exacerbate the crisis for those who are worst affected by it.
It goes against the grain of transformative reforms, which is the need of the hour, in an effort to build back better and it rings the government’s mantra of ‘sabka Saath, sabka vikas’ hollow.
Labour reforms must also be takes into consideration:
Labour reform is a tedious process but once implemented, it will be beneficial for industries and ultimately help in job creation.
As a country with sizable youth population, we should strive to create a conducive atmosphere for industries for better employment generation. The labour reforms including the code on occupational safety will reduce hassles and paper works for industries, and in a way improve productivity.
The reforms will give the required push for simpler labour laws, and help in economic growth. It needs to come into force faster for a developing economy like ours.
Changes in the manner in which labour laws operate in a State may require the Centre’s assent.
One hopes the Centre, which is pursuing a labour reform agenda through consolidated codes for wages, industrial relations and occupational safety, health and working conditions, would not readily agree to wholesale exemptions from legal safeguards and protections the law now affords to workers.
The most egregious aspect of the country’s response to the pandemic was its inability to protect the most vulnerable sections and its vast underclass of labourers from its impact.
The emphasis in the initial phase was on dealing with the health crisis, even when the consequence was the creation of an economic crisis.
While the country watches with horror the continuance of the collective misery of migrant workers well into the third spell of the national lockdown, the attitude of the ruling class towards labour remains one of utter apathy, bordering on contempt.
Insights Current Affairs Analysis (I–CAN) by IAS Topper