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ILO urges PM not to dilute labour laws

Topics Covered: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

ILO urges PM not to dilute labour laws

What to study?

For Prelims and Mains: States which have relaxed labour laws, impact and implications and ways to address them.

Context: The International Labour Organisation (ILO) has expressed concern and urged Prime Minister Narendra Modi to “send a clear message” to the Central and State governments to uphold international labour laws after the recent dilution of laws by some States.

 What’s the issue?

A group of 10 Central trade unions wrote to the ILO in Geneva on May 14, seeking its intervention to protect workers’ rights and international labour standards.

Uttar Pradesh, Madhya Pradesh, Gujarat and some other States either have suspended a large number of labour laws for two-three years or diluted them in an attempt to woo industry in the midst of the COVID-19 pandemic.

What are Indian labour laws?

Labour falls in the Concurrent List.

Estimates vary but there are over 200 state laws and close to 50 central laws. And yet there is no set definition of “labour laws” in the country. Broadly speaking, they can be divided into four categories.


Why are labour laws often criticised?

Indian labour laws are often characterised as “inflexible”. It has been argued that thanks to the onerous legal requirements, firms (those employing more than 100 workers) dither from hiring new workers because firing them requires government approvals. This, in turn, the argument goes, has constrained the growth of firms on the one hand and provided a raw deal to workers on the other.

Besides, there are too many laws, often unnecessarily complicated, and not effectively implemented. This has laid the foundation for corruption and rent-seeking.

Why states are giving relaxations?

  • These changes are being brought about to incentivise economic activity in the respective states.
  • Migrants coming home need jobs; and therefore, industries have to be offered a flexible hire-and-fire regime to restart operations.
  • At a holistic level, it is being argued that Indian labour laws are cumbersome and drive away investors. So, changes have been made to attract units to India.

Few notable changes made by states:

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.

Madhya Pradesh government has also suspended many labour laws for the next 1000 days.

What are the concerns associated?

The suspension of basic labour laws and the free hand given to industries may lead to a wave of easy closures and retrenchments, which will only worsen the unemployment situation in the country. Denying the rights of workers is a violation of human and fundamental rights. It may create insecurity among the workers. The changes may lead to desperate conditions for workers.

Way ahead:

It is true labour laws need to be streamlined. But this is not the right time. Millions of migrants, out of jobs, are heading back to their home state. By diluting labour laws that guarantee some measure of protection against exploitation, we could be adding to their misery.


Prelims Link:

  1. Labour under 75 schedule of Indian constitution.
  2. ILO- composition, objectives and members.
  3. Which states have diluted labour laws.
  4. Differences between formal and informal sector.
  5. Types of labour laws in India.

Mains Link:

Discuss the rationale behind dilution of labour laws by some states. Comment on the impacts of such relaxation’s.

Sources: the Hindu.