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Insights into Editorial: Workforce habits: On tweaking of labour laws



Over two months into the national lockdown, India’s workforce, ostensibly blessed to be part of its much-vaunted demographic dividend, is in complete disarray.

There is the visibly disturbing narrative of a few million workers trying to get back home from their respective urban lives as resources run out and lack of adequate living space hits hard in the face of a virus that requires physical distancing.

They used their feet, often facing police wrath, till the administration allowed trains and buses to move again.

While swathes of informal sector workers are moving away from their adopted base, the remaining 10% of the workforce that is formally employed with social security benefits are beset by pink slips, furloughs, or salary cuts.

The trend, driven by the slump in economic activity, cuts across sectors.

32% of Indian workforce reports decrease in earned income: Survey:

  1. The survey also suggests that professionals working in IT, manufacturing and media have reported low confidence towards job stability and career progression as companies in these industries buckle under the pressure of the novel coronavirus pandemic’s impact.
  2. According to the survey, one in four manufacturing professionals, more than one in five IT professionals, and more than two in five media professionals feel their companies will fare worse in the next six months.
  3. Yet, professionals in these same sectors have expressed confidence about strong long-term growth.
  4. About 77 percent of manufacturing professionals, 67 percent of media professionals, and 65 percent of IT professionals feel their companies will fare better in the next two years.
  5. As various sectors announce a hiring freeze, job-seekers have reset their expectations as more Indian professionals anticipate fewer job openings going forward.
  6. Findings support this by stating that 48 percent of active job seekers think there will be a decrease in available job opportunities, up 9 percent from last fortnight’s findings.

About 400 million workers in India may sink into poverty: UN report:

About 400 million people working in the informal economy in India are at risk of falling deeper into poverty due to the coronavirus crisis which is having “catastrophic consequences”, and is expected to wipe out 195 million full-time jobs or 6.7% of working hours globally in the second quarter of this year, the UN’s labour body has warned.

The International Labour Organization (ILO) in its report titled ‘ILO Monitor 2nd edition: COVID-19 and the world of work’, describes coronavirus pandemic as “the worst global crisis since World War II“.

The report said the disruption to the world’s economies caused by the COVID-19 pandemic is expected to wipe out 6.7% of working hours globally in the second quarter of this year — the equivalent of 195 million jobs worldwide.

Need of more productivity from various sectors:

Restrictions have eased slightly, but a return to normalcy has proved challenging even for the firms that are allowed to operate, largely due to inadequate manpower.

Industry representatives have pleaded with the Labour Ministry to cajole workers to return to their workplaces on being summoned, and if that does not prove effective, make them liable for action under relevant industrial labour legislation.

Relaxations have also been sought in statutory wage payments for April and May when little work happened.

Several States offered a temporary fix — stretching permissible working hours from eight to 12, so that productivity can improve even with less-than-optimal staff strength.

Some States are relaxing and purging Labour Laws:

  1. While Rajasthan withdrew such an order, Uttar Pradesh, Madhya Pradesh and some others have used the occasion to embark on a purge of labour laws, citing the need to spur investor confidence and revive job creation.
  2. Labour unions have protested this wholesale scrapping that would leave employees vulnerable in many aspects.
  3. Being a concurrent subject in the Constitution, States, however, need the Centre’s nod to effect these changes.
  4. Official instructions to keep paying employees amidst the lockdown have not worked evenly, while tweaks such as lowering the EPF contribution rate do not amount to much relief for firms or their staff.
  5. While the nature of work is changing and greater spending is needed on hygiene, the immediate challenge is to inspire employee confidence.

Can a State government nullify Central enactments?

Labour is a concurrent subject in the Constitution and most pieces of labour legislation are Central enactments. The U.P. government has said that labour laws will not apply for the next three years.

Even laws to protect basic human rights have been suspended. The Constitution does not envisage approval by the President of a State Ordinance.

This makes parliamentary laws inoperable in the absence of corresponding legislations on the same subject. Almost all labour contracts are now governed by statutes, settlements or adjudicated awards arrived through democratic processes.

These processes accord the labour with procedural equality, which ensures progress of a nation. LIC vs D.J. Bahadur & Ors (1980) – The Supreme Court said that any changes in the conditions of service can be only through a democratic process of negotiations or legislation.


Most migrant workers are running scared of the pandemic. Getting them home safely is a first step and giving them an emergency income support till the worst of the pandemic subsides is the next.

But for them to return to work enthusiastically over time, it is equally critical to reorient India’s current approach to urban and industrial housing, workplace social security and minimum wage standards.

Workers and businesses are facing catastrophe, in both developed and developing economies. We have to move fast, decisively, and together. The right, urgent, measures, could make the difference between survival and collapse.

The Centre must begin a dialogue with States on this front. Ineffective paper laws such as the Inter-State Migrant Workmen Act of 1979 can be reviewed thereafter.