As states nullify labour laws to kickstart economy, political battle lines are drawn

Uttar Pradesh removed itself from the purview of all but 3 labour laws

INDIA-ECONOMY-LABOUR Representational image | AFP

On Saturday, accusing the Centre of diluting labour laws using the coronavirus pandemic as an excuse, eight political parties jointly wrote a a letter to President Ram Nath Kovind, registering their protest over the issue. The workers are being treated as slaves, according to the letter signed by CPI (M) General Secretary Sitaram Yechury, CPI General Secretary D. Raja, CPI (ML) General Secretary Dipankar Bhattarcharya, All India Forward Bloc General Secretary Debabrata Biswas, Revolutionary Socialist Party (RSP) General Secretary Manoj Bhattacharya, RJD MP Manoj Jha, Viduthalai Chiruthaigal president Katchi Thol. Thirumavalavan and Loktantrik Janata Dal leader Sharad Yadav.

"Reducing them [labour laws] to this status is not merely a violation of the Constitution, but its nullification," they said. The parties said the Indian economy was already in a tailspin hurtling towards a recession even before the outbreak of this pandemic. "The government has done little to help those who lost their livelihood. 14 crore workers have lost their jobs since the lockdown began," they said.

What was the reason behind this letter? States like Gujarat, Madhya Pradesh, Haryana, Himachal Pradesh, Rajasthan and Punjab have diluted their labour laws, with an eye on fresh investment, both domestic and foreign. All of these states have extended daily working hours from eight to 12 without amending the Factories Act. In many of these states, contract labour acts will be diluted.

Uttar Pradesh removed itself from the purview of all but 3 labour laws.

Reacting to criticism over the move, Uttar Pradesh Labour Minister Swami Prasad Maurya accused the opposition of showing their anti-workers face and shedding crocodile for them. "Those who are shedding crocodile tears for workers perhaps do not know that this ordinance will not only pave way for bringing investments but would also open employment opportunities at a time when large number of migrant labourers are returning home and have to be provided jobs in the state."

"While opening the doors of investment, we have taken full care of workers' interest," Maurya said. He added that the ordinance has been brought to bring new investments, reopen the closed units, for generating more and more employment and for adjusting as many migrants as possible.

Here are some of the changes the states have implemented:

Madhya Pradesh

The state allows workers to work up to 72 hours a week with overtime pay, and has also greenlighted the need for just third party inspections. Changes in the Industrial Employment Act will allow the employers, with under 100 workers, more freedom to hire and fire employees. For industries with less than 50 employees, there will be no inspection. "End of inspection raj," announced CM Shivraj Singh Chouhan. The state is planning to implement these relaxations over a period of three years. 


Dilution of laws are largely similar to Madhya Pradesh. The Gujarat government on Friday said it will go all out to welcome firms wanting to shift out of China by giving them land within seven days and all clearances to set up industries in 15 days. The Vijay Rupani government also announced that new industries being set up will not be bound by labour laws for 1,200 days (3.2 years) from the start of manufacturing, to attract foreign direct investment and local investment post the COVID-19 pandemic. "We have decided that the process of approvals for new industries that wish to establish themselves in Gujarat will be hundred per cent online. They will be allocated land within seven days and all the necessary permissions related to the same shall be provided in 15 days from their application," he said. He said "new industrial units will be provided with relief from all the related labour acts and norms for 1,200 days". However, they will be bound to follow Minimum Wages Act, Industrial Safety Rules and The Employee Compensation Act, the CM said.

Uttar Pradesh:

The state cabinet chaired by the chief minister had given its nod to the Uttar Pradesh Temporary Exemption from Certain Labour Laws Ordinance, 2020, to exempt factories, businesses, establishments and industries from the purview of all but 3 labour laws and one provision of another Act for three years. Some labour laws, however, would continue to prevail, with the labour laws provisions related to women and child will continue to exist along with the Bonded Labour System (Abolition) Act, 1976, Building and Other Construction Workers Act 1996, Section 5 of the Payment of Wages Act, 1936 and Workmen Compensation Act 1923. 

Opposition lash out:

The All India Trade Union Congress (AITUC) alleged that Uttar Pradesh under Yogi Adityanath, in one stroke, made 38 laws defunct for 1,000 days (almost three years). "The remaining are only section 5 of Payment of Wages Act, 1934, Construction Workers Act, 1996, Compensation Act, 1993 and Bonded Labour Act, 1976 which remain functional." All these changes mean that the workers are to be used as bonded labour without any rights for sheer exploitation in the interest of capital without any guarantee of wages, safety and healthcare, social security, it added.

The Congress alleged that the Narendra Modi government is proposing to do away with the Interstate Migrant Workmen Act even though it is the Centre's responsibility to ensure workers' rights are taken care of under the legislation especially during the lockdown. The legislation is intended to regulate the employment of inter-state migrant workmen and to provide for their conditions of service. It was enacted to prevent the exploitation of inter-state migrant workmen by contractors, and to ensure fair and decent conditions of employment.

Samajwadi Party supremo Akhilesh Yadav on Friday termed as "objectionable" and "inhuman" the Uttar Pradesh government's decision to exempt industry from labour laws for the next three years. "The BJP government in UP has through an ordinance exempted industry from labour laws, which saved labourers from exploitation, for three years. This is highly objectionable and inhuman. This anti-poor BJP government, which could not patronise labourers, should immediately resign," Yadav said in a tweet in Hindi.

The reason behind the sudden move

Shortage of labour is already expected as migrants are returning to the native places and may stay there for a few months. The reforms may allow industry to expand, work for longer hours, and not worry about inspections by the labour department.

These reforms are being initiated by the states so that the Centre does not have to take a politically-sensitive step as it would lead to stringent opposition. Rather, the Centre would announce stimulus package, which may nudge the states to undertake reforms. As the BJP-ruled states have taken the lead, it would put pressure on the other state governments to ease certain laws to invite investors. The alacrity with which these state governments have pushed the reforms during the COVID-19-induced lockdown, is expected, since such reforms, otherwise, would have attracted protests.

-Inputs from Pratul Sharma