Context : In the backdrop of relaxation/suspension of the labour laws by MP and UP, the interests of labourers and workers need to be taken care of while balancing with the resumption of economic activity.
More on the news:
- The revival of business and economic activity after weeks of forced closure is indeed the need of the hour.
- However, the action of some states to grant sweeping exemptions from legal provisions aimed at protecting labourers and employees in factories, industries and other establishments scores low on the moral index.
- Madhya Pradesh, in order to give a boost to business and industry has allowed units to be operated without many of the requirements of the Factories Act.
- It has called for extension of Working hours to 12 hours, instead of eight, and weekly duty up to 72 hours.
- It seems that M.P has used Section 5 of the Act, which permits exemption from its provisions for three months.
- 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 which seeks to suspend all labour laws for three years.
- It has exempted 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.
State of Labour laws in India
- As per various estimates there are over 200 state laws and close to 50 central laws.
- And then also there is no set definition of Labour laws in the country.
- On a broader level, they can be divided into four categories.
- The main objectives of the Factories Act, for instance, are to ensure safety measures on factory premises, and promote health and welfare of workers.
- The Shops and Commercial Establishments Act, on the other hand, aims to regulate hours of work, payment, overtime, weekly day off with pay, other holidays with pay, annual leave, employment of children and young persons, and employment of women.
- The Minimum Wages Act covers more workers than any other labour legislation.
- The most contentious labour law, however, is the Industrial Disputes Act, 1947 as it relates to terms of service such as layoff, retrenchment, and closure of industrial enterprises and strikes and lockouts.
Source: The Indian Express
Criticism of Indian Labour laws
- Indian labour laws are often characterised as inflexible.
- It has been argued that firms (those employing more than 100 workers) dither from hiring new workers because firing them requires government approvals.
- Even the organised sector is increasingly employing workers without formal contracts.
- It has constrained the growth of firms on the one hand and provided a raw deal to workers on the other.
- Further, there are too many laws, often unnecessarily complicated, and not effectively implemented.
- This has laid the foundation for corruption and rent-seeking.
- Essentially, if India had fewer and easier-to-follow labour laws, firms would be able to expand and contract depending on the market conditions.
- In this case the resulting formalisation, at present 90% of India’s workers are part of the informal economy, would help workers as they would get better salaries and social security benefits.
Impact of such a move by MP and UP
In contravention with International commitments and also with Constitution
Pushing into informalisation and falling of Wages
Employment and economic growth
- It has been alleged that the various Home Ministry directives and State ordinances would be violative not only of India’s own Constitution but also its international commitments.
- Article 23 of the Constitution prohibits forced labour.
- The Supreme Court, in PUDR v. Union of India (1982), held that the word force must... be construed to include... force arising from the compulsion of economic circumstances which leaves no choice of alternatives to a person in want and compels him to provide labour or service even though the remuneration received for it is less than the minimum wage.
- Workers are being treated as a resource to be exploited by industry and state.
- The workers have no or low autonomy over self is at the core of dignity, a fundamental right.
- It would also be in contravention with the ILO’s Employment and Decent Work for Peace and Resilience Recommendation, 2017.
- It recommends states to ensure marginalised groups freely choose employment while rebuilding after any disaster.
- It will also create an enabling environment for exploitation, the removal of all labour laws will not only strip the labour of its basic rights but also drive down wages.
- Moreover, far from pushing for a greater formalisation of the workforce, this move will push existing formal workers into informal workers as they would not get any social security.
- There was always a wide gap between formal and informal wage rates.
- For example, a woman working as a casual labourer in rural India earns just 20% of what a man earns in an urban formal setting.
- If all labour laws are removed, most employment will effectively turn informal and bring down the wage rate sharply.
- In theory, it is possible to generate more employment in a market with fewer labour regulations.
- However, experience of states that have relaxed labour laws dismantling worker protection laws shows that they have failed to attract investments and increase employment.
- The move to suspend labour laws and the resulting fall in wages will further depress the overall demand in the economy, thus hurting the recovery process.
Reaction of Labour Unions
- Ten central trade unions said they were considering lodging a complaint with the International Labour Organisation (ILO) against the anti-worker changes in the labour laws in some States.
- In a joint statement, they said the recent blanket exemption given to establishments from the employer’s obligations under several labour laws for three years by the Madhya Pradesh and Uttar Pradesh governments was a retrograde and anti-worker move.
- This move was the second phase of anti-worker policies after six State governments increased the working hours from 8 to 12 hours.
- Central trade unions consider these moves as an inhuman crime and brutality on the working people, besides being a gross violation of the Right to Freedom of Association [ILO Convention 87], Rights to Collective Bargaining [ILO Convention 98] and also the internationally accepted norm of eight hour working days.
- The ILO Convention 144 in regard to tripartism has also been undermined by the government.
- The statement was signed by representatives of the Indian National Trade Union Congress, the All-India Trade Union Congress, the Hind Mazdoor Sabha, the Centre of Indian Trade Unions, the All-India United Trade Union Centre, the Trade Union Coordination Committee, the Self Employed Women’s Association, the All-India Central Council of Trade Unions, the Labour Progressive Federation and the United Trade Union Congress.
- The missing link of the country’s response to COVID-19 pandemic was the inability to protect the most vulnerable sections and its vast underclass of labourers.
- The emphasis in the initial phase was on dealing with the health crisis, even when the consequence was the creation of an economic crisis.
- Changes in the manner in which labour laws operate in a State may require the Centre’s assent.
- Labour falls in the Concurrent List and there are many laws enacted by the Centre that take precedence over that of state’s.
- Now the onus lies on the Centre, which is pursuing a labour reform agenda through consolidated codes for wages, industrial relations and occupational safety, health and working conditions, to not readily agree to wholesale exemptions from legal safeguards and protections for workers.
- The government should have emulated most governments across the worldlike Canada, Vietnam, Bangladesh and U.K.
- Canada is providing a temporary wage top-up for low income essential workers, also extending monetary help to self-employed individuals and workers facing job loss.
- Further, Vietnam is providing help to those who are on unpaid leave, at the same time social security to workers with no unemployment insurance.
- Bangladesh has introduced a bonus payment package for doctors and health workers, at the same time extending doles to those who lost their income.
- The UK government is set to pay 80% of usual wages of employees laid off for four months.
- It has also introduced Coronavirus statutory sick pay rebate scheme, whereby firms can claim the sick pay for coronavirus patients.
- All in all, they partnered with the industry and allocated 3% or 5% of the GDP towards sharing the wage burden and ensuring the health of the labourers.
The Factories Act, 1948
The Factories Act, 1948 consolidating and amending the law relating to labour in factories, was passed by the Constituent Assembly on August 28, 1948.
- The Act came into force on April 1, 1949.
- To regulate the working conditions in factories.
- To regulate health, safety, welfare, and annual leave.
- To enact special provision in respect of young persons, women and children who work in the factories.
- Working Hours
- According to the provision of working hours of adults, no adult worker shall be allowed to work in a factory for more than 48 hours in a week.
- There should be a weekly holiday.
- The Act lays down that every factory shall be kept clean and all necessary precautions shall be taken in this regard.
- The factories should have a proper drainage system, adequate lighting, ventilation, temperature etc.
- Adequate arrangements for drinking water should be made.
- Sufficient lavatory facilities should be provided at convenient places.
- The Act provides that the machinery should be fenced, no young person shall work at any dangerous machine, in confined spaces, there should be provision for manholes of adequate size so that in case of emergency the workers can escape.
- The Act provides that in every factory adequate and suitable facilities for washing should be provided and maintained for the use of workers.
- Facilities for storing and drying clothing, facilities for sitting, first-aid appliances, shelters, rest rooms and lunch rooms, crèches, should be there.
- The provisions of The Factories Act, 1948, or any rules made under the Act, or any order given in writing under the Act is violated, it is treated as an offence with provision for the following penalties.
- Imprisonment for a term which may extend to one year
- Fine which may extend to one lakh rupees or
- Both fine and imprisonment.
- If a worker misuses an appliance related to welfare, safety and health of workers, or in relation to discharge of his duties, he can be imposed a penalty of Rs. 500/-.
- The Act is applicable to any factory whereon
- Ten or more workers are working, or were working on any day of the preceding twelve months,
- and in any part of which a manufacturing process is being carried on with the aid of power,or
- where twenty or more workers are working, or were working on any day of the preceding twelve months.
Section 5 of the Factories Act, 1948- Power to exempt during public emergency
- In any case of public emergency the State Government may, by notification, exempt any factory or class or description of factories from all or any of the provisions of this Act for such period and subject to such conditions as it may think fit
- Provided that no such notification shall be made for a period exceeding three months at a time.
- Here Public emergency means a grave emergency whereby the security of India or of any part of the territory thereof is threatened, whether by war or external aggression or internal disturbance.
Conventions 87 and 98
Freedom of Association and The Right to collective bargaining
Conventions 138 and 182
Abolition of child labour
Conventions 29 and 105
Elimination of forced or compulsory labour
Conventions 100 and 111
Elimination of discrimination in respect of employment and occupation