SUSPENSION OF LABOUR LAWS TO OVERCOME THE ECONOMIC CRISIS CAUSED BY COVID-19: A WELCOME RELAXATION OR AN ASSENT TO EXPLOITATION
Mixed reactions have emerged over the
controversial Ordinance passed by the government of Uttar Pradesh to suspend
majority labour laws in wake of the economic crisis following the lockdown.
This article explores the contents of the ordinance, its basis, and its legality.
1.
What does the proposed Ordinance promulgated by the UP Government state?
The Uttar Pradesh Temporary Exemption from
Certain Labour Laws Ordinance, 2020 is an ordinance approved by the state of
Uttar Pradesh on May 8, 2020 in response to the economy rebuilding needed as a
consequence of the COVID-19 led lockdown. The Ordinance exempts various
industries in the state from different labour laws for a period of three years,
to revive the state’s economic activities. Among these laws are twenty-seven central
laws including critical legislations like the Factories Act 1948, Industrial
Disputes Act 1947, Minimum Wages Act 1948, Payment of Wages Act 1936 (except
Section 5 dealing with timely payment of wages), and the Child Labour
(Prohibition and Regulation) Act 1986. Nine state legislations and twenty-four
Rules formed under the Central and State legislations are also suspended.
The states of Madhya Pradesh and Gujarat have
also made certain relaxations to their labour law regimes to give the economy a
boost.
Therefore, the UP Ordinance
suspends majority labour laws for the next three years to help the economy
recover from the impacts of the COVID lockdown.
2.
What was the reason for passing such an ordinance?
There are two prominent reasons for this
ordinance having been passed by the state:
Request from Employer
Associations: The Ministry of Labour and Employment made a statement
that on May 8, 2020, members representing twelve Employers’ Associations and
Industry Bodies made a request to the government “to help industry come out of
the present crisis” by suspending labour laws for the next 2-3 years. The
Labour Minister, Mr. Santosh Kumar Gangwar had sympathized with the employers
and promised help.
While this Ordinance was all set to be passed
by state government by the time of this interaction, similar demands by
employers were known to the government since a while.
Attracting investment: A
major reason being attributed to this move is to attract foreign investment to
these states by ensuring ease of business through relaxed labour laws, making
the venture more affordable and lucrative. A large number of industries
currently want to relocate from parts of China, specially Wuhan, and are
looking for merging markets in South-East Asia. India could potentially attract
a large amount of foreign investment through this move.
Thus, this Ordinance is both a response to the
request of employers, as well as an attempt to increase investment in the
state.
3.
What are the legal implications of such an Ordinance? Is it constitutionally
valid?
The Ordinance suspends some of the most
essential labour laws of the country including the Factories Act, Industrial
Disputes Act, Minimum Wages Act, and the Child Labour (Prohibition and
Regulation) Act, as discussed. The Supreme Court has held that non payment of
minimum wages is tantamount to ‘forced labour’ prohibited under Article 23 of
the Constitution. It has also been held in a case where workmen were employed
in famine relief work, that exemption from the Minimum Wages Act is “clearly
violative” of Article 23. [See Sanjit Roy Vs. State of Rajasthan, (1983) I SCC
526].
Aside from being a violation of fundamental
rights, the Ordinance also contradicts Article 43 of the Constitution, which is
a directive principle of state policy. The Supreme Court has held that the
restrictions imposed upon the freedom of contract by the fixation of minimum
rates of wages though they interfere to some extent with the freedom of trade
or business guaranteed under Art. 19(1)(g) of the Constitution are not
unreasonable and being imposed in the interest of general public and with a
view to carry out one of the Directive Principles of State Policy as embodied
in Art. 43 of the Constitution are protected by the terms of clause (6) of Art.
19. [See Bijay Cotton Mills v. State of Ajmer, (1955) 1 S.C.R. 752]. The
inconveniences caused to employers as a result of the Act have been held to be
irrelevant. [The Edward Mills Co. Ltd. v. The State of Ajmer, [1955] 1 S.C.R.
735; M/s. Crown Aluminium Works v. Their Workmen, [1958] S.C.R. 651].
The Ordinance suspends the Industrial Disputes
Act. The Supreme Court had held that the right to life enshrined under Article
21 includes the right to livelihood and therefore termination of the service of
a worker without giving him reasonable opportunity of hearing in unjust,
arbitrary and illegal. [See (1993) 3 SCC 258].
The main object of the Child Labour
(Prohibition and Regulation) Act is to prohibit the engagement of children in
certain employments and regulation of condition of work of children in certain
other employments. This is among the list of suspended regulations.
This Ordinance has some heavy
constitutional challenges ahead of it, as it appears to be violating some of
the fundamental rights and principles enshrined in the Constitution of India.
However, the Supreme Court had been reluctant to step in to the aid of migrant
workers in the recent PIL before it while they were stuck in lockdown, so there
is a high possibility that this Ordinance will receive their approval or lack
of interference as well.
4.
Does this Ordinance appear to be a good step towards helping the economy
recover?
The lockdown led to industries coming to a
grinding halt in most parts of the country. It is going to be a mammoth task
recovering from this setback, particularly when cases of the novel coronavirus
continue to rise. The move is controversial because to targets the rights of
vulnerable sector that has already suffered immensely as a consequence of the
current circumstances. Yet, there exists a view that giving the employers some
liberty to be able to extract more work from their labour force on terms
favorable to employers may motivate them to keep their businesses going and
give industry the boost it needs to recover from this crisis. The idea of
drawing foreign investment as a result is also very lucrative and could give
the Indian economy the boost it needs.
However, India is a member of the
International Labour Organisation and also a signatory to several treaties
[there are 47 ILO conventions and 1 protocol ratified by India] whose
provisions are in direct conflict this move made by certain state governments.
The Ordinance thus suggests a
route to recovery which may or may not be successful, but is highly
exploitative of a vulnerable sector of society. There may not just be costs to
society but legal impediments in the way.
By Shiv Mangal Sharma &
Aishwarya
Advocate Supreme Court
