Suspension of labour laws in U.

On May 6, 2020, the Uttar Pradesh Cabinet decided to suspend 35 of the 38 labour laws
in the state for 3 years that will apply to all factories and manufacturing facilities as well as fresh
investments. It said that this would attract much-needed investment to an economy battered by
Covid-19.

Three laws have been exempted from the ordinance: the Building and Other Construction
Workers Act, 1996; the Workmen Compensation Act, 1923, and the Bonded Labour System
(Abolition) Act, 1976. Section 5 of the Payment of Wages Act, which relates to timely payment
of wages, will also continue to be in force.Labour laws related to children and women will also
not be affected.

This means several key laws will not apply to Uttar Pradesh. These include Central laws
such as the Minimum Wages Act, the Payment of Wages Act and the Payment of Bonus Act.
Since labour is on the concurrent list, both the Centre and the states can make laws under this
subject.

Some of the other Acts that have been suspended are The Industrial Disputes Act, The
Minimum Wages Act, The Factories Act, The Equal Remuneration Act, The Bonus Act, The
Interstate Migration Act, Contract Labour Act, The Employee Provident Fund Act, The Gratuity
Act. 

"The purpose of the ordinance is to encourage industries to freely employ the large
number of migrant workers that have come back. If industries have to go through the regular
process of employing then they will be hesitant," said a senior government official who did not
wish to be identified.1

The state has received close to 7 lakh migrant workers from across the country and many
more lakhs are expected to arrive in the coming days.

1
https://economictimes.indiatimes.com/news/economy/policy/uttar-pradesh-brings-ordinance-to-suspend-most-
labour-laws-for-3-years/articleshow/75609934.cms?from=mdr
 Uttar Pradesh Chief Secretary R K Tiwari told Business Standard that the ordinance will
be sent to the Central government for its approval. This means the state is trying to fulfill the
mandate under Article 213 of the Constitution. But experts state that even if the constitutional
procedure is followed, it would be embarrassing for the Centre to give its approval given the
measures it has adopted to codify and simplify labour laws.2

In a conversation with HuffPost India, Gunjan Singh, the head of litigation at the Human
Rights Law Network (HRLN), said it was the poor implementation of labour laws that led to the
terrible suffering of migrant workers during the poorly planned national lockdown, and
explained how the suspension of these legal protections will leave India’s poorest citizens
vulnerable to the worst exploitation.Singh, who specialises in labour laws, said, “The
consequence of suspending The Minimum Wages Act is forcing labourers into bonded labour.
Indian jurisprudence recognises that payment below minimum wages amounts to a situation of
bondage.”3

It is going to be a huge crisis even in terms of capital management. No industrial relation

can be healthy if the labour concerned is not being taken care of. 

RadhickaKapoor of ICRIER characterised this as “creating an enabling environment for

exploitation”. That’s because far from being a reform, which essentially means an improvement
from the status quo, the removal of all labour laws will not only strip the labour of its basic rights
but also drive down wages. For instance, what stops a firm from firing all existing employees
and hiring them again at lower wages, she pointed out.4

Labor Reform is Needed, But Not at the Expense of the Labor Force

The objective to increase investment and employment by relaxing the labor laws is
optimistic of the government. India had already been experiencing an economic slowdown which
2
https://scroll.in/article/961435/is-uttar-pradeshs-decision-to-suspend-35-labour-laws-legal-experts-believe-it-
could-be-challenged
3
https://www.huffingtonpost.in/entry/up-govt-s-suspension-of-labour-laws_in_5eb558a5c5b6a6733541543e
4
https://indianexpress.com/article/explained/what-labour-law-changes-mean-coronavirus-6403611/
was essentially a problem of demand in the economy. The relaxation of labor laws is a reform
towards the increase of supply and would intensify the demand problem due to the unavailability
of disposable income among a large class of people, i.e., the labor force.

The Central Government agrees that major reforms in the field of labor laws are required
due to the presence of multifarious legislation dealing with different aspects of labor law. The
Central Government sought to consolidate the existing laws into labor codes, which could be
said to be a step in the right direction to ease compliance with the laws. The complete suspension
of the laws to attract investment and reduce the compliance burden is patently illegal from a
Constitutional perspective.

Even the situation of a global pandemic due to COVID-19 does not justify the deliberate
neglect of the labor force. It is particularly in these times that the State must take steps in order to
protect their interests. Paradoxically, the response of other countries such as the UK, Canada, etc.
has been positive to support the employees and the employers in the time of crisis. This
suspension could lead to a wanton “hire and fire” policy by employers.5

International Labour Organization (ILO)

Appeals to Modi to uphold international commitments

The Director-General of International Labour Organization, Guy Ryder has expressed his
deep concern at the “unilateral suspension” of labour laws by various State governments.

In the letter to the trade unions, Karen Curtis, Chief, Freedom of Association Branch of
the ILO, said the ILO Director-General has immediately intervened, “expressing his deep
concern at these recent events and appealing to the Prime Minister to send a clear message to
Central and State governments to uphold the country’s international commitments and encourage
engagement in effective social dialogue.” The trade unions had complained to the ILO against
the Ordinances passed by some State governments suspending labour laws.

5
https://www.jurist.org/commentary/2020/05/daigavane-belmannu-labor-law-suspensions-india/
 “I shall not fail to keep you informed of any observations or comments that may be made
by the Indian authorities on the matters that you have raised,” Curtis added in the letter.

Global labour conference

The trade unions said there are umpteen instances that reflect the government’s refusal to
follow the procedures of the ILO as if the government has no obligation to the labour rights
watchdog.

“We also draw your pointed attention to the inhuman miseries of the tens of millions of
inter-state migrant workers during the lockdown period, reducing the most productive workforce
along with their family members, both in the organised and unorganised sector of industries and
services, into job-less, earning-less and even shelter-less and penny-less non-entities, not having
even a full meal a day; in desperation, millions of them have been walking hundreds of miles on
the highway, rail tracks, or even through jungles to reach their home-states and hundreds of them
have died on the way, owing to hunger, exhaustion and malnutrition-related ailments, besides in
road and railway track accidents,” the letter said.6

6
https://www.thehindubusinessline.com/economy/ilo-expresses-deep-concern-at-suspension-of-labour-
laws/article31673364.ece#
Personal Point of View:-

In my opinion,the Act that has been suspended that is the most important is the Industrial
Disputes Act that governs the fields of employment and termination of workers. The suspension
of the The Industrial Disputes Act would lead to complete lawlessness—employers will be at the
liberty to hire and fire workers at their own will. 

The second Act that is being done away with is the Minimum Wages Act. What they
have done is kept the Bonded Labour Act but they have exempted the Minimum Wages Act.
Now what is the rationale behind keeping the Bonded Labour Act and keeping the Minimum
Wages Act?  An employer has to give Rs. 100 per day for eight hours of work as per the Act.
When the Act is suspended, what is stopping an employee from giving Rs. 40 per day? And the
worker will not have any remedy to go to a court of law. The consequence of suspending The
Minimum Wages Act is forcing labourers into bonded labour. Indian jurisprudence recognises
that payment below minimum wages amounts to a situation of bondage. Right now, what is the
situation? Labourers will work for any amount of money because their situation is so desperate.
On the one hand, they are keeping the Bonded Labour Act to show that we are not forcing
labourers into a situation of bondage, but on the other hand, exempting employees from paying
minimum wages. The impact will be the same. If you are not giving minimum wages, the
situation is of bondage.

There are Supreme Court judgments on bonded labour — the most celebrated
BandhuaMuktiMorcha judgment of 1984 — says that any payment below the nominal wages
amounts to a situation of bondage. The government has created a situation where workers will
not have the right to claim their minimum wages. 

Concerning The Factories Act, which has detailed provisions for safety of workers — any
establishment has to have drinking water facilities, electricity, canteen — these labour laws were
the product of a long workers’ struggle. Now in one blow, you have removed all these laws,
putting labourers in a very precarious situation. We have already done a very poor job of
implementation of labour laws, but with this ordinance, there is no statutory backing for basic
rights.  

The Equal Remuneration Act ended the discrimination between men and women in terms
of wages. Without the Act, women could be paid less than men.

The Building and Construction Workers Act provides for the state to collect cess that is
to be used for various benefits like pensions, education, disability compensation. It is poorly
implemented and there are thousands of crores of unspent funds. By keeping this Act, they will
continue collecting the money, but will not actually use it for the welfare of the workers. 

Summarizing the main concerns, First, there will be no job security. Employers can hire
and fire at will. Second, by exempting minimum wages, the government is forcing workers into
bondage. Third, no statutory requirement for worker safety. Fourth, women could be paid less
than men.The Acts that will not be suspended offer some protection for the workerbut it is not
sufficient. This is creating a situation where labour will be exploited more. 

Every day, we find there are thousands of labourers who are still working under bondage
where there is no payment of minimum wages. You cannot have a business where basic rights of
workers are violated. If you see how capital shifts from one country to another, they are looking
at cheap labour. We saw the growth of the garment and automobile industry in Manesar and
Gurgaon at one point of time. And now you see the shift to Bangladesh. The reason behind this is
cheap labour and the poor implementation of labour laws. The business might grow but at what
cost? At the cost of exploitation of workers. That is the pattern we see across the globe.7 

7
https://www.huffingtonpost.in/entry/up-govt-s-suspension-of-labour-laws_in_5eb558a5c5b6a6733541543e