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VIEW: The road to labour market anarchy goes through UP and MP

VIEW: The road to labour market anarchy goes through UP and MP

VIEW: The road to labour market anarchy goes through UP and MP
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By KR Shyam Sundar  May 8, 2020 5:43:33 PM IST (Published)

These “labour law holidays” will create a labour market anarchy.

The COVID-19 crisis has adversely impacted the labour market as millions of workers, especially the migrant workers have been deprived of not only jobs and incomes but even shelter. They even have had to stage protests to demand their right of movement to their home states. The Union Labour Ministry issued merely an advisory to the employers on March 20, 2020 not to retrench workers and give full wages.

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The Home Ministry on March 29, 2020 issued a directive under the National Disaster Management Act, 2005, to ask employers to pay wages to their employees during the lockdown period. The Finance Minister offered niggardly relief measures to the organised sector workers and completely left out the unorganised sector workers save for free food, Rs 500 payment to women Jhan Dhan account holders among others.
In the meanwhile, as the Union government lifted the national lockdown partially from April 2020 and later on from May 4 for another fortnight, few state governments like Rajasthan, Gujarat, Himachal Pradesh, Punjab extended the maximum hours of work in a day from eight to 12 hours and in a week from 48 to 72 hours and save for Gujarat others provide for payment of overtime pay of double the normal wage rate.
But more daring labour changes have been initiated by two governments, viz. Madhya Pradesh and Uttar Pradesh. The Madhya Pradesh has amended the Factories Act, 1948 to exempt non-hazardous factories employing less than 50 workers from inspection and will recognize the Third-Party Certification and the same is submitted before 31st of every year. Worse, even in the case of reportage or complaint of serious/fatal accident inspection of the site will be done only if the Labour Commissioner gives his/her consent.
These pose considerable threats to occupational safety and health to the workers employed in the exempted factories and the clause on prior permission even for an investigation into even the fatal accidents is a grave concern. Further, it has amended the Factories Act, 1948 to exempt the registered factories for the next 1,000 days from all provisions save Sections 6-8 (dealing with approval, licensing and registration of factories), S ection 21-41G (relating to safety), Section 59 (overtime wages), Section 67 (prohibition of employment of young children), Section 79 (annual leave with wages), Section 88 (notice of certain accidents).
The exempted provisions concern inspections, conditions of work like ventilation, disposal of wastes and effluents, ventilation and temperature, lighting, dust and fume, facilities like drinking water, washrooms, canteens, creches, first-aid appliances, rest and lunchrooms, working hours of adults, etc. These relaxations cover a vast range of non-negotiable labour rights which have been acquired over the decades starting from 1881 and violate the ILO Conventions on Hours of work and its paradigm of decent work.
It has exempted the industries and workers for the next 1,000 days covered by workers under the Industrial Disputes Act, 1947 (IDA) from all provisions save Chapter V-A, 25-N (retrenchment), 25-O (closure), 25-Q penalty for layoff and retrenchment without prior permission), and 25-R (penalty for closure) — which anyhow is meagre, Rs 1,000 and Rs 5,000 and one and six months of imprisonment respectively. The Madhya Pradesh Industrial Relations Act, 1960 which among others provide for recognition of trade unions and bipartite committees.
The Uttar Pradesh government has issued a draft Ordinance Uttar Pradesh Temporary Exemption Ordinance, 2020 by which it has exempted in the name of attracting fresh investment and acceleration of existing economic activities all new factories and manufacturing establishments from all the labour laws that are in vogue in the State save the following, viz. Bonded Labour Practices (Abolition) Act, 1919 (sic) (Bonded Labour System (Abolition) Act, 1976), Employees’ Compensation Act, 1923, the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1919 (sic) (1996). However, the regulations relating to the employment of children and women will remain in force as also the regulation concerning timely payment of wages (S.5 of the Payment of Wages Act, 1936).
The vast list of exemptions from labour laws save those mentioned by the UP government will seriously hurt the conditions of employment and work and the varieties of rights like the right to form unions, the right to consultation via bipartite committees like the works committees, or the right to tripartite consultation under the Minimum Wages Act, the right to raise industrial disputes and take them for eventual resolution, the exercise of the legal right to strike, the right to be informed of changes in the conditions of employment, the right to natural justice in case of termination, the right to call for the abolition of contract labour, and in short the right to industrial democracy and decent work.
The Minimum Wages Act effectively covers as per 1999-2000 NSSO calculations 83.3 percent of the hired workers, the Payment of Wages Act, 1936 22.9 percent, the Contract Labour Act, 15.1 percent. These mean huge exclusions though if we factor in the unorganised component, the coverage will be much higher and to that extent, the “uncoverage” will be higher.
These cannot be justified either by the COVID-19 which is mischievous nor by rational economic logic nor by providing conducive labour market environment free of irritant labour laws nor to generate employment. These “labour law holidays” will create a labour market anarchy. Neither it will boost investment or labour productivity nor will it ensure labour welfare. It will stoke considerable industrial discontent and in the absence of efficient settlement mechanisms will lead to unrest.
To be sure, these are not even bounties to the employers and good employers will not want these exemptions. These acquire notoriety and will create a poor image of India. The Welfare and Socialistic State as far as these two states are concerned are effectively annihilated.
-KR Shyam Sundar is Professor, HRM Area, XLRI, Xavier School of Management. The views expressed are personal
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