Labour Laws Ordinance: Covid 19

As the novel Coronavirus (COVID-19) does not seem to abate any time soon, the Central and the State Governments have been working continuously for re-igniting and jump starting the economy and bringing about changes that makes it easier for investment to be brought in for manufacturing industries and factories. In lieu of the same, the Uttar Pradesh Government (hereinafter as referred to the Government) on May 8th 2020, approved the ‘Uttar Pradesh Temporary Exemption from Certain Labour Laws Ordinance, 2020’ (hereinafter referred to as Ordinance of 2020) which suspends all but three labour laws to be applicable on businesses and industries for a period of three years.

Labour Acts still in existence

As per the Ordinance of 2020, only three Legislations namely Building and Other Construction Workers Act, 1996, Bonded Labour System (Abolition) Act, 1976 and Workmen Compensation Act, 1923 along with Section 5 of the Payment of Wages Act, 1936 relating to right of the employee to receive timely wages have been made applicable on existing and new industries and factories for a period of next three years. The Ordinance effectively has discontinued the application of all other major Labour Acts viz. Contract Labour (Regulation and Abolition) Act, 1970; UP Shops and Establishments Act 1962; UP Welfare Fund Act; UP Industrial Peace (Timely Payment of Wages Act) 1961; UP Industrial Housing Act 1955; Industrial Establishment (National Holidays) Act 1961; UP Industrial Undertakings Special Provisions for Prevention of (Unemployment) Act 1966; The Inter State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979; UP Employment of Substitute Workmen Act, 1978; UP Sugar and Power Alcohol Industries Labour Welfare & Development Fund Act 1950; Apprentices Act 1961; Child Labour (Prohibition and Regulation) Act 1986; Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by Certain Establishments) Act, 1988; Beedi and Cigar Workers Act 1966; Cine Workers and Cinema Theatre Workers Act 1981; Equal Remuneration Act 1976; Factories Act 1948; Industrial Disputes Act 1947; Industrial Employment Act 1946; Maternity Benefit Act 1961; Minimum Wages Act 1948; Motor Transport Workers Act 1961; Payment of Bonus Act 1965; Payment of Gratuity Act 1972; Payment of Wages Act 1936 (except Section 5); Public Liability Insurance Act 1991; Sales Promotion Employees Act 1976; The Indian Boiler Act,1923; Trade Unions Act 1926; Weekly Holidays Act 1942; Working Journalists Employees Act 1955; Dangerous Machines Act 1983; Sick Industrial Companies Act 1985; and along with it, the provisions relating to bonus, holidays, occupational safety, health and working conditions of workers, problems relating to trade unions, contract workers and migrant labourers. However Ordinance of 2020, exempts its applicability to women and children and the provisions of the Labour Acts shall be applicable to the industries, factories and businesses as earlier.

The Application of Existing Labour Acts in UP

The Building and Other Construction Workers Act, 1996 as the name suggests protects the workers and the interests of those working in construction activities of any kind be it a building, street, road, railway tramways, airfields, irrigation, drainage, embankment and navigation works, generation, transmission and distribution of power, water works, oil and gas installations, electric lines, wireless, radio, television, telephone, etc. This Act regulates the hours of work, welfare measures, and other service conditions of such workers.

The Bonded Labour System (Abolition) Act, 1976 is the Act which deals with abolishment of bonded labour or in other words that no labour shall be forced to provide bonded labour under any contract, agreement or social custom in existence.

The Workmen’s Compensation Act, 1923 provides for payment of compensation to workmen and their dependents in case of injury and accident including certain occupational disease arising out of and in the course of employment resulting in disablement or death.

Although, the Ordinance is still not a law as it has not received the President’s assent, however the Uttar Pradesh Government has started receiving a lot of flak and criticism for giving a nod to such an Ordinance which on one hand promotes investment and ease of doing business but on the other nullifies the rights of the labour workforce considerably. At a time when the current pandemic has already diminished the work and the lives of the poor and the labour, such an Ordinance is bound to infringe upon even the basic and fundamental rights of the labour workforce as it gives the power to the factory or industry owner to treat the labour however they please in absence of stringent labour laws.

Similarly, Madhya Pradesh government promulgated the Madhya Pradesh Labour Laws (Amendment) Ordinance, 2020. This Ordinance amends two state laws: the Madhya Pradesh Industrial Employment (Standing Orders) Act, 1961, and the Madhya Pradesh Shram Kalyan Nidhi Adhiniyam, 1982. The 1961 Act regulates the conditions of employment of workers and applies to all establishments with 50 or more workers. The Ordinance increases this threshold to 100 or more workers. Therefore, the Act will no longer apply to establishments with between 50 and 100 workers that were previously regulated. The 1982 Act provides for the constitution of a Fund that will finance activities related to welfare of labour. The Ordinance amends the 1982 Act to allow the state government to exempt any establishment or class of establishments from the provisions of the Act through a notification.

Further, the Madhya Pradesh government has exempted all new factories from certain provisions of the Industrial Disputes Act, 1947. Provisions related to lay-off and retrenchment of workers, and closure of establishments will continue to apply. However, the other provisions of the Act such as those related to industrial dispute resolution, strikes and lockouts, and trade unions, will not apply. This exemption will remain in place for the next 1,000 days (33 months). It is also noteworthy that the Industrial Disputes Act, 1947 allows the state government to exempt certain establishments from the provisions of the Act as long as it is satisfied that a mechanism is in place for the settlement and investigation of industrial disputes.

Taking a cue from Uttar Pradesh, even the state of Gujarat has passed a new Labour law Ordinance, however, they have deviated from the UP model by enforcing the Ordinance only on new units in the manufacturing and service sector and the benefit shall not be passed onto existing units. The Ordinance also states that the relaxation will be for a period of 1200 days however the Minimum Wages Act, Industrial Safety Rules and the Employee Compensation Act have been left untouched and these will still be applicable even on the new units.

The Authors are Rohan Ahuja (Principal Associate) and Mizan Siddhiqui (Associate) At Athena Legal


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