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To contain the spread of COVID-19 in India, the central government imposed a nation-wide lockdown on March 24, 2020.  Under the lockdown most economic activities, other than those classified as essential activities, were suspended.  States have noted that this loss of economic activity has resulted in a loss of income for many individuals and businesses.  To allow some economic activities to start, some states have provided relaxations to establishments from their existing labour laws.  This blog explains the manner in which labour is regulated in India, and the various relaxations in labour laws that are being announced by various states. 

How is labour regulated in India?

Labour falls under the Concurrent List of the Constitution.  Therefore, both Parliament and State Legislatures can make laws regulating labour.  Currently, there are over 100 state laws and 40 central laws regulating various aspects of labour such as resolution of industrial disputes, working conditions, social security, and wages.  To improve ease of compliance and ensure uniformity in central level labour laws, the central government is in the process of codifying various labour laws under four Codes on (i) industrial relations, (ii) occupational safety, health and working conditions, (iii) wages, and (iv) social security.  These Codes subsume laws such as the Industrial Disputes Act, 1947, the Factories Act, 1948, and the Payment of Wages Act, 1936.   

How do state governments regulate labour?

A state may regulate labour by: (i) passing its own labour laws, or (ii) amending the central level labour laws, as applicable to the state.   In cases where central and state laws are incompatible, central laws will prevail and the state laws will be void.  However, a state law that is incompatible with central laws may prevail in that state if it has received the assent of the President.  For example: In 2014, Rajasthan amended the Industrial Disputes Act, 1947.  Under the Act, certain special provisions with regard to retrenchment, lay-off and closure of establishments applied to establishments with 100 or more workers.  For example, an employer in an establishment with 100 or more workers required permission from the central or state government prior to retrenchment of workers.  Rajasthan amended the Act to increase the threshold for the application of these special provisions to establishments with 300 workers.  This amendment to the central law prevailed in Rajasthan as it received the assent of the President. 

Which states have passed relaxations to labour laws?

The Uttar Pradesh Cabinet has approved an ordinance, and Madhya Pradesh has promulgated an ordinance, to relax certain aspects of existing labour laws.  Further, Gujarat, Rajasthan, Haryana, Uttarakhand, Himachal Pradesh, Assam, Goa, Uttar Pradesh, and Madhya Pradesh have notified relaxations to labour laws through rules.

Madhya Pradesh:  On May 6, 2020, the Madhya Pradesh government promulgated the Madhya Pradesh Labour Laws (Amendment) Ordinance, 2020.  The 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 Act to allow the state government to exempt any establishment or class of establishments from the provisions of the Act through a notification.  These provisions include payment of contributions into the Fund by employers at the rate of three rupees every six months. 

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).  Note 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.

Uttar Pradesh

The Uttar Pradesh Cabinet has approved the Uttar Pradesh Temporary Exemption from Certain Labour Laws Ordinance, 2020.  According to news reports, the Ordinance seeks to exempt all factories and establishments engaged in manufacturing processes from all labour laws for a period of three years, subject to the fulfilment of certain conditions.  These conditions include:

  • Wages:  The Ordinance specifies that workers cannot be paid below minimum wage.  Further, workers must be paid within the time limit prescribed in the Payment of Wages Act, 1936.  The Act specifies that: (i) establishments with less than 1,000 workers must pay wages before the seventh day after the last day of the wage period and (ii) all other establishments must pay wages before the tenth day after the last day of the wage period.  Wages must be paid into the bank accounts of workers. 

  • Health and safety:   The Ordinance states that provisions of health and safety specified in the Building and Other Construction Workers Act, 1996 and Factories Act, 1948 will continue to apply.  These provisions regulate the usage of dangerous machinery, inspections, and maintenance of factories, amongst others. 

  • Work Hours:  Workers cannot be required to work more than eleven hours a day and the spread of work may not be more than 12 hours a day. 

  • Compensation:  In the case of accidents leading to death or disability, workers will be compensated as per the Employees Compensation Act, 1923. 

  • Bonded Labour: The Bonded Labour System (Abolition) Act, 1976 will continue to remain in force.  It provides for the abolition of the bonded labour system.   Bonded labour refers to the system of forced labour where a debtor enters into an agreement with the creditor under certain conditions such as to repay his or a family members debt, due to his caste or community, or due to a social obligation.  

  • Women and children:  Provisions of labour laws relating to the employment of women and children will continue to apply.  

It is unclear if labour laws providing for social security, industrial dispute resolution, trade unions, strikes, amongst others, will continue to apply to businesses in Uttar Pradesh for the period of three years specified in the Ordinance.  Since the Ordinance is restricting the application of central level labour laws, it requires the assent of the President to come into effect. 

Changes in work hours

The Factories Act, 1948 allows state governments to exempt factories from provisions related to work hours for a period of three months if factories are dealing with an exceptional amount of work.  Further, state governments may exempt factories from all provisions of the Act in the case of public emergencies.  The Gujarat, Himachal Pradesh, Rajasthan, Haryana, Uttar Pradesh, Goa, Assam and Uttarakhand governments passed notifications to increase maximum weekly work hours from 48 hours to 72 hours and daily work hours from 9 hours to 12 hours for certain factories using this provision.  Further, Madhya Pradesh has exempted all factories from the provisions of the Factories Act, 1948 that regulate work hours.  These state governments have noted that an increase in work hours would help address the shortage of workers caused by the lockdown and longer shifts would ensure fewer number of workers in factories allowing for social distancing to be maintained.   Table 1 shows the state-wise increase in maximum work hours. 

Table 1: State-wise changes to work hours

State

Establishments

Maximum weekly work hours

Maximum daily work hours

Overtime Pay (2x ordinary wages)

Time period

Gujarat

All factories

Increased from 48 hours to 72 hours 

Increased from 9 hours to 12 hours 

Not required

Three months

Himachal Pradesh

All factories

Increased from 48 hours to 72 hours 

Increased from 9 hours to 12 hours 

Required

Three months

Rajasthan

All factories distributing essential goods and manufacturing essential goods and food

Increased from 48 hours to 72 hours 

Increased from 9 hours to 12 hours 

Required

Three months

Haryana

All factories

Not specified  

Increased from 9 hours to 12 hours 

Required

Two months

Uttar Pradesh

All factories

Increased from 48 hours to 72 hours 

Increased from 9 hours to 12 hours 

Not required

Three months*

Uttarakhand

All factories and continuous process industries that are allowed to function by government

Maximum 6 days of work a week

Two shifts of 12 hours each.

Required

Three months

Assam

All factories

Not specified

Increased from 9 hours to 12 hours 

Required

Three months

Goa

All factories

Not specified

Increased from 9 hours to 12 hours 

Required

Approximately three months

Madhya Pradesh

All factories

Not specified

Not specified

Not specified

Three months

Note: *The Uttar Pradesh notification was withdrawn

So far, both Houses of Parliament have been witnessing disruptions.  At the beginning of the session, 23 Bills were listed for passage, and 20 were listed for introduction.  Two weeks in, one Bill has been passed by both Houses, and three others by Lok Sabha.  These include Bills dealing with the re-haul of consumer protection laws, regulation of surrogacy, and recognition of transgender persons.  Six Bills have been introduced.  These include three Bills which replace the Ordinances currently in force, and a Bill to regulate dam safety.  In this blog, we discuss the key features of some of these Bills. 

Enhancing rights of consumers

The Consumer Protection Bill, 2018 replaces the Consumer Protection Act, 1986.  It was introduced in view of the significant changes in the consumer market landscape since the 1986 Act.  It introduces several new provisions such as enabling consumers to make product liability claims for an injury or harm caused to them, nullifying unfair contracts which impact consumer interests (such as contracts which charge excessive security deposits), and imposing penalties for false and misleading advertisements on manufacturers, as well as on the endorsers of such advertisements. 

The Bill also sets up Consumer Dispute Redressal Commissions (or courts) at the district, state, and national level, to hear complaints on matters related to deficiencies in services or defects in goods.  While these Commissions are also present under the 1986 Act, the Bill increases their pecuniary jurisdiction: District Commissions will hear complaints with a value of up to one crore rupees; State Commissions between one and ten crore rupees; and National Commission above 10 crore rupees.  The Bill also sets up a regulatory body known as the Central Consumer Protection Authority.  This Authority can take certain actions to protect the rights of consumers as a class such as passing orders to recall defective goods from the market, and imposing penalties for false and misleading advertisements. 

Recognising transgender persons and their rights

Last week, Lok Sabha also passed the Transgender Bill, 2018.  This Bill seeks to recognise transgender persons, confers certain rights and entitlements on them related to education, employment, and health, and carves out welfare measures for their benefit.  The Bill defines a transgender person as one whose gender does not match the gender assigned at birth.  It includes trans-men and trans-women, persons with intersex variations, gender-queers, and includes persons having such socio-cultural identities as kinnar, hijra, aravani, and jogta.  The Bill requires every establishment to designate one person as a complaint officer to act on complaints received under the Bill. 

The Bill provides that a transgender person will have the right to self-perceived gender identity.  Further, it also provides for a screening process to obtain a Certificate of Identity, certifying the person as ‘transgender’.  This implies that a transgender person may be allowed to self-identify as transgender individual, but at the same time they must also undergo the screening process to get certified as a transgender.  Therefore, it is unclear how these two provisions of self-identification and an external screening process will reconcile with each other. 

Regulating surrogacy and overhauling the Medical Council of India

The Surrogacy Bill, 2017 which regulates altruistic surrogacy and prohibits commercial surrogacy was also passed in Lok Sabha.  Surrogacy is a process where an intending couple commissions an eligible woman to carry their child.  In an altruistic surrogacy, the surrogate mother is not given any monetary benefit or reward, and the arrangement only covers her medical expenses and health insurance.  The Bill sets out certain conditions for both the intending couple and the surrogate mother to be eligible for surrogacy.  The intending couple must be Indian citizens, be married for at least five years, and at least one of them must be infertile.  The surrogate mother must be a close relative of the couple, must be married and must have had a child of her own.  Further, a surrogate mother cannot provide her own gametes for surrogacy.

The surrogate mother has been given certain rights with regard to the procedure of surrogacy.  These include requiring her written consent to abort the surrogate child, and allowing her to withdraw from the surrogacy at any time before the embryo is implanted in her womb. 

Another key Bill which was listed for passage in Lok Sabha this session but could not be taken up is the National Medical Commission Bill, 2017 (NMC Bill).  Several amendments to this Bill were introduced in Lok Sabha last week.  The NMC Bill seeks to replace the Medical Council of India, with a National Medical Commission.  It introduces a common final year undergraduate medical examination called the National Exit Test which will also grant the license to practice medicine.  Only medical students graduating from a medical institute which is an institute of national importance will be exempted from qualifying this National Exit Test.  The Bill also gives the NMC the power to frame guidelines to decide the fees of up to 50% of seats in private medical colleges and deemed universities.  The NMC may also grant limited license to certain mid-level practitioners connected with the medical profession to practice medicine.  The qualifying criteria for such mid-level practitioners will be determined through regulations, and they may prescribe specified medicines in primary and preventive healthcare. 

Regulating dam safety

The Dam Safety Bill, 2018 was introduced in Lok Sabha and applies to all specified dams across the country.  These are dams with: (i) height more than 15 metres, or (ii) height between 10 metres to 15 metres and subject to certain additional design and structural conditions.  It seeks to provide for the surveillance, inspection, operation and maintenance of specified dams for prevention of dam failure related disasters.  It creates authorities at the national and state level to formulate policies and regulations on dam safety and implement them.  It also puts certain obligations on dam owners by requiring them to provide a dam safety unit in each dam, among other things. 

When the Bill was being introduced, few opposition members raised objections on the grounds of Parliament’s legislative competence to make a law on dam safety which applies to all states.  They gave the example of the previous Dam Safety Bill, 2010, which applied only to the states of Andhra Pradesh and West Bengal who had adopted resolutions requiring Parliament to pass a law on dam safety.

So far the winter session has seen poor productivity with Lok Sabha working for 14% of its scheduled time, and Rajya Sabha for 5%.  This is one of the least productive sessions of the 16th Lok Sabha.  This is also the last major session before the dissolution of the 16th Lok Sabha.  Both Houses will meet tomorrow after the Christmas break.  With a packed legislative agenda, it is essential for Parliament to function in order to discuss and deliberate the Bills listed.  However, with a limited number of sitting days available in the ongoing session and continued disruptions, it remains to be seen if Parliament will be able to achieve its legislative agenda.

- This post is a modified version of an article published by The Wire on December 26, 2018.