Dilution of Labour Laws: Reasons Involved and possible impact of the actions taken.

Dilution of Labour Laws: Reasons Involved and possible impact of the actions taken.

Amidst such an international crisis, nations around the world are in a tailspin. When the total number of Covid-19 cases were around 50000 worldwide, central government announced nationwide lockdown as the cases soared. Health systems and economies all around trembled and with each passing week, statistics started to terrify nations.The failure of the health infrastructure with this pandemic has also orchestrated the narrow medical facility of the denizens, who discriminated patients on the basis of origin of a country. Subsequently, what followed the agony was an organized abandonment of the unorganized workforce, not surprisingly, from the gulf countries and pro industrial states of India, i.e., peninsular region of India owing to facilitative commerce.

In India itself the migrant laborers crisis has snowballed into a major havoc. The aggravating factors; income inequality and the vast number of laborers have made complete lockdown a farce idea. Threat of starvation is not fictitious, death has caught these laborers due to reasons such as road accidents while walking back to home, starvation, exhaustion, denial of medical care, suicide, police brutality and ofcourse corona virus. To ventilate economy, UP govt was the first to announce dilution of Labour laws followed by MP, Rajasthan, Maharashtra, Punjab, Gujrat and Kerela. The plight of migrant laborers have left them clueless about their situation. The fear of death is disguised in every potential decision they make. Covid-19 has made a sudden influx of migrant workers from different parts of India to the states of UP, Bihar, Chattisgarh, etc and also from the Gulf Countries thereby adding to labour surplus and inflating unemployment. The dilution of Labour laws has many positive and negative aspects to it but the dilution has indeed tried to shorten the path to 5 trillion economy, which was elongated with this sudden misfortune of Covid-19, but that doesn’t justify the mobilization of the stagnant economy by running over the basic remedial rights of migrant laborers.

In diluting labour laws, states have indeed gambled on the basic rights of the laborers for economic prosperity, perhaps a delayed economic prosperity could have put a lot less lives at stake. Labour laws are civilizational goals and cannot be trumped over an excuse of a pandemic. Covid-19 is being used as a pseudo legitimate umbrella to disguise retrenchment while other nations are trying to minimize it.

A laborer cannot feed himself by prosperity in the upcoming years when he is hunger stressed today. Furthermore, after halted income, workers’ morale was further shattered by the dilution of labour laws. The laws that are sought to be watered down, incorporate those related to occupational safety, health and working conditions of workers, settling industrial disputes and those pertaining to trade unions, contract workers and migrant laborers. Sanjay Hazarika points out that there is an estimate of over 300 million for the scale of internal migration in India. Laborers are peculiarly the most vulnerable because they’re neither helped by tax collectors nor by their elected representatives. The separate jurisdictions of state services has divided their agony into different parts.

The introduction of these changes will create a social chaos given the labour market’s opportunistic behaviour. What makes this deregulation more skeptical is that by the dilution of these laws, the working hours for laborers are raised from eight hours a day to twelve hours a day but the wages would be paid at the same proportionate rate for the extra hours meaning thereby where a shift was of three people is now of two so how is this deregulation helpful? Also overtime of upto 72 hours a week will be permitted. Extension of the working hours will deteriorate the health, safety and working conditions of the workers. Moreover, this will also put women at the bottom-most plinth as they face the risk of potential elimination, especially where an extensive labour power is required. Adding to their plight, India’s labour surplus situation will give more bargaining power to employers and this move is likely to put working conditions of laborers at the peril.

One of the provisions that will cease to apply, pertains to the dispute-settlement mechanism and with this, the work committee, conciliation officer and labour courts will also be gone. These mechanisms often pre-empt disputes and prevent escalations. Eliminating the entire mechanism of dispute settlement might lead to labour unrest as this will, in a way, immune the employers from the consequences of their action and their exploitation is likely to increase by certain folds.

Dilution of these labour laws will also wash away the regular inspection in the firms employing less than 50 workers and in the small and medium enterprises. Labour inspection services attain decent employment and working conditions by ensuring the compliance with the relevant labour laws and through preventive measures. In the absence of the labour inspection, enterprises may not adopt adequate measures to ensure health and safety of workers and employees may be exposed to the risk of accidents and diseases. The deregulation have contravened what Article 43 of the Constitution encapsulates, i.e, providing suitable working conditions to the employees.

Nonetheless, portraying this dilution as a complete scrapping of labour laws isn’t quite right, the road map to achieve the goal of economic prosperity can be traced back to 1991, when India went through economic liberalization with the objective of  achieving more market and service oriented economy, thereby expanding the role of private and foreign investments but what followed the liberalization is potential capitalist crisis, force majure: Covid-19 effects. Therefore, It becomes necessary to attract more investments and avoid recession to cope with this economic harm.

As number of companies are moving out of China, India sees it as an opportunity to create employment. Following the same, India in the first week of May had announced to offer land twice of Luxembourg’s size for the firms leaving from China. Furthermore, to remove the infestation of harassment, red-tapism and corruption between the industrial fraternity and the state, the center has decided to streamline the complex web of 45 central and 200 state labour laws into 4 codes on industrial relations, wages, social security and occupational safety. Furthermore, in September 2019 center had already announced corporate tax cut to attract more investments followed by more disinvestments in various PSUs, like LIC and ONGC.

During force majure, employers want the state to reintroduce laissez-faire and a system of indenture for the organized workforce too. It is also necessary to have a skilled workforce and cooperative labour management which is perhaps more warranted than flexible labour laws. It is no surprise that investments seek a hassle free procedure with less concussions, to facilitate the same India is striving to provide that conducive stimulus to ease up business start-ups. Also amid this catastrophe, India has announced 3 lakh crores of collateral free loans to MSMEs under Aatma Nirbhar Bharat Abiyaan and it has been clubbed with PM Kaushal Vikas Yojna, i.e., certification scheme for relevant skill training. India will have skilled laborers with easy access of loans. This complete infrastructural overhaul of laws and stimulus is a collateral to the BharatMala Project which is a centrally-sponsored and funded Road and Highway project of the Government of India to facilitate commerce.

This dilution of labor laws coupled with the changes in the pattern of production, advances in informalization and communication technology of India is likely to catalyse industrialization and attract investments. It is also worthy to note that last year India jumped 14 places coming at the rank of 63rd position in the Ease of Business Report. All these things points towards a brighter future.

It is to be noted that liberal labor laws regulation and rationalization were necessitated at places where extra paperwork and red-tapism was prevalent. But the dilution in this hard time has brought in various aspects like the extension of working hours, weak inspection provisions, less interference from authorities and restricted approach of the tribunals, which make this dilution questionable. Nonetheless, it must also be kept in mind that no country will deliberately torment its labor class by completely chipping off their labour rights. Moreover, the laws relating to Building and Other Worker Construction Act, Workmen Compensation Act, Bonded Labor System (Abolition) Act and Section 5 of Payment of Wages Act (the right to receive timely wages) are untouched. Therefore, this dilution must not be conflated with complete deregulation.

About the Authors

 Shantanu Anand

Shantanu Anand

( 4th year student at Dr. Ram Manohar Lohiya National Law University, Lucknow)

Saumya Singh

Saumya Singh

(3rd year student at Dr. Ram Manohar Lohiya National Law University, Lucknow)

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