Many States in India have announced a number of reforms to labour laws, amidst the Covid-19 crisis, granting various relief measures to employers to recover from the slowdown in the economy that has arisen due to the pandemic and to boost investment opportunities. Various States granting sweeping exemptions from various labour laws which are aimed at protecting labour and employees in factories, industries and other establishments, is taking away the concept of beneficial protection to the underserved labour class.
A summary of these reforms, in brief, as introduced in few of the States have been captured in this post.
The Government of Madhya Pradesh has introduced the following key amendments in respect of various labour laws vide notification dated 5th May 2020:
Contract Labour (Regulation and Abolition) Act, 1970 and Contract Labour (Regulation and Abolition) Madhya Pradesh Rules, 1973
The period of validity of licenses (including renewed licenses) granted under the provisions of the said Act has been extended to be valid upto the period of the contract for which the application has been made. The payment of fees for registration of license is now payable for 1 (one) calendar year at the time of registration. The application for obtaining licenses by the contractors has been made online and the previous requirement of delivering a physical copy of the application to the relevant authority has been done away with.
Third Party Inspection
Exemption from provisions of inspection of factories and recognition of third party inspection has been permitted for factories which have been classified as non-hazardous and which employ upto 50 workers. Such factories shall submit a third party inspection certification report, for applicable compliances, to the relevant authority before 31st January of every year. These factories will be exempted from the routine inspection process and may be inspected with prior permission of the Labour Commissioner only in case of a serious/ fatal accident or a complaint received in relation to any non-compliance.
Industrial Disputes Act, 1947
The Government of Madhya Pradesh has provided exemptions to all new industries registered under the Factories Act, 1948 from all provisions of the Industrial Disputes Act, 1947 (“ID Act”) for a period of 1,000 days with effect from 5th May 2020. Further, it may be noted that no exemptions will be granted from provisions relating to retrenchment and lay-offs (e. Chapter V-A and Section 25-N, 25-O, 25-P, 25-Q and 25-R of Chapter V-B of the ID Act) and they will continue to be applicable.
Factories Act, 1948 and Madhya Pradesh Factories Rules,1962
The factories registered under the Factories Act, 1948 have been exempted from all provisions under the Factories Act, 1948 and Madhya Pradesh Factories Rules,1962 for a period of 3 months from the date of publication of the notification dated 5th May 2020, except Section 6 (approval, licensing and registration of factories), 7 (notice by occupier), 8 (inspectors), Section 21 to 41-H (provisions relating to safety), Section 59 (wages for overtime), Section 65 (power to make exempting orders), Section 67 (prohibition of employment of young children), Section 79 (annual leave with wages), Section 88 (notice of certain accidents), Section 112 and rules made thereunder. Under the Madhya Pradesh Factories Rules, 1962, the Labour Commissioner has now been given the power to authorize any person or agency to undertake or conduct inspections for the classified factories. Further, Government of Madhya Pradesh vide its notification dated 11th May 2020 has amended the Madhya Pradesh Factories Rules, 1962 by changing the due date for filing (online) of the annual return from 15th January to 1st of February of every year.
Madhya Pradesh Industrial Relations Act, 1960
Industries such as textile, iron and steel, electrical goods, sugar and its by-products, cement, electricity generation, public motor transport, engineering including the manufacture of motor vehicles, potteries, chemical and chemical products, leather industry, etc. have been exempted from the provisions of the Madhya Pradesh Industrial Relations Act, 1960. However, it has been clarified that this change will not affect the pending cases before any competent authority.
Madhya Pradesh Shops and Establishments Act, 1958
Pursuant to the provisions of the Madhya Pradesh Shops and Establishments Act, 1958, no shops or commercial establishment situated in the local areas on any day be opened earlier than 06:00 A.M and be kept open later than 12:00 P.M.
Madhya Pradesh Labour Laws (Amendment) Ordinance, 2020.
The threshold of number of employees working in an undertaking has been increased from 50 to 100 for the applicability of the provisions of the Madhya Pradesh Industrial Employment (Standing Orders) Act, 1961.
All categories of establishments have been exempted from the applicability of the provisions of the Madhya Pradesh Shram Kalyan Nidhi Adhiniyam, 1982
Extension of Working Hours – The factories in Madhya Pradesh, through a notification issued on 24th April 2020, have been directed to comply with the following, for a period of 3 months:
- The workers have been allowed to operate for upto 12 hours (which was earlier capped at 8 hours per day) in a day or upto 72 hours in a week, with a minimum 30 minutes of rest interval after every 6 hours of work.
- Overtime wages will be paid by the employers as per Section 59 of the Factories Act, 1948 i.e. at double the rate of ordinary wages.
No Work No Pay
Further, pursuant to the Order (dated 30th April 2020) of Bombay High Court, the Labour Department of Madhya Pradesh vide a notification (on May 6, 2020), clarified that employers of establishments which have been permitted to operate, subject to the mandated safety procedures, may deduct wages of workers, in case of their absence from work.
Uttar Pradesh (Temporary Exemption from Certain Labour Laws) Ordinance 2020
The Government of Uttar Pradesh (“UP Government”) has promulgated the Uttar Pradesh (Temporary Exemption from Certain Labour Laws) Ordinance 2020 (vide a press release dated 6th May 2020), exempting all factories and manufacturing establishments from all provisions of labour laws applicable to them for a period of 3 years. However, the following labour laws will continue to remain in force:
- Bonded Labour System (Abolition) Act, 1976;
- Employee’s Compensation Act, 1923;
- Provisions of Factories Act, 1948 and Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996;
- Section 5 of Payment of Wages Act, 1936; and
- The provisions pertaining to employment of children and women.
The exemption notification dated 8th May 2020
Further, the UP Government had originally vide its Extension Of Working Hours For Factories In Uttar Pradesh notification dated 8th May 2020, exempted all factories registered under the Factories Act, 1948 in the state, from the provisions of Section 51 (Weekly Hours), Section 54 (Daily Hours), Section 55 (Intervals for Rest), Section 56 (Spread over) and Section 59 (Extra wages for overtime) of the Factories Act, 1948, subject to certain conditions with effect from 20th April 2020 till 19th July 2020.
The constitutional validity of the said notification was challenged in the Allahabad High Court in the matter of Uttar Pradesh Worker Front v. Union of India and Another. The matter was mentioned before the bench of Chief Justice Govind Mathur and Justice Siddhartha Varma on 14th May 2020, which issued notice to the UP Government.
Thereafter, the UP Government by its Withdrawal Order on 15th May 2020, revoked the said notification, granting exemption to all factories from the provisions of Section 51, 54, 55, 56 and 59 of the Factories Act, 1948. Hence, all factories in the State shall comply with the working hours (i.e. upto 8 hours in any day) as prescribed under the Factories Act, 1948.
The Allahabad High Court, on 19th May 2020, dismissed the petition in the matter of Uttar Pradesh Worker Front v. Union of India and Another, after the Court was informed that the challenged notification has been withdrawn by the UP Government.
Other Indian Stat
The Government of Assam through its notification dated 8th May 2020, exempted all factories in the state registered under the Factories Act, 1948 from the provisions of Section 51 (Weekly Hours), Section 52 (Weekly Holidays), Section 54 (Daily Hours), Section 56 (Spread Hours) and Section 6 (Daily and Weekly Hours) of the Assam Shops And Establishments Act, 1971 with effect from 8th May 2020, subject to the conditions that the total number of working hours in a day shall not exceed 12 hours and the spread over, inclusive of intervals for rest shall not exceed 13 hours in any one day.
The Gujarat Government on 8th May 2020, announced that new industrial establishments shall be exempted from all labour laws except the Minimum Wages Act, 1948, Employee’s Compensation Act, 1923 and Industrial Safety Rules, for a period of 1,200 May 2020
Government of Maharashtra, Goa, Haryana, Himachal Pradesh and Uttarakhand
The Government of Maharashtra, Goa, Haryana, Himachal Pradesh and Uttarakhand have also extended the working hours to 12 hours in any day and relaxed certain provisions under the Factories Act, 1948, in consonance with the exemptions granted by the State Governments of Madhya Pradesh, Uttar Pradesh, Assam, etc.
The Labour Department, Government of Karnataka has announced that no action will be taken against companies for non-payment of wages, in case the company is facing financial crunch due to the nationwide lockdown. Further, the Government of Karnataka through its notification dated 22nd May 2020, exempted all factories in the state registered under the Factories Act, 1948 from the provisions of Section 51 (Weekly Hours) and Section 54 (Daily Hours) for a period of 3 months, with effect from 22nd May 2020 till 21st August 2020. This exemption is subject to the condition that no worker shall be permitted to work for more than 10 hours in any day and 60 hours in any week and that the provision of Section 59 of the Factories Act, 1948 in relation to overtime wages will continue to be applicable.
Given the number of states coming up with the various relaxations and exemptions from labour laws, the International Labour Organization, in a press release, stated that the amendments to labour laws should be done only after tripartite talks between the government, workers’ organisations and employers’ organisations.
On one hand, where the Government was till recently issuing advisories to protect the underprivileged workforce and directing the employers to refrain from taking any adverse steps such as termination or reducing wages, now it seems that the aim has shifted – 180 degrees – to ensure continuity of business and uplifting the economy, by withdrawing the protections available under various labour laws. In the long run whether these exemptions will yield benefits to the industry as a whole – only time can tell. Given the exodus of migrant workers and the inhumane working conditions to be imposed on the workers who are ready to work may cause a big deficit of work force.
It will be interesting to watch how other courts respond given how UP withdrew its notification in a matter of a week.
–Archana Balasubramanian (Partner), Charulata (Associate)