Labour reforms: Centre to tell states not to rewrite laws

As reported by FE earlier, Madhya Pradesh, Uttar Pradesh and Gujarat proposed/issued orders, suspending key provisions of labour laws.

Having come under pressure from the International Labour Organisation (ILO) and a clutch of trade unions, the Union labour ministry will soon write to a few state governments that have made attempts to rewrite their labour laws, to desist from taking steps that are beyond their authority and could run into conflict with India’s international commitments in the arena. A labour ministry official confirmed the move, which apparently followed a directive from the Prime Minister’s Office.

As reported by FE earlier, Madhya Pradesh, Uttar Pradesh and Gujarat proposed/issued orders, suspending key provisions of labour laws. While the labour ministry feels that states are within their legal rights to relax labour-law provisions – like extension of work hours to 12 from 8 – for a period of three months given the serious crisis that manufacturing and trading units have plunged into, it is of the view that states can’t suspend key laws to undermine trade union rights and virtually allow the employers to resort to hire and fire policy. “If they (states) change labour laws, they can do it for three months (under Factories Act). We will deliberate on such proposals as and when those come to us and and take a call. However, if any ordinance has to be promulgated, the Centre will do that, and not the states,” a labour ministry official had told FE earlier. “On its own, the Centre has no plan to bring in labour-law ordinances,” the official had added.

To lure investment and make operations of business viable amid the Covid-19 pandemic, Uttar Pradesh, Gujarat and Madhya Pradesh have announced sweeping changes in labour laws, either through the ordinance route or through executive orders, including scrapping of some provisions of the relevant laws for three years or more. Replying to the central trade unions’ pleas against the moves , Karen Curtis, chief, Freedom of Association Branch, International Labour Standards Department, said, “Please allow me to assure you that the ILO director general has immediately intervened, expressing his deep concern at these recent events and appealing to the Prime Minister to send a clear message to central and state governments to uphold the country’s international commitments and encourage engagement in effective social dialogue.” Curtis, in his letter dated May 22 to CTUs said he would apprise the unions of the observations or comments that might be made by the Indian authorities on the matters raised by them.

Among the states, Uttar Pradesh drafted an ordinance and sent it for the President’s approval to suspend all but four labour laws for industries, both new and old, for three years. The state also extended work time to 12 hours on May 8, but had to roll back the move on May 15 after the Allahabad high court disapproved of it. Another step by UP was to invoke ESMA to ban strikes and protests by the employees of state government, corporations, local bodies and PSUs for six months.

On its part, Madhya Pradesh suspended most provisions including those governing retrenchment and trade union rights for ‘new establishments”, for 1,000 days, besides extending work time from 8 to 12 hours, with higher pay for extra time. The state also removed registration requirement for contractors employing less than 50 workers (previously, 20 workers)

As far as Gujarat is concerned, the state also extended the work hours to 12 instead of 8 earlier and kept in abeyance almost all labour laws for 1,200 days for ‘new units’.

Since the relevant orders issued by Madhya Pradesh and Gujarat seek to suspend the labour law provisions of the Industrial Disputes Act only for ‘new establishments’, these might get the concurrence of the Centre. But UP’s move seeking a blanket exemption from the key laws for all units for three years might not be approved by the Centre.

“If any proposal (from a state) contains something for which approval was given to any other states earlier, the labour ministry approves that proposal almost immediately. But, in cases where there is something new, which is not legally correct and is too extreme, the ministry analyses such proposals and gives its comments to the ministry of home affairs. The MHA then takes a call and gives its views to the President, who can only promulgate ordinance. This is the procedure,” a labour ministry official explained.