Authors: Abhinav Akash, DSNLU
Mrunalini Srinivasan, Sastra University
Riya Sharma, FIMT
Editor: Anoushka Chauhan, NALSAR
As the majority of the world’s population suffers from a global pandemic and an intense lockdown, there has been a great impact on the economies of the countries. The condition of our country is no different in this regard, and it is also suffering from a serious blow to the manufacturing and construction sector. To minimize such impact on the establishment, many amendments and announcements have been introduced including the suspension of 35 out of 38 labour law for a period of 3 years by the State of Uttar Pradesh.
The basic motive behind this ordinance can be seen as providing flexibility and easing the business of industry to employ the workers who have migrated back to the state and also to protect the rights of existing workers. But the suspension has brought intense problems as well, it’s been seen as curbing the Fundamental Rights of the labourer, such as their right to life and personal liberty by being denied proper wages and right to form associations and union as was held in landmark cases such as the Kulkarni case. In Sanjit Roy v. State of Rajasthan, it has been held that “whenever any labour or service is taken by the State from any person, who is affected by drought or famine, the State cannot pay him less wage than the minimum wage to help meet the famine situations”. The suspension of labour law directly violates the Right of Protection from Exploitation in Article 23.
This article analyzes the background of labor laws that have been suspended, and checks the constitutionality of the suspension itself through statutory provisions and case laws.
Labour Laws in India
Labour Law is also known as ‘The Law of Employment’. Labour Law establishes a relationship between the employer and employee. Main purpose of labor law is to provide safety and security to the labourers, to shield them from exploitation in an economy that has so far prospered from it. Labour law arose due to the demands of workers for better working conditions and the demand of employers to restrict the powers of workers in many organizations and to keep labour cost low. The growth and development of labour laws can be traced back to the establishment of the Labour Organization, the only tripartite U.N. agency, in 1919.
Classification of Labour Laws in India
India has several labor laws that protect the rights of its workers, ranging from terms of employment,non-discrimination, to equal pay and minimum wages. All of these operate for different issues, but have the same goal of the workers’ interests at their core. India’s several labor laws can be classified as follows. The most important facet of India’s labor laws - which are hundreds, with over 50 enacted by the Union Parliament - is that they distinguish between categories of ‘workmen’ and employees who are in supervisory/management roles, so as to protect those most vulnerable to exploitation. The labor laws of India focus mainly on blue collar workers.
Firstly, there are Regulative Laws related to the Regulation of Industrial Relations such as the Trade Unions Act, 1926 and the Industrial Disputes Act,1947. The objective of such legislations is to simply regulate relations between employees and employers and ease any industrial disputes. There are wage related laws such as the Minimum Wages Act, 1948, Payment of Bonus Act, 1965 and the Equal Remuneration Act,1976 ensure the fair distribution of wages between workers, non-discrimination in the wages. Thirdly, protective laws related to working hours and conditions of service such as the Factories Act,1948 see for the proper working environment of the workers, in the form of welfare. Welfare laws such as the Child Labour (Prohibition & Regulation) Act, 1986 protect the disadvantaged sections of society. Fifth, there are certain labor laws related to social security of workers. Some examples of these are Employees’ Compensation Act, 1923, Employees’ State Insurance Act, 1948, Employees’ Provident Fund & Miscellaneous Provisions Act, 1952, Payment of Gratuity Act, 1972, and Maternity Benefit Act, 1961. The last categorization can be said to encompass all those which don’t neatly fall into the aforementioned categories. These are miscellaneous, such as the Apprentices Act.
Despite the classifications and the fine lines that seem to separate them from each other, they all fall under the same ambit - to protect workers and ensure proper conditions for employment, free from discrimination of any kind.
Constitutional validity of Suspension of Labor Laws in UP
The Government of Uttar Pradesh suspended many labour laws by promulgating an ordinance called The Uttar Pradesh Temporary Exemption from Certain Labor Laws Ordinance, 2020. The two issues with this are whether firstly, the state has the power to suspend such laws, and secondly, would the suspension pass the test of constitutionality.
In Rai Sahib Ram Jawaya Kapur v. State of Punjab, the court held that labour laws are concurrent subject by way of Entry No. 22 and 24 of List III of Seventh Schedule. Article 254 talks about Repugnancy and that if there is any conflict between laws made by Centre and State on any of the subjects in the concurrent list, the central laws will prevail. State law will prevail over central law only if it is reserved and approved by the President. However, the promulgated ordinance has not received the President’s assent. The ordinance sent to the President for approval violates Article 213 as it requires the President’s instruction for promulgation of any ordinance by the Governor and if it is made by state legislature, it requires the President's assent to become enforceable .
The Indian Constitution guarantees rights for the protection and safeguard of labor under Part III and IV that pertains to Fundamental Rights and Directive Principles of State Policy (DPSP). Article 19(1) (c) guarantees the freedom to form associations. This fundamental right is violated because all labor laws are suspended which includes the Trade Unions Act, 1926. In Kulkarni v. State of Bombay , it was held that the right to form associations includes the right to form unions. Statutes like Minimum Wages Act, 1948, Factories Act, 1948 and Industrial Disputes Act, 1947 which provide social security are suspended and this affects the livelihood of many workers, which violates Article 21.
Directive Principles of State Policy are guidelines that should be kept in mind while formulating laws and policies. Article 38 aims in reducing inequalities in income, status and opportunities. Article 39 aims in securing the right to adequate means of livelihood for all citizens. Article 41 states that the state shall secure the right to work to the citizens in cases of unemployment and disablement. The suspension of the labour laws violates the DPSP’s because many workers are deprived of their means to secure social and economic justice. As Justice Chandrachud stated in a judgement:
“Suspension of labor laws will be a major violation of fundamental rights and Directive Principles of State Policy.”
Of the several labor laws suspended by the ordinance, only four remain applicable - the Building and Construction Labors Act, Workmen Compensation Act, Bondage Labor Abolition Act and Section 5 of the Payment and Wages Act. This adversely affects all workers. For example, the suspension of the Minimum Wages Act means people cannot claim compensation for their work, which practically reduces them to bondage labor, as any payment below the nominal wages amounts to a situation of bondage. While the Factories Act, which provides the constitutionally protected right to a safe and secure condition of work under Article 21, has been suspended, the Building and Construction Workers Act remains applicable, which extracts a tax from laborers. This makes their situation not only akin to slavery, but they have to additionally pay for it too.
While one could argue that the move is likely justifiable under Article 19(4), where fundamental rights can be suspended on grounds of public order, morality, etc., the principle of proportionality comes into question. According to well established legal norms, restrictions on human rights have to be rationally linked to the aim that the state seeks to pursue. Apart from the several violations of the fundamental rights at the surface itself, it seems unlikely that this suspension would pass the test of proportionality either - in which case, it is unconstitutional, through and through.
In this tough time, it was the duty of the government to look after the interests of the labour and just for the sake of economic balancing, the suspension of labour cannot be deemed correct. The suspension is clearly showing the desperation of the government to use the COVID-19 pandemic situation to weaken the country’s labour laws.
The Code of Wages, 2019, which included the Payment of Wages Act are suspended and may be repealed for this period of time leading to removal of all the obligation of the factories and construction sites manager to give timely wages to their employees and workers violating the basic fundamental rights under Article 14, 15, 19 and 21 of the Constitution of India .It will be interesting to see how the ordinances and notifications are implemented. The notice given by the UP Government of suspending almost all the labour laws is unlawful and unconstitutional in nature and it could create a sense of chaos between the migrant labourers and the existing working labourers as the state Government can, by virtue of this being a subject of the concurrent list, legislate on the issue. The govt. just needs to put a little effort on the administrative side rather than exclusively going after the legislative procedure and curbing the fundamental rights. Instead of scrapping away the very basic rights of workers and striking them when they’re at their most vulnerable, the government should tweak the administration lucratively to solve the economic problems - curbing every right should not be the solution to anything.
Winy Daigavane & Pavan Belmannu, Impact of Global Pandemic on Indian Labor Law, Jurist ( 20 May 2020) https://www.jurist.org/commentary/2020/05/daigavane-belmannu-labor-law-suspensions-india/.  Kulkarni vs State of Bombay 1954 AIR 73.  Sanjit Roy vs State of Rajasthan AIR 1983 SC 328.  AIR 1955 SC 549.  Tanvi Agarwal, Suspension of Labour Laws amid Covid-19: Constitutionality Check, Legal Services India http://www.legalserviceindia.com/legal/article-2598-suspension-of-labour-laws-amid-covid-19-constitutionality-check.html.  (1954) AIR 73, 1954 SCR 384.  PUDR v. Union of India, 1982 AIR 1473, 1983 SCR (1) 456.  Bandhua Mukti Morcha v. Union Of India & Others, AIR 1984 SC 802, 1984.  Propounded in cases such as Om Kumar v. Union of India, restrictions of fundamental freedoms must be proportional, the restrictions must be ‘reasonable’. Also reaffirmed in KS Puttuswamy and Anuradha Bhasin v. Union of India.  Sruthissagar Yamunan, Is Uttar Pradesh’s Decision to Suspend 35 Labour Law Legal? The Scroll (9 May 2020) https://scroll.in/article/961435/is-uttar-pradeshs-decision-to-suspend-35-labour-laws-legal-experts-believe-it-could-be-challenged.  Debayan Roy, Plea file in Supreme challenging Constitutional validity of Labour Law Ordinances Passed by 10 States, Bar and Bench (20 May, 2020) https://www.barandbench.com/news/litigation/plea-in-sc-challenges-constitutional-validity-of-labour-law-notificationsordinances-by-10-states-says-leads-to-labour-exploitation.