Introduction:

Labour law is certain stream of laws, administrative rulings, and precedents which address and regulate the legal rights of, and restrictions on, working people and their organizations in the context of employment. General notion, it articulates the relationship between trade unions, employers and employees. In other words, Labour law defines the rights and obligations as workers, union members and employers in the workplace.

Labour policy in India has been evolving in response to specific needs of the situation to suit requirements of planned economic development and social justice and has two fold objectives, namely maintaining industrial peace and promoting the welfare of labour. The labour laws of any country are directly the factors affecting economy and growth of a country. However, it is not less than a paradox that with approximately 90% of workers is employed in an ‘Informal Capacity’, Indian Labour Laws are often termed ‘Inflexible’.

 Labour is a concurrent subject in the Constitution of India implying that both the Union and the state governments are competent to legislate on labour matters and administer the same. There are major enactments of the centre that a state cannot brush aside. However, despite having over 200 state laws and approximately 50 central laws, the purview of labour law is still not defined.

Labour Laws amidst Covid-19 – Changing Dynamics

Covid-19 pandemic has set the world off to a path of public health and global economic crisis. Most of the countries affected by the pandemic have imposed lockdowns in respective nations. India has imposed complete lockdown since 25^th of March 2020. Under the powers conferred by the disaster management act, 2005, the lockdown has been extended till 31^stMay, 2020. With economy, businesses and industries at complete standstill, the adversity has started showing its marks. The loss in economic activities has resulted in loss of income to many individuals and businesses.

Thus, with a view to control the economic adversity and to boost the economy amidst the ongoing pandemic, many states viz. Uttar Pradesh, Madhya Pradesh, Gujarat, Rajasthan, Himachal Pradesh etc. have come up with various amendments and ordinancescontaining exemptions from compliances of certain provisions of the labour laws. Such an action has been takes in order to provide flexibility to the employers in order to sustain economically viable establishments. While, on one hand, due to losses suffered and weakening economy, establishments are facing hardship, such relaxations are boons to smoothen the operations out and to gain economic momentum, however, the practicality of the workers remain vulnerable.

Workers, in a practical environment today, are employed with industries and establishments, more in an informal arrangement to employment. Thus, the benefits extended to workers, are only to be directed towards formal workers. Thus, interests of a larger chunk of laborers, who are most vulnerable to such economic crisis, are undermined. However, the state governments maintain the stand that the decision is taken in wake of losses incurred to businesses and economic activities.

Shift in Paradigm of labour laws in various states:-

With suffering economy in wake of the lockdown and a large number of firms and workers looking down the barrel of an uncertain future, various states in the country have taken steps towards relaxation to industrial sector. Such states include UP, MP, Gujarat, Himachal Pradesh, Rajasthan etc. While Madhya Pradesh has adopted more of a nuanced approach towards these relaxations, the state of UP has taken the boldest steps as it has temporarily suspended as many as 30 enactments related to labour law.

With ceased provisions, one important aspect that is severely hindered is dispute settlement mechanism as works committee; conciliation officers, labour courts and tribunals are all gone. With cessastion of institutional machineries, labour unrest might gain momentum as these machineries prevent excalations of disputes.

Following are the relaxations that are brought about by various states:

Uttar Pradesh: (https://www.mondaq.com/india/employment-and-workforce-wellbeing/935398/suspension-of-labour-laws-amidst-covid-19)

Vide ordinance dated 08/03/20, the UP Government has suspended the following labour laws and rules in the state for all factories and establishments for a period of 3 years:

Apprentices Act 1961;

Beedi and Cigar Workers Act 1966;

Cine Workers and Cinema Theatre W. Act 1981;

Contract Labour (Regulation and Abolition) Act, 1970;

DookanAurVanijyaAdhisthan Act 1962;

Factories Act 1948 (barring provisions relating to safety and security of workers);

Industrial Disputes Act 1947;

Industrial Employment Act 1946;

Minimum Wages Act 1948;

Motor Transport Workers Act 1961;

Payment of Bonus Act 1965;

Payment of Gratuity Act 1972;

Payment of Wages Act 1936 (barring Section 5);

Public Liability Insurance Act 1991;

Sales Promotion Employees Act 1976;

The Indian Boiler Act, 1923;

Trade Unions Act 1926;

Weekly Holidays Act 1942;

Working Journalists Employees Act 1955;

Dangerous Machines Act 1983;

Sick Industrial Companies Act 1985;

Building and other construction workers (Regulation of Employment and Conditions of Services) Act, 1996 (barring provisions relating to safety and security of workers);

UP Shops & Establishments Act 1962;

UP Welfare Fund Act;

UP Industrial Peace (Timely Payment of Wages) Act 1961;

UP Industrial Housing Act 1955;

Industrial Establishment (National Holidays) Act 1961;

UP Industrial Undertakings Special Provisions for Prevention of (Unemployment) Act 1966;

UP Employment of Substitute Workmen Act 1978; and

UP Sugar & Power Alchohol Industries Labour Welfare & Development Fund Act 1950.

Only the provisions relating to safety and security of workers under the Factories Act, 1948 and the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996; Child Labour (Prohibition and Regulation) Act of 1986; Maternity Benefit Act, 1961; Employee’s Compensation Act, 1923; Equal Remuneration Act, 1976; Bonded Labour System (Abolition) Act, 1976; and Section 5 of the Payment of Wages Act, 1936 (the right to receive timely wages) remain in force in the state.

Also, the exemptions are subject to certain conditions.

Madhya Pradesh:

Madhya Pradesh has only amended certain labour law in respect of new industries and establishments, meaning thereby that labour laws will not come in way of business. Amendment has relaxed and increased overtime hours to 72 hours and the work shifts have been increased from 8 to 12 hours. Also, third party certification and routine inspection are now recognized, with further relaxation that no inspection is mandatory to a firm employing less than 50 persons. Provisions relating to lay-off, retrenchments and closing down of establishments shall continue to apply. But, provisions relating to industrial dispute resolution, strikes and lockdowns, and trade union will not apply.

Gujarat:

Vide notification dated 17/04/2020, the state of Gujarat has exempted establishments registered under factories act from various provisions from April 20, 2020 to July 19, 2020. However, following conditions are required to be fulfilled:

No adult worker shall be allowed or required to work in a factory for more than twelve (12) hours a day and seventy-two (72) hours in a week.

No worker shall work for more than six (6) hours before he has had an interval for rest for at least half an hour on each day.

No female worker shall be allowed or required to work in a factory between 7:00 PM to 6:00 AM.

Wages shall be in proportion of the existing wages. (E.g. if wages for eight (8) hours are Rs. 80, then the proportionate wages for twelve (12) hours will be Rs. 120).

Rajasthan:

Vide notification dated April 11, 2020, The State of Rajasthan has extended working hours to 12 hours per day for a period of 3 months from the date of the order. In regards to factories manufacturing essential food and grocery supplies, the Government of Rajasthan has exempted the provisions of working hours of adult workers under the Factories Act, 1948 subject to a few conditions in order to meet requirement of manpower. It is also clarified that the additional 4 hours per day shall be paid as overtime subject to an overtime limit of 24 hours per week.

Himachal Pradesh:

Vide notification dated April 21, 2020, State of HP has exempted all factories registered under the Factories Act, 1948 from provisions until July 20, 2020 subject to the following conditions:

No worker shall work in a factory for more than 12 hours in any day and 72 hours in a week.

No worker shall work for more than 6 hours before he has had an interval for rest for at least half an hour.

Wages in respect of increased working hours as a result of the exemption shall be in proportion to existing minimum wages fixed by the Government of HP under the Minimum Wages Act, 1948.

Provisions of Section 59 pertaining to overtime wages shall continue to be applicable without any change.

Drift in Labour laws in Madhya Pradesh:

On 06/05/20, the state of Madhya Pradesh introduced Madhya Pradesh Labour Law (amendment) ordinance, 2020, thereby making major amendments to the labour laws in the state. Following are the amendments made in the labour law in order to provide relaxation to industries and establishments:-

S. No.	Acts	Earlier provision	Amendment	Effect after amendment
1.	MP Industrial Employment (standing orders) Act 1961	Threshold of minimum 50 employees	Threshold increased to 100 employees	the act, now, does not governs and establishment or industry that has work force of less than 100 employees.
2.	MP Shram Kalyan Nidhi Adhiniyam, 1982		has inserted Sub-clause (3) to Section 28
3.	Factories Act, 1948		3rd party certification for non-hazardous industries employing upto 50 employees is now permitted by state
4	MP Factories Rule 1962		Insertion of New Rule 18-B:-Authorizes any authorized person or agency to conduct the inspection in the factory. Such person or agency is required to be authorized by labour commissioner for a particular area.
5	Industrial Dispute Act 1947		Provisions of industrial dispute resolution, strikes and lockouts, and trade unions will not apply. Provisions related to lay-off and retrenchment of workers, and closure of establishments will continue to apply. This exemption will remain in place for the next 1,000 days (33 months)
6	Madhya Pradesh Industrial Relation Act, 1960		Shall not apply to  certain industries This includes textile, leather, cement, iron and steel, electrical goods, sugar, electricity, public motor transport, engineering including manufacture of motor vehicles, among others.	Amendment shall not apply to pending cases before any appropriate auth., forum or court.
7	Factories act 1948 and allied MP Factories rules  1962		All provision of the acts are not to be followed by the factories except sec 6, 7, 8, 21 to 41 , sec. 59, sec 65, sec. 67, sec, 79, sec. 88 and sec. 112.
8	MP Shops and establishment act 1958	Sec 11 says no shop shall be allowed to be open for more than 9 hours a day.	No shop can be kept open before 6 am and later than 12 pm.

MP Industrial Employment (standing orders) Act 1961:-

The MP Industrial Employment (standing orders) Act 1961 previously had a threshold of a minimum of 50 employees. Meaning thereby, that these rules were only applicable to any industry/undertaking where the work force is of 50 or more employees. But by virtue of this ordinance, the threshold is increased to 100 employees. Thus, the act, now, does not governs and establishment or industry that has work force of less than 100 employees.

MP Shram Kalyan Nidhi Adhiniyam, 1982

By way of the abovementioned ordinance, the government has inserted Sub-clause (3) to Section 28 of MP Shram Kalyan Nidhi Adhiniyam, 1982, which reads as under:

“(3) The State Government may, by notification, exempt any establishment or any category of establishments from any or all of the provisions of this Act, subject to such condition, as may be specified in the notification.”.

Thus, by way of the amendment, the government is now cested with powers to make exemptions to certain undertaking or class of undertakings.

Factories Act, 1948:-

Amendment to recognize 3^rd party certification and routine inspection:

3^rd party certification for non-hazardous industries employing upto 50 employees is now permitted by state.  Such industries/undertakings who present such report before 31^st January every year, there shall be no routine inspection by the department and the inspection can be done with prior permission of labour commissioner in case of serious accident or complaint.

Other provisions of the Act such as those related to industrial dispute resolution, strikes and lockouts, and trade unions, will not apply.

MP Factories rules 1962:

Insertion of New Rule 18-B:-Authorizes any authorized person or agency to conduct the inspection in the factory. Such person or agency is required to be authorized by labour commissioner for a particular area.

Industrial dispute act 1947:

The Government of Madhya Pradesh has restricted the applicability of a major number of provisions of the Industrial Disputes Act, 1947 for new manufacturing units that will come up in the next 1,000 days. Such companies will no longer be required to seek permission of the government to lay-off workers, but will still be required to do so for retrenchment and giving retrenchment compensation to workers, failing which will attract penalty.

This relaxation, nevertheless, will not be given to existing businesses.

The objective of the Act is to create a mechanism to address industrial disputes between workers and employers. Industries won’t be required to seek government permission for suspending workers but will need to do so while removing them from the job. They will also have to create a separate mechanism to deal with industrial disputes.

The government of MP has not amended the laws to protect workers from wrongful termination and large factories (with 300 or more workmen) will require government approval before retrenchment or closure of the establishment.

Madhya Pradesh Industrial Relation Act, 1960

Shall not apply to certain industries.

Textile including cotton silk, artificial silk, staple fibre, jute and carpet.

Iron and steel.

electrical goods.

Sugar and its byproducts, including i). growing of sugarcane on farms belonging to or attached to concern engaged in the manufacture of sugar, and ii). All agriculture and industrial operation connected with the growing of sugar cane or the said manufacture

Cement.

Electricity generation, transmission and distribution.

Public motor transport

Engineering including manufacture of motor vehicles

Potteries including refractory goods, fire brakes, sanitary wares, insulators, tiles, stone ware pipes, furnace lining bricks and other ceramic goods.

Chemical and chemical products industry

Leather, tanneries including leather products

This Amendment shall not apply to pending cases before any appropriate authority, forum or court.

The MPIR Act of 1960 gave recognition to trade unions and employers’ associations to act as a bargaining agent for settling disputes or engaging in a discussion related to terms of employment of workers in a particular industry at the local level. In MP, the 11 sets of industries will now be exempt from the law for an indefinite period of time.

While there is no provision for recognition of trade unions for collective bargaining in the central labour law governing them i.e. the Trade Union Act of 1926, some states such as West Bengal, Kerala, Maharashtra and Rajasthan have a separate rule for this purpose – which is aimed at ensuring peace and industrial harmony.

Factories act 1948 and allied MP Factories rules  1962:

3 months exemption for already established factories- all the factories are exempted almost from all the provisions of factories act 1948 and allied MP Factories rule 1962 except:

Provisions related to following category in act and rule-

Approval, licensing, registration (sec 6.),

Notice by occupier (sec 7),

Inspection (sec 8),

Provisions related to safety (sec 21 to 41 H) i.e chapter 4 and 4A,

Extra wages for overtime (sec 59)

Power to make certain exempting orders by state govt. (sec 65),

Provision related to employment of minor and young children (sec. 67),

Annual leave for wages (sec 79)

Notice regarding accidents (sec 88)

General provisions to make rules by state govt. (sec 112)

MP Shops and establishment act 1958:

There is also amendment in the Madhya Pradesh Shops and Establishments Act , 1958 with respect to the timing of operation of shops and establishment. As per the new amendment same can be open from 6AM till 12 PM.

V) NEW INDUSTRIAL RELATIONS TERMS IN MP:-

For new firms

*Most of the provisions of the Industrial Disputes Act will not apply, including need to seek permission to lay-off.

*Permission still required for retrenchment or closure of firms and to give retrenchment compensation.

*No mechanism for raising industrial disputes.

For existing firms

*No recognition of trade unions and employer bodies for collective bargaining.

*Term of license for hiring contract workers will be valid for more than a year.

VII) Implications:

As per these amendments, registrations and licences under different labour laws will be issued in a day versus the earlier 30 days, renewal of factory license will be for 10 years instead of one year now.

license will be issued for entire contract period instead of the calendar year under the Contract Labour Act.

with a view to invite new industries and investors in the next 1,000 days that all provisions, except Section 25 (which is related to safety) of the Industrial Disputes Act, have been relaxed.

provision has been made for one-time registration with no subsequent renewal for new businesses.

At present, shops can be opened from 8 a.m. to 10 p.m., but now they will be allowed to operate for a longer period of time.

duration of shifts in factories during the period of Covid-19 outbreak has been increased from 8 hours to 12 hours with permission of overtime up to 72 hours in a week. Factory owners will be able to change shifts as per their convenience to increase production.

In addition, a provision has been made to maintain a single register instead of 61 registers under labour laws and to file a single return instead of 13.

under the Factory Act, exemption has been given to factories from inspection for a period of three months. Employers will be allowed to have a third party inspection of their factories.

Earlier, registration of third party inspectors were done in Mumbai, but now the labour commissioner of MP is authorized to do it .

Establishments employing less than 50 workers have been excluded from inspection under labour laws.

After the amendments new inspections can only be done with the permission of the labout commissioner and on the basis of complaints.

Provisions of the MP Industrial Relations Act have been also relaxed, now trade unions and factory managers will be able to resolve the disputes as per their convenience. The labour court shall not be moved for these disputes by either of the parties.

In industries with less than 100 laborers exemptions have been given from provisions of the MP Industrial Employment permanent order Act.

The industrial employment act which was earlier applicable to establishments with more than 50 workers but less than 100 till now has been extended to establishments with more than 100 workers.

Under the contract labour act, contractors had to register for employing 20 laborers so far, now registration is only required after employing 50 laborers of more.

The ID Act has ben made effective on establishment with 300 workers instead of those employing 100 workers.

A facility of fixed term employment has been provided for personnel working on contract in industries and other establishments.

VIII) Termination of employees during COVID 19 – Effect

The National Disaster Management Authority vide its order dated May 17, 2020 has extended the lockdown till May 31, 2020 but with limited restrictions. Concurrently, the National Executive Committee, Ministry of Home Affairs (“MHA”) vide its order dated May 17, 2020 (“MHA Order”), in exercise of its powers under the Disaster Management Act, 2005, also issued directions and guidelines for implementation of the lockdown measures.

One of the important development in the MHA Order is that all previous orders issued by the National Executive Committee in exercise of its powers under Section 10(2)(l) of the Disaster Management Act, 2005 shall cease to have effect from May 18, 2020. The orders that stand withdrawn by the MHA Order includes the contentious order dated March 29, 2020 issued by the MHA (“MHA Wage Order”) which directed the State Governments/Union Territory Governments to take all necessary steps and issue necessary orders to ensure, inter alia,  that

“All the employers, be it in the Industry or in the shops and  commercial establishments, shall make payment of wages of their workers, at their work places, on the due date, without any deduction, for the period their establishments are under closure during the lockdown”.

Brief Background on Payment of Wages during Lockdown:-

The Ministry of Labour and Employment had issued an advisory on March 20, 2020 (“Advisory”) advising all employers of public and private establishments to extend their cooperation by not terminating the employees, especially casual and contractual workers, or reducing the wages of such employees. The Advisory further stated that in case the place of employment is made non-operational due to the COVID-19 pandemic, then the employees of such unit will be deemed to be on duty.

Thereafter, the MHA Wage Order was issued. Pursuant to the issuance of the Advisory and the MHA Wage Order, most of the states in India also issued orders/advisories (applicable up until the initial lockdown, i.e. till March 31, 2020) on similar grounds, i.e. advising or directing employers not to terminate the employees/workmen and to treat the lock-down period as a ‘paid leave’ for all its employees.

Subsequently, in view of the extension of the nationwide lockdown, some states extended the applicability of the orders beyond March 31, 2020 or issued new orders under the Epidemic Diseases Act, 1897 stating that the employees (including temporary/contractual/outsourced, etc.) of private establishments, required to stay at home in view of the government order shall be treated as ‘on duty’ and shall be paid in full in this respect.

The above stated orders including the MHA Wage Order and several advisories and directions issued by the states were challenged by the industry before the Hon’ble Supreme Court of India as being unconstitutional on several grounds including that they infinge upon the fundamental right to freedom of the industrial units and enterprises to carry on any occupation, trade or business under Article 19 of the Constitution of India as it will lead to collapse of the industrial units if they are forced to pay salaries without any revenue. The notices have been issued in the petitions to the Government of India and respective states, but no stay order has so far been granted by the Apex Court other than an order in a few of the petitions that no coercive action will be taken against the employers.

Notwithstanding the above MHA Wage Order and state government directions, many employers initiated measures such as reduction of salaries (forced as well as voluntary), leave without pay, adjusting the applicable annual paid leaves against the days without work, terminating large number of employees and in some extreme cases declaring bankruptcy. Faced with the above difficulties, a few trade unions and workers have also filed counter petitions seeking protection from wrongful termination and payment of wages. In one such petition filed by the Rashtriya Shramik Aghadi, a contract labourers’ union, the Aurangabad Bench of the Bombay High Court, on May 12, 2020, held that the principle of ‘no work-no wages’ cannot be applied during the present extraordinary situation prevailing in the country due to the COVID-19 pandemic and directed the principal employer to ensure that the contractor pays full wages, save and except food allowance and conveyance allowance, to the employees for the months of March, April and May, 2020.

Now considering that the new MHA Order has lifted most of the restrictions including the restrictions on private offices and industrial units to operate (subject to certain social distancing/protection norms and following the practice of working from home as far as possible), the previous MHA Wage Order that all the employers, will need to make payment of wages of their workers, without any deduction, for the period their establishments are under closure during the lockdown is no longer relevant. This is so as most employers (other than under the prohibited activities) are now authorised to normalise their operations and require employees to report back to work.

IX) Judgments:

Hand Tools Manufacturers Association Vs. Union of India & Ors. W.P. (Civil) No. 11193/2020 (Supreme Court)

The petitioner had challenged the constitutional validity of the Ministry of Home Affairs order dated March 29 arguing that it violated Articles 14 and 19 of the Constitution. Four days after the nationwide lockdown was imposed, MHA on March 29, in a circular issued to all private companies directing them to pay full salaries to their employees during the lockdown.

The circular also warned of legal implications if the order was not complied with. All the employers, be it in the industry or in the shops and commercial establishments, shall make payment of wages of their workers, at their workplaces, on the due date, without any deduction, for the period their establishments are under closure during lockdown period, ” the MHA order had said.

In this particular case, direction was given by the Court that no coercive step should be taken and pending for listing in this week.

KERALA VYDYUTHI MAZDOOR SANGHAM & ORS. v. STATE OF KERALA & ORS (Kerala HC):-

The Court on a Petition challenging state government’s recent decision to defer paying six days’ worth salaries to government employees for the next five months in the wake of the COVID-19 crisis stayed the Operation of Govt decision for two months while holding that Payment of salary is certainly not a matter of bounty. It is a right vested in every individual to receive the salary. Article 300A of the Constitution which confers a right to property will include within its purview “salary” also a property, at least prima facie.”

Align Components Pvt. Ltd and another v. Union of India and others (Bombay HC):-

The Court on a petition challenging the notification issued by the GOI dated 29/03/2020 held that the workers would be expected to report for duties as per the shift schedules subject to adequate protection, from Corona Virus infections, by the employer in areas where restrictions are lifted in Maharashtra. In the event such workers voluntarily remain absent, the Management would be at liberty to deduct their wages for their absence subject to the procedure laid down in Law while initiating such action. This would apply even to areas where there may not have been a lock down.

K.Amsa Kannan v. State of Tamil Nadu (Madras HC):-

The Court dismissed Plea for Reduction in Salary of Government Servants holding that it is a matter of Govt. Policy.

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