Gujarat joins UP & MP to make reforms in labor laws to kick-start economy

Story Highlights
  • After 40 days of Lockdown, Commercial activites resumes in various parts all across the country
  • The states are liberalizing their labour laws in order to give momentum to a standstill economy
  • The nationwide tally has neared 60,000 marks, including 1,981 deaths

INDIA: The nationwide lockdown in India due to the Coronavirus pandemic has brought the economic development of the country to a standstill. With the third phase of lockdown, certain relaxations have been given across the country to restart economic activities in the country. However, for a long term plan and attract more foreign investment in the industries, a majority of states are taking steps to ease the labour laws.

Uttar Pradesh & Madhya Pradesh announced major changes in their labour laws where UP Govt has slashed 38 laws at once making them null for 1000 days. Only three laws including Section 5 of Payment of Wages Act 1934, Construction Workers Act 1996, Compensation Act 1923 and Bonded Labour Act 1976 remain functional.

Important laws like Industrial Disputes Act, Act on Occupational Safety and Health, Contract labour act, Migrant Labour Act, Equal Remuneration Act etc have been removed posing a huge risk to the labourers.

Similarly, the MP government has ordered drastic changes in the Factories Act, Contract Act and Industrial Disputes Act allowing employers to hire or fire labourers at will and suspend dispute raising, and for contractors to supply up to 49 persons as labourers without needing to obtain a licence. The dilutions also say no inspections will be allowed without prior permissions.

After UP & MP, Gujarat too has made announcements to exempt new projects from provisions of labour laws. However, the relaxation will be applicable if the unit is committed to work for at least 1200 days. Gujarat Chief Minister Vijay Rupani has announced that the rules under existing labour law, pertaining to minimum wages, safety and compensation in case of accidents will continue to be effective and there will be no relaxations in these three domains.

The Gujarat Chief Minister Vijay Rupani said “Except for laws pertaining to the payment of minimum wages, following safety norms and adequate compensation for workers in case of industrial accidents, no other provisions of the labour law would apply to all new companies that wish to operate in the state for at least 1,200 days, and for those that have already been operational for that period.”

Apart from UP, MP and Gujarat, proposals to dilute or put labour laws on hold have also been suggested by Telangana, Tamil Nadu, Odisha, Haryana, Punjab and Tripura.

Meanwhile, opposing the State Governments, Central trade unions, including RSS-backed Bharatiya Mazdoor Sangh (BMS), have said that the decision to dilute major labour laws to aid industries will have “disastrous” implications for the workers.

BMS General Secretary Virjesh Upadhay said, “We disagree with the suspension of labour laws and will seek an explanation from UP, Gujarat and MP governments on the rationale behind the move. Everyone, including the workforce, must know how suspension of labour laws will help economic activity.”

BMS also stated the orders to dilute labour laws violated rules of the International Labour Organisation.  The All India Trade Union Congress (AITUC) termed the ordinance as “draconian”.

“All this means that the workers are to be used as bonded labour without any rights for sheer exploitation in the interest of capital without any guarantee of wages, safety and healthcare, social security,” AITUC said in a statement. On Friday, Rajya Sabha MP Elamaram Kareem, who is a CITU leader and member of the parliamentary standing committee on labour, also wrote to PM Narendra Modi, asking him to intervene and prevent other state governments from following the footsteps of UP and MP. Kareem said dilution of labour laws in the name of kick-starting businesses is both “anti-labour and anti-human”.

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