Labour laws relaxation and the possible consequences

Labour laws relaxation and the possible consequences

India has always been a society which has cared for its citizens and has worked for the rights of its citizens. Today in response to the pandemic the government has relaxed certain labour laws expecting it to be a game changer to deal the economic crisis caused by the pandemic. Several states like Rajasthan, Uttar Pradesh, Madhya Pradesh and Gujarat has forwarded the relaxation in the labour laws for the duration of nearly three years. However several key labour laws are untouched like the laws related to the bonded labours, timely payment of the salaries and the deployment of the women and child labours.

Now the concern which arises in the mind is, will this decision contribute to the exploitation of the labours of the country or will it support the Indian economy as expected.

What are the labour laws?

Though there is no specific definition for labour laws, it consists of laws that centre has decided and no state can ignore or dismiss it, on its own. Basically, the labour falls under the concurrent list, which consists of 50 items. If we talk about the laws to protect the workers, there are around 200 state laws and approximately 50 central laws. These laws ensure the protection of workers against exploitation and also guides the employers to maintain a healthy workplace structure.


Let us have a brief look at the different categories of labour laws in India:

  • Laws defining conditions of work.
    • Factories Act, 1948.
    • The Contract Labour (Regulation & Abolition) Act, 1970.
    • Shops and Commercial Establishment Act.
  • Laws defining wages & Remuneration.
    • The Minimum Wages Act, 1948.
    • Payment if Wages Act, 1936.
  • Laws dealing with social security.
    • Employees Provident Fund Act, 1952.
    • Workmen’s Compensation Act, 1923.
    • Employee State Insurance Act, 1948.
  • Laws defining Employment Security & Industrial Relations.
    • The Industrial disputes Act, 1947.
    • Industrial Establishments (Standing Orders) Act, 1946.

Now let us discuss few of the changes done in these laws:

  • Existing businesses and the new setups are eligible to exercise the changes in the labour laws.
  • Having the employee’s discretion the employer can increase the working hour from 8 hours to 12 hours along with 72 hours week overtime.
  • The factory registration will be processed in a single day instead of the earlier 30 days duration. And the licence duration has been increased to the tenure of 10 years instead of a year.
  • Industries have been relaxed in majority of provisions of the Industrial Disputes Act, 1947. For example-
    • Industries are permitted to decide about the labour service as per their convenience.
    • The interference of the labour court have been restricted for the duration.
    • Having less than 50 workers employed, the contractors are relaxed to register under Contract Labour (Regulation and Abolition) Act, 1970.

Even though these relaxations are for the specific time duration but they can have a negative impact on the lives of the labour class section of the society.

The possible consequences of relaxing the Labour laws by the government are as follows:

  • Firstly, it will lead to the exploitation of the labours. For instance, the state of UP has suspended the labours laws. These include even those who come under the Minimum Wage Labour Act. If all the laws are removed, this may also bring down the rate of wages.
  • The relaxation in the laws will also vanish the gap between the formal and informal workforce.  Relaxation will turn the formal one’s into informal workers and hence workers will be denied of all social securities.
  • Removal of the law will surely affect the economy of the country. Discarding the labour law will reduce the cost of labour, that will, in turn, reduce the wages, and lower earnings will surely reduce the demands of the consumer.
  • The past experiences define that relaxation in labour laws fails to captivate investment and employment. So, in the long run, the relaxation will not create more employment opportunities.
  • Basically, the change in any law requires undergoing the following process of review and public consultation by the Parliament Committees and approval. This process has not been observed in this case.

The removal of these laws has been taken with the aim to give a new start to the economy. But it still poses many challenges for the workers as some might misuse this relaxation and can take undue advantage of the working class.

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