Editorial Notes

[Editorial Notes] Dilution of Labour Laws

The long-awaited labour law reforms by states may make it easier for factories and businesses to run efficiently amid the coronavirus-led economic crisis, but the relaxation in rules may also put at stake the interest of labourers and workers, with businesses getting a free hand.
By IASToppers
May 14, 2020


  • Introduction
  • Indian labour laws
  • Big relief to industries
  • Increased working hours
  • Other Relaxations
  • Exploitation of labour
  • Conclusion

Dilution of Labour Laws

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The significant changes in labour laws have been recently announced by UP, MP, Gujarat, Rajasthan, Punjab and Odisha. UP has made the boldest changes as it has suspended the application of almost all labour laws in the state for the next three years. These changes are aimed to give a boost to economic activities in the respective states which is currently stalled due to lockdown.

Indian labour laws:

  • There are over 200 state laws and close to 50 central laws and yet there is no set definition of “labour laws” in the country.
  • Broadly they can be divided into four categories mentioned in Chart 1.
  • The main objectives of the Factories Act is to ensure safety measures on factory premises, and promote health and welfare of workers.
  • The Shops and Commercial Establishments Act aims to regulate hours of work, payment, overtime, weekly day off with pay, other holidays with pay, annual leave, employment of children and young persons, and employment of women.
  • The Minimum Wages Act covers more workers than any other labour legislation.
  • The Industrial Disputes Act, 1947 relates to terms of service such as layoff, retrenchment, and closure of industrial enterprises and strikes and lockouts.
  • Indian labour laws are often characterised as “inflexible”.
  • Further, there are too many laws and often unnecessarily complicated, and not effectively implemented.

Big relief to industries:

  • Businesses and factories are at a standstill due to the nationwide lockdown.
  • The shutdown factories have directly made a severe dent on the employment condition of the country.
  • Given the unprecedented economic fallout from coronavirus, various industry bodies appreciated the labour law relaxations.
  • The industry sought to assure that the rule changes will let businesses function and thus generate more employment.
  • If more work opportunities come up as a result of these changes in norms and regulations, it will definitely benefit all stakeholders, including labour, business units and the Indian economy.

Increased working hours:

  • Some states have embarked on a plan to give a boost to business and industry by allowing units to be operated without many of the requirements of the Factories Act.
  • The working hours may extend to 12 hours, instead of eight, and weekly duty up to 72 hours.
  • In the industrial point of view the increase in working hours is being seen as an opportunity to produce more even with the shortage of manpower.
  • This is due to a shortage of manpower, which is going to hit all sectors, especially the manufacturing sector, hence increasing working hours comes to rescue.
  • The change is being criticized by labour welfare bodies which accuse it as violation of labour rights with no focus on worker well-being.

Other Relaxations:

  • To increase the working hours it appears, the Section 5 of the Factory Act has been used, which permits exemption from its provisions for three months.
  • However, this exemption can be given only during a ‘public emergency’, defined in a limited way as a threat to security due to war or external aggression.
  • UP has approved an ordinance suspending all labour laws for three years, except  a few ones relating to the abolition of child and bonded labour, women employees, construction workers and payment of wages, besides compensation to workmen for accidents while on duty.

Exploitation of labour:

  • Meanwhile, the new labour law changes are also seen as a bane for the workers desperately looking for a job to end their financial nightmare.
  • As per the critics, instead of providing protections to the most marginalised and vulnerable, as exposed by the covid crisis, these moves will further exacerbate the crisis for those who are worst affected by it.
  • It goes against the grain of transformative reforms, which is the need of the hour, in an effort to build back better and justify the government’s mantra of ‘Sabka Saath, Sabka Vikas’.
  • It is highly immoral on the part of some States to address this need by granting sweeping exemptions from legal provisions and sacrificing the interests of labourers and workers.


As Labour is placed in Concurrent list, the changes in the manner in which labour laws operate in a State may require the Centre’s assent. It is expected that the centre would carefully examine the issue by looking at both perspectives and not readily agree to wholesale exemptions from legal safeguards and protections the law now affords to workers.

Mains 2020 Editorial Notes

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