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ARE INDIA’S LABOUR LAWS TOO RESTRICTIVE?

Why in news?

Some State governments including Uttar Pradesh (U.P.) and Madhya Pradesh (M.P.) have proposed ordinances to exempt manufacturing establishments from the purview of most labour laws.

Are the Labour Law Exemption ordinances justified?

Three Issues:

  1. The kind of changes that have been made, they potentially will hurt, will dis-enable the realisation of the constitutional objectives that the Constitution provides as a number of basic rights, and, a number of directions under the directive principles of state policy.
  2. The facility of the concurrent subject has been abused.
  3. It will create industrial discontent, even a kind of labour unrest, which will stifle any hope of achieving industrial progress. And, employers will not benefit because these provisions will hurt labour welfare and thereby labour efficiency.

At the lower ends of the labour spectrum where less education is required, there is usually an excess supply of labour which gives more bargaining power to employers.

  • So, the responsibility of the state in such a context is to safeguard the interests of labour through legislation because the market does not give them the necessary protection.
  • The well-known things that act as constraints on job creation- include the overall health of the economy, the level of demand in the economy.

Was lack of flexibility in Labour Laws an issue?

  • It is certainly possible that at the lower end of the manufacturing spectrum, the labour laws have been arbitrarily and extortionately imposed.
  • They do incentivise some employers to evade showing workers on their books, for fear that even if they’re following laws, the state may come down on them on some pretext or the other.
  • There has to be a little bit more of a nuanced understanding of where exactly labour laws are a constraint and what can the government do to make life simpler there, while not going beyond a non-negotiable floor.

Is urging the mandatory return of workers implementable?

  1. There must be enabling conditions like resumption of public transportation or private provision of transportation by the employers.
  2. COVID SOPs must be effectively implemented at the workplace because the workers could withdraw from a potentially hazardous workplace.
  3. And third, there must be work.

If these three conditions are satisfied and still the workers do not report, action can be taken against them, as per the company rules or agreements or the standing orders under the Industrial Employment Standing Orders Act, 1946, giving the workers a fair hearing.

Do these ordinances risk compromising workers’ rights and safety?

  1. These ordinances have frozen the conditions of work like lighting, temperature, dust and fumes and brightness and there is every incentive for the employer to ignore given the labour market opportunistic behaviour.
  2. The extension of working hours and deficient conditions of work, pose a considerable threat to occupational safety and health.

Making India a more attractive destination as a Justification

  • The overall business climate, the reliability of the state and its policies, the infrastructural situation, electricity supply, logistics and transport, the quality of labour and the skill of labour, human capital issues.
  • All these things matter as much, if not more, than the level of wages and the laxity, or lack thereof of the labour laws.

What lies ahead for our labour force?

  • The responsibility actually lies squarely on the government to restore some health to the labour market.
  • There is a necessity for the government to come out with a fairly strong fiscal package that creates optimistic conditions by providing employment to people, something that tightens the labour market a little bit, puts money in people’s pockets, and creates demand in the economy.
  • And, once the private investment follow and once there’s some health restored in the economy and economic growth has been restored, then, we can go back to the labour reform issue.

-Source: The Hindu

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September 2022
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