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    suspension of labor laws amidst the covid pandemic situation

    Jul 25, 2020.

    In the backdrop of lock-down and resulting economic and manufacturing slowdown, some of the State Governments, in an extra ordinary move, have suspended the operation and applicability of a majority of the labor law legislation in their respective states. The move has been justified on the grounds of attracting new investment under the ease of doing business and the revival of economic activities during and post the Covid-19 lock-down. These initiatives have simultaneously raised the concerns about protection of the right of the workforce as envisaged under the various labor legislation and also the legality of such suspension of laws, many of which have been passed by the Central Government. Here is a simplified list status quo for a quick understanding of the situation and its legal implications.

    Uttar Pradesh:

    The UP Government promulgated the Ordinance dated 8th March,2020, which suspends a majority of the key labour laws and rules thereunder in the State for all factories and establishments engaged in the manufacturing process, for a period of three (3) years. The list of suspended labour laws is as follows:

    1. Apprentices Act 1961.
    2. Beedi and Cigar Workers Act 1966;
    3. Cine Workers and Cinema Theatre W. Act 1981.
    4. Contract Labour (Regulation and Abolition) Act, 1970;
    5. Dookan Aur Vanijya Adhisthan Act 1962;
    6. Factories Act 1948 (barring provisions relating to safety and security of workers);
    7. Industrial Disputes Act 1947;
    8. Industrial Employment Act 1946;
    9. Minimum Wages Act 1948;
    10. Motor Transport Workers Act 1961;
    11. Payment of Bonus Act 1965;
    12. Payment of Gratuity Act 1972;
    13. Payment of Wages Act 1936 (barring Section 5);
    14. Public Liability Insurance Act 1991;
    15. Sales Promotion Employees Act 1976;
    16. The Indian Boiler Act, 1923;
    17. Trade Unions Act 1926;
    18. Weekly Holidays Act 1942;
    19. Working Journalists Employees Act 1955;
    20. Dangerous Machines Act 1983;
    21. Sick Industrial Companies Act 1985;
    22. Building and other construction workers (Regulation of Employment and Conditions of Services) Act, 1996 (barring provisions relating to safety and security of workers);
    23. UP Shops & Establishments Act 1962;
    24. UP Welfare Fund Act;
    25. UP Industrial Peace (Timely Payment of Wages) Act 1961;
    26. UP Industrial Housing Act 1955;
    27. Industrial Establishment (National Holidays) Act 1961;
    28. UP Industrial Undertakings Special Provisions for Prevention of (Unemployment) Act 1966;
    29. UP Employment of Substitute Workmen Act 1978; and
    30. UP Sugar & Power Alcohol Industries Labour Welfare & Development Fund Act 1950.

    Barring 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), remaining all labour laws as listed above are suspended in the State.

    Exemptions are subject to the fulfillment of the following conditions:

    • Name and details of all employed workers shall be entered electronically on the no-attendance register prescribed in Section 62 of the Factories Act, 1948.
    • No workers shall be paid less than minimum wage as prescribed by the UP Government.
    • The wages of the workers shall be within the time frame limit prescribed under Section 5 of the Payment of Wages Act, 1936.
    • The wages to workers shall be paid only in their bank accounts.
    • The provisions of the Factories Act, 1948 and the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 relating to safety and security of workers shall remain applicable.
    • The workers shall not be allowed or required to work for more than eleven hours per day and the spread over of the work shall not be more than twelve hours per day.
    • For any death or disability due to accident arising out of and in the course of employment, compensation shall be paid in accordance with the Employees Compensation Act, 1923.
    • The provisions of the various labour laws relating to the employment of women and children shall remain applicable.
    • The provisions of Bonded Labour System (Abolition) Act, 1976 shall remain applicable.

    The effect of the Ordinance essentially, makes the key labour laws and rules thereunder relating to workers and those concerning occupational safety, industrial disputes, contract workers, trade unions, fair practices of hiring and firing, retrenchment, lay- off, rate of overtime payment etc. in-operative for a considerable period of time.


    The State of Gujarat has by a notification dated April 17, 2020 exempted all factories registered under the Factories Act, 1948 from various provisions relating to weekly hours, daily hours, intervals for rest etc., with effect from April 20, 2020, with the following conditions until July 19, 2020:

    • 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).

    The Chief Minister of Gujarat has issued a statement that labour law relaxations shall be made applicable to new projects in the State on the condition that they operate for at least twelve hundred (1200) day.The law will be introduced shortly to effect changes.

     Madhya Pradesh:

    The Government of MP vide a gazette notification dated May 05, 2020 has amended the Industrial Disputes Act, 1947 allowing new establishments to be exempt from provisions under the Industrial Disputes Act, 1947, barring the provisions of Chapter V-A (Lay-off and Retrenchment), provisions of Chapter V-B (Special Provisions relating to Lay-off, Retrenchment and closure in certain Establishment only with the prior permission) pertaining to conditions precedent to retrenchment of workmen, procedure for closing down an undertaking, special provisions as to restarting of undertakings closed down before commencement of the Industrial Disputes (Amendment) Act, 1976, penalty for lay-off and retrenchment without previous permission and penalty for closure. The exemption is applicable for a period of thousand (1000) days subject to the condition that adequate provisions are internally made by such industries for the investigation and settlement of industrial disputes of the workmen employed by them.

    Further, the notification exempts factories from provisions of the Factories Act, 1948 and MP Factories Rules, 1962 for a period of three (3) months from the date of publication of the notification. Exemption is available from all provisions of the Factories Act, 1948 barring provisions pertaining to approval, licensing and registration of factories, notice by occupier and inspectors, provisions of Chapter IV (Safety), Chapter IV-A (Provisions relating to Hazardous Processes), Section 59 (Extra wages for overtime), Section 65 (Power to make exempting rules), Section 67 (Prohibition of employment of young children), Section 79 (Annual leave with wages), Section 88 (Notice of certain accidents) and Section 112 (General powers to make rules) and rules made thereunder.


    The State of Rajasthan has issued a notification dated April 11, 2020 for extending working hours to twelve (12) hours per day for a period of three (3) months from the date of the order. It is also clarified that the additional four (4) hours per day shall be paid as overtime subject to an overtime limit of twenty-four (24) hours per week.

    Himachal Pradesh ("HP"):

    The State of HP has issued a notification on April 21, 2020 exempting all factories registered under the Factories Act, 1948 from provisions relating to weekly, daily, spread hours and interval of rest until July 20, 2020 subject to the following conditions:

    • No worker shall work in a factory for more than twelve (12) hours in any 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.
    • 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.

    It shall not be surprising that following the footsteps of these states, several other States may also announce measures exempting businesses and establishments from provisions of labour laws.

    Implications and the legality of the suspension of labour laws by the state governments:

    As it appears from the above, barring the state of UP, majority of the states have opted for the suspension of some of the labour laws primarily to ensure the smooth operation in light of the reduced work force given the large-scale migration of the workers and they have invoked the power under section 5 of the Factory Act 1948, which allows states to exempt industrial units from observing labour welfare statutes during public emergency. But the boldest and the most extensive action has been taken by the UP government that suspends the operation of all the major labour laws for a very considerable period of time.  It has been justified by stating that it is the need of the hour in order to give concessions to ongoing and new industrial establishments, businesses and factories. While this move by the Government aims to revive and boost businesses and industries, it has raised several questions with regard to the legality of such suspension and its impact on the statutory rights of the industrial workforce.

    The question is:

    Since labour is on the concurrent list of the Constitution, both the Centre and the states can make laws under this subject. But can a state government be empowered within its legislative competency to completely suspend Central laws?

    Article 213 (1) of the Constitution has the following provisions:

    “(a) a Bill containing the same provisions would under this Constitution have required the previous sanction of the President for the introduction thereof into the Legislature; or 

    (b) he would have deemed it necessary to reserve a Bill containing the same provisions for the consideration of the President; or

    (c) an Act of the Legislature of the State containing the same provisions would under this Constitution have been invalid unless, having been reserved for the consideration of the President, it had received the assent of the President.”

    Though the suspension of labour laws has been done through the ordinance, however, all ordinances have to be placed before the Assembly within six months for its consideration and should be subject to the provision of Article 213(1).

    A reference to Article 254 (2) is pertinent here, which provides that any Bill relating to a subject in the concurrent list, which may be repugnant to a Union law, needs the approval of the President for its enforcement. This means that it has to be cleared by the Centre, which would advise the President to give his assent. This applies to an ordinance as well due to Article 213 (1). It has been learnt that the UP government has sent the ordinance for the approval of the central government. It is interesting to note that no such move has been initiated by the central government to suspend any central labour laws.

    It is also curious to note that the state government has chosen the route of exemption, instead of repealing, as in that case the central laws would have come into force.

    Judicial Challenge:

    A PIL has been filed in the Supreme Court of India challenging the decisions of Gujarat, Uttar Pradesh and Madhya Pradesh to exempt industrial units from labour welfare statutes and allowing them to take steps such as increasing daily and weekly working hours and depriving workers of their right to move courts on the ground of COVID-19 pandemic and the Hon’ble court has issued notice on the same.

    Similarly, a petition has been filed in the Allahabad High Court questioning the move of the UP government to increase the working hours and a notice has been issued to the state government to respond to the same. Following this, the government has withdrawn the executive order increasing the work hour to 12 hours a day but the ordinance still remains in force.

    It would be interesting to watch how the courts in India approach the issue to seek the crucial balance between the interests of the employers and employees/workmen.

    The content of this article is intended to provide a general guide to the subject matter and should not be treated as the legal opinion by the author. Specialist advice should be sought about any specific issues/queries.