Not the right time to dilute labour laws

An unfortunate spin-off from the pandemic has been the suspension of basic labour laws in many states that guarantee some protection to employees. Uttar Pradesh last Wednesday approved an ordinance exempting factories and businesses from the purview of, among others, the Minimum Wages Act, for three years. Madhya Pradesh too, in a notification issued on May 5, has exempted 11 categories of industries from the application of the MP Industrial Relations (MPIR) Act of 1961. Soon after, Gujarat announced new industrial units need not comply with labour laws for 1,200 days, except for three basic acts.

The rationale offered by the UP government for pulling the plug on labour protection is that migrants coming home need jobs; and therefore industries have to be offered a flexible hire-and-fire regime to restart operations. MP’s bureaucrats have been saying the changes have been made to attract units exiting China. At a holistic level, it is being argued that Indian labour laws are cumbersome and drive away investors. This is not the first attempt at dismantling or diluting labour laws. The first round was in 2014, soon after the BJP came to power, when several states watered down the protective features for workmen in the Industrial Disputes Act.

The revival of the economy is dependent on many factors such as the right stimulus, tax breaks and administrative support. With high levels of joblessness, and people desperate for jobs, militant labour is the last thing we should be worrying about. In fact, the suspension of basic labour laws and the free hand given to industries may lead to a wave of easy closures and retrenchments, which will only worsen the unemployment situation in the country. It is true labour laws need to be streamlined. But this is not the right time. Millions of migrants, out of jobs, are heading back to their home state. By diluting labour laws that guarantee some measure of protection against exploitation, we could be adding to their misery.