Suspension of Labor Law: The Constitutionality Test

By | May 14, 2020
Suspension of Labor Law The Constitutionality Test

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This article ‘Suspension of Labor Law: The Constitutionality Test’ has been written by Prakash Balout, an alumnus of The WB National University of Juridical Sciences, Kolkata (NUJS).

Suspension of Labor Law: The Constitutionality Test

In 2012, there were around 487 million workers in India, the second largest after China[1] and that makes both courtiers the fastest developing nations. India is said to have pro-labor laws that help the labor in protecting their rights and raising voice against any apathy.

The Uttar Pradesh government through an ordinance “Uttar Pradesh Temporary Exemption from Certain Labor Laws Ordinance, 2020,” suspended the labor laws. The said the controversial ordinance has been passed on 6th May, hours before the Aurangabad Train Tragedy, killing more than 16 laborers who were migrating to their respective homes amid of lockdown.

The Uttar Pradesh state government has said in an ordinance that 35 of the essential and inherent labor laws will not apply to employees for a period of three calendar years (roughly 1000 days) in order to give a fillip to investment in the state, affected by Covid-19. Only four laws Building and Construction Labors Act, Workmen Compensation Act, Bondage Labor Abolition Act and Section 5 of the Payment and Wages Act (the right to receive timely wages) remain applicable.[2]

Authorities hold that “The idea is that in the present circumstances, where we need to provide employment to workers who have migrated back to the state and to protect the existing employment, some flexibility has to be given to business and industry,” in a statement.

The ordinance sent to the central government for further clearance as the same is mandated by the article 254 (2) of the constitution, which says “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.” Though the ordinance cleared the legal ambiguity experts opined that the same can still be challenged.

The Equal Remuneration Act; The Payment of Wages Act, The Minimum Wages Act, The Bonus Act, Trade Unions Act, Industrial Employees Act, The Factories Act, The Employees’ Provident Funds Act, Contract Labor Acts, Industrial Disputes Act which governs strike, lockouts, and bunds, and even Maternity Benefits Act for women laborers are some the statute that is passed by parliament will be inapplicable by the force of ordinance. Making them all repugnant only through one ordinance by state governments is an unusual and rather a very surprising move as the said step can imply the rebel behavior of the state government. Nonetheless, the state has to necessarily acquire clearance from the Centre.

The general law of ordinance can question the said ordinance in many ways.

  • First, In case when the state government failed to pass the ordinance through the state legislature within six months, the provisions remain inapplicable.
  • Second, In case the Centre won’t give its nod for such robust change in labor laws in the name of reforms amid Covid-19 situations.
  • Third, In case when the constitutionality of the ordinance will be challenged in court. The High Court of the state will have the jurisdiction as this being a state ordinance.

The arguments are plenty as the said step is being criticized in many ways. If the Industrial Disputes Act, which regulates the termination of employment gets suspended than the said suspension of the Industrial Disputes Act would lead to absolute disorder as the employer will take the autocratic decisions regarding the termination of employees and dictate the terms and conditions of their employment.

The same goes for the suspension of the Minimum Wages Act which mandates that a person should be given minimum wage for his survival prescribed by state to state government.

The employer will be at power to pay less than the minimum standard because of such suspension. The Supreme Court judgment once holds a position against paying less than minimum standard in Bandhua Mukti Morcha v. Union Of India & Others[3] where the court held that “any payment below the nominal wages amounts to a situation of bondage.”  Though the ordinance has exempted the Bondage Labor act, on the contrary state has created an environment where the laborers can’t claim their minimum wages which is their fundamental legal right.

The factories act which ensures basic safety and other facilities like water, hygiene, electricity, and canteen will also be compromised due to this ordinance. In a landmark judgment of Consumer Education & Research … v. Union Of India & Others[4] the court observed that “employer is duty-bound to provide a safe and secure condition of work as the same is a part of his right to life with dignity enshrined under article 21 of the constitution.” Suspension of Equal Remunerations act combined with the suspension of the Minimum Wages Act, women will be paid less than men and less than the minimum standard she is entitled to.

In all, the exemption of The Building and Construction Workers Act is the biggest blow on laborers as this statute enables the state to impose a tax on the labor for their betterment like education, pension, disability compensation, and social security which they will never benefit because of the poor implementation. With regard to the Shops and Establishment Act and the Factories Act mandates payment for overtime, other working hours, and even holidays but the laborer has to work without receiving payment of overtime and holidays.

Justice Chandrachud held in a judgment that “suspension of labour laws will be a major violation of fundamental rights and Directive Principle of the State Policy.” Hence the ordinance hardly survives the constitutionality test. In other judgment also the apex court opined that principle of minimum wage is a byproduct of article 23 paying less than minimum wages amounts to forced labor.[5]

After Yogi Government’s decision to suspend labor laws, the Chief Minister of Madhya Pradesh and Rajasthan also hints to introduce such suspension in the name of reforms and investment business.


By: Prakash Balout,

The author is an alumnus of The WB National University of Juridical Sciences, Kolkata (NUJS).


References

[1] In 2012, there were around 487 million workers in India, the second largest after China.

[2] Business Standard Report available at https://www.business-standard.com/article/economy-policy/up-govt-to-exempt-businesses-from-all-but-three-labour-laws-for-3-years-120050701531_1.html

[3] AIR 1984 SC 802, 1984

[4] 1995 AIR 922, 1995 SCC (3) 42

[5]People’S Union For Democratic … v. Union Of India & Others 1982 AIR 1473, 1983 SCR (1) 456


  1. COVID-19: Plights of Migrant Labourers & Exposed Weak Systems
  2. Slavery and Forced Labour: Sections, International Perspective & Laws
Author: Prakash Balout

Mayank is a student at Faculty of Law, Delhi University. Under his leadership, Legal Bites has been researching and developing resources through blogging, educational resources, competitions, and seminars.

  • Komal says:

    Very informative article.