Coronavirus Lockdown 3.0: Suspension of labour laws by fiat can only be an immediate-term response to the current crisis
There has been talk for some time now about easing labour laws, already seen in industry circles as being too rigid and acting as a drag on growth, specifically to facilitate emerging from the lockdown. And it’s not just a question of emerging from it, there’s also the issue of surviving what looks like being a brutal and prolonged global economic downturn. It was reported on Friday that ordinances were being issued in some states.
There has been talk for some time now about easing labour laws, already seen in industry circles as being too rigid and acting as a drag on growth, specifically to facilitate those emerging from the lockdown. And it’s not just a question of emerging from it, there’s also the issue of surviving what looks like being a brutal and prolonged global economic downturn. It was reported on Friday that ordinances were being issued in some states.
There is obviously little room to doubt that it will take some time for the world to emerge from the hit it has taken. Economists have agreed on one thing: Until we know how long the pandemic will last and in what form, it is not possible to predict how long it will take for the global economy to start approaching something resembling business as usual. We don’t yet know whether there will be numerous waves, what will happen come winter and so on.
These uncertainties are crucial to the question of relaxing labour regimes to help jumpstart the economy in this country, as elsewhere, notably in the US, where a practically unimaginable rise in unemployment is fuelling draconian solutions in some states.
In India, one of the key changes conceived has been to allow an increase of the working day from eight hours to 12 and the working week from 48 to 72 hours. It had been reported in the second week of April, still in the first phase of the national lockdown, that the Centre was pondering amending the Factories Act of 1948 to allow this.
Though the Centre is yet to follow up on this, a number of states have already issued notifications under provisions of the Factories Act itself increasing the working day for factory workers to 12 hours.
By 21 April, Gujarat, Rajasthan, Punjab and Himachal Pradesh had done this in chronological order. While Punjab, Rajasthan and Himachal Pradesh had provided for overtime to be paid at double the rate of pay as prescribed in law, but Gujarat had expressly provided for extra payment at the normal rate. Haryana followed suit at the end of the month, stipulating overtime payments as per law.
The first four states had stipulated for the new regime a period of roughly three months, while Haryana specified a two-month ‘amnesty’. We will return to this point. On the face of it, these amendments to the Factories Act by ordinance suffer from some legal ‘infirmities’, even though a provision of the Act itself, Section 65(2), allows state governments to make exemptions in respect of daily and weekly hours and weekly holidays to help factories to deal with an ‘exceptional press of work’. Among the possible problems with the ordinances are a separate section of the Factories Act that prohibits the increase of the working week to over 60 hours, including overtime work, and the fact that the enabling section does not allow tinkering with the provision (Section 59) for the payment of double the ‘normal’ rate for overtime work (see here).
While trade unions have protested in a memoranda to the government, there have been no reports about these notifications having been challenged in any court or tribunal. But away from matters legal, there are questions of expediency, optimality and fairness. The eight-hour day was first won by workers in the wake of World War I, against the backdrop of desperate attempts to increase productivity. Several studies had found at that time that a reduction in the prevalent long hours of work (and better remuneration) actually increased productivity.
Ford was one of the first major companies to adopt the new hours, in 1918, increasing productivity and doubling profits in two years. After the war, a number of countries passed legislation limiting the working day and requiring workers to be provided with other benefits, including, better conditions of work. In India, the existing Factories Act was amended in 1948 to limit the working day and mandate workers’ safety.
The curtailment of the working day to eight hours is thus not just a matter of workers’ ‘rights’, it is also a matter of workers’ physical and mental health and, from a purely practical point of view, one of productivity, which drove labour reforms, as mentioned, in the first place. Forcing workers to put in shifts that are one and a half times the existing ones, is unlikely to promote efficiency. It had been said in defence of the move that this will help run factories with the involvement of smaller numbers of workers. Given restrictions on travel and the difficulty and inadvisability of putting up large numbers of workers in hastily arranged living quarters, this sounds reasonable, as long as these measures are for limited durations – for instance, three months.
But now several states are planning to introduce relaxations that are designed to last longer, for years. These are questionable. Uttar Pradesh has said it will pass an ordinance keeping in abeyance labour laws in respect of wages, hours and welfare provisions for three years, though it is yet to make clear what the shape of the exemptions will be. Madhya Pradesh has issued an ordinance amending two state laws to make for more flexible labour regimes. Many restrictions are being waived for 1,000 days for new ventures. Gujarat said on Friday that new industrial ventures would be exempt from some labour laws for 1,200 days, well over three years.
That there is a crisis is obvious. That industries, especially those in the medium, small and micro sectors, will need assistance in various forms to come out of the lockdown and tide over the period that will be unfavourable to business is also obvious. What is questionable is granting blanket immunities for long periods of times, citing current exigencies.
It would have made more sense to grant immunities for shorter periods and extend them as necessary. It could be, and has been, argued that rigidities in labour regimes needed to be removed anyway. That is a matter to be established, on merits, by public discussions involving those involved or interested. The current crisis should not be treated as an opportunity for circumventing legitimate debate.
Chambers of commerce have been reported as having suggested to Union Labour Minister Santosh Gangwar in a webinar on Friday that labour laws should be suspended for two to three years, except those pertaining to minimum wages, bonuses and other statutory dues, and the increase of the working hours to 12 a day to help industry meet the current crisis.
Neither sounds reasonable because, as argued, the latter is unlikely to be an efficient long-term solution, especially once lockdown restrictions are lifted and mobility ceases to be a problem, while the other prolongs exceptional remedies beyond demonstrated needs. At least, for the present.
Finally, there is the issue of calling upon the ‘people’ to make sacrifices. Care should be taken to ensure that the poor, who already shoulder a disproportionate proportion of the ‘social’ burden, should not be asked to make even more disproportionate sacrifices to overcome a crisis that affects them disproportionately in any case.
'What kind of a Yogi propagates hate': Rahul Gandhi slams Uttar Pradesh CM over 'abba jaan' remark; BJP hits back
Earlier, taking to Twitter, Gandhi posted, "Jo nafrat kare, woh yogi kaisa! (What kind of a Yogi propagates hate)."
The Balurghat MP further said Mamata Banerjee should 'stop harbouring ambitions of becoming the next PM' and concentrate on running Bengal properly
A PhD in botany, 41-year-old Majumdar, known to be sharing close ties with Ghosh, is the first state president of the saffron camp from north Bengal.