India moves major changes in labor law to limit coronavirus impact; UP, MP, Punjab, others make these changes

Laws that relax include those related to the resolution of industrial disputes, occupational safety, health and working conditions of workers, etc. (Bloomberg image)

The coronavirus-led crisis in India has caused many states to relax labor laws to boost the economy and attract more investment. After CM Shivraj Singh Chouhan of Madhya Pradesh announced the relaxation of its labor laws, the Yogi Adityanath government in Uttar Pradesh has tabled a mega amendment on its labor laws. The latest move by the UP government has exempted companies from the scope of almost all labor laws for the next three years. Laws that relax include those related to industrial dispute resolution, occupational safety, health and working conditions for workers, and those related to unions, contract workers and migrant workers.

However, the Construction and Other Construction Workers Act of 1996; Workers’ Compensation Act, 1923; Bonded Labor System (Abolition) Act, 1976; and Section 5 of the Wage Payment Act, 1936 (the right to receive wages on time), will remain intact for both existing businesses and new factories being established in the state. The state government statement said the decision is made in the wake of losses suffered by businesses and economic activities.

Also read: Labor reforms finally come to India: Shivraj Chouhan liberates industry, after agricultural privatization

State details of amendments to labor laws:

Madhya Pradesh: CM Shivraj Singh Chouhan announced the abolition of the requirement to fill 61 registrations and 13 declarations, instead only one registration and the return will be enough to obtain the license. It also allowed overtime of up to 72 hours and the period of work shifts in factories increased from 8 to 12 hours. In another major relaxation, the state government said there will be no inspection at companies that employ less than 50 workers and at small and medium-sized companies, the inspection will be conducted only with the permission of the labor commissioner or in the event of a complaint.

Uttar Pradesh: The Yogi Adityanath-led government struck down labor laws (except three laws and one provision) for the next three years to provide a cushion for downed businesses and factories in the state. Now, industrial units also won’t have to worry about inspection or compliance officials knocking on their doors, as they wouldn’t be vigilant if labor laws were implemented.

Rajasthan: In addition to increasing work hours from 8 hours per day to 12 hours per day, the state has amended the Industrial Disputes Act to increase the threshold for layoffs and downsize to 300 from 100 before. To recognize the union, the union membership threshold has been increased from 15% to 30%.

Maharashtra: All stores and factories are required to submit consolidated annual returns rather than multiple returns under various labor laws.

Kerala: Prime Minister Pinarayi Vijayan said that if the investor agrees to complete the paperwork in one year, the state government would facilitate a new industrial license within a week after the application is submitted.

Punjab, Himachal Pradesh and Gujarat: These three states have also modified their Factory Acts in the past month to increase work time to 12 hours a day and 72 hours a week, compared to 8 hours a day and 48 hours a week.