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labour laws

How Labour Law Changes Will Impact Firms, Workers And Economy?

labour laws
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In May, a number of state governments made key changes on how labour laws were implied. Since then, India’s labour laws have experienced rapid changes with many state governments either amending or are considering an amendation of the Factories Act, 1948. This is being done in order to maximise working hours which violates CODE 001 (Hours of Work) of International Labour Organisation.

The economy of India has gone through a huge turmoil in recent months due to the lockdown and thousands of firms and workers stare at an uncertain future. Meanwhile, some state governments are planning to make significant changes in the country’s labour laws.

The major changes were announced by the State governments of Madhya Pradesh, Uttar Pradesh and Gujarat. Some other states such as Rajasthan, Punjab and Orrisa, too made some changes, although smaller in scope. Madhya Pradesh and Uttar Pradesh, in particular, have carried out substantial changes in the labour laws, with the latter suspending nearly three dozen labour laws and constricting the scope of Factories Act, 1948.

The suspension of labour laws will intensify informality in the Indian workforce in several ways. Multiple labour market securities in the formal sector like employment, health and safety, skills, and income will either be weakened or destroyed. One of the major considered reasons behind the changes in laws and policies is the lack of dialogue with the trade unions present in the country as they are believed to be the legitimate and legal representatives of millions of workers working.

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What’s Not Right About Indian Labour Laws?

The main objectives of the Factories Act, for instance, are to ensure safety measures on factory premises and promote the health and welfare of workers.  The Shops and Commercial Establishments Act, on the other hand, aims to regulate hours of work, payment, overtime, a weekly day off with pay, other holidays with pay, annual leave, employment of children and young persons, and employment of women.

Indian labour laws are often characterised as “inflexible”. This turns out to be the main reason behind the fact that even organised sectors are employing workers without formal contracts. It is also true that there are too many laws, often unnecessarily complicated, and not effectively implemented, which indirectly just leads to corruption.

At present 90% of India’s workers are part of the informal economy if India had fewer and easier-to-follow labour laws, firms would be able to expand and contract depending on the market conditions, and that would help workers as they would get better salaries and social security benefits.

What Are State Governments Doing?

Alongside Madhya Pradesh and Uttar Pradesh, several other state governments of Rajasthan, Gujarat, Punjab, Himachal Pradesh, and Odisha have amended the Factories Act, 1948 during the lockdown to increase the maximum number of working hours per day from eight to 12 and maximum working hours per week from 48 to 72.

These state-level amendments are being criticised by many organisations, and are demanding working hours per week to be 48 as 72-hour workweek violates the cardinal principle of a 48-hour workweek, as is mentioned in ILO Conventions C001 and C1919.  Limiting working hours to eight per day and to 48 hours per week was acquired after decades of struggles from 1881 to 1948.

Experts believe that if all labour laws are removed, most employment will effectively turn informal and bring down the wage rate sharply. оформить займ до зарплатые займ без процентовзайм онлайн быстро деньги займ великий новгородзайм на счет кивимоментальный займ без отказа

Mahima Joshi

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