Labour Laws in India

Reading time: 8-10 minutes.

In the wake of COVID -19, many states in India have relaxed labour laws in order to promote economic investments. Major changes were brought by governments of Madhya Pradesh, Gujarat and Uttar Pradesh, while some minor changes were made by the states of Punjab, Odisha, Rajasthan.  This pose greater questions regarding labour rights on one hand, and the economic development on the other.

Labour law falls under the purview of concurrent list where both Union and the State government can legislate, barring few matters that are reserved solely for the Union like the regulation of labour and safety in mines and oilfields. In exercise of these powers numerous legislations have been evolved both in the Centre and States whenever such rights are demanded. This has resulted in a variety of labour laws. Over 60 major central labour legislations and about 150 state labour legislations were enacted. Many economists have disregarded these labour laws because of their inflexibility. Many legal scholars also believe that these multitudinous laws are inefficacious both to the employer and workers. Labour reforms have always been the much-wanted exigency. However, these sweeping changes brought in by the State governments have come as a bolt from the blue for all.

Significance of this development

These reforms were introduced to revive the economy and investment, that were hard hit during this COVID-19 pandemic. It has been argued that this would clear the structural gridlocks and procedural bottlenecks and in turn would lead to greater investment and create employment opportunities for migrant workers who are returning home. But the significance of these changes is limited to only a fewer percentage of workforce employed in the formal sectors to which these Acts apply. These changes would mean nothing the larger workforce of India comprising of workers of unorganised sectors.

The suspension of Industrial Disputes Act, which aims at procedure to be followed in case of disputes and differences that arise between the employer and workmen, might lead back to hire and fire policy through which the employers will be at liberty to hire a labour and fire him at any time without much formalities and safeguards.

Minimum wages act, 1948 has been done away with, which could mean no workmen has the legal right to ask for a minimum wage as specified in the Act. Following PUDR and Bandhula Mukti Morcha judgment, this would result in ‘forced labour’ under Article 23 of the Constitution. However, the bonded labour abolition act is retained.

The doing away of the Factories Act, which provides for necessary compliance of certain work standards, would mean that the employers are no longer bound to ensure these safety measures in the factory. This change was welcomed with raised eyebrows by many legal scholars owing to the fact that COVID-19 actually demands major changes in the factory so as to be in conformity with the social distance norms and ensuring hand sanitation etc.

Work hours have also been raised by many states from 8 hours to 12 hours in many states with some even doing away with payment of overtime wages. Equal remuneration Act is also suspended which would mean that men and women could be paid differential wages.

It is been predicted that more states would be likely to follow these states, in order for their industries to survive and compete with those of the other states. These moves also question the welfare nature of our state that has been reiterated timelessly in various judicial pronouncements.

Which laws have been relaxed?

This move, that was wholly initiated by the States, varies from one state to another. While some States have adopted hard core measures like the UP, some had made only minor changes.

Of the 38 labour laws in Uttar Pradesh, 35 were done away with. UP passed the ‘Uttar Pradesh Temporary Exemption from Certain Labour Laws Ordinance, 2020’. This exempts businesses, the manufacturing sector mostly for three years from labour laws barring four: Building and Other Construction Workers Act; Workmen Compensation Act; Bonded Labour System (Abolition) Act; and section 5 of the Payment of Wages Act, which says that timely wages have to be paid and the Maternity Benefits Act for the next three years.

However, Madhya Pradesh government has brought few changes and alterations only and not a total blanket ban as in case of the Uttar Pradesh government. It has exempted non-hazardous factories, which employ up to 50 workers, from the inspection process, subject to a government-recognised third-party certification. It also allowed workers to work overtime, up to 72 hours a week if they are willing and are paid overtime. Various provisions of Industrial Disputes Act were also suspended, MP has amended a few Acts. It has exempted 11 industries — textile, leather, cement, iron and steel, electrical goods, sugar, electricity, public motor transport, engineering, including manufacturing of motor vehicles — from the Madhya Pradesh Industrial Relations (MPIR) Act, 1961

Major labour law statutes in India

Given that labour law, evolved with time and demands of the workers over the years, labour law in India has been diversified with one act for to govern a particular matter. Broadly it can be classified into laws relating to industrial relations, wages, work conditions, social security measures, prohibitive labour laws. The Industrial Disputes Act, 1947has been enacted to settle disputes and differences between the employer and the workmen amicably.

Trade Union act, 1926 deals with the procedure of registering, regulating and recognising trade unions and also the rights and liabilities thereof.

Minimum Wages Act, 1948 provides for minimum wages for certain employment. It allows the various State government to specify minimum wages in respect to an employment.

Payment of wages Act, 1936 deals with the procedure, manner and time of paying wages to the workmen of certain class of employment.

The Factories Act, 1948 (the Factories Act) lays down provisions for the health, safety, welfare and service conditions of workmen working in factories. It contains provisions for working hours of adults, employment of young persons, leaves, overtime, etc. 

The Equal Remuneration Act, 1976 provides for the payment of equal remuneration to men and women workers for the same work and prevents discrimination, on the ground of sex, against women in the matter of employment, recruitment and for matters connected therewith or incidental thereto.

Landmark judgements regarding rights of labours

PUDR V. Union of India, 1983 is a landmark case in regard to rights of labour especially under this pretext. The case concerns with payment of wages below the minimum wages prescribed in the Minimum Wages Act, 1948 and employment of children below age 14 in the construction site of Asiad games in Delhi. The SC expanded Article 23 that prohibits  traffic in human beings and begar and other similar forms of forced labour by expounding that  “the word ‘force’ must therefore be constructed to include not only physical or legal force but also force arising from the compulsion of economic circumstance which leaves no choice of alternatives to a person in want and compels him to provide labour or service even though the remuneration received for it is less than the minimum wage of course”.

It was held in Bandhua Mukti Morcha versus Union of India AIR 1984 SC 802 that the right to live with human dignity derives its life breath from the Directive Principles of State Policy, particularly Article 39 (e), Article 39 (f), Article 41 and Article 42, therefore, it must include the protection of health and strength of workers, both men and women, and of the tender age of children against abuse, opportunities and facilities for children to develop in a healthy manner and conditions of freedom and dignity, educational facilities, just and humane conditions of work and maternity relief.

In Sanjit Roy v. State of Rajasthan, it has been held that the payment of wages lower than the minimum wages to the person employed on Famine Relief work is violative of Article 23. Whenever any lobour or service is taken by the State from any person who  is affected by drought and scarcity condition the State cannot pay him less wage than the minimum wage on the ground that it is given them to help meet famine situation. The State cannot take advantage of their helplessness.

In Deena v. Union of India, labour taken from prisoners without paying proper remuneration was held to “forced labour” and violative of Article 23 of the Constitution.

In Randhir Singh v. Union of India, the Supreme Court has held that although the principle of ‘equal pay for equal work’ is not expressly declared by our Constitution to be a fundamental right, but it is certainly a constitutional goal under Articles 14, 16 and 39(c) of the Constitution. This right can, therefore, be enforced in cases of unequal scales of pay based on classification.

Constitutionality & legality

The doctrine of repugnancy as enumerated in Article 254 of our Constitution, if any provision of a state law is repugnant to a provision in a law made by the Parliament, which the Parliament is competent to enact, or with any existing law regarding any matter in the Concurrent List, then the Parliamentary law would prevail over the State law. It will be of no importance whether the Parliamentary law was enacted before or after the State law. To the extent of repugnancy, the State law will be void. Hence most labour laws are Central Acts, with few granting the State government the provision of framing rules and regulations in regard to its implementation. However, most provisions are mandatory ones that cannot be overlooked by the state legislations. Article 254 (2) also provides that any Bill relating to a subject in the concurrent list, which may be repugnant to a Union law, would need the approval of the President. Hence, for these changes to be valid, needs the approval of the President.

There is another contention that says that the relaxations in work timings brought in by various state governments of Gujarat, Himachal Pradesh and Punjab under Factories Act are either in exercise of their powers in case of a public emergency or to address an exceptional press of work. Hence, whether Covid-19 or the economic shutdown caused by it would qualify to fall under these grounds is a question. Also, in case of a public emergency, the state government can only provide these relaxations for a maximum period of 3 months at once.

Following the rationale in PUDR closely it is apparent that by suspending Minimum Wages Act, the states are promoting forced labour which is against the Constitution and any state action in contraction with the constitution is void. The court also further held in the same case against the contention of the State that Construction work does not fall under the purview of the Employment of Children Act 1938 and hence is does not attract prohibition under Article 24 that “This is a constitutional prohibition which, even if not followed up by appropriate legislation, must operate ‘proprio vigore’ and construction work being plainly and indubitably a hazardous employment, it is clear that by reason of this constitutional prohibition, no child below the age of 14 years can be allowed to be engaged in construction work”. Hence, even when the Minimum wages Act is suspended Article 23 demands that every worker should be paid at least a minimum wage.

Suspension of Equal Remuneration Act, 1976 would also amount to ultra vires Article 14 of the Constitution.


It is the contention of many legal laureates that before sweeping changes are made in the complex legal framework of a democratic republic like India, consultation with all stakeholders is imperative so that one’s worries and expectations are also taken into account. Economic development is much needed but it should not come at the cost of rights of another, especially the vulnerable and the weak. There should be a proper balance between the initiatives encouraging investments and ease of doing business and also the social economic welfare of labours on the other hand.

Author: Leelavathi P from The Tamil Nadu Dr. Ambedkar Law University, School of Excellence in Law Chennai.

Editor: Dhawal Srivastava from Rajiv Gandhi National University of Law, Patiala.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s