Monday 26 October 2020

Labour laws reformed by states to meet COVID challenge

The Shivraj Singh Chouhan government of Madhya Pradesh leads the race, with the Yogi Adityanath dispensation close on the trail in announcing relaxations in labour laws

Several Indian states are changing their labour laws in the wake of the coronavirus epidemic in the country in order to give a fillip to the economy and attract more investment. After Madhya Pradesh Chief Minister Shivraj Singh Chouhan announced relaxation in its labour laws, Yogi Adityanath’s Uttar Pradesh government has come up with significant changes in its labour laws.

The Uttar Pradesh government has exempted businesses from the scope of nearly all labour laws for the coming three years. Laws related to settling industrial disputes, occupational safety, health and working conditions of workers, and those related to trade unions, contract workers and migrant labourers have been changed.

Madhya Pradesh labour law reforms

Chief Minister Shivraj Singh Chouhan has announced businesses in the state no longer need to fill 61 registers and 13 returns. Instead, only one register and the return will be sufficient to get a business licence.

The Chouhan government has permitted overtime by workers up to 72 h. Further, the Madhya Pradesh government has increased the period of working shifts in factories from 8 h to 12 h.

The state government said that there would be no inspection in the firms employing less than 50 workers. The inspection will take place only with the permission of the labour commissioner or in the case of a complaint in small and medium enterprises.

Uttar Pradesh labour reforms

The Uttar Pradesh government led by Yogi Adityanath has turned the labour laws (except three laws and one provision) for the next three years defunct to provide a cushion to the sagging businesses and factories in the state.

The industrial units in Uttar Pradesh will not have to worry about inspection or enforcement officials raiding shops, offices and factories to check whether labour laws are being implemented.

The Yogi Adityanath government has also ended the condition of bringing farm produce to state mandis but also scrapped the mandi tax and opened private mandis for the benefit of small and marginal farmers — in the first-ever major agriculture reforms aimed at providing different marketing platforms to farmers and saving their exploitation at the hand of big traders and middlemen.


There are, however, critical laws that have not been touched. These are

  • Building and Other Construction Workers Act, 1996
  • Workmen Compensation Act, 1923
  • Bonded Labour System (Abolition) Act, 1976; and Section 5 of the Payment of Wages Act, 1936 (the right to receive timely wages)

The three laws above will remain unchanged for the existing businesses as well as new factories in the state. The Uttar Pradesh government said it was concerned about the losses incurred to businesses and economic activities due to the lockdown which had to be imposed to break the infection chain.

Rajasthan reforms

Besides raising the working hours from 8 h a day to 12 h a day, the state has amended the Industrial Disputes Act to increase the threshold for lay-offs and retrenchment to 300 from 100 earlier.

A trade union will be recognised in Rajasthan only on crossing the threshold membership of 30%. The threshold was 15% earlier, creating an atmosphere of too much of activism in the industrial domain by too many unions.


The Uddhav Thackeray-led government has asked all the shops and factories to submit consolidated annual returns instead of multiple returns under various labour laws.


Chief Minister Pinarayi Vijayan had said if the investor agrees to complete formalities in a year, the state government would facilitate new industrial licence within a week after the application is filed.

Punjab, Himachal Pradesh, Gujarat

These three states have amended their Factories Acts in the last month to increase the worktime to 12 h a day and 72 h every week from 8 h a day and 48 h a week.

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