Centre asks Gujarat and UP govts to specify labour laws they want repealed

In early May, both states had proposed suspending key labour laws for three years in a bid to attract investments flowing out of China due to the Covid-19 pandemic

The Union government has asked the state governments of Uttar Pradesh and Gujarat to specify the labour laws they have proposed to suspend by taking the Ordinance route.

In early May, these states had proposed suspending key labour laws for a period of three years in a bid to attract investments flowing out of China due to the Covid-19 pandemic.

“The Union government had sent its queries, asking to specify which labour laws do the state government plan to suspend through the proposed Ordinance. We have sent our response to the Central government, giving out the details,” a senior UP government official said, requesting anonymity. The state had received a query from the Union labour and employment ministry on June 8, the official added.

A senior Gujarat government official confirmed the state had received similar queries from the Centre, which it has replied to. The states have stated that among major labour laws, the Industrial Disputes Act of 1947 and the Contract Labour (Regulation and Abolition) Act of 1970 are proposed to be fully dismantled temporarily. Some or the other provisions of other labour laws will continue to apply, but those related to certain welfare schemes, licensing, working condition requirements and inspections for factories are sought to be abolished.

The two state governments had sent the draft Ordinance for the approval of the President after getting a nod from their respective governors. Since labour is a concurrent subject under the Constitution of India, states can frame their own laws but need the approval of the Centre for making amendments to central laws. 

The President will take a final view on the Ordinances after seeking the central government’s advice. A final decision of the President is pending, though the Central government has expressed reluctance towards any proposal to scrap labour laws already.

Last month, Union Labour and Employment Minister Santosh Kumar Gangwar, on being asked about the proposals of the two states to abolish labour laws to attract investment, had told Business Standard that “there is no question of removing labour laws. A proposal to do away with labour laws is not feasible to my view.”

The BJP-ruled UP government had in the first week of May approved an Ordinance to exempt all manufacturing units in the state for the next three years from almost all labour laws. The Gujarat government followed its footsteps by approving an Ordinance but only for new units being set up in the state for a period of 1,200 days. Provisions related to wages, safety, wages, and women and children have been kept intact.

However, the Ordinances had failed to specifically mention the Acts which the states had wanted to repeal for a temporary period of time. For instance, though it mentioned that provisions of various labour laws related to employment of women will remain applicable, it didn’t specify what all it would cover. 

Experts had further argued that the companies would have to comply with Employees Provident Fund schemes and Employees State Insurance scheme of workers as the laws governing them are controlled and administered by the central government, even if the state governments want to scrap them for three years or more.