UP Governor gives nod to labour law changes; President to take a final call

Uttar Pradesh Governor Anandiben Patel has approved an Ordinance exempting companies from almost all labour laws in the state for a period of three years, a top official said on Thursday.

The ball is in the court of the central government now as the Ordinance has been sent to President Ram Nath Kovind whose approval is required for the new law to come into effect. Kovind will seek the opinion of the Union home and labour ministries before taking a decision on the draft Ordinance. 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.

A senior UP government said that the Ordinance will apply to “old units hiring new workers and all the new units, both dealing with manufacturing process.”

“The UP governor has approved the Ordinance as proposed by the state Cabinet. It has now been sent to the central government for approval,” the official said, requesting anonymity. The UP government has said that through the labour law changes, it wants to attract investment in the state, especially since it saw influx of workers coming back from other states during the national lockdown.

The Uttar Pradesh Temporary Exemption from Certain Labour Laws Ordinance, 2020, proposes that all factories and establishments engaged in manufacturing process will be exempt from “the operation of all labour laws for a period of three years”, provided they fulfill certain conditions.

These conditions are that workers get paid the minimum wages and the salary has to be deposited on time in their bank accounts, not through cash. The provision of Factories Act, 1948 and Building and Other Construction Workers (BoCW) Act, 1996 relating to safety and security of workers, shall remain applicable. None of the provisions related to women and children and compensation to workers in case of accidents will be done away with along with a continued ban on bonded labour.

However, laws related to settling industrial disputes, and those related to trade unions, contract workers, and migrant labourers will cease of exist. Employers won’t be required to comply with welfare provisions in the Factories Act, related to cleanliness, disposal of waste, lighting, drinking water, urinals, canteens, rest rooms, crèches, and wages during the leave period, among others. Construction firms won’t be required to contribute towards a welfare fund for construction workers.

While industry executives have cheered the move, trade unions have criticised it for diluting the labour rights of workers, even as the International Labour Organisation has asked States in India to go for proper consultation before effecting any such changes that should adhere to global standards.