Are India’s labour law reforms only a gift for factories, or will workers benefit too?

The new labour reforms will promote ease of doing business in the state. however, it is crucial that companies safeguard the interests and wellbeing of the labourers.

jobs, employment, unemployment, job crisis, unrmployment rate, labour participation rate
worker, employees, labour laws, UP, cronavirus, lockdown, industry, factories
Change is important, but the change should come with a focus on worker wellbeing – working condition and living conditions. (Bloomberg image)

The long-awaited labour law reforms by states may make it easier for factories and businesses to run efficiently amid the coronavirus-led economic crisis, but the relaxation in rules may also put at stake the interest of labourers and workers, with businesses getting a free hand. On one hand, the industry sought to assure that the rule changes will let businesses function and thus generate more employment; on the other hand, social experts said the move may further aggravate the crisis for those who are worst affected. Given the unprecedented economic fallout from coronavirus, various industry bodies appreciated the labour law relaxations.

In tough times like these, brought about by the coronavirus pandemic, industries are facing challenges and there is a need to create an environment in which businesses can survive in the present and grow in the future. “I do not see this as being pro-industry or pro-labour; this is a situation where business units need to survive because economic activity needs to grow; for which some changes in norms and regulations may be necessary over a specified time frame,” Niranjan Hiranandani, President, Assocham, told Financial Express Online.

Also Read: India moves big labour law changes to limit coronavirus impact; UP, MP, Punjab, others make these changes

If factories work, unemployed people will be put to work too

If more work opportunities come up as a result of these changes in norms and regulations, it will definitely benefit all stakeholders, including labour, business units and the Indian economy, Niranjan Hiranandani added. Businesses and factories are at a standstill due to the nationwide lockdown. The shutdown factories have directly made a severe dent on the employment condition of the country, CMIE said.

The unemployment rate rose to the highest level of 27.1 per cent in the week ended May 3, according to CMIE, while the small traders and wage labourers seem to be among the worst hit from the lockdown. More than 9 crore people within this section of the society lost their livelihood in just about a month. In this context, the increase in working hours is being seen as an opportunity to produce more even with the shortage of manpower.

Also Read: Gujarat joins UP, MP, other states in easing labour laws; new projects get major relief 

Much needed reform, but watch out for pitfalls

Even as the reform in labour laws is something the industry and free-market experts have been calling for long, it needs to be ensured that the worker welfare is not compromised. “The change in labour laws will be beneficial for both the industry as well as the labourers. These new reforms will promote ease of doing business in the state. However, it is crucial that companies safeguard the interests and wellbeing of the labourers,” Sumit Kumar, Vice President, National Employability through Apprenticeship Program, TeamLease, told Financial Express Online. Factories would need to judiciously ensure compliance to all labour laws, Sumit Kumar added.

“As far as the increase in working hours is concerned, this is due to a shortage of manpower, which is going to hit all sectors, especially the manufacturing sector. I feel change is important, but the change should come with a focus on worker wellbeing – working condition and living conditions,” Gayathri Vasudevan, Executive Chairperson and Co-Founder, LabourNet Services, told Financial Express Online. 

However, the attention of employee health will be a deeper concern for the companies as the risk of Covid-19 will stay for the next two years. With the need of fumigation or sanitisation and physical distancing, there will be a marked improvement in occupational safety and health, which was an area of zero focus earlier, added Gayathri Vasudevan, who was a former project officer at the International Labour Organisation.

Also Read: End of lockdown not end of trouble for migrant labour; here’s what workers may face when economy opens

The biggest concern: Exploitation of labour

Meanwhile, the new labour law changes are also seen as a bane for the workers desperately looking for a job to end their financial nightmare. Instead of providing protections to the most marginalised and vulnerable, as exposed by the covid crisis, and thus an opportunity to rectify the fractured economic system, these moves will further exacerbate the crisis for those who are worst affected by it, Trinanjan Radhakrishnan, Project Coordinator, Sustainable Development at Oxfam India, told Financial Express Online. It goes against the grain of transformative reforms, which is the need of the hour, in an effort to build back better and it rings the government’s mantra of ‘sabka Saath, sabka vikas’ hollow, Trinanjan Radhakrishnan added.

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.