Even as the states have the power to suspend some provisions of the labour laws, they cannot exempt all labour laws.
After UP, Madhya Pradesh, Gujarat and other states suspended several provisions in their labour laws, the debate has heated up on whether such change in labour laws can pass the legal barrier. Even as the states have the power to suspend some provisions of the labour laws, they cannot exempt all labour laws. Since labour is on the concurrent list under the Seventh Schedule of the Indian Constitution, both the centre and the states can make laws under this subject. Most central labour laws have provisions that delegate certain powers to the state government, however, while the states have the powers to exempt several provisions from enforcement in their respective states, in matters where the centre holds the field, the state cannot directly move to make exemptions.
“There can be a claim of repugnancy by the central government when the state government tries to suspend entire laws and not just those sections delegated to it. Further, Article 213 of the Constitution mandates that an ordinance be sent to the President for his assent and according to Article 254 (2), 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,” Neeraj Dubey, Partner, Lakshmikumaran & Sridharan Attorneys, told Financial Express Online. So, there are a lot of steps before these measures are enforced in these states, he added.
There is another part of the debate 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 as such may need to be judicially validated, if questioned. Also, in case of a public emergency, the state government can only provide these relaxations for a maximum period of 3 months at once.
“These exemptions are also only applicable for an initial period of 3 months as per law. As these exemptions form part of the MP government’s 1000 day plan to attract fresh investments in the state, it is currently not clear how the government would be able to extend these further after Covid threat subsides,” said Damini Bhalla, Partner, L&L Partners.
The UP government also passed an ordinance exempting all factories and commercial establishments from the application of a majority of labour laws for a period of 3 years. However, since labour welfare including conditions of work and employer’s liability fall under the concurrent list of the Constitution, a carte blanche compliance holiday from the applicability of all labour laws in general including the overall exemption from central statutes may require Presidential assent before it is brought in force, Damini Bhalla added.
Meanwhile, the detailed text of the ordinance is still not released and thus more clarity is yet to come in the public domain about the changes in the laws. The government aims to boost the factory output, employment and thus the economy through these changes in the labour laws. Attracting foreign companies looking to shift base out of China is also one of the motives behind exempting the labour laws.