India's Labour Laws: A Key Area of Reform

28 May 2020  Read 3162 Views

India has a number of labour laws that govern almost all the aspects of employment and are regarded as rigid in nature due to their restriction on mobility. In this article, we will be discussing the background of labour laws and the recent reforms done by various state governments due to the Covid-19 outbreak. 


The state has the duty to ensure that workers have fair and just wages, humane conditions of work, a decent standard do living. These duties flow from the preamble, fundamental rights as well the directive principles of state policy. As previously stated the concept of labour laws flows from the constitution:

  1. Article 23 guarantees fundamental right against exploitation. People's Union for Democratic Rights v. Union of India held "it is the constitutional obligation of the State to take the necessary steps for the purpose of interdicting such violation and ensuring of the State to take the necessary steps for the purpose of interdicting such violation and ensuring service of the fundamental right by the private individual who is transgressing the same…...a person provides labour or service to another for remuneration which is less than the minimum wage, the labour or service provided by him clearly falls within the scope and ambit of the words "forced labour" under Article 23."

  2. Article 21 is known as the heart and soul of the Indian constitution, which guarantees the fundamental right to life and personal liberty.

The Supreme Court has widened the concept of Life to such extent that it includes almost all the elements of labour laws. Right to life doesn't mean mere animal existence, if it far wider, it includes a life which is meaningful and liveable with dignity. 

  1. Directive principles of state policy, under Part IV of the constitution, though not enforceable in the court of law, provide the roadmap to the governments to take necessary steps to upliftment of workers and also eradicating any such violence that occurs due to unjust labour practices. DPSP includes right to social justice (Article 38(1)), living wage and proper working conditions for worker (Article 43), maintain heath (Article 47), maternity benefits (Article 42).

  2. Indian legislatives have time and again implemented a slew of labour laws to protect and regulate the labour market. These include the Factories Act, 1948, Industrial Dispute Act, 1948, the Minimum Wages Act, 1948; Trade Union Act, Maternity Benefit Act, Establishments (Standing Orders) Act, 1946 etc. 

In Bijay CottonMills Ltd. v. State of Ajmer, the Supreme Court held that employers are compelled to pay the employees minimum wages prescribed in the Minimum wages act. Merely because the labourers are willing to work on less wages, the employer cannot take advantage of their poverty and helplessness. 


Covid-19 has destroyed world economies and has resulted in the largest lockdown since the World Wars and the 1912 Flu pandemic. It has resulted in loss of live and livelihood of a number of people. But the worst sufferers of the pandemic, are the poor and vulnerable class of India. In the midst of one most the grappling economic crises India has faced since the 1990s, many state governments have relaxed their labour laws in the hope to attract investors. 


State governments in hope of inciting these investors have decided to relax or even suspend the basic labour laws of their state. These states include Uttar Pradesh, Gujrat, Madhya Pradesh and Assam. Through various ordinances and notifications passed by these governments, they have diluted and suspended some of the basic provisions of Industrial Disputes Act and Factories Act. For example, in the Factory Act, the state government has given exemption to apply the provisions for a period of three years. The provisions are stripping the workers of their basic rights such as safety, fair wages, maternity benefits, trade union etc.  Further, the ordinance has allowed the factories to resolve the disputes without the intervention of labour courts.


In India, labour law lies in the concurrent list under item 22, thereby giving both the state legislates and the parliament the competence to draft and frame laws according to their needs. Many labour laws such as the Factories Act has been enacted to implement the suggestions of ILO and enforce fundamental rights of workers. Suspension and dilution of the provisions will: 

  • Adversely impact the rights of workers and is completely contrary to the provisions of Part III of constitution. 

  • Result in a total chaos as there would no redress mechanism left for the workers to address their woes and will lead to strikes and bandhs by various trade unions. Industrial peace is necessary to increase national productivity. 

  • Suspension of labour laws will severely impact the health of workers. 

  • Lastly, it is against the conventions of ILO. India is party to many ILO conventions and treaties. Suspending rights and duties of employer and employee will be in conflict with internationally practised standards and obligations. 

After much uproar, few states have taken back their notifications. Uttar Pradesh government has withdrawn the order after a notice by the Allahabad High Court. Further Rajasthan Government was also forced to take back the order of extending work hours and has restores factory working hours to 8 hours in contrast to the notification dated 24th April which allowed extension up to 12 hours. 


Labour reforms are indeed needed in India. Labour rights are easily violated and workers are muted in fear of losing employment. The central government had come up a business reforms action plan which talks about efficiency. It also has a checklist for the state governments to ensure that they are following norms. It is undeniable that the country needs an overhaul of reforms as at the ground level, only a few are being implemented. In India, where social justice is becoming a distant dream, a total dilution of rights of workers is nothing more than an authoritarian rule which is completely opposed to the democratic principles that the constitution espouses.

About the Author: Ruchika Jha | 3 Post(s)

Ruchika is from Jaipur, Rajasthan. I have completed my schooling from Delhi Public School R.K.Puram and currently in my penultimate year of law school at Hidayatullah National Law University. I am interested in Banking and Technology Law. I also have a keen interest in Human Rights and would like to contribute to improving the deteriorating situation of society.  I enjoy cooking, traveling, writing, and research. I strive to better myself every day and work in a dynamic, challenging, work-oriented environment to accomplish my desire to seek more knowledge

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