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With the announcement of 'unlock-2' (phase-2 of openingof lockdown), except for few areas, industries or establishmentshave gradually started inching towards operations of businesseswith the limited workforce or resources to not only sustain thebusinesses but also to contribute to the economic growth ofIndia.

Since COVID-19 has led to slow down of economic growth in India,besides the federal (central) government, state governments havealso commenced introducing various measures by way of amendinglabour and employment statutes, such as granting exemption inworking hours and raising the statutory thresholds, amongst others,to ease the financial burden on employers

The subject "labour" falls under the concurrent listof the Constitution of India, thus giving power to both federal andstate governments to make laws regulating labour and employment,with the exception of certain matters being reserved for thefederal government. State governments generally provide foramendment, exemptions, or additions concerning the subject"labour" either by introducing a subject specific statuterelevant for such a state or by amending the federal statutes,within the rights available to states, which requires assent of theHon'ble President of India.

State governments derive power from Article 2131 ofthe Constitution of India which allows amendments by way ofordinances in the statutes (when not exercising the powers givenwithin the statutes). In the last few weeks, state governments,exercising the powers under Article 213, have passed certainordinances to carry out major amendments in federal laws, whichwould come into force as soon as the ordinances receivePresident's Assent. Simultaneously, exercising the rightsavailable within the statutes, various state governments havebrought in several changes, which are relevant for the specificperiod.

A. UTTAR PRADESH

The Uttar Pradesh ("UP") Governmenton May 08, 2020 has introduced the Uttar Pradesh TemporaryExemption from Certain Labour Laws Ordinance, 2020, applicable toall factories and establishments engaged in manufacturing processand intends to exempt the said factories and manufacturingestablishments from the operation of certain labour laws for atemporary period of 3 years subject to the conditions,amongst others, mentioned therein:

B. MADHYA PRADESH

The Madhya Pradesh ("MP") Governmenton May 06, 2020 also has introduced the Madhya Pradesh Labour Laws(Amendment) Ordinance, 2020, which aims at amending two state laws,the Madhya Pradesh Industrial Employment (Standing Orders) Act,1961 and the Madhya Pradesh Shram Kalyan Nidhi Adhiniyam, 1982.

The Madhya Pradesh Industrial Employment (Standing Orders) Act,1961 is applicable to all the undertakings2 having 50employees3. The MP Government by way of an amendmentintends to increase the applicability threshold to 100 or moreemployees.

The Madhya Pradesh Shram Kalyan Nidhi Adhiniyam, 1982 providesfor constitution of a labour welfare fund that will finance theactivities related to welfare of labour. Under the said Act, anemployer is required to deposit contribution on behalf of bothemployer and employee4 at the rate of INR 1(employee's contribution) and INR 3 (employer'scontribution) every 6 months. The proposed ordinance intends toamend the said Act by including a new section to allow theGovernment of MP to exempt any establishment or class ofestablishments from the provisions of the said Act through anotification.

C. GOA

Vide the Contract Labour (Regulation and Abolition) (GoaAmendment) Ordinance, 2020 introduced on June 26, 2020, the StateGovernment of Goa intends to amend the threshold of employees from205 workmen to 50 as prescribed under Section 1(4)6 of the Contract Labour (Regulation and Abolition)Act, 1970 (the "CLRA Act") forapplicability of CLRA Act in the State of Goa and, also incorporatea new section with respect to compounding of offences, dependingupon number of workmen employed in the establishment and number oftimes such an offence is committed.

Further, vide the Industrial Disputes (Goa Amendment) Ordinance,2020 introduced on June 26, 2020, the State Government of Goa wantsto amend the Industrial Disputes Act, 1947 (the "IDAct"), as in force in the state of Goa. The StateGovernment of Goa intends to lower the limitation period from 3years to 1 year under Section 2 A (3)7 of the IDAct.

Further, a new sub-section (4) in Section 2A is proposed to beinserted which makes it mandatory for raising the dispute beforeconciliation officer within 1 year from the date of discharge,dismissal, retrenchment or termination in order to qualify as an"industrial dispute" under the ID Act.

The Government of Goa intends to amend the threshold regardingapplicability from 100 to 300 workmen, as provided in Section25K8 (Chapter V-B) of the ID Act (special provisionsrelating to lay-off, retrenchment and closure in certainestablishments). In case of retrenchment (under Section25F9 and Section 25N of the ID Act) or closure of anundertaking (under Section 25O of the ID Act), compensation to bepaid to workmen is sought to be enhanced from 15 days' averagepay to 45 days' average pay, for every completed year ofservice part in excess of 6 months.

Further a new Section 31 A relating to compounding of offencesis proposed to be incorporated for any offence punishable underSections 25Q, 25R, 25U, 26, 27, 28, 29, 30A and subsections (1) and(2) of Section 31.

D. ASSAM

The Factories (Assam Amendment) Ordinance, 2020 introduced onJune 30, 2020 aims at amending the threshold of employees in thedefinition of factory10, as defined in the FactoriesAct, 1948, from 10 workers (where manufacturing process is with theaid of power) to 20 and from 20 workers (where manufacturingprocess is without the aid of power) to 40.

E. BIHAR

The Factories (Bihar Amendment) Ordinance, 2020 introduced onJuly 02, 2020, aims at amending the threshold of employees in thedefinition of factory, as defined in the Factories Act, 1948, from10 workers (where manufacturing process is with the aid of power)to 20 and from 20 workers (where manufacturing process is withoutthe aid of power) to 40.

Vide the Industrial Disputes (Bihar Amendment) Ordinance, 2020promulgated on July 02, 2020, the state government intends to amendthe threshold regarding applicability from 100 to 300 workmen, asprovided in Section 25K (Chapter-V-B) of the ID Act (specialprovisions relating to lay-off, retrenchment and closure in certainestablishments).

The Contract Labour (Regulation and Abolition) (Bihar Amendment)Ordinance, 2020 promulgated on July 02, 2020 proposes to amend thethreshold regarding applicability of statute from 20 to 50 workmen,as prescribed under Section 1 (4) of the CLRA Act.

F. GUJARAT

The Factories (Gujarat Amendment) Ordinance, 2020 introduced onJuly 02, 2020 aims at amending the threshold of employees in thedefinition of factory, as defined in the Factories Act, 1948, from10 workers (where manufacturing process is with the aid of power)to 20 and from 20 workers (where manufacturing process is withoutthe aid of power) to 40.

Further, the State Government of Gujarat also intends toincorporate a new section with respect to compounding of offences,which may be specified by the State Government of Gujarat by way ofnotification.

The Industrial Disputes (Gujarat Amendment) Ordinance, 2020introduced on July 03, 2020 aims to amend the threshold regardingapplicability from 100 to 300 workmen, as provided in Section 25K(Chapter-V-B) of the ID Act (special provisions relating tolay-off, retrenchment and closure in certain establishments).

Under Section 25N of the ID Act, the option to pay the workmanwages in lieu of 3 months' notice is sought to be done awaywith. Further, in case of a retrenchment (under Section 25N of theID Act) or closure of an undertaking (under Section 25O of the IDAct), an amount equivalent to the workman's last threemonths' average pay has been added in the last of eachsection.

The Contract Labour (Regulation and Abolition) Gujarat AmendmentOrdinance, 2020 introduced on July 20, 2020 aims at amending thethreshold regarding applicability of statute from 20 workers to 50,as prescribed under Section 1 (4) of the CLRA Act.

G. HIMACHAL PRADESH

The Contract Labour (Regulation and Abolition) Himachal PradeshAmendment Ordinance, 2020 introduced on July 09, 2020 aims atamending the threshold regarding applicability of statute from 20workers to 30, as prescribed under Section 1 (4) of the CLRAAct.

The Industrial Disputes (Himachal Pradesh Amendment) Ordinance,2020 promulgated on July 09, 2020 aims to amend the thresholdregarding applicability from 100 to 200 workmen, as provided inSection 25K (Chapter-V-B) of the ID Act (special provisionsrelating to lay-off, retrenchment and closure in certainestablishments). Further, in case of retrenchment (under Section25F of the ID Act), the compensation is sought to be increased from15 days' average pay to 60 days' average pay for everycompleted year of continuous service or part thereof more than 6months. Further, the provisions governing prohibition of strikesand lock-outs under Section 2211 is sought to be madeapplicable to public utility and non-public utility services.

The Factories (Himachal Pradesh Amendment) Ordinance, 2020promulgated on July 09, 2020 aims at amending the threshold ofemployees in the definition of factory, as defined in the FactoriesAct, 1948, from 10 workers (where manufacturing process is with theaid of power) to 20 and from 20 workers (where manufacturingprocess is without the aid of power) to 40.

Further, the State Government of Himachal Pradesh also intendsto incorporate a new section with respect to compounding ofoffences which are punishable with fine only and committed for thefirst time.

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Footnotes

1. 213. Power of Governor to promulgateOrdinances during recess of Legislature

(1) If at any time, except when theLegislative Assembly of a State is in session, or where there is aLegislative Council in a State, except when both Houses of theLegislature are in session, the Governor is satisfied thatcircumstances exist which render it necessary for him to takeimmediate action, he may promulgate such Ordinance as thecircumstances appear to him to require: Provided that the Governorshall not, without instructions from the President, promulgate anysuch Ordinance if

(a) a Bill containing the same provisionswould under this Constitution have required the previous sanctionof the President for the introduction thereof into the Legislature;or

(b) he would have deemed it necessary toreserve a Bill containing the same provisions for the considerationof the President; or

(c) an Act of the Legislature of theState containing the same provisions would under this Constitutionhave been invalid unless, having been reserved for theconsideration of the President, it had received the assent of thePresident

(2) An Ordinance promulgated under thisarticle shall have the same force and effect as an Act ofLegislature of the State assented to by the Governor, but everysuch Ordinance

(a) shall be laid before the legislativeAssembly of the State, or where there is a Legislative Council inthe State, before both the House, and shall cease to operate at theexpiration of six weeks from the reassembly of the Legislature, orif before the expiration of that period a resolution disapprovingit is passed by the Legislative Assembly and agreed to by theLegislative Council, if any, upon the passing of the resolution or,as the case may be, on the resolution being agreed to by theCouncil; and

(b) may be withdrawn at any time by theGovernor Explanation Where the Houses of the Legislature of a Statehaving a Legislative Council are summoned to reassemble ondifferent dates, the period of six weeks shall be reckoned from thelater of those dates for the purposes of this clause

(3) If and so far as an Ordinance underthis article makes any provision which would not be valid ifenacted in an Act of the legislature of the State assented to bythe Governor, it shall be void: Provided that, for the purposes ofthe provisions of this Constitution relating to the effect of anAct of the Legislature of a State which is repugnant to an Act ofParliament or an existing law with respect to a matter enumeratedin the Concurrent List, an Ordinance promulgated under this articlein the Concurrent List, an Ordinance promulgated under this articlein pursuance of instructions from the President shall be deemed tobe an Act of the Legislature of the State which has been reservedfor the consideration of the president and assented to by him.

2. The Madhya Pradesh IndustrialRelations Act, 1960 defines 'Undertaking' as a concern inany industry. 'Industry' means:

(a) any business, trade, manufacture orundertaking or calling of employers.

(b) any calling, service, employment,handicraft, or industrial occupation or avocation of employees, andincludes-

(i) agriculture and agricultureoperations;

(ii) any branch of an industry or groupof industries which the State Government may by notification,declare to be an industry for the purposes of this Act.

3.The Madhya Pradesh Industrial RelationsAct, 1960 defines 'employee' as any person employed in anyindustry to do any skilled, unskilled, manual, supervisory,technical or clerical work for hire or reward, whether the terms ofemployment be express or implied, and includes

(a) a person employed by a contractor todo any work for him in the execution of a contract with an employerwithin the meaning of sub-clause(e) of clause 14, and

(b) an apprentice other than anapprentice under sub-clause (v) but does not include anyperson-

(i) who is subject to the Army Act, 1950,or the Air Force Act, 1950 or the Navy Discipline Act 1957; or

(ii) who is employed in the PoliceService or as an officer or other employee of prison; or

(iii) who is employed mainly in amanagerial capacity; or

(iv) who being employed in a supervisorycapacity draws wages exceeding one thousand and six hundred rupeesper mensum; or

(v) who is a craftsman or an apprenticeworking under a scheme approved by the State Government on thecondition that such craftsman or apprentice shall not be deemed tobe an employee under this Act;

Explanation An employee who hasbeen dismissed, discharged or retrenched from employment or whoseemployment has been otherwise terminated shall, in respect ofmatters relating to such dismissal. discharge, retrenchment ortermination, be deemed etc., be an employee for the purposes ofthis Act.

4. Under Section 2(3),"employee" means any person who is employed for hire onreward to do any skilled, semi-skilled or un-skilled, manual,clerical, supervisory, or technical work in an establishment butdoes not include any person:

(a) who is employed mainly in amanagerial or administrative capacity; or

(b) who, being employed in a supervisorycapacity draws wages exceeding one thousand and six hundred rupeesper mensem or exercises, either by the nature of the dutiesattached to the office, or by reason of the powers vested in him,functions mainly of a managerial nature.

5. The Goa government had already reducedthe threshold from 20 to 10 employees for the applicability of theContract Labour (Regulation and Abolition) Act, 1970 vide GazetteNotification dated April 30, 2001.

6. 1 (4) It applies -(a) to everyestablishment in which twenty or more workmen, art employed or wereemployed on any day of the preceding twelve months as contractlabour;

(b) to every contractor who employs orwho employed on any day of the preceding twelve months twenty ormore workmen. Provided that the appropriate Government may, aftergiving not less than two months' notice of its intention so todo, by notification in the Official Gazette, apply the provisionsof this Act to any establishment or contractor employing suchnumber of workmen less than twenty as may be specified in thenotification.

7. (3) The application referred to insub-section (2) shall be made to the Labour Court or Tribunalbefore the expiry of three years from the date of discharge,dismissal, retrenchment or otherwise termination of service asspecified in sub-section (1).

8. 25K. Application of Chapter V-B.- (1)The provisions of this Chapter shall apply to an industrialestablishment (not being an establishment of a seasonal characteror in which work is performed only intermittently) in which notless than 2[one hundred] workmen were employed on an average perworking day for the preceding twelve months. (2) If a questionarises whether an industrial establishment is of a seasonalcharacter or whether work is performed therein only intermittently,the decision of the appropriate Government thereon shall befinal.

9. 25F. Conditions precedent toretrenchment of workmen

No workman employed in any industry whohas been in continuous service for not less than one year under anemployer shall be retrenched by that employer until,

(a) the workman has been given onemonth's notice in writing indicating the reasons forretrenchment and the period of notice has expired, or the workmanhas been paid in lieu of such notice, wages for the period of thenotice:

(b) the workman has been paid, at thetime of retrenchment, compensation which shall be equivalent tofifteen days' average pay for every completed year ofcontinuous service or any part thereof more than six months;and

(c) notice in the prescribed manner isserved on the appropriate Government or such authority as may bespecified by the appropriate Government by notification in theOfficial Gazette.

10. (m) "factory" means anypremises including the precincts thereof-

(i) whereon ten or more workers areworking, or were working on any day of the preceding twelve months,and in any part of which a manufacturing process is being carriedon with the aid of power, or is ordinarily so carried on, or

(ii) whereon twenty or more workers areworking, or were working on any day of the preceding twelve months,and in any part of which a manufacturing process is being carriedon without the aid of power, or is ordinarily so carried on,-

but does not include a mine subject tothe operation of the Mines Act, 1952 (35 of 1952), or a mobile unitbelonging to the armed forces of the Union, a railway running shedor a hotel, restaurant or eating place.

Explanation. I--For computing the numberof workers for the purposes of this clause all the workers indifferent groups and relays in a day shall be taken intoaccount;

Explanation. II.--For the purposes ofthis clause, the mere fact that an Electronic Data Processing Unitor a Computer Unit is installed in any premises or part thereof,shall not be construed to make it a factory if no manufacturingprocess is being carried on in such premises or part thereof;

11. 22. Prohibition of strikes andlock-outs

(1) No person employed in a publicutility service shall go on strike in breach of contract,

(a) without giving to the employer noticeof strike, as herein-after provided, within six weeks beforestriking; or

(b) within fourteen days of giving suchnotice; or

(c) before the expiry of the date ofstrike specified in any such notice as aforesaid; or

(d) during the pendency of anyconciliation proceedings before a conciliation officer and sevendays after the conclusion of such proceedings.

(2) No employer carrying on any publicutility service shall lock-out any of his workmen,

(a) without giving them notice oflock-out as hereinafter provided, within six weeks before lockingout; or

(b) within fourteen days of giving suchnotice; or

(c) before the expiry of the date oflock-out specified in any such notice as aforesaid; or

(d) during the pendency of anyconciliation proceedings before a conciliation officer and sevendays after the conclusion of such proceedings.

(3) The notice of lock-out or strikeunder this section shall not be necessary where there is already inexistence a strike or, as the case may be, lock-out in the publicutility service, but the employer shall send intimation of suchlock-out or strike on the day on which it is declared, to suchauthority as may be specified by the appropriate Government eithergenerally or for a particular area or for a particular class ofpublic utility services.

(4) The notice of strike referred to insub-section (1) shall be given by such number of persons to suchperson or persons and in such manner as may be prescribed.

(5) The notice of lock-out referred to insub-section (2) shall be given in such manner as may beprescribed.

(6) If on any day an employer receivesfrom any persons employed by him any such notices as are referredto in sub-section (1) or gives to any persons employed by him anysuch notices as are referred to in sub-section (2), he shall withinfive days thereof report to the appropriate Government or to suchauthority as that Government may prescribe the number of suchnotices received or given on that day.

The content of this article is intended to provide a generalguide to the subject matter. Specialist advice should be soughtabout your specific circumstances.

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Labour Laws Amendments - Initiatives By State Governments To Provide Impetus To Economic Activity - Employment and HR - India - Mondaq News Alerts