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To contain the spread of COVID-19 in India, the central government imposed a nation-wide lockdown on March 24, 2020. Under the lockdown most economic activities, other than those classified as essential activities, were suspended. States have noted that this loss of economic activity has resulted in a loss of income for many individuals and businesses. To allow some economic activities to start, some states have provided relaxations to establishments from their existing labour laws. This blog explains the manner in which labour is regulated in India, and the various relaxations in labour laws that are being announced by various states.
How is labour regulated in India?
Labour falls under the Concurrent List of the Constitution. Therefore, both Parliament and State Legislatures can make laws regulating labour. Currently, there are over 100 state laws and 40 central laws regulating various aspects of labour such as resolution of industrial disputes, working conditions, social security, and wages. To improve ease of compliance and ensure uniformity in central level labour laws, the central government is in the process of codifying various labour laws under four Codes on (i) industrial relations, (ii) occupational safety, health and working conditions, (iii) wages, and (iv) social security. These Codes subsume laws such as the Industrial Disputes Act, 1947, the Factories Act, 1948, and the Payment of Wages Act, 1936.
How do state governments regulate labour?
A state may regulate labour by: (i) passing its own labour laws, or (ii) amending the central level labour laws, as applicable to the state. In cases where central and state laws are incompatible, central laws will prevail and the state laws will be void. However, a state law that is incompatible with central laws may prevail in that state if it has received the assent of the President. For example: In 2014, Rajasthan amended the Industrial Disputes Act, 1947. Under the Act, certain special provisions with regard to retrenchment, lay-off and closure of establishments applied to establishments with 100 or more workers. For example, an employer in an establishment with 100 or more workers required permission from the central or state government prior to retrenchment of workers. Rajasthan amended the Act to increase the threshold for the application of these special provisions to establishments with 300 workers. This amendment to the central law prevailed in Rajasthan as it received the assent of the President.
Which states have passed relaxations to labour laws?
The Uttar Pradesh Cabinet has approved an ordinance, and Madhya Pradesh has promulgated an ordinance, to relax certain aspects of existing labour laws. Further, Gujarat, Rajasthan, Haryana, Uttarakhand, Himachal Pradesh, Assam, Goa, Uttar Pradesh, and Madhya Pradesh have notified relaxations to labour laws through rules.
Madhya Pradesh: On May 6, 2020, the Madhya Pradesh government promulgated the Madhya Pradesh Labour Laws (Amendment) Ordinance, 2020. The Ordinance amends two state laws: the Madhya Pradesh Industrial Employment (Standing Orders) Act, 1961, and the Madhya Pradesh Shram Kalyan Nidhi Adhiniyam, 1982. The 1961 Act regulates the conditions of employment of workers and applies to all establishments with 50 or more workers. The Ordinance increases this threshold to 100 or more workers. Therefore, the Act will no longer apply to establishments with between 50 and 100 workers that were previously regulated. The 1982 Act provides for the constitution of a Fund that will finance activities related to welfare of labour. The Ordinance amends the Act to allow the state government to exempt any establishment or class of establishments from the provisions of the Act through a notification. These provisions include payment of contributions into the Fund by employers at the rate of three rupees every six months.
Further, the Madhya Pradesh government has exempted all new factories from certain provisions of the Industrial Disputes Act, 1947. Provisions related to lay-off and retrenchment of workers, and closure of establishments will continue to apply. However, the other provisions of the Act such as those related to industrial dispute resolution, strikes and lockouts, and trade unions, will not apply. This exemption will remain in place for the next 1,000 days (33 months). Note that the Industrial Disputes Act, 1947 allows the state government to exempt certain establishments from the provisions of the Act as long as it is satisfied that a mechanism is in place for the settlement and investigation of industrial disputes.
Uttar Pradesh
The Uttar Pradesh Cabinet has approved the Uttar Pradesh Temporary Exemption from Certain Labour Laws Ordinance, 2020. According to news reports, the Ordinance seeks to exempt all factories and establishments engaged in manufacturing processes from all labour laws for a period of three years, subject to the fulfilment of certain conditions. These conditions include:
Wages: The Ordinance specifies that workers cannot be paid below minimum wage. Further, workers must be paid within the time limit prescribed in the Payment of Wages Act, 1936. The Act specifies that: (i) establishments with less than 1,000 workers must pay wages before the seventh day after the last day of the wage period and (ii) all other establishments must pay wages before the tenth day after the last day of the wage period. Wages must be paid into the bank accounts of workers.
Health and safety: The Ordinance states that provisions of health and safety specified in the Building and Other Construction Workers Act, 1996 and Factories Act, 1948 will continue to apply. These provisions regulate the usage of dangerous machinery, inspections, and maintenance of factories, amongst others.
Work Hours: Workers cannot be required to work more than eleven hours a day and the spread of work may not be more than 12 hours a day.
Compensation: In the case of accidents leading to death or disability, workers will be compensated as per the Employees Compensation Act, 1923.
Bonded Labour: The Bonded Labour System (Abolition) Act, 1976 will continue to remain in force. It provides for the abolition of the bonded labour system. Bonded labour refers to the system of forced labour where a debtor enters into an agreement with the creditor under certain conditions such as to repay his or a family members debt, due to his caste or community, or due to a social obligation.
Women and children: Provisions of labour laws relating to the employment of women and children will continue to apply.
It is unclear if labour laws providing for social security, industrial dispute resolution, trade unions, strikes, amongst others, will continue to apply to businesses in Uttar Pradesh for the period of three years specified in the Ordinance. Since the Ordinance is restricting the application of central level labour laws, it requires the assent of the President to come into effect.
Changes in work hours
The Factories Act, 1948 allows state governments to exempt factories from provisions related to work hours for a period of three months if factories are dealing with an exceptional amount of work. Further, state governments may exempt factories from all provisions of the Act in the case of public emergencies. The Gujarat, Himachal Pradesh, Rajasthan, Haryana, Uttar Pradesh, Goa, Assam and Uttarakhand governments passed notifications to increase maximum weekly work hours from 48 hours to 72 hours and daily work hours from 9 hours to 12 hours for certain factories using this provision. Further, Madhya Pradesh has exempted all factories from the provisions of the Factories Act, 1948 that regulate work hours. These state governments have noted that an increase in work hours would help address the shortage of workers caused by the lockdown and longer shifts would ensure fewer number of workers in factories allowing for social distancing to be maintained. Table 1 shows the state-wise increase in maximum work hours.
Table 1: State-wise changes to work hours
State |
Establishments |
Maximum weekly work hours |
Maximum daily work hours |
Overtime Pay (2x ordinary wages) |
Time period |
All factories |
Increased from 48 hours to 72 hours |
Increased from 9 hours to 12 hours |
Not required |
Three months |
|
All factories |
Increased from 48 hours to 72 hours |
Increased from 9 hours to 12 hours |
Required |
Three months |
|
All factories distributing essential goods and manufacturing essential goods and food |
Increased from 48 hours to 72 hours |
Increased from 9 hours to 12 hours |
Required |
Three months |
|
All factories |
Not specified |
Increased from 9 hours to 12 hours |
Required |
Two months |
|
All factories |
Increased from 48 hours to 72 hours |
Increased from 9 hours to 12 hours |
Not required |
Three months* |
|
All factories and continuous process industries that are allowed to function by government |
Maximum 6 days of work a week |
Two shifts of 12 hours each. |
Required |
Three months |
|
All factories |
Not specified |
Increased from 9 hours to 12 hours |
Required |
Three months |
|
Goa |
All factories |
Not specified |
Increased from 9 hours to 12 hours |
Required |
Approximately three months |
All factories |
Not specified |
Not specified |
Not specified |
Three months |
Note: *The Uttar Pradesh notification was withdrawn
India has been in lockdown since March 25, 2020. During this time, activities not contributing to the production and supply of essential goods and services were completely or partially suspended. Passenger trains and flights were halted. The lockdown has severely impacted migrants, several of whom lost their jobs due to shutting of industries and were stranded outside their native places wanting to get back. Since then, the government has announced relief measures for migrants, and made arrangements for migrants to return to their native place. The Supreme Court of India, recognising the problems faced by migrants stranded in different parts of the country, reviewed transportation and relief arrangements made by the government. On June 9, the Court directed central and state governments to complete transportation of remaining stranded migrants and expand focus of relief measures to facilitate employment for returning migrants. In this blog, we highlight some facts about migration in India, summarise key relief measures announced by the government and directives issued by the Supreme Court for the migrant population in relation to the lockdown.
Overview of Migration
Migration is the movement of people away from their usual place of residence, across either internal (within country) or international (across countries) borders. The latest government data on migration comes from the 2011 Census. As per the Census, India had 45.6 crore migrants in 2011 (38% of the population) compared to 31.5 crore migrants in 2001 (31% of the population). Between 2001 and 2011, while population grew by 18%, the number of migrants increased by 45%. In 2011, 99% of total migration was internal and immigrants (international migrants) comprised 1%.[1]
Patterns of migration
Internal migrant flows can be classified on the basis of origin and destination. One kind of classification is: i) rural-rural, ii) rural-urban, iii) urban-rural and iv) urban-urban. As per the 2011 census, there were 21 crore rural-rural migrants which formed 54% of classifiable internal migration (the Census did not classify 5.3 crore people as originating from either rural or urban areas). Rural-urban and urban-urban movement accounted for around 8 crore migrants each. There were around 3 crore urban-rural migrants (7% of classifiable internal migration).
Another way to classify migration is: (i) intra-state, and (ii) inter-state. In 2011, intra-state movement accounted for almost 88% of all internal migration (39.6 crore persons).1
There is variation across states in terms of inter-state migration flows. According to the 2011 Census, there were 5.4 crore inter-state migrants. As of 2011, Uttar Pradesh and Bihar were the largest source of inter-state migrants while Maharashtra and Delhi were the largest receiver states. Around 83 lakh residents of Uttar Pradesh and 63 lakh residents of Bihar had moved either temporarily or permanently to other states. Around 60 lakh people from across India had migrated to Maharashtra by 2011.
Figure 1: Inter-state Migration (in lakh)
Note: A net out-migrant state is one where more people migrate out of the state than those that migrate into the state. Net in-migration is the excess of incoming migrants over out-going migrants.
Sources: Census 2011; PRS.
Reasons for internal migration and size of migrant labour force
As of 2011, majority (70%) of intra-state migration was due to reasons of marriage and family with variation between male and female migrants. While 83% of females moved for marriage and family, the corresponding figure for males was 39%. Overall, 8% of people moved within a state for work (21% of male migrants and 2% of female migrants).
Movement for work was higher among inter-state migrants- 50% of male and 5% of female inter-state migrants. As per the Census, there were 4.5 crore migrant workers in 2011. However, according to the Working Group Report on Migration, the Census underestimates the migrant worker population. Female migration is recorded as movement due to family since that is the primary reason. However, many women take up employment after migrating which is not reflected in the number of women moving for work-related reasons. [2]
According to the Economic Survey, 2016-17, Census data also underestimates temporary migrant labour movement. In 2007-08, the NSSO estimated the size of India’s migrant labour at seven crore (29% of the workforce). The Economic Survey, 2016-17, estimated six crore inter-state labour migrants between 2001-2011. The Economic Survey also estimated that in each year between 2011-2016, on average 90 lakh people travelled for work.
Figure 2: Reasons for intra-state migration
Sources: Census 2011; PRS.
Figure 3:Reasons for inter-state migration
Sources: Census 2011; PRS.
Issues faced by migrant labour
Article 19(1)(e) of the Constitution, guarantees all Indian citizens the right to reside and settle in any part of the territory of India, subject to reasonable restrictions in the interest of the general public or protection of any scheduled tribe. However, people migrating for work face key challenges including: i) lack of social security and health benefits and poor implementation of minimum safety standards law, ii) lack of portability of state-provided benefits especially food provided through the public distribution system (PDS) and iii) lack of access to affordable housing and basic amenities in urban areas. 2
Poor implementation of protections under the Inter-State Migrant Workmen Act, 1979 (ISMW Act)
The ISMW Act provides certain protections for inter-state migrant workers. Labour contractors recruiting migrants are required to: (i) be licensed, (ii) register migrant workers with the government authorities, and (iii) arrange for the worker to be issued a passbook recording their identity. Guidelines regarding wages and protections (including accommodation, free medical facilities, protective clothing) to be provided by the contractor are also outlined in the law.
In December 2011, a report by the Standing Committee on Labour observed that registration of workers under the ISMW Act was low and implementation of protections outlined in the Act was poor. The report concluded that the Central government had not made any concrete and fruitful efforts to ensure that contractors and employers mandatorily register the workers employed with them enabling access to benefits under the Act.
Lack of portability of benefits
Migrants registered to claim access to benefits at one location lose access upon migration to a different location. This is especially true of access to entitlements under the PDS. Ration card required to access benefits under the PDS is issued by state governments and is not portable across states. This system excludes inter-state migrants from the PDS unless they surrender their card from the home state and get a new one from the host state.
Lack of affordable housing and basic amenities in urban areas
The proportion of migrants in urban population is 47%.1 In 2015, the Ministry of Housing and Urban Affairs identified migrants in urban areas as the largest population needing housing in cities. There is inadequate supply of low-income ownership and rental housing options. This leads to the spread of informal settlements and slums. The Prime Minister Awaas Yojana (PMAY) is a central government scheme to help the economically weaker section and low-income group access housing. Assistance under the scheme includes: i) slum rehabilitation, ii) subsidised credit for home loans, iii) subsidies up to Rs 1.5 lakh to either construct a new house or enhance existing houses on their own and iv) increasing availability of affordable housing units in partnership with the private sector. Since housing is a state subject, there is variation in approach of States towards affordable housing.2
Steps taken by the government with regard to migrant labour during the lockdown
During the lockdown, several inter-state migrant workers tried to return to their home state. Due to the suspension public transport facilities, migrants started walking towards their home state on foot. Subsequently, buses and Shramik special trains were permitted by the central government subject to coordination between states.[3],[4] Between May 1 and June 3, more than 58 lakh migrants were transported through specially operated trains and 41 lakh were transported by road. Measures taken by the government to aid migrants include-
Transport: On March 28, the central government authorised states to use the State Disaster Response Fund to provide accommodation to traveling migrants. States were advised to set up relief camps along highways with medical facilities to ensure people stay in these camps while the lockdown is in place.
In an order issued on April 29, the Ministry of Home Affairs allowed states to co-ordinate individually to transport migrants using buses. On May 1, the Indian Railways resumed passenger movement (for the first time since March 22) with Shramik Special trains to facilitate movement of migrants stranded outside their home state. Between May 1 and June 3, Indian Railways operated 4,197 Shramik trains transporting more than 58 lakh migrants. Top states from where Shramik trains originated are Gujarat and Maharashtra and states where the trains terminated are Uttar Pradesh and Bihar.[5] Note that these trends largely correspond to the migration patterns seen in the 2011 census data.
Food distribution: On April 1, the Ministry of Health and Family Affairs directed state governments to operate relief camps for migrant workers with arrangements for food, sanitation and medical services. On May 14, under the second tranche of the Aatma Nirbhar Bharat Abhiyaan, the Finance Minister announced that free food grains would be provided to migrant workers who do not have a ration card for two months. The measure is expected to benefit eight crore migrant workers and their families. The Finance Minister also announced that One Nation One Ration card will be implemented by March 2021, to provide portable benefits under the PDS. This will allow access to ration from any Fair Price Shop in India.
Housing: The Aatma Nirbhar Bharat Abhiyaan also launched a scheme for Affordable Rental Housing Complexes for Migrant Workers and Urban Poor to provide affordable rental housing units under PMAY. The scheme proposes to use existing housing stock under the Jawaharlal Nehru National Urban Housing Mission (JnNURM) as well as incentivise public and private agencies to construct new affordable units for rent. Further, additional funds have been allocated for the credit linked subsidy scheme under PMAY for middle income group.
Financial aid: Some state governments (like Bihar, Rajasthan and Madhya Pradesh) announced one-time cash transfers for returning migrant workers. UP government announced the provision of maintenance allowance of Rs 1,000 for returning migrants who are required to quarantine.
Directions by the Supreme Court
The Supreme Court reviewed the situation of migrant labourers stranded in different parts of the country, noting inadequacies and lapses in government response to the situation.
[1] Census, 2011, Office of the Registrar General & Census Commissioner, Ministry of Home Affairs.
[2] Report of Working Group on Migration, Ministry of Housing and Urban Poverty Alleviation, January 2017, http://mohua.gov.in/upload/uploadfiles/files/1566.pdf.
[3] Order No. 40-3/2020-DM-I (A), Ministry of Home Affairs, April 29, 2020, https://prsindia.org/files/covid19/notifications/4233.IND_Movement_of_Persons_April_29.pdf.
[4] Order No. 40-3/2020-DM-I (A), Ministry of Home Affairs, May 1, 2020, https://prsindia.org/files/covid19/notifications/IND_Special_Trains_May_1.jpeg.
[5] “Indian Railways operationalizes 4197 “Shramik Special” trains till 3rd June, 2020 (0900hrs) across the country and transports more than 58 lacs passengers to their home states through “Shramik Special” trains since May 1”, Press Information Bureau, Ministry of Railways, June 3, 2020, https://pib.gov.in/PressReleseDetail.aspx?PRID=1629043.