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LATEST NEWS UPDATES | Are India’s labour laws too restrictive? -Suresh Seshadri

Are India’s labour laws too restrictive? -Suresh Seshadri

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published Published on May 15, 2020   modified Modified on May 17, 2020

-The Hindu

For employers, availability of skilled workforce and worker-management ties are more vital

Some State governments including Uttar Pradesh (U.P.) and Madhya Pradesh (M.P.) have proposed ordinances to exempt manufacturing establishments from the purview of most labour laws. In a discussion moderated by Suresh Seshadri, Amit Basole (Associate Professor of Economics, Azim Premji Unversity, Bengaluru) and K.R. Shyam Sundar (Professor of Human Resource Management, XLRI, Jamshedpur) look at the backdrop for this move and consider what lies ahead for the country’s labour and industrial relations. Edited excerpts:

* Are the ordinances justified given the need to both preserve and create jobs in the wake of the COVID-19 crisis?

K.R. Shyam Sundar: First, let me express my profound sense of shock [at the] changes or even disruptions that M.P. and U.P. governments have introduced on the pretext of creating employment and attracting investment. This is a very dangerous kind of political legitimacy that has been invoked.

There are three issues here. The Constitution provides a number of basic rights, and, under the directive principles of state policy, a number of assurances. Now, the kind of changes that have been made, they potentially will hurt, will dis-enable the realisation of the constitutional objectives. Second, the facility of the concurrent subject has been abused. And, we should bear in mind that the national codification and the labour law reform process is on. What is the unholy hurry on the part of the State governments to do this? But, I have an explanation: given the COVID situation and the national lockdown, the trade unions that are already weak cannot mobilise their forces and conduct any kind of a State-level or national struggle. This is a clear case of vulnerability, which the state has exploited.

Now, whether the labour laws constitute rigidities, the answer, in a cautious sense, is ‘indecisive’ because there are research studies on both sides. The World Bank survey, 2014, asked employers... and the employers did not rate labour law regulations as [among] the top five or seven or 10 irritants. For them, the availability of skilled workforce and cooperative labour-management relations were far more important than flexible labour laws. So, the gravest implication of these labour laws [changes] is that it will create industrial discontent, even a kind of labour unrest, which will stifle any hope of achieving industrial progress. And, employers will not benefit because these provisions will hurt labour welfare and thereby labour efficiency.

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The Hindu, 15 May, 2020, https://www.thehindu.com/opinion/op-ed/are-indias-labour-laws-too-restrictive/article31585617.ece?homepage=true


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