Uttar Pradesh and Madhya Pradesh have scrapped several labour laws for the next three years in a bid to provide a succour to industries affected by the COVID lockdown.

Uttar Pradesh, India's most populous state, one that is home to over 7 lakh migrant workers, has exempted businesses from all but four labour laws and one provision of another act, for the next three years.

CNBC-TV18 spoke to KR Shyam Sundar, Professor of Xavier School of Management on this subject.

Below is the edited transcript of the interview:

For the last 15 years, we have repeatedly heard the clamour for reforming labour laws. Currently, four codes are under study. Parliament is looking at it, standing committees have been asked to look at those, and one has been taken forward by the Central government. In light of the ordinance passed by Uttar Pradesh (UP) and Madhya Pradesh (MP), one view is that this is going to make it easier for companies to actually get on with doing business and it will provide the much needed ease of doing business. The other view is that this is in fact going to undo a lot of the work that was done to protect the rights of labour. Where do you stand on this?

I should also start by saying that the entire edifice of labour rights…construction of the edifice of the labour rights dates back to 1881 when the first Factory Act was enacted and then it slowed, and then the 1948 Factories Act and so on and so forth. So, it is not only a matter of 70 years, it is a matter of more than 130-140 years.

It is true that labour law reforms are necessary to enable business to thrive, but the kind of reforms that are being advocated at the central level through the four codes, they do not appear to be very encouraging. Firstly, of the four labour codes, one has been passed, that is the wage code, but is yet to be notified.The remaining three codes which are social security, industrial relations (IR), and operational safety and health, they leave a lot to be desired.

It appears to be a copy, cut, paste rather than labour law reforms. They help neither the employers nor the workers. In the process, some of the labour law reforms that the employers have been lobbying for, have been introduced.

But, to put it in scientific context as an academic, labour law rigidities have been magnified beyond its worth. On a scale of 1 to 10 for the factors essential to ease of doing business, labour law rigidity will be somewhere at 9 or 10. In fact, for improving the ease of doing business, there are other factors such as availability of skilled person power or infrastructure facilities, enforcement of contract and all those things. So, I think labour law reforms, the way the employers are asking and the way the Central government and now the state governments are responding, they seem to be in unholy hurry to curtail historically one’s labour rights.

The fact of the matter is that as you yourself pointed out, a lot of these acts, a lot of the legislation dates back more than 70 years. A lot of these provisions have outlived their utility. So, do you not believe that as we review this process, while we do put the safeguards and the checks and balances in place, there are provisions which needs to be axed, which needs to go?

I do agree that labour laws need modernization, as we are now looking at a globalised economy and that the laws that were formulated during the command economy needs to be modified. But I am not happy with the process of introduction of labour law reforms.

India has ratified several of the International Labour Organisation (ILO) Conventions and primarily ILO Convention C144 which is Tripartite Consultation of International Labour Standards which requires the Union government and the state governments to consult the stakeholders, which are primarily trade unions and industry bodies, before announcing any kind of labour law reforms. But none of the codes have been preceded by effective social dialogue.

First Published:May 8, 2020 9:34 PM IST