12-Hour Work Day, Reduced Social Security Benefits May Be Soon Introduced By Employers To Cut Costs

To cut costs and ramp up operations that were disrupted by the outbreak of COVID-19, representatives of employers' associations have made several proposals with the Union Labour and Employment Ministry last week over a webinar.

Their list of suggestions include increasing daily working hours to 12 hours, suspension of most labour laws for the next 2-3 years, salaries to be covered under Corporate Social Responsibility (CSR) expenses, reduction of social security costs for both employer and employee, subsidised power, and a financial package for industry, a CNBC-TV18 report said.

According to the report, these associations have proposed:

• relaxation of the provisions of the Industrial Disputes Act to treat the lockdown period as lay-off
• allow wages paid by to the workers to be covered under expenses under CSR funds as businesses face a liquidity crisis
• increase the maximum limit of 33 percent workforce to at least 50 percent of the workforce to allow an increase in goods and services produced to the optimum level;
• To suspend the labour laws for the next 2-3 years except the provisions like minimum wages, bonus and statutory dues, till the industry is out of the present crisis;
• To increase the working hours to 12 hours per day;
• To provide an appropriate package to the industries to avoid lay-offs;
• Subsidized rates on electricity supply;
• Reduce social security costs on both employees and employers;
• Provide counselling (on fears of COVID-19), transportation, free groceries for about six months to migrant workers;
• To create a databank of migrant labour.
• To create a national epidemic fund to help the workers of the unorganized sector and daily wagers.

In the last few days, some state governments have suspended several key Labour Laws, barring a few.

In Uttar Pradesh, the state cabinet has decided to promulgate the Uttar Pradesh Temporary Exemption from Certain Labour Laws Ordinance, 2020 ('Ordinance') which suspends the operation of 38 labour laws with the exception of Section 5 of the Payment of Wages Act, 1936, the Employees Compensation Act, 1932, the Bonded Labour System (Abolition) Act, 1976 and the Building and Other Construction Workers Act, 1996 for a period of three years.

This legislative intervention to aid recovery of industries from the economic effects of the pandemic would suspend labour laws that have provisions to cover registration of trade unions, terms of employment, retrenchment, lay-offs, payment of terminal benefits, safety and welfare benefits in factories.