Ordinance passed by Uttar Pradesh to suspend labour laws

In May 2020, the Government of Uttar Pradesh approved an ordinance titled the “Uttar Pradesh Temporary Exemption from Certain Labour Laws Ordinance, 2020”, which sought to suspend the operation of most labour laws in the state for a period of three years. This move, introduced in the wake of the COVID-19 pandemic, was aimed at stimulating industrial activity and attracting investment at a time when the economy faced severe disruption. The ordinance, however, generated intense national debate over workers’ rights, constitutional propriety, and the balance between labour welfare and economic liberalisation.

Background

The ordinance was introduced during the early months of the COVID-19 pandemic, when India was under a nationwide lockdown. Industries across the country were facing massive losses, production had halted, and millions of migrant workers had returned to their home states, including Uttar Pradesh.
In response to this economic crisis, the Uttar Pradesh government, led by Chief Minister Yogi Adityanath, sought to ease regulatory constraints on industries and employers. The objective was to boost employment opportunities, attract new investments, and revive the state’s industrial sector by providing businesses with flexibility in labour operations.
The government justified the move as a temporary measure to help industries recover from the unprecedented economic shock caused by the pandemic.

Key Provisions of the Ordinance

The Uttar Pradesh Temporary Exemption from Certain Labour Laws Ordinance, 2020 proposed sweeping changes by suspending the enforcement of most labour laws in the state. Key features included:

• Suspension of most labour laws: Nearly all labour legislations, both central and state, were proposed to be suspended for a period of three years, with only a few exceptions.
• Applicable duration: The ordinance was to remain in force for three years from the date of its notification.
• Objective: To provide employers with maximum operational freedom in hiring, working hours, and service conditions, thereby promoting industrial activity.

Laws That Remained in Force

Although the ordinance suspended a large number of laws, several key labour protections were retained. The following laws and provisions continued to apply:

• The Building and Other Construction Workers Act, 1996
• The Workmen’s Compensation Act, 1923
• The Bonded Labour System (Abolition) Act, 1976
• The Payment of Wages Act, 1936 (limited provisions)
• Provisions related to the safety of workers in factories
• Section 5 of the Payment of Wages Act, ensuring timely payment of wages
• Provisions related to child and women labour

Thus, while basic safeguards concerning safety, bonded labour, and wage payment were preserved, most laws regulating working conditions, dispute resolution, trade union rights, and industrial relations were proposed to be suspended.

Major Laws Affected by the Suspension

The suspension covered nearly 38 labour laws, including significant ones such as:

• The Industrial Disputes Act, 1947 – governing layoffs, retrenchments, and industrial disputes.
• The Factories Act, 1948 – setting standards for working hours, safety, and welfare of workers.
• The Trade Unions Act, 1926 – protecting workers’ rights to form and register unions.
• The Minimum Wages Act, 1948 – determining minimum wage standards for workers.
• The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 – relating to employee savings and social security.
• The Payment of Bonus Act, 1965 – providing bonuses based on profits and productivity.

The combined suspension of these laws was seen as a major departure from established labour protection norms in India.

Government’s Rationale

The Uttar Pradesh government argued that the economic crisis required extraordinary measures to ensure job creation and industrial stability. The rationale behind the ordinance was:

• Revival of industries: Reducing regulatory burdens would encourage industrialists to restart production and hire workers quickly.
• Attracting investment: With several states competing to attract industries relocating from other parts of the world, especially China, Uttar Pradesh aimed to project itself as an investment-friendly destination.
• Employment generation: By simplifying labour compliance requirements, the state hoped to create large-scale employment opportunities for migrant workers returning from other states.
• Administrative efficiency: The suspension was intended to reduce bureaucratic delays and promote ease of doing business.

Criticism and Opposition

The ordinance drew widespread criticism from trade unions, labour rights activists, legal experts, and opposition parties. Major concerns included:

• Violation of workers’ rights: The suspension of laws such as the Minimum Wages Act and Industrial Disputes Act was seen as undermining fundamental labour protections.
• Constitutional concerns: Critics argued that labour welfare is a subject under the Concurrent List, and such sweeping suspension required approval from the President of India and Parliament, not merely a state ordinance.
• Erosion of social security: Workers would be left without safeguards regarding working conditions, overtime, and compensation.
• Possibility of exploitation: With minimal legal oversight, there was fear of increased exploitation of vulnerable workers.
• International commitments: The move was also criticised as being inconsistent with India’s obligations under International Labour Organisation (ILO) conventions.

Trade unions across the country condemned the ordinance as anti-worker and organised protests and petitions urging the central government to intervene.

Central Government and Legal Response

The ordinance required the President’s assent under Article 213 of the Constitution, as it involved the suspension of central laws. Reports indicated that the central government sought clarifications and expressed reservations about the blanket suspension of central labour legislations.
As a result, the ordinance did not receive final approval, and the proposed exemptions did not come into full legal effect. However, certain temporary relaxations were implemented through executive notifications, particularly related to working hours and operational flexibility.

Broader Context and Implications

The Uttar Pradesh ordinance was part of a broader trend during the early pandemic months, when several Indian states, including Madhya Pradesh, Gujarat, and Rajasthan, introduced measures to relax labour laws to attract investment. These moves were reflective of the ongoing debate in India about labour reform — balancing workers’ welfare with economic competitiveness.
While the ordinance aimed at promoting industrial recovery, it highlighted deep tensions between economic liberalisation and social protection. The episode also underscored the need for comprehensive, nationally coordinated labour reforms rather than ad hoc state-level suspensions.