10.6092/issn.1561-8048/10879
The nation-wide lockdown due to COVID-19 has caused acute distress amongst the large informal workforce in India. India’s federal system has meant that relief measures have been introduced both at the central and state level. However, these measures have largely been imposed without a consultative process and are piece-meal and sector-specific in their scope. Consequently, these measures extend to only a small slice of the labour force in the country and do not effectively guarantee the fundamental right to social security for all workers.
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Saurabh Bhattacharjee
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COVID-19 and Labour Law: India
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2020-04-29
2020-04-15
2020-09-15
ILLeJ
Saurabh Bhattacharjee
2020/04/29
10.6092/issn.1561-8048/10879
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Social Security
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COVID-19 and Labour Law: India
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COVID-19 and Labour Law: India                                                        Italian Labour Law e-Journal
Saurabh Bhattacharjee                                                                Special Issue 1, Vol. 13 (2020)
bhat.saur@nujs.edu                                                     Covid-19 and Labour Law. A Global Review
                                                                                                   ISSN 1561-8048
                                                                    https://doi.org/10.6092/issn.1561-8048/10879




                     COVID-19 and Labour Law: India
                         Saurabh Bhattacharjee *

                                                   Abstract
     The nation-wide lockdown due to COVID-19 has caused acute distress amongst the large
     informal workforce in India. India’s federal system has meant that relief measures have been
     introduced both at the central and state level. However, these measures have largely been
     imposed without a consultative process and are piece-meal and sector-specific in their scope.
     Consequently, these measures extend to only a small slice of the labour force in the country
     and do not effectively guarantee the fundamental right to social security for all workers.
     Keywords: Covid-19; Labour Law; Provident Fund; Cash Transfer; Informal Labour;
     Insurance; Social Security.




    While the spread of COVID-19 constitutes an unprecedented global public health crisis,
 India’s skeletal public health infrastructure, densely-populated settlements and a large
 informal workforce make the country particularly vulnerable to this pandemic. Not
 surprisingly, India responded with a stringent nation-wide lockdown even before the total
 number of detected cases of COVID-19 in the country had crossed 6001. In fact, a few
 individual states had announced separate lockdowns even before the national lockdown2.


 1. The General Legal Framework for the National Lockdown

    The Central Government invoked the Disaster Management Act 2005 (DMA) to
 impose this national lockdown. The National Disaster Management Authority (NDMA),
 the body responsible under the DMA, declared the pandemic as a disaster through an
 Order on 24 March 2020 and directed social distancing guidelines to be followed3. The
 Chairman of the National Executive Committee of the NDMA issued detailed guidelines


 *
   Assistant Professor of Law, National University of Juridical Sciences, Kolkata.
 1  Vaishnavi Chandradekshar, ‘1.3 billion people. A 21-day lockdown. Can India curb the coronavirus?’ Science, 31
 March 2020,
 https://www.sciencemag.org/news/2020/03/13-billion-people-21-day-lockdown-can-india-curb-
 coronavirus, accessed 20 April, 2020.
 2 ‘Corona threat: West Bengal announces lockdown measures’, in The Hindu Business Line, 22 March 2020.
 3 No. 1-29/2020-PP (Pt. II), dated 24 March 2020,

 https://ndma.gov.in/images/covid/ndmaorder240320.pdf,, accessed 19 April, 2020.
    Saurabh Bhattacharjee                                                          Italian Labour Law e-Journal
                                                                                  Special Issue 1, Vol. 13 (2020)
                                                                     Covid-19 and Labour Law. A Global Review
                                                                                       Section: National Reports




for the lockdown.4 These guidelines directed the closure of all non-essential government
offices, commercial and industrial establishments, transport services, hospitality services,
educational institutions, places of worship, gatherings, etc5.
   Apart from the measures under the DMA, several state governments have invoked the
colonial era Epidemic Diseases Act, 1897 (EDA). Section 2 of EDA enables State
Governments to take measures and prescribe regulations during the outbreak of an
epidemic disease. Violation of such orders issued by state governments6 attracts criminal
sanction in accordance with Section 188 of the Indian Penal Code 18607.
   Besides, Section 144 of the Code Of Criminal Procedure 1973, which empowers
Magistrates to issue orders in urgent cases to “prevent, obstruction, annoyance or injury”
or “danger to human life, health or safety, or a disturbance of the public tranquillity, or a
riot” has also been invoked in some states8.


2. Impact of the National Lockdown

   While some questions have been raised about the constitutional permissibility of the
national lockdown9, the immediate aftermath of the imposition of the lockdown
highlighted its tragic cost. The most dramatic has been the mass exodus of migrant
labourers from big cities to their homes in the hinterland. With more than 90% of Indian
workers engaged in precarious work that lack adequate social security and paid leave10,
many workers, especially daily wage labourers, found themselves without work and unable
to afford food or shelter.
   A survey of more than three thousand constructions workers concluded that 90% of the
workers had lost their source of income due to the lockdown11. Another survey of stranded
workers estimated that 89% of workers interviewed hadn’t been paid by their employers up
to the third week of lockdown and 50% of such workers had less than a day’s food grains


4 No. 40 -3/2020-DM-I (A), dated 24 March 24 2020,
 https://www.mha.gov.in/sites/default/files/MHAorder%20copy.pdf , accessed 19 April, 2020.
5 Exceptions were made for defence, police, emergency services, healthcare, shops, banks, media, e-

commerce dealing with essential goods, shops dealing with food, groceries, fruits, vegetables and dairy, power
generation, petrol pumps and security services.
See https://www.mha.gov.in/sites/default/files/Guidelines.pdf, accessed 19 April, 2020.
6    No. Corona-2020/CR-58/Aarogya-5 (Maharashtra), https://arogya.maharashtra.gov.in/pdf/30.pdf,
accessed 19 April, 2020; No. HFW 54 CGM 2020 (Karantaka), https://karnataka.gov.in/storage/pdf-
files/covid%20(3).pdf , accessed 19 April, 2020.
7 Section 188 of the Indian Penal Code provides penalty for “Disobedience to order duly promulgated by

public servant”. Section 188, Indian Penal Code, 1860, https://indiankanoon.org/doc/1432790/, accessed 19
April, 2020.
8 ‘Haryana imposes section 144 to tackle coronavirus’, in The Economic Times, 20 March 2020.
9 Gautam Bhatia, ‘An Executive Emergency: India’s Response to Covid-19’ Verfassungsblog, 13 April 2020,

https://verfassungsblog.de/an-executive-emergency-indias-response-to-covid-19/ , accessed 19 April, 2020.
10 Amanat Khullar, ‘Remote work is not an option in India’s huge informal economy’ Quartz India, 17 March 2020,

https://qz.com/india/1819957/coronavirus-prevention-measures-dont-reach-indias-huge-informal-
economy/, accessed 18 April, 2020
11 ‘42% of labourers don’t have even a day’s worth rations left: Survey’, in The Hindu, 6 April 2020.



https://doi.org/10.6092/issn.1561-8048/10879                                                                    2
     Saurabh Bhattacharjee                                                              Italian Labour Law e-Journal
                                                                                       Special Issue 1, Vol. 13 (2020)
                                                                          Covid-19 and Labour Law. A Global Review
                                                                                            Section: National Reports




left with them12. Indeed, the hunger and distress caused by the lockdown has reportedly
caused more than 300 deaths across the country13. Some workers have also been forced
into bonded debt as a result.14 Beyond the immediate distress, it is also estimated that the
long-term impact of the lockdown could push more than 100 million Indians below the
World Bank-determined poverty line15.


3. Relief Measures for Workers in Response to the Lockdown

    In recognition of the potentially catastrophic impact of the COVID-19 lockdown on the
livelihood of workers, both the central government and the state governments have
announced several measures for wage security and social security for workers.


3.1 Directive on Payment of Wages by Employers

    Initially, the Union Ministry of Labour and Employment issued an Advisory that called
upon employers to refrain from termination of employment or reduction in wages during
the COVID-19 lockdown16. This was followed by a mandatory Order issued by the Union
Ministry of Home Affairs under the DMA on 29 March, 2020 that directed all employers
to pay wages at the due date, without any deduction for the period of the closure due to the
lockdown17.
    The Central Government has also increased the wages for workers under its Mahatma
Gandhi National Rural Employment Guarantee Scheme (MGNREGS), which offers up to
100 days of unskilled manual work per year on public works projects. However, critics have
highlighted that routine annual increase on the wages have been repackaged as COVID-19
relief18.

12  Rajendran Narayanan, ‘What Migrant Workers Are Revealing In SOS Calls To Us’ 12 April 2020,
https://www.ndtv.com/opinion/what-migrant-workers-are-revealing-in-sos-calls-to-us-2209556 , accessed
18 April, 2020
13 Shivam Vij, ‘More than 300 Indians have died of the coronavirus, and nearly 200 of the lockdown’ The Print, 13 April

2020, https://theprint.in/opinion/more-than-300-indians-have-died-of-the-coronavirus-and-nearly-200-of-
the-lockdown/400714/, accessed 20 April, 2020
14 Anuradha Nagaraj and Roli Srivastava, ‘No work, new debt: virus creates perfect storm for slavery in India’ Thomson

Reuters Foundation News, 13 April 2020, https://news.trust.org/item/20200413065535-edq5n/, accessed 20
April, 2020
15 Sai Manish, ‘Coronavirus impact: Over 100 million Indians could fall below poverty line’ 17 April 2020,

https://www.business-standard.com/article/economy-policy/coronavirus-impact-over-100-million-indians-
could-fall-below-poverty-line-120041700906_1.html accessed 20 April, 2020
16 Ministry of Labour and Employment, D.O. No.M-11011/08/2020 -Media, 20 March 2020,

https://labour.gov.in/sites/default/files/Central_Government_Update.pdf , accessed 19 April, 2020.
17 Ministry of Home Affairs, No. 40-3/2020-DM-I (A), 29 March 2020,

https://www.mha.gov.in/sites/default/files/MHA%20Order%20restricting%20movement%20of%20migra
nts%20and%20strict%20enforement%20of%20lockdown%20measures%20-%2029.03.2020_0.pdf, accessed
19 April, 2020.
18 Nidhi Jacob, Utsav H Gagwani & Shreya Khaitan, ‘India’s COVID19 Financial Package: Rehashed Existing

Programmes, Little New Spending’ IndiaSpend, 27 March 2020, https://www.indiaspend.com/indias-covid19-
financial-package-rehashed-existing-programmes-little-new-spending/ , accessed 20 April, 2020.

https://doi.org/10.6092/issn.1561-8048/10879                                                                         3
     Saurabh Bhattacharjee                                                            Italian Labour Law e-Journal
                                                                                     Special Issue 1, Vol. 13 (2020)
                                                                        Covid-19 and Labour Law. A Global Review
                                                                                          Section: National Reports




3.2 Relief under Provident Fund Scheme

   The Central Government has also announced that it would pay the provident fund
contribution (twenty-four per cent of their wages) under the Employees’ Provident Funds
& Misc. Provisions Act, 1952 for three months for establishments having one hundred or
fewer employees and in which at least ninety per cent the employees draw monthly wages
less than Rs.1500019. The Employees’ Provident Fund Organisation (EPFO), the body
administering the Employees’ Provident Fund (EPF) Scheme, has further clarified that this
benefit would be available only for employees for whom contributions have been received
for any period during the last six months20.
   The Central Government has also allowed non-refundable withdrawal of an amount up
to a maximum of three months’ wages or three-fourth of the standing amount in an
employee’s Provident Fund Account, whichever is less21. The EPFO has declared that it
has already processed about 1.37 lakh claims disbursing an amount of Rs. 279.65 crores22
under this facility23.


3.3 Sector-specific Cash Transfers to Workers

   In addition to introducing new measures under the Provident Fund scheme, cash
transfers directed at specific categories of workers have been announced. The Central
Ministry of Labour and Employment has issued an Advisory to the state governments
directing them to transfer cash to registered construction workers out of the funds
accumulated under the Welfare Fund set-up by the Building and Other Construction
Workers Act, 1996 (BOCWA)24. Accordingly, many states have announced cash transfers
for construction workers registered under the BOCWA25. Various state governments have
also announced cash transfer measures for the support of registered street vendors,


19 Ministry of Labour and Employment, ‘EPFO puts in place Online Mechanism to credit EPF and EPS Accounts of
Subscribers       as       per     PM       Gareeb      Kalyan         Yojna’          11         April       2020,
https://pib.gov.in/newsite/PrintRelease.aspx?relid=201178, accessed 20 April, 2020
20 EPFO, ‘A Scheme to implement the PMGKY package for credit of employee’s & employer’s share of EPF & EPS

contributions      (24%        of   wages)    for     three       months        by        Govt.        of     India’
https://www.epfindia.gov.in/site_docs/PDFs/Circulars/Y2020-2021/SchemeCOVID_24_10042020.pdf
21 Notification GSR 225(E), 27 March, 2020,

https://labour.gov.in/sites/default/files/EPF_scheme%2C1952.pdf, accessed 20 April, 2020.
22 Lakh and crore are units in the Indian numbering system. A lakh is equal to one hundred thousand and a

crore is equal to ten million.
23   EPFO, ‘EPFO settles 1.37 lakh COVID-19 claims in less than 10 days’ 9 April 2020,
https://www.epfindia.gov.in/site_docs/PDFs/Updates/PR_COVID19advance.pdf, accessed 20 April, 2020.
24 Ministry of Labour and Employment, ‘Labour Ministry Issues Advisory to all States/UTs to use Cess fund for

Welfare of Construction Workers’ 24 March 2020, https://pib.gov.in/PressReleasePage.aspx?PRID=1607911,
accessed 19 April, 2020.
25 For a compilation of measures announced by different states, see ‘Interventions of States in Response to COVID-

19 Outbreak’ Dvara Research, 25 March 2020,
https://www.dvara.com/research/resources/notes/interventions-of-states-in-response-to-covid-19-
outbreak/, accessed 20 April, 2020.

https://doi.org/10.6092/issn.1561-8048/10879                                                                       4
     Saurabh Bhattacharjee                                                                Italian Labour Law e-Journal
                                                                                         Special Issue 1, Vol. 13 (2020)
                                                                            Covid-19 and Labour Law. A Global Review
                                                                                              Section: National Reports




registered-auto-drivers, registered daily-wage workers, and for self-employed workers
registered with Shops and Establishment Welfare Boards26.


3.4 Insurance and Ex Gratia Compensation for Health Workers and Workers in
Essential Service

   The other major category of relief announced is individual insurance and compensation
announced for health workers and frontline workers engaged in essential services. The
Central Government has announced an ‘accident insurance cover of Rs 50 lakh per health
worker.’27 Similar measures announced by State governments have supplemented this
insurance cover. For example, the West Bengal Government has announced an additional
insurance for care workers another 10 lakhs28. The state government of Assam has
announced an insurance cover of Rs. 50 lakhs for police personnel and all other frontline
officials of departments directly engaged in the fight against Coronavirus29. The Union
Government has also approved ex-gratia monetary compensation to workers involved in
the purchase and transfer of food grains, in case of death due to COVID-19 infection30.


4. Limits of a Piecemeal Approach: Massive Gaps in Protection

    The welfare measures announced for the benefit of workers may appear substantial at
first glance. However, a scrutiny of the reach of the announced measures shows that they
barely cover a fraction of the workforce in this country.
    For example, the EPF scheme ordinarily applies only to establishments with at least 20
workers. Given that less than 10% of the establishments in India hire more than 10
employees31, an overwhelming majority of establishments and employees are outside the
ambit of the EPF scheme. Further, the reach of such cash transfers to registered informal
workers is massively compromised by the low extent of registration of workers with
various statutory welfare boards. A survey of construction workers by a non-governmental
26 Dvara Research, ibid.
27 Ministry of Finance, ‘Finance Minister announces Rs 1.70 Lakh Crore relief package under Pradhan Mantri Garib
Kalyan Yojana for the poor to help them fight the battle against Corona Virus’ 26 March 2020,
https://pib.gov.in/PressReleasePage.aspx?PRID=1608345, accessed 18 April, 2020.
28 Namarata Acharya & Arup Roy Chowdhury, ‘West Bengal stayed one jump ahead of Centre on coronavirus detection,

in Business Standard’ 3 April 2020.
29 Press Trust of India, ‘Coronavirus in Assam: Police personnel, govt's frontline staff to get Rs 50 lakh insurance each’

Business Today, 6 April 2020, https://www.businesstoday.in/current/economy-politics/coronavirus-in-
assam-police-personnel-govt-frontline-staff-to-get-rs-50-lakh-insurance/story/400230.html, accessed 19 April
2020.
30 Ministry of Consumer Affairs, ‘Food & Public Distribution, Government approves ex-gratia compensation

for more than one lakh FCI employees in case of death due to COVID-19’ 10 April 2020,
https://prsindia.org/files/covid19/notifications/2419.IND_DFPD%20FCI%20Compensation%20to%20W
orkers_April%2010.pdf, accessed 20 April, 2020.
31 Ministry of Statistics & Programme Implementation, ‘Abstract of the Sixth Economic Census 2013-2014’

http://www.icssrdataservice.in/datarepository/index.php/catalog/146/study-description, accessed 19 April,
2020.

https://doi.org/10.6092/issn.1561-8048/10879                                                                            5
     Saurabh Bhattacharjee                                                               Italian Labour Law e-Journal
                                                                                        Special Issue 1, Vol. 13 (2020)
                                                                           Covid-19 and Labour Law. A Global Review
                                                                                             Section: National Reports




organisation found that 94% of the workers were not registered under the BOCWA32. Only
around 6% of the informal workers are estimated to have registered under the Unorganised
Workers Social Security Act 200833. Consequently, state-capacity to deliver the cash transfer
to affected workers is severely constrained. The effects of the limited state-capacity has
been exacerbated by the piece-meal sector-specific approach that only covers a few select
categories of informal work. As a result, the vast majority of workers in India remain
untouched by relief measures announced.
   Most significantly, it appears that the Order of the Ministry of Home Affairs issued
under the DMA directing employers to pay wages without any deduction for the period of
the lockdown is being widely flouted. News reports from across the country indicate that
workers, especially contract workers, have either not been paid at all or been paid only a
part of the wages34. On the other side, the financial crunch caused by the lockdown has
affected the ability of the employers to pay the requisite wages35. The All India
Manufacturers Organisation (AIMO), an industry body representing some 100,000 small
manufacturers, claim that most of their members would be unable to pay wages in the
absence of support from the government36. Indeed, a petition has also been filed in the
Supreme Court challenging the validity of the order directing full payment of wages during
the lockdown37. In the absence of governmental support for businesses, wage security for
workers would remain severely imperilled.
   There has also been a palpable lack of dialogue and consultation with trade unions and
civil society organisations representing informal workers. Even though there have been
reports of engagement with business chambers38, the relief measures have largely been
announced without any meaningful consultative process with the affected workers.
   The welfare measures announced for workers as part of COVID-19, therefore, are
inadequate. The piece-meal approach to labour welfare fails to address the protection needs
for vast sections of the labour force adversely affected by the COVID-19 lockdown. In as
much as the right to livelihood and social security has been recognised as a fundamental

32 Seema Chishti, ‘Survey shows 42% have no ration left for the day, let alone duration of lockdown’ in Indian Express, 6
April 2020.
33 Kathyayini Chamaraj, Will the SS Code ensure universal social security?, India Together, 9 September 2019,

http://www.indiatogether.org/universal-ss-human-rights, accessed 19 April, 2020.
34 Vijayta Lalwani, ‘‘We are trapped’: Hunger is on the rise in Haryana’s industrial belt’ Scroll.in, 12 April 2020,

https://scroll.in/article/958838/we-are-trapped-hunger-is-on-the-rise-in-haryanas-industrial-belt, accessed 20
April, 2020; Niharika Sharma, ‘Coronavirus crisis triggers layoffs, pay cuts, and hiring freeze across Indian industries’
Quartz India, 17 April 2020, https://qz.com/india/1837566/coronavirus-triggers-layoffs-across-indian-it-
startup-aviation/, accessed 19 April, 2020.
35 Harsha Raj Gatty, ‘B’luru lockdown: Garment workers face uncertainty, factory owners unwilling to pay wages’ Citizen

Matters, 3 April 2020,           https://bengaluru.citizenmatters.in/bengaluru-garment-factory-workers-wages-
coronavirus-lockdown-union-gatwu-43925, accessed 16 April, 2020.
36 ‘Coronavirus: Small businesses in India struggle to pay wages amid lockdown’ India Today, 8 April 2020,

https://www.indiatoday.in/business/story/coronavirus-small-businesses-in-india-struggle-to-pay-wages-
amid-lockdown-1664610-2020-04-08, accessed 16 April, 2020.
37 Sanya Talwar, ‘Plea In SC Challenges Validity Of Government Order Directing 100% Payment Of Wages During

Lockdown By Commercial Establishments’ Livelaw.in, 18 April 2020, https://www.livelaw.in/top-stories/plea-in-
sc-challenges-validity-of-government-order-directing-100-payment-of-wages-during-lockdown-by-
commercial-establishments-155433, accessed 20 April, 2020.
38 Chitra Narayanan, Covid-19 impact: PM must consult with trade unions for workers’ revival package, says labour

economist, in The Hindu Business Line, 8 April 2020.

https://doi.org/10.6092/issn.1561-8048/10879                                                                           6
     Saurabh Bhattacharjee                                                    Italian Labour Law e-Journal
                                                                             Special Issue 1, Vol. 13 (2020)
                                                                Covid-19 and Labour Law. A Global Review
                                                                                  Section: National Reports




right in Indian constitutional law39, more substantive and universalised social security
measures, formulated through a participatory process, are the need of the hour.




Copyright © 2020 Saurabh Bhattacharjee. This article is released under a Creative
Commons Attribution 4.0 International License




39Calcutta Electricity Supply Corporation (India) Ltd. v. Subhash Chandra Bose AIR 1992 SC 573; Regional
Director, ESIC v Francis D’Costa AIR 1995 SC 1811.

https://doi.org/10.6092/issn.1561-8048/10879                                                               7
