Industries have consistently advocated for labour reforms in India, seeking statutory changes that would permit extended workhours. In response to these appeals, and the government’s desire to bolster competitiveness in the manufacturing sector and boost economic growth, several Indian states, particularly those with a strong presence of manufacturing companies, have initiated discussions and advancements towards enacting these reforms. This unfolding development has sparked a contentious debate within the labour landscape, shedding light on the complex interplay between industry priorities, economic factors, and the rights of workers.
This article explores India's controversial 12-hour workday proposal, highlighting its alignment with India's efforts to foster a business-friendly environment and anticipating its resilience against potential legal challenges.
At the outset, the author will critically examine the potential deviations resulting from state amendments that extend working hours beyond the provisions of the central legal framework, specifically the Factories Act, 1948 (“Factories Act”). In this context, the discussion will envision the future of these reforms, in terms of their legal acceptability, taking into account the Centre’s yet-to-be-implemented Occupational Safety, Health, and Working Conditions Code, 2020 (“OSH Code”), which also promotes extended working hours for economic considerations. In the course of these examinations, the article will delve into the rationale behind this initiative, its impact on the economy, and the potential ways forward.
I. DEVIATION FROM THE FACTORIES ACT
Post-independence, the Factories Act emerged as the cornerstone legislation governing Occupational Safety and Health ("OSH") in India, with one of its key focuses being the regulation of workhours.
Due to the concurrent nature of labour laws, states can amend the Factories Act or other Central legislations pertaining to OSH for their respective states, or even establish their own legislation within this domain. In doing so, the states must ensure that their laws are harmonised with the Central framework, failing which, the said laws are rendered vulnerable to legal challenges or invalidation, particularly if the justification for deviation is not sufficiently compelling.
Thus, it is crucial to assess whether the extension of workhours currently under consideration in several Indian states, through amendments to their respective state-level Factories Acts, aligns with the provisions and authority granted to states under the Central-level Factories Act.
A. Change of Shifts
§51 of the Factories Act states, “no adult worker shall be required or allowed to work in a factory for more than forty-eight hours in any week”, and §54 of the Factories Act states, “no adult worker shall be required or allowed to work in a factory for more than nine hours in any day”. However, the proviso to §54 of the Factories Act states, “the daily maximum specified in Section 54 may be exceeded in order to facilitate the change of shifts”.
Given the aforementioned proviso, which carves an exception for ‘daily’ but not ‘weekly’ maximums, states have found room for flexibility in surpassing daily workhours without exceeding the weekly limit. Consequently, reforms recently contemplated or put into effect, such as in Karnataka, require 12 workhours a day, distributed across 4 days per week, with the remaining 3 days designated as paid holidays. This approach effectively extends daily workhours by 3 hours while remaining compliant with the weekly limit of 48 hours.
However, the 12-hour workday in question should not come under the purview of the said proviso, which addresses situations where daily workhours may be exceeded for ‘facilitating shift changes’. The exception is provided to manage the supplementary time required for an efficacious transition and handover from one shift to another, rather than an extension of the shift duration itself.
B. Exceptional Press of Work
§65(2) of the Factories Act allows state governments to exempt workers from specific provisions of the Act, including §§51 and 54 that pertain to daily and weekly workhours, “to deal with an exceptional press of work”. §65(3)(i) of the Factories Act proceeds to clarify that any such exemption granted is subject to the condition that “the total number of hours of work in any day shall not exceed twelve”.
The recent surge in 12-hour workdays in India, as it emerges as a global manufacturing hub along with the government’s explicit goal of “increasing by a big margin the efficiency in terms of increasing the work output”, raises the question of whether this qualifies as an ‘exceptional press of work’, warranting the use of the statutory exception to extend work hours up to 12. To address this, the legislative intent of the Factories Act should be tapped into. As the primary legislation governing OSH, the workhours stipulated in the Factories Act factor in the potential risks associated with prolonged workhours, both within and outside the workplace. Therefore, exemptions ‘to deal with an exceptional press of work’ should be narrowly construed to allow flexibility in managing unforeseen and temporary surges in production, rather than enabling permanent or long-term extension of regular workhours. In this context, the manufacturing and economic development goals of the states cannot be classified as an ‘exceptional press of work’, for they represent a well-informed and enduring pursuit.
II. THE ANTICIPATED FUTURE OF LABOUR REFROMS
Indian labour laws, under the concurrent list, prioritize Parliament-made laws over conflicting state legislation per Article 254(1) of the Constitution of India (“Constitution”). However, Article 254(2) of the Constitution provides an exception: if a conflicting state law, reserved for the President's consideration, receives assent, it prevails in that state. State amendments allowing 12-hour workdays conflict with the central labour law, the Factories Act, necessitating mandatory Presidential assent for such provisions. In Kaiser-i-Hind Pvt Ltd v. National Textile Corporation, the Supreme Court emphasized that the “President be apprised of the special reason or object and purpose, for which predominance for the state law over the Central law is sought”.
In the present case, the application of mind regarding assenting to the ‘predominance of the state law over the Central law’ will be diluted. This is due to there being no such predominance in spirit. The ‘special reason or object and purpose’ for the deviation in question, i.e., economic opportunities through the realm of manufacturing, is in alignment with the Centre’s long-term vision. This vision aims to relax labour laws to foster a business-friendly environment, thus paving the way for India’s integration into the global supply chain.
To substantiate, labour relaxations being introduced in several states have primarily come in the wake of the labour code bills passed by the Parliament in 2020, which are yet to be brought into force. This has also been indicated by Tamil Nadu in justification of its amendments regarding workhours. Of the aforesaid labour codes, the relevant code for workhours is the Centre’s OSH Code, which will replace the Factories Act and expand the scope for extending workhours upon implementation. Section 25(1)(a) of the OSH Code states that “no worker shall be required or allowed to work in any establishment for more than eight hours in a day”, and Section 26(1) of the OSH Code states that “no worker shall be allowed to work in an establishment for more than six days in any one week”, thus establishing a threshold of working hours at 8 hours daily and 48 hours weekly. However, Section 127(2) of the OSH Code provides an exemption from these provisions in cases where the State Government deems it necessary in the public interest “to create more economic activities and employment opportunities”, which could potentially justify the state reforms in question.
Furthermore, states introducing extended workhours have cited their desire to develop a manufacturing base in the electronics sector, encouraged by various incentives offered by the Central Government. For instance, both Karnataka and Tamil Nadu rolled out extended workhours following lobbying by companies like Apple and Foxconn, to boost electronics production and attract further investment.
Therefore, the state reforms in question are not a standalone, tunnel-vision goal but part of a broader effort led by the Centre itself. As a result, the granting of Presidential assent, which involves evaluating the justification or necessity for deviating from the central law, may not require extensive deliberation in this particular instance. The state reforms may remain effective even if they formally diverge from the existing Central regime, as they align with the intended direction of the Centre. This alignment is expected to be implemented in the near future through the mentioned codes. Consequently, the issue of conflict is likely to become obsolete.
Despite potential Presidential approval, these state reforms may encounter constitutional challenges. In Gujarat Mazdoor Sabha v. The State of Gujarat, the Supreme Court rejected justifications for 12-hour shifts post-pandemic, citing a violation of the Right to Life under Article 21 of the Constitution. If such extended shifts are deemed a violation of fundamental rights even during economic crises, it strongly signals that similar practices for economic development in normal times are unlikely to gain legal acceptance.
III. ECONOMIC IMPLICATIONS
Proposing longer work hours, whether through state-level amendments or the impending central labour code, has been a crucial step for India to become a major manufacturing hub. Efficiency is key for India to compete globally which is allowed by way of running production with two 12-hour shifts through increased productivity and reduced transaction costs. As a result, the ability to implement extended work hours is a decisive factor in making India more attractive to global manufacturers, aligning with the government's push to promote manufacturing and diversify from competitors like China.
However, the initial belief that increased productivity will offset the costs of longer workdays may not hold over time. Workers spending long hours at work may experience diminishing marginal productivity, fatigue, and an increased risk of industrial accidents, especially as they age. The theory and empirical research and modelling of the manufacturing sector suggest that reduced workhours tend to improve productivity and performance on the job.
Furthermore, the amendments to labour laws, while aimed at creating a favourable environment for businesses and attaining economic growth, may result in jobless growth. The implication is that if longer working hours result in workers producing more, then for a given amount of output that has to be produced, fewer workers would be required. An increase in working hours could mean a reduction in employment if such a policy is institutionalised in the coming years.
While in some cases, longer working hours would increase labour productivity and output growth, it is a move that shifts the burden disproportionately onto workers. The debate on labour law amendments transcends economic considerations, delving into broader questions about societal values and progress, fairness, and the pursuit of sustainable and equitable development.
Indian labour law reforms are uncommon, yet the nation's current receptivity to workhour adjustments signifies a strong commitment to becoming a manufacturing hub. However, the decision to boost the manufacturing sector by permitting two 12-hour shifts rather than three 8-hour shifts may be myopic. Reducing shift changes and saving minimal transition time will not significantly enhance production. On the contrary, extending work hours could potentially result in decreased worker productivity and increased safety risks, which would ultimately undermine the intended goal of saving time.
If the law is intended to increase manufacturing and foster economic development, it should take a holistic approach, considering not only the overall business development but also the per capita welfare of the population. Rather than reducing the number of shifts and consequently, the workforce, increasing the number of employees should be considered to enhance production.
In the present case, the state reforms depart from the existing legal framework of the Factories Act. Although they may find a path to legitimacy through procedural channels like Presidential assent and potentially gain acceptance upon the implementation of the new OSH Code, the ongoing debate remains far from concluding and may well intensify and come to the forefront as the central laws in question are put into force.
*The author is a final year BBA. LL.B. (Hons.) student at Jindal Global Law School.