Introduction
A milestone was achieved in the sphere of labour jurisprudence in India, with the government finally deciding to enforce the four newly legislated Labour Codes, after a hiatus of nearly 5 years. The Labour Codes, rationalising 29 labour laws, aim to simplify and consolidate the plethora of often intersecting Labour Laws of India. One of these Codes, the Industrial Relations Code, 2020 (hereinafter ‘IRC’), subsumes three fundamental Labour Legislations: the Industrial Disputes Act, the Trade Unions Act, and the Industrial Employment (Standing Orders) Act. Though glaring reforms have been made with respect to many provisions formerly present in these Acts, one noticeable aspect is the continuity of Section 9A of the Industrial Disputes Act, 1947 (hereinafter “IDA“), which deals with changes in the condition of service, now falling under Section 40 of the IRC.
This article argues that the legislature missed a crucial opportunity to clarify statutory protections against unilateral shift changes, thereby exposing workers to managerial arbitrariness. It begins by analysing Section 9A of IDA and examines how it does not cover shift changes in the majority of establishments, exposing workers to arbitrary and unfettered discretion. It then analyses the case of Pfizer Private Ltd. v. Workmen, which provides a potential stopgap mechanism in this aspect. It concludes by offering suggestions, including certain omissions in the statutory framework as well as addition of a new Section 40(2).
Section 9A: A glaring grey spot with respect to Shift changes
Section 9A of IDA addresses unilateral changes to working conditions. It limits the employer’s power by requiring 21 days’ notice and specifying the manner in which the proposed change is to take effect. This provision is to be read together with the Fourth Schedule of IDA, which provides for eleven such conditions for which a notice has to be given. Courts have interpreted these conditions as exhaustive, though, by interpretation, some of these eleven may include additional conditions. Thus, a three-pronged test must be satisfied for Section 9A to come into action. Firstly, there must be a change in the condition of service. Secondly, it must be a change that adversely affects the worker. Thirdly, it must be a condition prescribed under the Fourth Schedule of IDA.
A glance at the fourth schedule reveals that it includes broad areas. The focus of this article is specifically on changes to shift timings, which could be dealt with under items 4 (Hours of work and rest intervals) and 6 (Starting, alteration or discontinuance of shift working otherwise than in accordance with standing orders) of the schedule. However, the judicial interpretations and other provisions of IRC reveal a vacuum in this context.
The most obvious recourse in these cases would be to rely on item 6, which protects against the starting, alteration or discontinuance of a work shift, provided it is not included in the standing order. These standing orders are statutorily imposed terms regarding conditions of employment that prevail over any employment contract once certified by a certifying officer. However, a reference to the Industrial Employment (Standing Orders) Act, 1946, showcases that the concept of standing order is only to such industries wherein a hundred or more workmen are either employed, or were employed on any day of the preceding twelve months. The IRC, which subsumes the Standing Orders Act, further raises the bar by extending this stipulation to establishments with 300 workers under Section 28. An analysis of the industrial structure in our country reveals a grim picture, with the average number of workers per factory as of the year surveyed standing at 73, as per the Annual Survey of Industries, 2023-2024. Furthermore, MSMEs are the second-largest employer in the country, after agriculture, and it is next to impossible for these industries to reach the 300-worker threshold for item 6 to apply, leaving a large number of workers outside the statutory ambit.
Another recourse envisaged then is item 4 of the schedule, which deals with Hours of work and could address changes in shifts. However, the Court has marked a clear demarcation between ‘Hours of Work’ and ‘Periods of Work’. The Court held that ‘Period of Work’ refers to the timings on which the workman is required to be present at the premises of the establishment, and the term ‘Hours of Work’ is defined as the total hours for which the workman is required to work. These two terms cannot be used interchangeably with the expression with the same. Hence, a change in ‘Period of Work’ will not fall within item 4 of the Fourth Schedule, thereby closing the door to the workmen approaching the Court under this avenue.
The purpose of providing twenty-one days’ notice is to engage in collective bargaining against the changes proposed to the conditions of service that adversely affect the workers. In the absence of a standing order, these workmen do not have statutorily imposed terms that provide certainty and uniformity in working conditions. In this context, the provisions that allow collective bargaining become even more essential for these workers. However, it is clear by interpretation of the Statute that in the absence of Standing Orders, a change in shift timings for the majority of establishments does not fall under the legislative protections envisaged in Section 9A read with the Fourth Schedule. This creates a regulatory vacuum especially for smaller establishments and MSMEs which do not fall under the ambit of Standing Orders. This leaves the employer free to make an arbitrary change in this condition without due process and without providing any time period for bargaining. Shift timings directly affect the livelihoods and daily working conditions of employees and can damage their work-life balance.
The Pfizer case: A Potential Stopgap Mechanism
In the absence of any remedy provided either by IRC or IDA, the case of Pfizer Private Ltd. v. Workmen provides a potential stopgap mechanism for the workers to approach the courts. In this case, the employer sought to arbitrarily and unilaterally change the shift timings of the worker by imposing a three-shift system, which also included night shifts. Here, the Court refused the argument of the appellant regarding reasonableness due to the presence of standing orders which prescribed the said three-shift system. However, the Court maintained that a general standard of reasonableness is applicable for assessing the changes the employer makes to shift timing in absence of Standing Orders. This move provided a significant safeguard even in the context of a national emergency, where expedient manufacturing of goods was considered quintessential. By observing that employers cannot exercise unfettered discretion in changing shift timings, the Court opened the way for challenging such changes on the grounds of reasonableness.
Therefore, in the absence of an avenue to utilise the collective bargaining power of the workers in the context of changes brought about by changes in shift timings, the judgment posed a restriction on the unfettered discretion of the employer by putting a standard of reasonableness on such modifications. The same was discussed and re-affirmed in subsequent cases as well. In Association of Planters of Kerala v. State of Kerala, the Court while discussing the Pfizer case upheld the validity of increased paid holidays for industrial workers from four to nine, applying a broader principle that managerial powers which affect labour conditions should conform to standards of industrial fairness and reasonableness and such managerial authority can be subject to judicial review.
Suggestions and Reforms
There are several negative impacts of working shift changes on employees. The changes in work timings are primarily driven by the employer’s decision rather than the workers’ preference. This has led to a host of problems for the workers, including but not limited to the uncertainty of workers’ income and shift timings, difficulties in fulfilling children’s educational needs and the numerous difficulties associated with doing multiple jobs, which is a typical occurrence in unorganised sectors of the economy. Workers who are at risk of arbitrary changes in shift timings are also more prone to adverse health effects. Irregular working hours are believed to be the cause of sleep disruption, higher risks of fatigue and worse mental health. As a result, workers are less productive, and among them, worker satisfaction is lower.
In light of the grim conditions faced by Indian workers, it is essential to implement reforms to address these issues. The European Union addressed these same challenges with Directive (EU) 2019/1152, which provided a framework for EU member states to provide for transparent and predictable working conditions. The directive’s main goal is to make work schedules more predictable as part of the respectable work ethic that Europeans uphold, as opposed to permitting schedules to be set arbitrarily by managers. Notably, two member states, France and Ireland, have adopted this directive into their respective labour regimes. This directive obligates employers to provide information to their employees about the reference hours, days of work and reasonable notice before any assignment. Strong safeguards are given to workers, as seen in Article 10 of the Directive, which protects the right of workers to refuse an assignment without adverse consequences when work is demanded outside of reference hours with no reasonable notice.
In the Indian context, the principles of the EU’s directive can serve as a reference for a focused legislative agenda which solves the issues faced by Indian workers. Firstly, the IRC should be amended to mandate employers to provide written information about the reference hours and days of work, and to provide a minimum of reasonable notice about any change in shift timings, to ensure certainty in the minds of Indian workers. This can be easily achieved by just omitting the words “otherwise than in accordance with standing orders” as prescribed in item 6 of the fourth schedule.
Secondly, a new clause, Section 40(2) needs to be added in the IRC. The said provision should prescribe that changes made without adhering to Sec. 40(1) shall not be binding upon the workers, and also entitle the workers to such compensatory benefits as may be prescribed under the rules. In doing so, the Indian labour regime would move away from the mix of fragmented standing orders and individual contracts to a more coherent and comprehensive system that accommodates the needs of Indian workers and the fluctuating needs of the Indian industry.
Author Bio: Japmeet S.B. and Vikram Kalugotla are fourth-year B.A. LL.B. (Hons.) students at NUALS, Kochi. Their research interests include constitutional law, labour and employment law, corporate and company law, insolvency and bankruptcy law, regulatory governance, and technology, media, and telecommunications (TMT) law.
[Editorial Note: This piece was edited by Ira Kamat and published by Vedang Chouhan from the student editorial board.]