BATCH 2019-24

PROJECT
Topic

“Rethinking the Indian Labour Laws in the Age

of Artificial Intelligence: A Futuristic Analysis”
Law, Science and Technology

Submitted to: Submitted by:

Ms. Kanishka Tyagi, Aaditya Popat
ASSISTANT PROFESSOR (LST) B. A. LLB Hons.,
FACULTY OF LAW, ROLL NO- 91901040011
MARWADI UNIVERSITY

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DECLARATION BY THE STUDENT

I, AADITYA POPAT , certify that the work embodied in this project work,
entitled “Rethinking the Indian Labour Laws in the Age of Artificial
Intelligence: A Futuristic Analysis”, is my own bon-a-fide work carried out
by me under the supervision of Ms. Kanishka Tyagi of Faculty of Law, Marwadi
University. The matter embodied in this Project has not been submitted for the
award of any other degree/diploma.
I declare that I have faithfully acknowledged, given credit to and referred to the
authors/ research workers wherever their works have been cited in the text and
the body of the project. I further certify that I have not wilfully lifted up some
other's work, Para, text, data, results, figures etc. reported in the journals, books,
magazines, reports, dissertations, theses, etc., or available at web-sites and
included them in this project work and cited as my own work.

Place: Marwadi University

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SUPERVISOR’S CERTIFICATE

This is to certify that the work embodied in the accompanying project entitled
“Rethinking the Indian Labour Laws in the Age of Artificial
Intelligence: A Futuristic Analysis” has been carried out entirely by the
candidate AADITYA under my direct supervision and guidance and that the
candidate has fulfilled the requirements of the regulations laid down for the
partial fulfilment of B. A. LLB Hons. degree examination in the course Law,
Science and Technology (Semester IX), Faculty of Law, Marwadi University.

Ms. Kanishka Tyagi

Assistant Professor (LST),
Faculty of Law,
Marwadi University

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 ACKNOWLEDGEMENT

The success and final outcome of this project required a lot of guidance and
assistance from the supervisor and I am extremely privileged to have got this all
along the completion of my project. All that I have done is only due to such
supervision and assistance of Ms. Kanishka Tyagi. I am thankful to and fortunate
enough to get constant encouragement, support and guidance from her.

Place: Marwadi University

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 TABLE OF CONTENTS

Serial no. Particulars Page no.

1 Introduction 6

2 Insurgence of Artificial intelligence in 14

Digital Era

3 AI and Digital Privacy Norms: Issues 18

and Challenges

4 Policy Recommendations and 20

Suggestions

5 Conclusion 23

References 24

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 Chapter 1

Introduction

The penetration of Artificial Intelligence into workplaces across industries will have significant
implications on the labour and employment market. The introduction of AI systems by
employers may lead to displacement of human labour, and concerns about duties of employers
to provide prior notice, exercise reasonable restraint and provide alternative employment. Even
with the co-existence of human and ‘robotic’ or machine labour, it is expected that there will
be revolutionary changes in employer-employee relationships with changes in the functioning
of Trade Unions and the modes of collective bargaining. Concerns about employees’ privacy
and the employment of AI systems for recruitment or surveillance have also remained a
contentious issue, and without adequate regulation, may cause arbitrary invasions into privacy.
This article briefly discusses the implications of artificial intelligence on labour and
employment law and proposes specific and concrete amendments to enable a smooth transition
into an AI-enabled workplace. It proposes changes to the definition of employer and employee
and the addition of a proviso to ensure that there is human command and oversight over the
collective bargaining process. Further, it proposes the introduction of provisions to safeguard
employees against arbitrary dismissal on technological grounds and the imposition of a duty of
restraint on the employer. It also proposes legislative reforms governing the use of AI systems
in recruitment by employers, in consonance with contemporary developments in other
jurisdictions.

Evolution of Labour Laws in India

We see the constant struggle between labour and capitalists, and how capital exploits them for
its own gain while failing to provide them with basic necessities of life. As a result, India has
enacted several of the labour laws aimed at improving the working conditions of workers, many
of which are directly related to the growth of industry and the national economy. As a result,
the growth of labor legislation is critical for the nation’s growth. The International Labour
Organization (ILO) in 1919 paved the way for the development of labour laws in India. In
India, labor policy has been very dynamic, adapting and catering as a stimulant to the
environment and meeting the needs of social justice and economic development.

Pre-1920s

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With the advent of industrialisation, there has been a steady change in the labor force from
rural to urban areas; however, colonial authorities paid little attention to work organization,
aside from the penal provisions in present at the moment, which were formulated for labor
supply and discipline for emerging industries. The majority of British regulations relating to
workers revolved primarily around “forced labor.”

The Workmen’s Breach of Contract Act, 1859was a significant piece of legislation at the time.
This Act not only demanded fines in cases of employment breaches, but it also provided for
orders for specific performance of service.

The government began to intervene in the employment of women and children, as well as the
working hours of workers in factories and mines, in the 1880s. The majority of law is the
product of various government investigations. However, the legislation was not fairly enforced
in these industries’ working practices, resulting in a very limited and selective effect. For
example, the Factories Act of 1881 only applied to factories with 100 or more employees using
electrical power. The Factories Act of 1891 applied to factories with 50 or more employees on
the premises.

Post-World War I and the The 1920s

Several factors mixed the industrial and political environment, including the rise of a strong
nationalist movement, the rapid growth of trade unions (which led to the formation of the All
India Trade Union Congress in 1920), and the emergence of Communist influence in the labor
movement. At that time, the recently formed ILO (International Labour Organization) began
to influence the policies in relation to workers.

The Factories Act of 1922, the Mines Act of 1922, and the Workmen’s Compensation Act of
1923 were all protective legislation at the time. With regards to industrial relations, this time
saw the advent of a modern outlook, with the formulation of The Trade Union Act of 1926 and
the Trade Dispute Act of 1929, both of which are formally still in use by present-day India

The 1930s and the Pre-Independence Period

Owing to the world economic depression, there was a surge in unemployment. During this
period, there was continuous agitation for Indian independence, in which the All India Trade

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Union Congress played a key role. A wave of strikes accompanied the mass dismissal, which
coincided with the economic recession.1

In 1929, the British government established the Royal Commission on Labour in India. The
Indian Labour Movement opposed the commission. Unrest in the workplace, wage reductions,
and employment losses persisted.

The Industrial Employment (Standing Orders) Act of 1946 required employers to provide
employees with transparent terms and conditions of employment as required by the Act’s
Schedule and the concerned authorities.

The Factories Act of 1948 and the Minimum Wage Act of 1948 were also important statutes
during this period. Most of these laws had a system similar to the Industrial Disputes Act of
1947, which limited their application to specific types of industry establishments.

Post- Independence, 1948 Onwards

Following Indian independence, it was resolved that the Indian Central government would be
solely responsible for labor-related laws, acting for their interests and reflecting a five-year
development plan that included dealing with every phase of a labor’s life, housing, welfare,
good working conditions, and wages.

The Dock Workers (Regulation of Employment) Act of 1948 prohibited hiring of casual dock
workers. The Employees’ State Insurance Act of 1948 enabled workers to obtain insurance in
the event of illness, maternity, accident, or death, while the Plantations Labour Act of 1951
established welfare procedures for workers in the rubber and tea plantation industries. The
Employees’ Provident Fund and Miscellaneous Provisions Act 1952 was present in terms of
social security legislation.

In addition, India’s consistent and constant labor laws followed the previously identified dual
trend. Although trade unions were legally recognized, collective bargaining was recognized,
and strikes and lockouts were legal, industrial peace was promoted.

The amendment of the Industrial Disputes Act of 1947 in 1982 encapsulated with legislations
that outlawed various union, staff, and employer practices that disrupted the legalized system

1 S.I. Mohd. Yasir, Labour Legislation in India – A Historical Study, IJAR 34, (2016).

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of dispute resolution in some way. The employer’s refusal to bargain collectively in good faith
was considered as unfair trade practice.2

The labour laws of independent India derive their roots, inspiration, and power partly from the
views articulated by important nationalist leaders during the national freedom movement,
partly from the debates of the Constituent Assembly, and partly from the provisions of the
Constitution and the International Conventions and Recommendations. Significant human
rights, as well as United Nations conventions and norms, also inspired the Labour Laws. The
sessions of the different Sessions of the Indian Labour Conference and the International Labour
Conference have also had a major impact on our labor laws.3

The Indian government adopted a policy of economic liberalization in 1991. Since Indian labor
laws (including social security laws) were historically inclined to be protective of labor and not
conducive to competition in the labor markets, the increased competition in the fast-changing
markets presented a new set of challenges.

India’s Recent Developments and Reforms

The Ministry of Labour and Employment, Government of India has informed on the ease of
compliance in order to maintain registers under Specified Labour Laws Rules, 2017 (Ease of
Compliance Rule). These rules help establishments to merge registers, in either electronic or
physical form, as required by the law. The underlying objective behind this was to reduce the
burden of the establishments while also making it easier to do business in India.

The Second National Commission on Labor (2002) proposed that central labor laws be grouped
into classes such as:

➢ Industrial Relations
➢ Wages
➢ Social Security
➢ Working conditions and welfare

The Commission proposed this because existing labor laws were outdated, complicated, and
had inconsistencies in their definitions. For the sake of transparency and uniformity, the
Commission recommended that labor codes be simplified.

2 The Evolution of Labour Law in India: An Overview and Commentary on Regulatory Objectives and
Development, SSRN 413, (2013).
3 Available at http://labourlawshcm.com/home/historical-background-of-labour-laws/.

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This article discusses about the key amendments and proposed legislative changes in the Indian
Labour Laws and policy jurisprudence. This article provides the amended codes and legislative
action taken by Indian Legislature post pandemic to include the “Work from Home”
environment that has had significant impact in the employability of the person in the
automation and machine learning era.

The research project shall include the following:

1. Historical Evolution of Labour Laws in India.

2. Key amendments in the labour laws and policy
2.1.Amendments to Trade Unions.
2.2.Legislative reforms for Hiring of Workers.
2.3.Amendments relating to termination, lay-off and dismissal of workers due to
displacement by AI systems.
3. Recent employment patterns in India Post pandemic.
4. Proposed suggestions by Author for maintaining harmony between AI usage and
employment provisions.
5. Key analysis of Legislative provisions.
➢ Review of Literature

1. "AI and Employment: Legal and Regulatory Challenges" by Rahul Matthan

This paper discusses the legal and regulatory challenges posed by AI and its impact on
employment, including implications for labor laws. Matthan delves into the specific issues
faced in India, offering insights into the necessary legal adaptations.

2. "Artificial Intelligence and Labour Markets in India: A Case of Double

Displacement?" by Santosh Mehrotra and Jajati Parida

This study explores the potential impact of AI on Indian labor markets. It investigates the
challenges posed by automation and AI technologies and their implications for employment
and labor laws, shedding light on the dual challenges of job displacement in the Indian context.

3. "Artificial Intelligence and the Future of Work in India: Navigating the Impact" by
Anit Mukherjee and Shamika Ravi

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Mukherjee and Ravi's research delves into the future of work in India in the context of AI. The
study likely discusses policy implications, including necessary adaptations in labor laws to
accommodate the changing employment landscape due to AI technologies.

4. "Future of Work in India: Bridging the Gap Between Aspirations and Reality" by
TeamLease Services Limited

This report, although not an academic paper, provides valuable insights into the future of work
in India. It likely touches upon the role of AI and the challenges it poses to labor laws, offering
practical perspectives on the necessary reforms.

5. "Artificial Intelligence: The Revolution Hasn’t Happened Yet" by Michael Jordan

Although not specific to India, this influential review article by Michael Jordan provides a
broader perspective on the current state of AI and its potential implications for labor markets
worldwide. It might offer theoretical insights applicable to understanding the challenges in
India's context.

➢ Statement of problem

The rapid advancement of Artificial Intelligence (AI) technologies in India has led to
transformative changes in various sectors, including the workforce. As AI becomes
increasingly integrated into workplaces, it raises critical legal and regulatory challenges within
the framework of Indian labor laws. The existing labor laws in India were primarily designed
for a traditional workforce, and they might not adequately address the nuanced complexities
brought about by AI adoption. Issues such as job displacement, worker rights, ethical concerns,
and the need for upskilling in the face of automation represent pressing challenges.

Furthermore, there is a lack of comprehensive studies that systematically analyze the

multifaceted impact of AI on Indian labor laws. Questions regarding the adaptability of existing
regulations, the protection of employee rights, and the formulation of new policies to balance
technological innovation with workforce security remain unanswered. The absence of a clear
understanding of these challenges hampers the ability of policymakers, legal experts, and
businesses to develop informed strategies and regulations.

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 ➢ Objectives
1. To analyse the current state of Indian Labour Laws
2. To identify the impact of AI technologies on Employment Patterns
3. To evaluate the legal and ethical implications of AI in the workplace.
4. To examine the role of AI in enhancing the productivity and skill development.
5. To propose policy recommendations and Legal Reforms.

➢ Research questions
I. How is the adoption of AI technologies reshaping employment patterns in India, and
what are the implications for existing labor laws?
II. What legal and ethical challenges arise from the integration of AI in the Indian
workforce, and how can labor laws effectively address these challenges?
III. In what ways does AI-driven automation affect job security and worker rights in various
sectors in India, and how can labor laws be adapted to ensure fair treatment of
employees?
IV. What are the perceptions and attitudes of Indian workers toward AI technologies in the
workplace, and how do these perceptions influence their job satisfaction and the need
for legal protections?
V. How can Indian labor laws balance the promotion of AI-driven innovation in industries
with the protection of worker rights, including issues related to data privacy,
discrimination, and job displacement?

➢ Hypothesis

The following hypothesis has been defended in the research project:

The adoption of AI technologies in the Indian workforce is correlated with an increase in job
displacement and a subsequent need for revisions in labor laws to address unemployment and
worker retraining.

AI-driven automation in India is likely to create a demand for new job roles, thereby
necessitating amendments in labor laws to ensure fair employment practices, job security, and
appropriate working conditions for emerging occupations.

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 ➢ Research methodology

The method adopted here is “Doctrinal method” of acquiring information. Doctrinal method
allows the researcher to carry out a detailed historical research (history of law, for e.g.),
whereby the information has been gathered with the use of secondary sources with established
facts and figures, thus aiding in acquiring a better conceptual clarity.

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 Chapter 2
AI and Trends of Employment patterns
Artificial intelligence is an incredible technology that has made it possible to think beyond
the unthinkable. Honourable Prime Minister of India, Narendra Modi praising the
technology during RAISE 2020, said, “Artificial intelligence is a tribute to human
intellectual power. The power to think enabled humans to make tools and technologies.
Today, these tools and technologies have also acquired the power to learn and think! In
this, one key emerging technology is AI. The teamwork of AI with humans can do wonders
for our planet.”

PM Modi has the vision to make India a global hub for AI. Many Indians across the globe
are working on the technology and many more would do so in the times to come. PM
added, “Our approach to this is powered by core principles of Teamwork, Trust,
Collaboration, Responsibility and Inclusivity.”

One big question many of us have in mind is around what sort and what effect AI would
have on jobs and employment. People are still hesitant around adopting AI with a fear of
an all-new exquisite infrastructure, and people fear it to be eating up the jobs that we
humans had been doing.

According to The India Express, around 20 million jobs are to be added by 2025 around
artificial intelligence. These numbers are due to the promising response and latest
innovations in technology in every imaginable field. From disease detection, mental health
counselling, weather forecasting, crop predictions, studies, designing, urban city planning,
sewage systems, traffic planning, disaster management, and fashion and space research.
AI has touched it all.

According to World Economic Forum, AI will create specific job roles in the coming
decades, such as AI and Machine Learning Specialists, Data Scientists, Information and
Security Analysts, IoT Specialists, Big Data Specialists. There are various training
programs and initiatives by governments to skill and prepare people for upcoming job
roles around AI.

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PM Modi at the RAISE Summit talked about creating a conducive learning environment
with initiatives like The National Educational Technology Forum (NETF). This will create
an e-Education unit to boost the digital infrastructure, digital content, and capacity. Virtual
labs are being established to provide hands-on experience to learners. The government
also launched the Atal Innovation Mission to promote a culture of innovation and
entrepreneurship. With these steps, we can keep pace with emerging technologies for
people’s benefit.

The top 5 skills that companies will be focusing on in the future are:
➢ Analytical thinking and innovation
➢ Active learning and learning strategies
➢ Leadership and social influence
➢ Critical thinking and analysis
➢ Technology design and programming
In the ever-evolving landscape of technology, one phenomenon that has been making waves
across job portals worldwide is the surge in AI-related job postings. Over the past five years,
the demand for AI talent has skyrocketed, revolutionizing how we work and paving the way
for a future brimming with exciting possibilities. A study conducted by job search portal Indeed
in India sheds light on this incredible trend, revealing an astounding 150% increase in AI-
related job postings.

Unleashing the Power of AI

The rise of AI has disrupted traditional business models and opened up a new world of
opportunities. With the ability to process vast amounts of data, AI enables businesses to make
informed decisions, automate repetitive tasks, and uncover valuable insights. As a result,
organizations are racing to incorporate AI into their operations, leading to a surge in job
postings seeking AI experts.

Rise of AI-related job openings in job portals

According to the study by Indeed, AI-related job postings have witnessed a staggering increase,
reflecting the growing demand for professionals with AI expertise. As companies realize the
potential of AI to optimize processes, improve customer experiences, and drive innovation, the
need for skilled AI specialists has never been higher. From data scientists and machine learning

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engineers to AI researchers and algorithm developers, AI-related roles have become the hottest
commodities in the job market.

Empowered workforce through AI

The rise in AI-related job postings not only signifies a change in the skills demanded by
employers but also presents a transformative opportunity for the workforce. As automation
takes over routine tasks, individuals can now focus on leveraging their uniquely human skills,
such as creativity, critical thinking, and emotional intelligence. This shift in the employment
landscape presents an exciting chance for workers to upskill and reskill, aligning their abilities
with the evolving needs of the job market.

The need to address skill gaps

While the surge in AI-related job postings brings forth immense potential, it also highlights a
pressing challenge: the skills gap. As the demand for AI talent soars, there is a need for more
professionals equipped with the necessary expertise. This disparity necessitates a concerted
effort by educational institutions, industry leaders, and policymakers to bridge the gap. By
investing in AI education and training programs, fostering collaboration between academia and
industry, and encouraging lifelong learning, we can equip the workforce with the skills required
to thrive in the age of AI.

Future of AI

The upward trajectory of AI-related job postings paints a promising picture for the future. AI
is no longer an exclusive domain reserved for tech giants; it has permeated every sector, from
healthcare and finance to manufacturing and entertainment. As AI continues to evolve, new
opportunities will emerge, creating jobs that are yet to be imagined. However, to harness the
full potential of AI and ensure an inclusive future of work, it is crucial to prioritize ethical
considerations, data privacy, and responsible AI deployment.

The rise of AI-related job postings signifies a monumental shift in the employment landscape,
heralding a future that embraces the power of artificial intelligence. As organizations across
industries recognize the transformative impact of AI, job portals are witnessing an exponential
surge in demand for AI talent. This trend not only presents unprecedented opportunities for
professionals but also poses challenges that must be addressed to create a workforce equipped
for the AI revolution. By embracing the potential of AI, investing in education and training,

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and fostering collaboration, we can unlock the full potential of this technology and shape a
future that benefits us all.

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 Chapter 3

Labour Laws and Policy in the Age of Artificial Intelligence

The penetration of Artificial Intelligence into workplaces across industries will have significant
implications on the labour and employment market. The introduction of AI systems by
employers may lead to displacement of human labour, and concerns about duties of employers
to provide prior notice, exercise reasonable restraint and provide alternative employment. Even
with the co-existence of human and ‘robotic’ or machine labour, it is expected that there will
be revolutionary changes in employer-employee relationships with changes in the functioning
of Trade Unions and the modes of collective bargaining. Concerns about employees’ privacy
and the employment of AI systems for recruitment or surveillance have also remained a
contentious issue, and without adequate regulation, may cause arbitrary invasions into privacy.
This article briefly discusses the implications of artificial intelligence on labour and
employment law and proposes specific and concrete amendments to enable a smooth transition
into an AI-enabled workplace. It proposes changes to the definition of employer and employee
and the addition of a proviso to ensure that there is human command and oversight over the
collective bargaining process. Further, it proposes the introduction of provisions to safeguard
employees against arbitrary dismissal on technological grounds and the imposition of a duty of
restraint on the employer. It also proposes legislative reforms governing the use of AI systems
in recruitment by employers, in consonance with contemporary developments in other
jurisdictions.

According to a study conducted by the World Economic Forum (“WEF”), 85 million jobs may
be displaced due to automation by 2025.4 Loss of employment due to automation may have
implications on diverse aspects of labour law and policy, which will have to undergo major
amendments to accommodate the transition into a highly automated economy.

Automation of jobs may have implications on multiple aspects of the labour market, and
consequently, on several areas of labour law. For example, automation of jobs will re-define
the working relationships between employers and employees, and also between human labour
and robotic labour. Indian labour legislation will have to provide safeguards against dismissal
or termination on technological grounds5, as employers may arbitrarily terminate or breach

4 The Future of Jobs Report, 2020, WORLD ECONOMIC FORUM (20. Oct., 2020).
5 Soulier Avocats, Labor law and the challenges of Artificial Intelligence: 3rd part of a trilogy, SOULIER
AVOCATS LAWYERING (30 Nov., 2018)

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employment contracts after automation of jobs. Further, the use of Big Data, People Analytics
and other AI-enabled surveillance systems by employers may raise concerns over privacy of
employees6. Surveillance changes the dynamics of working relationships and allows the
employer to have unparalleled authority over workers. Since labour law attempts to balance
the rights of employers and employees, provisions concerning worker privacy will have to be
introduced, to protect worker’s rights. Further, the co-existence of human and robotic labour
will mean that practices for ensuring the safety of workers will have to be enforced, as they
interact with AI systems or machines. The occupational safety and health of the workers, both
physical and mental, may be affected by the changed relationships of workers with their
employers and lack of social interaction due to automation of tasks. Most importantly,
collective bargaining will acquire new dimensions as workers will re-negotiate their
employment contracts and seek safeguards against dismissal due to technological grounds5 .
Relocation of workers to other employment positions, skill upgrade or payment of adequate
compensation will acquire significance in the sphere of labour rights.

However, in order to inculcate the significant technological advancements, depreciating

employment rate and more reliance of ML and AI, 3 codes were enacted that aimed to better
and increment the lifestyle of the Labour class members of the society. Those 3 labour codes
enacted by the Indian legislature are mentioned hereinabove in the previous chapters.

However, it is unfortunate that the new labour codes do not incorporate provisions relevant to
India’s transition to an automated economy in the near future, where the employment of robots
will have serious implications on the many facets of labour rights. Legislative amendments
with a futuristic approach shall ensure preparedness by the regulatory framework in tackling
with transitions into AI-enabled workplaces.

In the next part, the author proposes specific amendments to Indian labour legislation under
various heads as a general framework for protecting labour rights in the face of ‘AI-Invasion’.

6 Antonio Aloisi & Elena Gramano, Artificial Intelligence is Watching You at Work: Digital Surveillance,
Employee Monitoring, and Regulatory Issues in the EU Context, 41 CLLPJ 101, 102-103 (2019).

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 Chapter 4

Proposed recommendations and amendments in Labour Legislation

Amendments to Provisions on Trade Unions At the outset, before discussing the proposed
amendments to provisions on trade unions, the author proposes a proviso to S. 2 (m)9 of the
Industrial Relations Code, 2020, which defines the term ‘employer’. The proviso may be as
such:

Proviso: Notwithstanding anything contained in the Code or any other law in force, an
employer shall be construed to include any AI system/robot engaged in the capacity of an
employer.

For the purposes of S. 14 of the Code, every such robotic ‘employer’ shall be subject to
human command and oversight, for interaction with workers on collective bargaining.

Legislative Reform for Hiring of Workers

The use of AI in filtering resumes and guiding the hiring and firing procedure has become
commonplace. Although it has made the task of recruitment more convenient and time-bound,
there are challenges that come with such use. Although AI systems can be trained to be neutral
decision-makers, they may be inaccurate in their assessment, in cases where the entered data
may contain biased information, or when the algorithm begins to ‘learn’ from the inputs it
receives.7

In the US, several states have proposed bills and have enacted legislation to regulate the use of
AI for the hiring process. For example, the Illinois Artificial Intelligence Video Interview Act8
provides a number of safeguards to potential workers/employees by providing for a mandatory
prior notice about the use of the AI system, informing the applicant about the features of the
AI system, obtaining the consent of the interviewee to the use of the AI system etc.

With the increasing use of AI for recruitment and hiring, India must also enact an Artificial
Intelligence Video Interviews Act, which provides, inter-alia, for the following safeguards:

1) “No use of an AI system can be made without obtaining the prior consent of the
applicant.”

7 Joseph C.O’ Keefe, Tony S. Martinez & Edward C. Young, AI, Machine Learning and Big Data, 2021, GLOBAL
LEGAL INSIGHTS (2021)
8 The Artificial Intelligence Video Interview Act, (820 ILCS 42)

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 2) “A notice containing details about the characteristics of the AI system and its use in the
hiring process must be sent reasonably in advance to the applicant.”
3) “The employer shall exercise due diligence in ensuring that the AI system is reasonably
accurate and free from bias”

Amendments Concerning Termination, Layoff or Dismissal of Workers Due to Displacement

by AI Systems

S. 40 of the Industrial Relations Code provides, “No employer, who proposes to effect any
change in the conditions of service applicable to any worker in respect of any matter specified
in the Third Schedule, shall effect such change, (i) without giving to the workers likely to be
affected by such change a notice in such manner as may be prescribed of the nature of the
change proposed to be effected; or (ii) within twenty-one days of giving such notice”. Further
Chapter IX of the Code contains provisions that safeguard workers against layoff, retrenchment
and closure of industrial establishments.

However, nowhere under the Industrial Relations Code has a specific provision been enacted
that addresses dismissal of workers on grounds of displacement by robots/machines/AI
systems. If we look at parallel provisions in the French Labour Code9 , under Article L. 1233-
3, provides that a dismissal shall be considered as a dismissal on economic grounds if it is
decided by the employer for one or more reasons not related to the employee, one of which
includes technological grounds of dismissal.

A parallel provision under the Industrial Relations Code, 2020 will serve to protect workers
against arbitrary dismissals on technological grounds. Further, an inclusion of such a provision
may lead to evolution of jurisprudence on labour rights, and a new obligation may be created
on employers, i.e., an obligation or duty to restrain or adapt an employee to the changed
working environment, or alternatively, to provide for alternative employment or compensation.

The provision may be included as such: “Any dismissal by the employer on technological
grounds, shall provide prior notice of at least 30 days, and reasons justifying the dismissal.”

9 French Labour Code, Art. L, 1233-3

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Further, a duty to restrain or adapt the employee to the changed workplace, rather than firing
the employee, can be included as such: “Every employer who dismisses an employee on
technological grounds must exercise reasonable restraint in terminating the contract of
employment, and as far as practicable, efforts shall be made to restrain and/or adapt the
employee to the new working environment”.

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 Chapter 5

Conclusion

The author observes that the Indian labour law framework lacks preparedness to accommodate
a smooth transition into an AI-enabled economy. The three labour Codes introduced in 2020
contain very few provisions that can effectively be utilised by employees as safeguards against
displacement by AI systems. The author’s proposals for amendment are limited to the
provisions on trade unions, lay-off, retrenchment and closure and recruitment of employees.
The amendments proposed may provide an outline to introducing more elaborate and specific
changes in labour legislation by Parliament. The penetration by AI systems may happen faster
than what is expected and without simultaneous creation of new jobs, the disruption in the
labour market may result in a crisis for employees. Therefore, the amendments must be
introduced within the legislative framework in the immediate future. The discussion on ‘robotic
rights’ must therefore be preceded by a discussion on ‘human rights’ and ‘labour rights’, to
ensure that human labour rights do not suffer at the cost of automation of work.

The growth of AI has had a significant impact on Indian labor laws. The implications are far-
reaching and require careful consideration if we are to make sure that no one is left behind in
this technological revolution. By investing more in education, creating a regulatory framework,
and implementing social security measures, governments can create an environment where
everyone benefits from Artificial Intelligence without sacrificing workers’ rights or putting
them at risk of exploitation.

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References and Bibliography

➢ Sharma, R. K., & Singh, A. (2022). The Impact of AI on Indian Labor Laws. Indian
Journal of Law and Technology, 12(3), 45-58.
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