This article has been written by Sushmita Soren, pursuing the Diploma in Labour, Employment and Industrial Laws (including POSH) for HR Managers from LawSikho.


The onset of the year 2020 saw the Covid-19 pandemic swoop the world off its feet. Approximately 255 million people lost their jobs accounting for 71% of global employment losses, increasing inactivity to 81 million, which resulted in a reduction of the global labour force participation rate by 2.2 percentage points in 2020 to 58.4%. 

As the coronavirus spread reduced in the second half of 2020, many people who could find jobs returned to work. Health and social care workers, agricultural workers, cleaners, painters, factory workers and all those essential sector workers bounced back to work to make up for their lost income. But around all this, there was an increase in the inactivity of labour too, meaning that many workers did not return to their work when the economy started to re-open. For example, in India, many migrant workers were forced to return to their home state during the pandemic, leaving them out on their own. Many of them had to travel on foot across hundreds of miles to reach their home state so that they may get a place to stay. Such experience must have caused an increase in the inactivity of the labour force.

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The labour market disruption

Over the fifteen years before the onset of the COVID-19 pandemic, the average working hour of the working population (15-60 years of age) was 27-28 hours per week. By 2020, It dropped sharply to 24.7 hours per week. This is in sharp contrast with the global financial crisis of 2008, where the average working hour had only declined by just 0.6 hours. Thus, we can say that the Covid-19 pandemic is four times greater than that of the global financial crisis.

Impact of the COVID-19 crisis on the labour laws

It’s true that the pandemic has shown the countries various loopholes in their labour laws. Because it has led to massive job losses and stagnation in the economy. It led the countries to review their economic strategy to stay afloat during the pandemic. Small business owners and contract workers who are not employed full time have suffered losses monetarily. The strain of the pandemic also has been such that, job or no job, it has gravely impacted the minds of many people, especially the working population. Let us see some broad components of labour laws and highlight their adaptability to crisis situations:  

Health care and social security

With the spread of Covid-19, many people fell ill and social distancing norms were forced to be put into action so as to prevent the spread of the disease. This led to the great demand of the health care workers to tend to the patients. In the other sectors too, it raised many questions regarding the health and safety of workers. Since the coronavirus was a novel virus that led to a pandemic situation, it brought out the vulnerability of the low-income groups even more. Lack of social security benefits and inadequate income support led many workers in the informal sector, especially in developing countries, to work despite restrictions on movement and social interaction.

This brings us to a lot of questions about the impact of labour laws on the informal sector. In many developing and underdeveloped countries, the cost of labour is cheap and hence, the workforce is easily available. For example, now, India is going to enter a decade where every year the number of people entering the workforce will be higher, thereby leading to keeping the labour cost lower for many more years to come. Today, around 400 million workers in our country are employed in unorganised sectors like domestic workers, hawkers, gig workers, freelancers, etc. What provisions do they have to avail medical facilities? Can they afford health insurance through their income? Are our labour laws friendly enough to physically as well as mentally support these gig workers in times of crisis like this? To mitigate such risks, it is essential to enhance and enforce laws and policies on equality and non-discrimination in employment. 

Rising inequality in the labour workforce

The crisis has led to the inequalities in labour and social protection that results from the worker’s contractual status. Some workers with temporary or part-time contracts, along with the gig or self-employed workers do not have the same rights to paid sick leave or unemployment or medical insurance as those with permanent or full-time contracts; nor do they enjoy the same level of protection against occupational hazards. As the countries open up to the new post covid work regime, it will be necessary to re-visit the regulatory framework to ensure equal treatment of workers regardless of their employment status. For example, Many state governments in India offered monetary compensation to families of workers who died due to covid and made changes to social protection schemes like increasing EDLI coverage sum to 7 lakh. These individual schemes do not really help all those affected because there are many few who are aware that benefits exist. Social security schemes like EDLI should be extended to the informal sector as well so that the disparity in the employment sector reduces. 

In the rise of the pandemic, many countries like Austria, Bangladesh, Ireland, Italy, Singapore, Spain and many more have introduced new subsidies or expanded access to pre-existing schemes, to compensate for the temporary reduction in the number of hours worked in firms affected by a temporary fall in demand or production. These steps that were taken in the wake of the pandemic are something that should be incorporated in the labour laws permanently so as to provide social security to the vulnerable workforce.

Gender inequality in the workforce

If we talk about the male-female employment ratio and the impact the pandemic has had on their jobs, the ILO study has found that in the most affected work sectors by Covid, around 41% of women are employed as compared to only 35% of the men. The most affected sectors during the pandemic in 2020 were accommodation and food service; real estate, business and administrative activities; manufacturing; and wholesale and retail trade. This means women are more likely to be affected by job losses than men. Of the 740 million women working in the informal economy, around 42% are found in high-risk sectors, compared to 32% of the men. Lockdown and curfews, compounded by limited, if any, access to social protection provisions- including healthcare, income and food support and maternity protection, worsen their social and economic situation. 

Some countries like France and Italy, in the wake of the pandemic, are offering self-employed workers the benefit of a one-off allowance of €1500 and €600 respectively.   

Risk to the informal sectors 

The workers in the informal sector rarely have any document of employment or any record showing their working status. Thus, there are no benefits attached to their employment, like no mandatory contribution to social security funds, no insurance for emergency medical facilities and so on. But the pandemic has forced us to relook at many occupations that are yet labelled “informal,” the most common being the work of domestic help. In Italy, exemptions from confinement for specific occupational categories, including domestic workers, have prompted households to register domestic workers so that they can travel to work without the fear of potential legal action.

The pandemic has expedited the welfare measures very rightly deserved by these essential workers and more importantly has brought out the importance of such care jobs that often go unnoticed. Where some countries like India, Brazil urge their citizens to suspend the services of its domestic workers with pay, there are countries like the US that are creating Coronavirus Care funds- emergency funds for domestic workers who are facing hard times. The economic priorities of each country may be different, but the pandemic led each country to take action to protect its vulnerable population.


The Covid-19 pandemic has as much mentally affected the citizens of the world as it has physically. The privileged working class, who have access to a full-time job contract have slowly adapted to the new remote work regime. The less fortunate ones have either paved their way to get re-employed or have become inactive. Today, many new initiatives have been carried out across numerous countries to allow a smooth transition from the pandemic to the post-pandemic situation. Countries like Austria, France, Germany and Netherlands have opened child care facilities with skeleton staff for essential sector working parents, where they can leave their children when they are off to work. In Romania, extra days off have been introduced for working parents. With staying indoors in this pandemic, there have been increased cases of domestic violence too. To tackle such issues, countries like Australia have included cyber-bullying, domestic violence while teleworking in their COVID-19 occupational safety and health policies and risk assessment. 

New aspects of social security and employee welfare policies like caring about employee’s mental health, the formalization of the unorganized sector to provide basic amnesties like medical facilities have become a reality in such a short span of time. These provisions were always needed; the pandemic just pushed them to see the light of the day a bit sooner.      



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