Labour law - An overview

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LABOUR LAWS IN INDIA

ANOVERVIEW

Presented by CA Vijay Joshi


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CONTENTSOFTHISMODULE

History of Legislation

Labour legislation in India

Development after Independence

Broad Requirements of Society Various LegislationsCentral &

State

List of Legislations


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HISTORYOFLEGISLATION

What is Law?

Intention of the society to fulfill the need to

correct any wrong or promote harmony

Labour Law is the body of laws, administrativerulings and precedents which address the legal

rights of and restrictions on working people and

their organisation

Every state enacts different laws to fulfill theirneeds to cover the specific requirement


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WHOISLABOUR?

Every person who works for emoluments in any

form is a worker.

Various pieces of legislations have tried to define

differently.

Plethora of laws has added diversity and

confusion in the minds of workers.

Uniformity and harmony is required.


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LABOURLAWS

Labour Laws arose due to demands of workers forbetter condition, right to organise

These also arose out of demands of employers to

restrict the powers of workers and to keep labour

costs low

Every labour law recognises that the relation exists

based on contract of employment

This has been the case since the fall of feudalism

and the necessity of modern economic relation

Many terms and conditions of contract of

employment are implied by legislation or common

law.


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FACTORSBROADLYCOVEREDINCOMMON

LABOURLEGISLATIONS

Minimum Wages

Working Time

Health and Safety

Anti-Discrimination Unfair dismissal

Child Labour

Collective Labour Law

Trade Unions

Strikes

Lockouts, Closure, Retrenchments


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HISTORYOFLABOURLEGISLATIONININDIA

Interwoven with the history of British colonialism

Pre-independence era

Indian textile goods were competitive with British textiles

Government enacted various legislations to protect

competition

Enactments covered

Factories Act, stipulation of 8 hours work, abolition of child

labour, restriction of women in night employment and overtime

beyond 8 hours.


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CONTD. . .

Formal employment

More educated and

increased awareness

Covers about 8 % of

the total work

No formal employment

Largely uneducated and

unaware about the

rights

Covers about 92% of

the total work

ORGANISED UNORGANISED


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TRADEUNIONISMANDTRADEUNIONSACT, 1926

Almost 10 different major central unions based ondifferent political ideologies

Almost every other union is affiliated to these

AITUC (All India Trade Union Congress formed in

1920) is the first central unionAt about the same time, a strike at the Buckingham

and Carnatic Mills, Madras led by B.P.Wadia

ultimately brought about the rise of Trade Unions Act,

1926 Management brought about civil suit against the

workers in the Madras High Court, obtained injunction

order and damages against the leader for inducing a

breach of contract.


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CONTD. . .

This was followed by wide protests that finally

yielded Trade Unions Act,1926. It facilitated registration of union, internal

democracy, a role for outsiders and permission for

raising a political fund subject to separate

accounting requirements. The act facilitates unionisation both the organised

as well as unorganised sectors.

Fundamental right of freedom of association was

formally recognised later in constitution. However, registration of trade union does not bind

employer for its recognition.

But collective bargaining power in the organised

sector forces them.


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WAGEDETERMINATION

This has been achieved by various instruments.

Minimum Wages Act, 1948 covers organised and

unorganised sectors equally

It governs methods to fix the minimum wages in thescheduled industries (which may vary from state to

state)

Unfortunately, the minimum wage is so low that in

many industries , there is erosion of real wages

This so even after revision of wages occasionally.

Indexation system brought about the necessary

relief to the employees.


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CONTD. . .

Many organised sectors through collectivebargaining were able to achieve reasonable

indexation benefits with system of payment of

bonus

Bonus which was a gratuitous act came to berecognised as right with passage of Payment of

Bonus Act.

The law provided for payment of thirteenth month of

wage as bonus.

Minimum bonus was fixed at 8.33% with maximum

bonus at 20% of the annual wages with provision

for set-on and set-off for any surplus or shortfall in

the profits of an employer.


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STRIKESANDLOCKOUTS

Workers have a right to strike even without a noticeunless it involves a public utility service

Employers have a right to lockout, subject to same

condition

However, parties may sort out their differencesthrough conciliation officer who may facilitate

settlement

If this does not yield satisfactory result, government

may refer to compulsory adjudication or ban thestrike or lockout


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CONCILIATION,ARBITRATIONANDADJUDICATION

When conciliation fails, it is open to both the parties

to refer it to arbitration or for appropriate

government to refer the dispute to tribunal or labour

court for adjudication

Disputes may be settled by collective bargaining,

conciliation or compulsory adjudication


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CONTD. . .

IDA now extends to even unorganised sector

Its pro-worker protection and safeguards againstarbitrary losses have evolved through they last 50

years or so.

The law has undergone substantial modification

with recognition of need for partnership betweenlabour and capital

This was unanimously approved in tripartite

conference in December 1947 with labour being

advanced fair wage and fair working conditions andin return capital to receive fullest co-operation for

uninterrupted production.


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REGULATIONOFJOBLOSSES

Under the present law, any industrial establishmentemploying 100 or more workers must make an

application to the Government seeking permission

before resorting to lay-off, retrenchment or closure.

However, the chapter is undergoing change in theera of globalization and liberalization since RBI

study has reported that sickness in India is a

profitable business.

IDA also provides for no alteration of existingservice condition without giving a notice of 21 days

to the workers and the union.


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REMOVALFROMSERVICE

A permanent worker can be removed from service

only for proven misconduct or for habitual absence

due to ill health, alcoholism and the like, or on

attaining retirement age.

Doctrine of HIRE AND FIRE is no longer approved

Misconduct of worker is protected by Standing

Orders to be framed by certifying officer of the

labour department.

Employers must follow the principle of natural

justice

An order of dismissal can be challenged in the

labour court


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COMTD. . .

Almost all pro-worker developments are now

identified as areas of rigidity and in the name of

flexibility, there is pressure on Government to

repeal or amend all such laws.

Globalization has also increased tendency for

offloading or subcontracting, through the use of

cheaper forms of contract labour, where there is no

unionization, no welfare benefits, and quite often,

not even statutorily fixed minimum wages. The system of voluntary retirement with the golden

handshake has become widely prevalent both in

the public and private sectors.


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CONTD. . .

Leave Certificates for health reasons are forwarded

to employer who is obliged to honour them.

Employment injury including occupational disease

is compensated according to a scheme of rates

proportionate to the extent of injury and loss of

earning capacity. However, experience with the implementing agency

is clouded with corruption and inefficiency.

The Maternity Benefit Act is also applicable to

notified establishments, whose coverage needs tobe extended to unorganised sectors.


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WOMENLABOURANDLAW

Women constitute significant part of the workforce inIndia.

Out of these, almost 87% are employed in

agricultural sectors as labourers and cultivators.

The Equal Remuneration Act, 1976 provides for thepayment of equal remuneration to men and women

workers for same or similar work.

No discrimination is permissible in recruitment and

service conditions except where employment of

women is prohibited or restricted by law.

In 1997, Supreme Court declared that sexual

harassment at workplace amounts violation of rights

of gender equality.


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IMPLEMENTATIONOFLABOURLAWS

Ministry of Labour has the responsibility to protect

and safeguard the interest of workers in general

and those constituting the deprived and the

marginal classes of the society.

Ministry seeks to achieve this through enacting and

implementing labour laws regulating the terms and

conditions of service and employment of workers.

First National Labour Commission was appointed in

1966 to review the changes in the conditions oflabour since independence.


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CONTD. . .

Its report was received in 1969.

Many of its recommendations were accepted

through amendments of various labour laws.

Second National Labour Commission was

constituted in 1999.


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GENERAL

All labour laws provide for an inspectorate to

supervise implementation and also have penalties

ranging from fines to imprisonment.

Experience is that very few cases are filed, rarely

violator found guilty and almost in nil cases is the

employer sent to prison.

This does not mean that the provisions are not

implemented at all.

Collective bargaining and unionisation, forces

speedy implementation of provisions of various

labour laws.


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CONTD. . .

A recent trend has been to seek the creation of

welfare fund through the collection of a levy fromwhich medical benefits and/or pension benefits are

made.

Another contemporary effort is to provide an

umbrella statute to take care of employmentconditions and social welfare benefits for all the

unorganised sections.

Common central legislation for all agricultural

workers is also on the anvil. For the unorganised sector, a renewed attempt to

focus on the core of labour standard identified by

ILO in its Declaration on Fundamental Rights at

Work would also be welcomed.


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LISTOF43 LABOURLAWSENACTEDBY

CENTRALGOVERNMENT

(a) Labour laws enacted by the Central Government, where the CentralGovernment has the sole responsibility for enforcement

1. The Employees State Insurance Act, 1948 2. The Employees Provident Fund and Miscellaneous Provisions Act,1952 3. The Dock Workers (Safety, Health and Welfare) Act, 1986 4. The Mines Act, 1952 5. The Iron Ore Mines, Manganese Ore Mines and Chrome Ore Mines

Labour Welfare (Cess) Act, 1976

6. The Iron Ore Mines, Manganese Ore Mines and Chrome Ore MinesLabor Welfare Fund Act, 1976

7. The Mica Mines Labour Welfare Fund Act, 1946

8.

The Beedi Workers Welfare Cess Act, 1976 9. The Limestone and Dolomite Mines Labour Welfare Fund Act, 1972 10.The Cine Workers Welfare (Cess) Act, 1981 11.The Beedi Workers Welfare Fund Act, 1976 12.The Cine Workers Welfare Fund Act, 1981


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CENTRALGOVERNMENTCONTD.. (b) Labour laws enacted by Central Government and enforced both by

Central and State Governments

1. The Child Labour (Prohibition and Regulation) Act, 1986. 2. The Building and Other Constructions Workers (Regulation of Employment and Conditions of

Service) Act, 1996.

3. The Contract Labour (Regulation and Abolition) Act, 1970. 4. The Equal Remuneration Act, 1976. 5. The Industrial Disputes Act, 1947. 6. The Industrial Employment (Standing Orders) Act, 1946. 7. The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act,

1979.

8. The Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by CertainEstablishments) Act, 1988

9. The Maternity Benefit Act, 1961 10.The Minimum Wages Act, 1948 11.The Payment of Bonus Act, 1965 12.The Payment of Gratuity Act, 1972 13.The Payment of Wages Act, 1936 14.The Cine Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981 15.The Building and Other Construction Workers Cess Act, 1996 16.The Apprentices Act, 1961


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CENTRALGOVERNMENTCONTD..

(c) Labour laws enacted by Central Government and enforced by theStateGovernments

1. The Employers Liability Act, 1938 2. The Factories Act, 1948 3. The Motor Transport Workers Act, 1961 4. The Personal Injuries (Compensation Insurance) Act, 1963 5. The Personal Injuries (Emergency Provisions) Act, 1962 6. The Plantation Labour Act, 1951 7. The Sales Promotion Employees (Conditions of Service) Act, 1976 8. The Trade Unions Act, 1926 9. The Weekly Holidays Act, 1942 10.The Working Journalists and Other Newspapers Employees (Conditions ofService) and Miscellaneous Provisions Act, 1955 11.The Workmens Compensation Act, 1923 12.The Employment Exchange (Compulsory Notification of Vacancies) Act, 1959 13.The Children (Pledging of Labour) Act 1938 14.The Bonded Labour System (Abolition) Act, 1976 15.The Beedi and Cigar Workers (Conditions of Employment) Act, 1966


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ARTICLE254 INCONSISTENCYBETWEENLAWSMADE

BYPARLIAMENTANDLAWSMADEBYTHE

LEGISLATURESOFSTATES

(1) If any provision of a law made by the Legislature of a State is repugnantto any provision of a law made by Parliament which Parliament is competentto enact, or to any provision of an existing law with respect to one of thematters enumerated in the Concurrent List, then, subject to the provisions ofclause (2), the law made by Parliament, whether passed before or after thelaw made by the Legislature of such State, or, as the case may be, theexisting law, shall prevail and the law made by the Legislature of the State

shall, to the extent of the repugnancy, be void.

(2) Where a law made by the legislature of a State with respect to one of thematters enumerated in the Concurrent List contains any provision repugnantto the provisions of an earlier law made by Parliament or an existing law withrespect to that matter, then, the law so made by the Legislature of suchState shall, if it has been reserved for the consideration of the President and

has received his assent, prevail in that State: Provided that nothing in this clause shall prevent Parliament from enacting at

any time any law with respect to the same matter including a law adding to,amending, varying or repealing the law so made by the Legislature of theState.


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FORMATIONOFILO

Created in 1919 in the wake of a destructive war

Lasting world peace and harmony can be achieved

only if the working classes are treated and looked

after properly Work is central to peoples well being

The only tripartite UN agency bringing together

Representatives of Governments, Employers and

Workers jointly Global Body responsible for drawing up and

overseeing international labour standards

Founded Global University in 2004


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USEFULWEBSITES

http://www.labour.nic.in/(Ministry of Labour and

employment)

http://labourandemployment.gov.in/home.htm

(Labour and Employment Department) http://www.ilo.org(International Labour

Organisation)

http://esic.nic.in(Employees State Insurance

Corporation) http://esicdelhi.org.in

www.gujaratindia.com
http://www.labour.nic.in/http://labourandemployment.gov.in/home.htmhttp://www.ilo.org/http://esic.nic.in/http://esicdelhi.org.in/http://www.gujaratindia.com/http://www.gujaratindia.com/http://esicdelhi.org.in/http://esic.nic.in/http://www.ilo.org/http://labourandemployment.gov.in/home.htmhttp://www.labour.nic.in/


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QUESTIONS/ SUGGESTIONS/ COMMENTS???


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Labour law - An overview