LABOUR LAWS IN INDIA AN OVERVIEW

Presented by CA Vijay Joshi

CONTENTS OF THIS MODULE

History of Legislation Labour legislation in India Development after Independence Broad Requirements of Society Various Legislations Central & State List of Legislations

HISTORY OF LEGISLATION
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, administrative rulings and precedents which address the legal rights of and restrictions on working people and their organisation Every state enacts different laws to fulfill their needs to cover the specific requirement

WHO IS LABOUR?
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.

LABOUR LAWS
Labour Laws arose due to demands of workers for better 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.

CONTD. . .
Existence of employer and employee relationship is necessary Various enactments have direct or presumptive relationships recognised As such, the thrust has always been on the basic relations and recognition thereof

FACTORS BROADLY COVERED IN COMMON

LABOUR LEGISLATIONS Minimum Wages Working Time Health and Safety Anti-Discrimination Unfair dismissal Child Labour Collective Labour Law Trade Unions Strikes Lockouts, Closure, Retrenchments

HISTORY OF LABOUR LEGISLATION IN INDIA

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.

CONTD. . .
ORGANISED UNORGANISED

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

TRADE UNIONISM AND TRADE UNIONS ACT, 1926

Almost 10 different major central unions based on different political ideologies Almost every other union is affiliated to these AITUC (All India Trade Union Congress formed in 1920) is the first central union At 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.

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.

WAGE DETERMINATION
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 the scheduled 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.

COLLECTIVE BARGAINING IN THE ORGANISED

SECTOR A much neglected area relates to fixing and revising wages through collective bargaining A Fair Wage Committee was appointed in 1948 It reported that 3 levels of wages should exist minimum, fair and living. It was further pointed out that all industries must pay at least minimum wages; AND Those with the capacity to pay would apply only to the fair wage, which could be linked to productivity 15th Indian Labour Conference in 1954 defined needbased minimum wage and how it could be quantified

CONTD . . .
Many organised sectors through collective bargaining were able to achieve reasonable indexation benefits with system of payment of bonus Bonus which was a gratuitous act came to be recognised 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.

STRIKES AND LOCKOUTS

Workers have a right to strike even without a notice unless it involves a public utility service Employers have a right to lockout, subject to same condition However, parties may sort out their differences through conciliation officer who may facilitate settlement If this does not yield satisfactory result, government may refer to compulsory adjudication or ban the strike or lockout

CONCILIATION, ARBITRATION AND ADJUDICATION

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

DISPUTE SETTLEMENT PRIOR TO INDEPENDENCE

Industrial Disputes Act,1947 provides for the settlement machinery The framework for this legislation is of colonial origin The law originally firstly in Trade Disputes Act, 1929 introduced by British Government This was the period of spate of strikes and huge loss of person days Also, in 1942, British Government wanted to maintain wartime supplies to the allied forces through Rule 81A of the Defence India Rules, 1942 The same continues to be in IDA even after independence

CONTD. . .
IDA now extends to even unorganised sector Its pro-worker protection and safeguards against arbitrary losses have evolved through they last 50 years or so. The law has undergone substantial modification with recognition of need for partnership between labour and capital This was unanimously approved in tripartite conference in December 1947 with labour being advanced fair wage and fair working conditions and in return capital to receive fullest co-operation for uninterrupted production.

REGULATION OF JOB LOSSES

Under the present law, any industrial establishment employing 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 the era of globalization and liberalization since RBI study has reported that sickness in India is a profitable business. IDA also provides for no alteration of existing service condition without giving a notice of 21 days to the workers and the union.

REMOVAL FROM SERVICE

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

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.

REGULATION OF CONTRACT LABOUR

The Contract (Prohibition and Regulation) Act, 1970 provides a mechanism for registration of contractors and for the appointment of a Tripartite Advisory Board that investigates particular forms of contract labour. The above law is a kind of interface in the process of regulating the transition from regular employment to irregular employment. The enforceability of the act is now diluted and the minimum protection envisaged under this law is in jeopardy.

EMPLOYMENT INJURY, HEALTH AND MATURITY

BENEFIT

The Workmen Compensation Act, 1923 is one such piece of labour legislation which covers all cases of accidents arising out of and in the course of employment. The rate of compensation is determined by a schedule proportionate to the extent of injury and the loss of earning capacity. This law applies to the unorganised sectors and to those who are not covered by the ESIC. ESIC provides for contribution from employer and employee to the Insurance Corporation which runs the dispensaries and hospitals in working class locations.

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 to be extended to unorganised sectors.

RETIREMENT BENEFITS
There are two types of retirement benefits available. The Payment of Gratuity Act and the Provident Fund Act are those two legislations. In case of gratuity, a worker who has put in not less than 5 years of continuous service is entitled to gratuity equal to 15 days wages for every year of completed service. In case of provident fund, employer and employee, contribute as per the specified percentage to the Fund which accumulates at specified rate of interest (8.5%) and the accumulated amount is paid over to employee on retirement.

WOMEN LABOUR AND LAW

Women constitute significant part of the workforce in India. Out of these, almost 87% are employed in agricultural sectors as labourers and cultivators. The Equal Remuneration Act, 1976 provides for the payment 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.

IMPLEMENTATION OF LABOUR LAWS

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 of labour since independence.

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.

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.

CONTD. . .
A recent trend has been to seek the creation of welfare fund through the collection of a levy from which medical benefits and/or pension benefits are made. Another contemporary effort is to provide an umbrella statute to take care of employment conditions 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.

LIST OF 43 LABOUR LAWS ENACTED BY

CENTRAL GOVERNMENT

(a) Labour laws enacted by the Central Government, where the Central Government 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 Mines Labor 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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LIST OF 43 LABOUR LAWS ENACTED BY CENTRAL GOVERNMENT CONTD..

(b) Labour laws enacted by Central Government and enforced both by Central and State Governments 1. The Child Labour (Prohibition and Regulation) Act, 1986.
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2. The Building and Other Constructions Workers (Regulation of Employment and Conditions of Service) Act, 1996. 3. 4. 5. 6. The Contract Labour (Regulation and Abolition) Act, 1970. The Equal Remuneration Act, 1976. The Industrial Disputes Act, 1947. 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 Certain Establishments) 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

LIST OF 43 LABOUR LAWS ENACTED BY CENTRAL GOVERNMENT CONTD..

(c) Labour laws enacted by Central Government and enforced by the State Governments 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 of Service) 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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ARTICLE 254 INCONSISTENCY BETWEEN LAWS MADE BY PARLIAMENT AND LAWS MADE BY THE LEGISLATURES OF STATES

(1) If any provision of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament is competent to enact, or to any provision of an existing law with respect to one of the matters enumerated in the Concurrent List, then, subject to the provisions of clause (2), the law made by Parliament, whether passed before or after the law made by the Legislature of such State, or, as the case may be, the existing 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 the matters enumerated in the Concurrent List contains any provision repugnant to the provisions of an earlier law made by Parliament or an existing law with respect to that matter, then, the law so made by the Legislature of such State 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 www any time any law with respect to the same matter including a law adding to, .cara amending, varying or repealing the law so made by the Legislature of the jkum State. arra
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FORMATION OF ILO
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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USEFUL WEBSITES
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

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QUESTIONS/ SUGGESTIONS/ COMMENTS???

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