In this article, Saumya Sinha of Rajiv Gandhi National University of Law does an overview of labour laws in India.
Labour Laws in India
Labour law is also commonly known as ‘the law of employment’. The growth and development of labour laws can be traced back to the establishment of the International Labour Organisation, the only tripartite U.N. agency, in 1919. It brings together governments, employers and workers of 187 member States to set labour standards, develop policies and devise programmes promoting decent work for all women and men. It is devoted to promoting social justice and internationally recognized human and labour rights, pursuing its founding mission that social justice is essential to universal and lasting peace. India has been the permanent member of the governing body of ILO since 1922. This has been a major reason behind the progressive labour legislation in India.
Moreover, labour policy in India has been evolving in response to specific needs of the situation to suit requirements of planned economic development and social justice and has two fold objectives, namely maintaining industrial peace and promoting the welfare of labour. Labour law cover three aspects.
- Industrial Relations
- Workplace Health and safety
- Employment standards
Both the Central government and the State government are vested with the power to legislate on the matters concerning labour laws. The Central government has the power to legislate with respect to the entries mentioned in the Union List of Schedule VII of the Constitution.
- Regulation of labour and safety in mines and oilfields,
- Industrial disputes concerning Union employees, and
- Union agencies and institutions for professional, vocational or technical training.
On the other hand, both the Central Government and State Governments have the power to legislate with respect to the entries mentioned in the Concurrent List of Schedule VII of the Constitution.
- Trade unions, industrial and labour disputes,
- Social security and social insurance, employment and unemployment, and
- Welfare of labour including conditions of work, provident funds, employers’ liability, workmen’s compensation, invalidity and old age pensions and maternity benefits.
For instance, the central legislation includes the Trade Unions Act, 1926, the Factories Act, 1948, the Payment of Wages Act, 1936, etc. and the State legislation includes the Shop & Establishment Acts (of respective States), Labour Welfare Fund Act (of respective States), etc.
Classification of Labour Laws
There are more than a hundred legislations dealing with labour law in India. Therefore, the classification of labour laws becomes important for the purpose of understanding them. One way of classifying them is on the basis of enactment and enforcement. The other way of classifying is on the basis of the purpose and the objective of the legislation.
The former type of classification is as listed below.
- The labour laws enacted by the Central Government, the responsibility of enforcement of which lies solely on the Central Government.
- The laws enacted by the Central Government, the responsibility of enforcement of which lies on both the Central Government and the State Government.
- The laws enacted by the State Government and enforced by them only.
- The laws enacted and enforced by various State Governments which apply to respective states.
The other type of classification can be done by dividing the legislation under broad categories.
- Laws dealing with industrial relations.
- Laws dealing with remuneration- payment, deduction and related issues.
- Laws dealing with the social security of the employees.
- Laws dealing with nature and conditions of service and employment such as the issue of working hours, weekly holidays, the interval between working hours, etc.
- Laws dealing with the issues of gender equality and women empowerment.
- Laws dealing with social evils and prohibiting them such as bonded labour, child labour, etc.
- Laws dealing with employment and training of the employees.
For the purpose of having an overview of the labour laws, we shall be dealing with the latter type of classification.
Laws dealing with Industrial relations
The Industrial Disputes Act, 1947
This an important legislation dealing with the issues of industrial dispute, closure, lock-out, strike, retrenchment, lay-off, etc. Prior to this Act, the Trade Disputes Act, 1929 solved the industrial disputes. However, there were some inherent defects in the Act which was sought to be removed by enacting a fresh legislation i.e. the Industrial Disputes Act, 1947. The Act provides for an elaborate mechanism to get the industrial disputes resolved. There are various authorities under the Act for the same which includes Conciliation officers, Boards of Conciliation, Labour Courts, Tribunals, and National Tribunals. The main features of the Act have been discussed in the subsequent points.
- The industrial dispute has to be referred for conciliation at the first instance.
- The dispute may be referred to the industrial tribunal either by the parties or by the State government. The parties refer the dispute by an agreement with respect to the same.
- Strike and lockouts are regulated by the Act. The Act lays down certain circumstances in which they are prohibited.
- The Act also provides for compensation to the workmen in case of lay-off or retrenchment or transfer/closure of an undertaking.
The Trade Unions Act, 1926
Trade Unions are vital to the smooth functioning of the industry. The Trade Unions collectively assert the demands of the workmen and make it easy for the workmen to negotiate with the employer. This is commonly called ‘collective bargaining’. The Trade Unions Act, 1926 provides for the establishment of the Trade Unions and lays down provisions with respect to the registration of such Trade Unions and their rights and liabilities. The Act places no restriction on the objects which the Trade Unions can take up. Trade Unions which do not get registered are not governed by the provisions of the Act.
Laws dealing with remuneration- payment, deduction and related issues
Payment of Wages Act, 1936
This Act came against the backdrop of the great injustice that was being done to the employees with respect to the payment of wages. There were many cases of abuse such as the wages were denied or delayed, arbitrary deductions were made, heavy fines were imposed and more often than not payment was done in kind rather than in cash. Thus, the Act was enacted to regulate the payment of wages by certain regulations such as fixing responsibility for such payment, fixing wage-period, and time of payment of wages, etc. It has provision for authorized deductions from the wages and levying of fines under certain circumstances. There are penalties for the employer in case of non-compliance of the provisions of the Act.
Minimum Wages Act, 1948
The objective of this Act is to provide minimum wages to the workers employed in the employments mentioned in the Schedule I of the Act such as employment in any rice mill, flour mill or dal mill or employment in any tobacco manufactory, etc. The appropriate government is empowered under the Act to fix minimum wages and revise them regularly. It also lays down provision for overtime wages. There are penalties under this Act too for non-compliance of the provisions by the employer.
Laws dealing with the social security of the employees
Employee’s Compensation Act, 1923
The Act provides for the compensation to workmen or their dependents in case of accidents arising out of or in the course of employment. Such accidents may either result in death or disablement (permanent/temporary) of the workmen. It also includes compensation for occupational diseases i.e. the diseases contracted from the employment. The Act lays down a detailed list of the persons falling under the category of ‘dependents’ and the method to calculate the amount of compensation in different circumstances. Thus, the Act is a comprehensive legislation dealing with all the facets of compensation and the related issues.
Employees’ State Insurance Act, 1948
The Act lays down provisions for benefits to employees such as sickness benefit, maternity benefit, disablement benefit, medical benefit and funeral benefit. Out of these, medical benefit is extended to the family members of the employee too and the funeral benefit is paid to the eldest surviving member of the family or in his absence, to the person who actually incurs the expenditure on the funeral. It is to be noted that all the benefits under this Act are paid in cash. The Act also provides for the establishment of Corporation, Committee, and Council etc. to implement the provisions of the Act effectively.
Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, Labour Welfare Fund Act (of respective States), Payment of Gratuity Act, 1972 are some other laws which fall under this category.
Laws dealing with nature and conditions of service and employment
Factories Act, 1948
The Act regulates the working conditions of the workers employed in factories. It lays down provisions to ensure adequate safety measures are implemented in the factories for the health and welfare of the workers. The Act outlines the general duties of the occupier for the same and the duties of the manufacturers, etc. who import or supply any article for use in a factory. Furthermore, there is a separate chapter in the Act dealing with hazardous processes in factories. There are separate provisions dealing with working hours of adults, annual leave with wages, etc. It regulates the employment of women and children and prohibits the employment of children below fourteen years of age.
The Industrial Employment (Standing Orders) Act, 1946
This is another important legislation which was enacted to resolve the friction between the employers and the workmen. This Act requires the employer to formally define the conditions of employment under him. The Act contains a schedule which contains the list of the matters to be provided in standing orders. The employer is under an obligation to make the standing orders known to the workmen. Further, the Act also regulates the duration and modification of such orders.
Shops and Commercial Establishments Act (of respective States), Contract Labour (Regulation and Abolition) Act, 1970, The Plantation Labour Act, 1951, The Mines Act, 1952 are other laws dealing with the nature and conditions of work.
Laws dealing with the issues of gender equality and women empowerment
Equal Remuneration Act, 1976
Equal pay for equal work has constitutional recognition as contained in the Fundamental Rights and the Directive Principles of State Policy. The Act provides for the payment of equal remuneration to both men and women for performing same work or work of similar nature, failing which the employer is penalised. Thus, it prevents discrimination against women in the matters of payment of remuneration.
Maternity Benefits Act, 1961
Prior to the enactment of this Act, there were different State Acts and three central Acts dealing with the provisions of maternity benefit. The Act was enacted to reduce the disparities in different laws and provide for maternity protection to the women employed in all establishments except those to which Employees’ State Insurance Act, 1948 apply. The Act prohibits the employer from employing women during certain periods and the right of such women to be paid the maternity benefit.
Laws dealing with the prohibition of social evils
Child Labour (Prohibition & Regulation) Act, 1986
The Act is in consonance with various articles of the Constitution. It distinguishes between ‘adolescent’ and ‘children’ and prohibits the engagement of children in all occupations and the engagement of adolescents in hazardous occupations. Further, the Act also provides for the regulation of conditions of work of adolescents in such employment where they are permitted to work. These regulations are with respect to the working hours, holidays, health and safety. Moreover, the Act also lays down penalties for not complying with the provisions of the Act.
Sexual Harassment at the Workplace (Prevention, Prohibition and Redressal) Act, 2013
This is one of the most recent legislation and was enacted to incorporate the guidelines laid down by the Supreme Court. It provides for protection of women against sexual harassment at workplace. There are provisions in the Act dealing with the prevention and redressal of such complaints. This Act is in consonance with the spirit of Article 21 of the Constitution which includes the right of a woman to dignity, life and liberty.
Bonded Labour System (Abolition), Act, 1976, the Beedi and Cigar Workers (Conditions of Employment) Act, 1966 are the other Acts which fall under this category.
Laws dealing with employment and training of the employees
Apprentices Act, 1961
The wave of Industrial revolution generated the need of trained employees and thus, the need for training apprentices. The Act is a comprehensive legislation dealing with the qualification of being engaged as an apprentice, obligations of apprentices, their payment, their working conditions and working hours, employer’s liability, etc.
There are various labour laws which deal with different labour and industrial issues. The Acts have been enacted with the objective of social and economic justice. They also embody the constitutional spirit contained in various Articles.
- The Articles contained in Part III of the Constitution such as Article 16, 19, 23 and 24
- The Articles contained in Part IV of the Constitution such as Article 39, 41, 42, 43, 43A and 54
The provisions laid down in various conventions and treaties which India has ratified have also been incorporated in these Acts time and again.
However, they fail to achieve the objectives completely because of certain reasons.
- The penalties given under the various Acts are inadequate so as to create a deterrent in the mind of an offender.
- There are so many legislations that the workmen or the employees are more often than not unaware of their rights under these laws.
About the Ilo, International Labour Organisation, https://www.ilo.org/global/about-the-ilo/lang–en/index.htm.
Mission and Impact of the ILO, International Labour Organisation, https://www.ilo.org/global/about-the-ilo/mission-and-objectives/lang–en/index.htm.
 INDIA CONST. Schedule VII, List I, Entry 55.
 INDIA CONST. Schedule VII, List I, Entry 61.
 INDIA CONST. Schedule VII, List I, Entry 65.
 INDIA CONST. Schedule VII, List III, Entry 22.
 INDIA CONST. Schedule VII, List III, Entry 23.
 INDIA CONST. Schedule VII, List III, Entry 24.
 Labour Laws in India, National Crime Investigation Bureau,http://ncib.in/pdf/ncib_pdf/Labour%20Act.pdf.
 INDIA CONST. Art. 16(2).
 INDIA CONST. art. 39(a), 39(d).
 INDIA CONST. art. 23, 24, 15(3), 39(c), 44.
 Vishaka v. State of Rajasthan, (1997) 6 SCC 241.