LFGHR Project

7/29/2019 LFGHR Project

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INTRODUCTION

To secure to each labourer the whole product of his labour, or as nearly as

possible, is a worthy object of any good Government said Abraham Lincoln.

Labour law also known as employment law is the body of laws,

administrative rulings, and precedents which address the legal rights of, and

restrictions on, working people and their organizations. As such, it mediates

many aspects of the relationship between trade unions, employers and

employees. In other words, Labour law defines the rights and obligations as

workers, union members and employers in the workplace. Generally, labour law

covers:

Industrial Relations certification of unions, labour-management relations,

collective bargaining and unfair labour practices;

Workplace Health And Safety;

Employment Standards, including general holidays, annual leave, working

hours, unfair dismissals, minimum wage, layoff procedures and severance pay.

There are two broad categories of labour law. First, collective labour law

relates to the tripartite relationship between employee, employer and union.

Second, individual labour law concerns employees' rights at work and throughthe contract for work.

The labour movement has been instrumental in the enacting of laws protecting

labour rights in the 19th and 20th centuries. Labour rights have been integral to

the social and economic development since the industrial revolution

Industrialisation poses a challenge for an entrepreneur in the form of management

of the resources. The management and effective and efficient deployment of the

resources of the organisation is the factor which decides the profitability and

viability of any organisation .Labour is one of the basic resources of any industry

and has an important bearing on the performance and goals of the organisation.


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In India we have a plethora of Laws which deals with issues concerning Labour

administration, labour welfare, regulation of industrial relations between the

management and the workers. For the effective and efficient management of labour

in an industry or an organisation it is necessary to have a complete knowledge of

the Laws, bye laws, regulations and ordinances applicable to the industry ingeneral and to the company or organisation specifically. The laws and bye laws

applicable to labour issues and interests provides for various compliances in

accordance with procedures laid therein.

MEANING OF LFGHR

L- Legal

FFramework

G - Governing

HHuman

R-Relations

Thus , LFGHR means a set of rules governing working relations between

employees and employers , employees and government and employers and

government employees.

WHAT IS LABOUR LAW?

Wikipedia, the internet encyclopedia defines labour law as Labour Law is the

body of laws, administrative rulings, and precedents which address the relationship

between and among employers, employees, and labor organizations, often dealing

with issues of public law. The terms Labour Laws and Employment Laws, are

often interchanged in the usage. This has led to a big confusion as to their

meanings. Labour Laws are different from employment laws which deal only with

employment contracts and issues regarding employment and workplace

discrimination and other private law issues.


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Employment Laws cover broader area than labour laws in the sense that

employment laws cover all the areas of employer/employee relationship except the

negotiation process covered by labour law and collective bargaining.

Labour Laws harmonize many angles of the relationship between trade unions,employers and employees.

The final goal of labour law is to bring both the employer and the employee on the

same level, thereby mitigating the differences between the two ever-warring

groups.

ORIGIN OF LABOUR LAWS

Labour laws emerged when the employers tried to restrict the powers of workers'

organisations and keep labour costs low. The workers began demanding betterconditions and the right to organise so as to improve their standard of living.

Employers costs increased due to workers demand to win higher wages or better

working conditions. This led to a chaotic situation which required the intervention

of Government. In order to put an end to the disputes between the ever-warring

employer and employee, the Government enacted many labour laws.

In India the labour laws are so numerous, complex and ambiguous that they

promote litigation rather than the resolution of problems relating to industrial

relations. The labour movement has contributed a lot for the enactment of laws

protecting labour rights in the 19th and 20th centuries.

HISTORY OF LABOUR LAWS

The history of labour legislation in India can be traced back to the history of

British colonialism. The influences of British political economy were naturally

dominant in sketching some of these early laws. In the beginning it was difficult to

get enough regular Indian workers to run British establishments and hence laws for

chartering workers became necessary. This was obviously labour legislation inorder to protect the interests of British employers.

The British enacted the Factories Act with a really self-centered motive. It is well

known that Indian textile goods offered serious competition to British textiles in

the export market. In order to make India labour costlier, the Factories Act was


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first introduced in 1883 because of the pressure brought on the British parliament

by the textile moguls of Manchester and Lancashire. Thus we received the first

stipulation of eight hours of work, the abolition of child labour, and the restriction

of women in night employment, and the introduction of overtime wages for work

beyond eight hours. While the impact of this measure was clearly for the welfare ofthe labour force the real motivation was undoubtedly the protection their vested

interests.

India provides for core labour standards of ILO for welfare of workers and to

protect their interests. India has a number of labour laws addressing various issues

such as resolution of industrial disputes, working conditions, labour compensation,

insurance, child labour, equal remuneration etc. Labour is a subject in the

concurrent list of the Indian Constitution and is therefore in the jurisdiction of both

central and state governments. Both central and state governments have enacted

laws on labour issues. Central laws grant powers to officers under central

government in some cases and to the officers of the state governments in some

cases.

THE EMERGENCE OF LABOUR LAW

From the view of convenience , the history of industrial legislation can be divided

into three parts-

1. Initial Period ( Till 1918 A.D)2. Period prior to independence ( 1918 A.D to 1947 )3. Period since independence ( from 1947 till now )1. Initial Period ( Till 1918 A.D)During this period the process of industrial legislation was very slow but the few

enactments which were made during this period manifest that the government and

the employers had started thinking about it. In the beginning of the period Indian

Fatal Accident Act ,1855 came into existence. Its object was to expound the

liability of the accidents with regard to workers.


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Thereafter was enacted the Workmens Breach Of Contract Act 1860. This act

was a violent assault on the right of workers . In this act there was the provision to

punish the worker for the breach of contract. With the enactment of the act a wave

of tremendous dissatisfaction spread among the workers and therefore, the then

contemporary British government set up an Industrial Commission. It studied thecondition of workers during that period and in its report made important

suggestions in this connection according to which that place was recognized as a

factory where work was done with the help of machines and at least 100 workers

were employed in it, In view of these reforms In 1881 A.D Employees And

Workmen ( Disputes ) Factories was enacted , but despite the passage of the

above acts there was not much improvement in the condition of workers. So a

second industrial commission was appointed and keeping its recommendations in

another Factories Act 1890 was passed and its object was to give maximumfacilities to the workers.

When these reforms were taking place in the industrial areas then more attention

was also given to the workers in the mines . A Mining Enquiry Committee was

formed to overview the situations of the mining workers and on the basis of their

suggestions in 1901 A.D Indian Mines act was enacted .

Thus, during the above period the enactment of the above mentioned acts for the

working class set as a trend of reform in the direction of labor legislation.

2. Period Prior To Independence ( 1918 A.D To 1947 )In the beginning of the twentieth century when the First World War was ended

then there was a new awakening in the laborers or the working class of the entire

world. After the dreadful annihilation of the world there was the commencement of

a new Industrial revolution among the civilized nations, in consequence there was

a significant change in the industrial sphere. There was the development and

expansion of industries whereby there was considerable in the industrial areas and

there was a astonishing increase in the number of workers employed in those

industries. Whereas on one hand the owners of industries and the employers of the

good industries got a good opportunity of getting profits of production and on the

other hand indifferent industries the works employed got the opportunity of new

organization strength.


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a) Workmens Compensation Act 1923b) Trade Union Act 1926c) Mining (Amendment) Act, 1923d) Indian Dock Labourers Act, 1934e) Indian Merchant Shipping Act, 1923f) Indian Railways Act, 1890g) Children (Pledging Of Labor) Act,1933h) Mines Maternity Act, 1921Thus, during this period labourers of every sphere were given legal protection as

regards their rights and so that workers might get all round benefit statues were

enacted. Thus, this period can be called the period of development of industriallegislation.

3. Period Since Independence ( From 1947 Till Now )In this period there have been revolutionary changes in the industrial sphere. The

rights of the workers got legal recognition. In the period the following Acts were

enacted

a) Industrial Disputes Act,1947b) Payment Of Minimum Wages Act, 1952c) Employees State Insurance Act, 1948d) Employment Exchange Act, 1961e) Payment Of Bonus Act, And Payment Of Gratuity Act , 1972f) Workmens Provident Fund Act, 1952NEED OF LABOUR LEGISLATION

Ever since industrialization became a force to reckon with, the working class has

been at the receiving end of the ill treatment meted out to them by their employers.

The fact that they were illiterate, unsure of themselves and disunited did nothing to

improve their situation. They were systematically exploited and discriminated

against by hordes of employers, for whom profits took precedence over everything


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else, including the health and welfare of a worker.

Workers were made to work for long hours under absolutely inhuman conditions.

They were paid a pittance for the work they put in. All too often, a proportion of

this pittance was taken away under one pretext or the other.

Workers could do nothing about this injustice. They had no right to discuss the

terms and conditions of their employment. The constant influx of migrants, from

rural to urban areas in search of employment, ensured that employers were always

assured of cheap labour and a submissive working class. Anyone who refused to

work under these conditions would lose his job to another worker grateful for the

opportunity to earn a living.

The demand for consumer goods rose around the two World wars. Employers felt

the need to go in for large-scale production in order to cope with the demand. It

was at this time that workers realized that if they were to band together, they would

be able to demand more equitable terms and conditions of employment. This

realization led to a demand for higher wages and better working conditions. When

employers refused to heed these demands, strikes and lockouts became the

commonplace.

The basic principle of industrial legislation is to ensure social justice to the workers

The object of legislation is the equitable distribution of profits and benefits

accruing from industry between industrialists and workers and affording protection

to the workers against harmful affects to their health safety and morality.

In a developing country like India, Labour legislation becomes especially

important because of the following reasons

1).Labour organizations are relatively weak and in most of the cases, they depend

merely on the mercy of the employers.

Individual worker is economically very weak and is unable to bargain his terms

with the employers. Now the prior payment of wages layoff, dismissal,


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retrenchments etc , are all governed by legislation. The economic insecurity of the

workers is removed to a great extent.

2) .In many organizations, workers may feel occupational insecurity.

The workers may not be given money in case of accidents, death, occupationalAct, Employees State Insurance Act, certain benefits have been statutorily given to

workers which the employees otherwise may not get from their employers.

3.)In any factories, there important working conditions on account of which the

employees health and safety is always in danger .The factories Act contains

a number of provisions relating to health safety and welfare of workers. Special

provisions have been made for the women.

4.)Labour legislation is also necessary from the viewpoint of law and order

situation and national security of the country. State plays a vital role in the

continuing production.

a) It helps in the economic development of the country.

b) The idea of Welfare State is embodied in the Directive Principles of the

constitution and for reason, various labour laws have been enacted to protect the

sections of the society.

5.)Labour Legislation is one of the most progressive and dynamic instruments

for achieving socio-economic progress.

ELEMENTS OF LABOUR LAW

The basic subject matter of labour law can be considered under nine broad heads

Employment; Individual Employment Relationships Wages And Remuneration; Conditions of Work Health, Safety, And Welfare; Social Security;


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Trade Unions And Industrial Relations; The Administration Of Labor Law; And Special Provisions For Particular Occupational Or Other Groups.PURPOSE OF LABOUR LEGISLATION

Labour legislation that is adapted to the economic and social challenges of

the modern world of work fulfils three crucial roles:

it establishes a legal system that facilitates productive individual and collectiveemployment relationships, and therefore a productive economy;

by providing a framework within which employers, workers and theirrepresentatives can interact with regard to work-related issues, it serves as animportant vehicle for achieving harmonious industrial relations based on

workplace democracy;

it provides a clear and constant reminder and guarantee of fundamentalprinciples and rights at work which have received broad social acceptance

and establishes the processes through which these principles and rights can be

implemented and enforced

But experience shows that labour legislation can only fulfills these functions

effectively if it is responsive to the conditions on the labor market and needs of

the parties involved. The most efficient way of ensuring that these conditions

and needs are taken fully into account is if those concerned are closely

involved in the formulation of the legislation through processes of social

dialogue. The involvement of stakeholders in this way is of great importance in

developing a broad basis of support for labour legislation and in facilitating its

application within and beyond the formal structured sectors of the economy.

OBJECTIVES OF LABOUR LEGISLATION

The main objectives for various labour laws areas follows :

To protect the workers from profit seeking exploiters To promote cordial industrial relations between employers and employees.


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To preserve the health safety and welfare of workers. To product the interests of women and children working in the factories. To improve their working and living conditions, To encourage settlement of industrial dispute amicably for the purposeof

maintaining industrial peace and harmony,

To provide for a legal machinery to take care of various aspects of socio-economic importance and environment,

To ensure social justice to both the employers and the employees , To reduce tensions and chances of victimization, To create an environment of peaceful coexistence, To ensure safeguard and safe environment for workmen in factories and

industries,

To compensate the injured workmen and their dependents in the event ofaccident,

To provide relief to workmen in the matter of layoff andretrenchment, collective bargaining, etc.

PRINCIPLES OF LABOUR LEGISLATION :

There are four principles on which the labour legislation is based viz,

1. Social Justice.2. Economic Justice.3. National economy4. International conventions

Social Justice

The concept of social justice refers to providing justice to everyone in the society

so that the poor are not exploited by the rich..It is an in the interest of both

employers and employees that they should consider themselves as two wheels of acart and firmly believe that one cannot exist without the other.


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National Economy :

Labour legislation ensures industrial peace and helps in the industrialization of the

country..The Directive principles of the constitution contain the idea of welfarestate..It is a fundamental of a welfare state to look after the interest of workers who

are the weakest section of the society and satisfy their physical needs with the

increase in productivity the benefits are shared with the workers , resulting in their

prosperity..Thus for the growth of economy and development of the country ,

labour legislation acts as guiding principle.

International Conventions

International labour organizations aims at securing the minimum standard of living

for the workers throughout the world..If any convention is passed by

government, it becomes binding if it is ratified by any

country..Thus, labour legislation is guided by these conventions

LABOUR JURISDICTION-STATE VS CENTRAL

Under the Constitution of India, Labour is a subject in the Concurrent List where

both the Central & State Governments are competent to enact legislation subject to

certain matters being reserved for the Centre.

Constitutional Status

Union List Concurrent List

Entry No. 55 : Regulation of labour and

safety in mines and oil fields

Entry No. 22: Trade Unions; industrial

and labour disputes.

Entry No. 61: Industrial disputes

concerning Union employees

Entry No.23: Social Security and

insurance, employment andunemployment.

Entry No.65: Union agencies and

institutions for "Vocational ...training..."

Entry No. 24: Welfare of about including

conditions of work, provident funds,

employers 'invalidity and old age

pension and maternity benefit.


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The legislations can be categorized as follows:

1) Labour laws enacted by the Central Government, where the CentralGovernment has the

sole responsibility for enforcement.

2) Labour laws enacted by Central Government and enforced both by

Central and State Governments.

3) Labour laws enacted by Central Government and enforced by the State

Governments.

4) Labour laws enacted and enforced by the various State Governmentswhich apply to respective States

The Constitution of India provides detailed provisions for the rights of the citizens

and also lays down the Directive Principles of State Policy which set an aim to

which the activities of the state are to be

guided. These Directive Principles provide

a. For securing the health and strength of employees, men and women;

b.That the tender age of children are not abused;

c. That citizens are not forced by economic necessity to enter avocations unsuitedto their age or strength;

d.Just and humane conditions of work and maternity relief are provided; and

e. That the Government shall take steps, by suitable legislation or in any other

way, to secure the participation of employee in the management of undertakings,

establishments or other organisations engaged in any industry.

LABOUR POLICY OF INDIA

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, viz., maintaining industrial peace and promoting the

welfare of labour.


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Labour Policy Highlights

Creative measures to attract public and private investment. Creating new jobs New Social security schemes for workers in the unorganised sector. Social security cards for workers. Unified and beneficial management of funds of Welfare Boards. Reprioritization of allocation of funds to benefit vulnerable workers. Model employee-employer relationships. Long term settlements based on productivity. Vital industries and establishments declared as `public utilities`. Special conciliation mechanism for projects with investments of Rs.150 crores

or more. Industrial Relations committees in more sectors. Labour Law reforms in tune with the times. Empowered body of experts to

suggest required changes.

Statutory amendments for expediting and streamlining the mechanism ofLabour Judiciary.

Amendments to Industrial Disputes Act in tune with the times. Efficient functioning of Labour Department. More labour sectors under Minimum Wages Act. Child labour act to be aggressively enforced. Modern medical facilities for workers. Rehabilitation packages for displaced workers. Restructuring in functioning of employment exchanges. Computerization and

updating of data base.

Revamping of curriculum and course content in industrial training. Joint cell of labour department and industries department to study changes in

laws and rules.

CLASSIFICATION OF VARIOUS LABOUR LAWS

The days where the labourers toiled hard for a pittance are in for a welcome

change. Around this time, the government decided to impose some kind of order in


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this set-up. A number of laws were enacted in order to provide relief to workers

and ensure the smooth working of the production process.

There are over 45 legislations on labour from the Central Government and the

number of legislations enacted by the State Governments is close to four times that

of the Central Acts.

Labour Laws can be classified into the following eight categories:

1. Laws related to Industrial Relations2. Laws related to Wages3. Laws related to Specific Industries4. Laws related to Equality and Empowerment of Women5. Laws related to Deprived and Disadvantaged Sections of the Society6. Laws related to Social Security7. Laws related to Employment & Training8. OthersLaws related to Industrial Relations

1. The Trade Unions Act, 19262. The Industrial Employment (Standing Orders) Act, 1946

The Industrial Employment (Standing Orders) Rules, 1946

3. The Industrial Disputes Act, 1947Laws related to Wages

1) The Payment of Wages Act, 1936The Payment of Wages Rules, 1937

2) The Minimum Wages Act, 1948The Minimum Wages (Central) Rules, 1950

3) The Working Journalist (Fixation of Rates of Wages) Act, 1958Working Journalist (Conditions of service) and Miscellaneous Provisions

Rules, 1957

4) The Payment of Bonus Act, 1965The Payment of Bonus Rules, 1975


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Laws related to Specific Industries

a. The Factories Act, 1948b. The Dock Workers (Regulation of Employment) Act, 1948.

The Plantation Labour Act, 1951c. The Mines Act, 1952d. The Working Journalists and other Newspaper Employees (Conditions of

Service and Misc. Provisions) Act, 1955

The Working Journalists and other Newspaper Employees (Conditions of

Service and Misc. Provisions) Rules, 1957

e. The Merchant Shipping Act, 1958f. The Motor Transport Workers Act, 1961g. The Beedi & Cigar Workers (Conditions of Employment) Act, 1966h. The Contract Labour (Regulation & Abolition) Act, 1970i. The Sales Promotion Employees (Conditions of Service) Act, 1976

The Sales Promotion Employees (Conditions of Service) Rules, 1976

j. The Inter-State Migrant Workmen (Regulation of Employment andConditions of Service) Act, 1979

k. The Shops and Establishments Actl. The Cinema Workers and Cinema Theatre Workers (Regulation of

Employment) Act, 1981

The Cinema Workers and Cinema Theatre Workers (Regulation ofEmployment) Rules, 1984

The Cine Workers Welfare Fund Act, 1981.

m.The Dock Workers (Safety, Health & Welfare) Act, 1986n. The Building & Other Construction Workers (Regulation of Employment &

Conditions of Service) Act, 1996

o. The Dock Workers (Regulation of Employment) (inapplicability to MajorPorts) Act, 1997

p. The Mica Mines Labour Welfare Fund Act, 1946q. The Limestone & Dolomite Mines Labour Welfare Fund Act, 1972r. The Beedi Workers Welfare Fund Act, 1976s. The Beedi Workers Welfare Cess Act, 1976t. The Iron Ore Mines, Manganese Ore Mines & Chrome Ore Mines Labour

Welfare Fund Act, 1976


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u. The Iron Ore Mines, Manganese Ore Mines & Chrome Ore Mines LabourWelfare Cess Act, 1976

v. The Cine Workers Welfare Fund Act, 1981w.The Cine Workers Welfare Cess Act, 1981x. The Employment of Manual Scavengers and Construction of Dry latrines

Prohibition Act, 1993

y. The Coal Mines (Conservation and Development) Act, 1974

Laws related to Equality and Empowerment of Women

1) The Maternity Benefit Act, 19612) The Equal Remuneration Act, 1976

Laws related to Deprived and Disadvantaged Sections of the Society

1) The Bonded Labour System (Abolition) Act, 19762) The Child Labour (Prohibition & Regulation) Act, 1986

Laws related to Social Security

1. The Workmens Compensation Act, 19232. The Employees State Insurance Act, 19483. The Employees Provident Fund & Miscellaneous Provisions Act, 19524. The Payment of Gratuity Act, 1972

Laws related to Employment & Training

1. The Employment Exchanges (Compulsory Notification of Vacancies) Act,1959The Employment Exchanges (Compulsory Notification of Vacancies) Rules,

1959

2. The Apprentices Act, 1961


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Others

1. The Fatal Accidents Act, 18552. The War Injuries Ordinance Act, 19433.

The Weekly Holiday Act, 19424. The National and Festival Holidays Act

5. The War Injuries (Compensation Insurance) Act, 19436. The Personal Injuries (Emergency) Provisions Act, 19627. The Personal Injuries (Compensation Insurance) Act, 19638. The Labour Laws (Exemption from Furnishing Returns and Maintaining

Register by Certain Establishments) Act, 1988

9. The Public Liability Insurance Act, 1991

OVERVIEW OF IMPORTANT LABOR LAWS

THE FACTORIES ACT, 1948

Objectives

1. To ensure adequate safety measures and to promote the health and welfare ofthe workers employed in factories.

2. To prevent haphazard growth of factories through the provisions related to theapproval of plans before the creation of a factory.

Applicability of the Act

1. Applicable to the whole of India including Jammu & Kashmir.2. Covers all manufacturing processes and establishments falling within the

definition of factory.

3. Applicable to all factories using power and employing 10 or more workers, andif not using power, employing 20 or more workers on any day of the preceding12 months.

Scheme of the Act

1. The Act consists of 120 Sections and 3 Schedules.2. Schedule 1 contains list of industries involving hazardous processes


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3. Schedule 2 is about permissible level of certain chemical substances in workenvironment.

4. Schedule 3 consists of list of notifiable diseases.

EMPLOYEES PROVIDENT FUND AND MISCELLANEOUS

PROVISIONS ACT, 1952

An Act to provide for the institution of provident funds, pension funds and

deposit linked insurance

fund for the employees in the factories and other establishments. The Act extends

to the whole of India except the State of Jammu and Kashmir

Objectives

To make provisions for the future of the industrial worker after he retires or for his

dependents in the case of his early death.

Compulsory Provident Fund Family Pension Deposit linked insurance

Scope and coverage

Application to factories and establishments employing 20 or more persons. Can be made applicable by central government to establishments employing

less than 20 persons or if the majority of employees agree.

Excludes establishments employing 50 or more persons or 20 or more personsbut less than 50 persons, until the expiry of three years in the case of the

former, and five years in the case of the former, and five years in the case of

the latter, from the date of setting up of establishment.

Applicable to all persons who are employed directly or indirectly throughcontractors in any kind of work.


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Eligibility

Employees drawing pay not exceeding Rs. 6,500/- per month.

Schemes framed under the Act

The Employees Provident Funds Schemes, 1952; The Employees Pension Scheme, 1995 and The Employees Deposit Linked Insurance Scheme, 1976

THE EMPLOYEES STATE INSURANCE ACT (ESI ACT), 1948

Origin

The Employee State Insurance act was promulgated by the Parliament of India

in the year 1948.To begin with the ESIC scheme was initially launched on 2

February 1952 at just two industrial centers n d in the country namely Kanpur

and Delhi with a total coverage of about 1.20 lakh workers. There

after the scheme was implemented in a phased manner across the country

with the active involvement of the state governments.

Objectives:

The ESI Act is a social welfare legislation enacted with the object of

providing certain benefits to employees in case of sickness, maternity and

employment injury. Under the Act, employees will receive medical relief, cash

benefits, maternity benefits, pension to dependents of deceased workers and

compensation for fatal or other injuries and diseases.

Administration Of The Act

The provisions of the Act is administered by Employees State Insurance

Corporation

ESIC - Employees State Insurance Corporation (ESIC) has been formed to

supervise the scheme under Section 3 of the Act. The Corporation supervises and

controls the ESI scheme.


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Applicability of ESI Scheme - The scheme is applicable to all factories. [Section

1(4)]. The Appropriate Government can also make it applicable to any other

industrial, commercial, agricultural or other establishments, by issuing notification

and giving 6 month notice. [Section 1(5)].

Thus, ESI Act can be made applicable to shops also. However, since Government

has to provide for hospitals and medical facilities, the Act can be made applicable

to different parts of State at different dates. Thus, if a factory is at a place where

ESIC is unable to provide medical facilities, ESI Act may not be made applicable

to that area. Government can exempt a factory or establishment or persons or class

of persons from provisions of ESI Act, if the employees are getting better medical

facilities/ [e.g. if Government is convinced that the factory itself is providing very

good medical facilities e.g. like TISCO].

PAYMENT OF GRATUITY ACT, 1972

Gratuity is a lump sum payment to employee when he retires or leaves service. It is

basically a retirement benefit to an employee so that he can live life comfortably

after retirement. However, under Gratuity Act, gratuity is payable even to an

employee who resigns after completing at least 5 years of service.

In DTC Retired Employees v. Delhi Transport Corporation 2001(4) SCALE 30 =

2001 AIR SCW 2005, it was observed that gratuity is essentially a retiring benefit

which as per Statute has been made applicable on voluntary resignation as well.

Gratuity is reward for good, efficient and faithful service rendered for a

considerable period.

Employers liable under the scheme - The Act applies to every factory, mine,

plantation, port, and railway company. It also applies to every shop and

establishment where 10 or more persons are employed or were employed on any

day in preceding 12 months. [Section1(3)]. Since the Act is also applicable to allshops and establishments, it will apply to motor transport undertakings, clubs,

chambers of commerce and associations, local bodies, solicitors offices etc. , if

they are employing 10 or more persons.


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Employees eligible for gratuity Employee means any person (other than

apprentice) employed on wages in any establishment, factory, mine, oilfield,

plantation, port, railway company or shop, to do any skilled, semi-skilled or

unskilled, manual, supervisory, technical or clerical work, whether terms of such

employment are express or implied, and whether such person is employed in amanagerial or administrative capacity. However, it does not include any

Central/State Government employee. [Section 2(e)]. Thus, the Act is applicable to

all employees - workers as well as persons employed in administrative and

managerial capacity.

Gratuity is payable to a person on (a) resignation (b) termination on account of

death or disablement due to accident or disease (c) retirement (d) death. Normally,

gratuity is payable only after an employee completes five years of continuous

service. In case of death and disablement, the condition of minimum 5 years

service is not applicable. [Section 4(1)].

The Act is applicable to all employees, irrespective of the salary.

PAYMENT OF BONUS ACT, 1965

The term bonus has not been defined in the Payment of Bonus Act, 1965.

Websters International Dictionary, defines bonus as something given in additionto what is ordinarily received by or strictly due to the recipient. The Oxford

Concise Dictionary defines it as something to the good into the bargain (and as an

example) gratuity to workmen beyond their wages.

Establishments to which the Act is applicable - The Act applies to(a) every

factory; and (b) every other establishment in which twenty or more persons are

employed on any day during an accounting year. [section 1(3)].


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PAYMENT OF WAGES ACT, 1936

Objectives

To ensure regular and prompt payment of wages and to prevent theexploitation of a wage earner by prohibiting arbitrary fines and deductions

from his wages.


Application for payment of wages to persons employed in any factory. Not applicable to wages which average Rs 6,500 per month or more. Wages include all remuneration, bonus, or sums payable for termination of

service, but do not include house rent reimbursement, light vehicle charges,

medical expenses, TA, etc.

Important provisions of the Act

Responsibility of the employer for payment of wages and fixing the wageperiod.

Procedures and time period in wage payment. Payment of wages to discharged workers. Permissible deductions from wages. Nominations to be made by employees. Penalties for contravention of the Act. Equal remuneration for men and women. Obligations and rights of employers. Obligations and rights of employees.

The Act is to regulate payment of wages to certain class of employed persons. The

main purpose of this Act is to ensure regular and timely payment of wages to theemployed persons, to prevent unauthorized deductions being made from wages and

arbitrary fines being imposed on the employed persons. The Act extends to the

whole of India.

Application of the Act:


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The Act applies to payment of wages to persons employed in factory or railways. It

also applies to any industrial or other establishment specified in Section 2(ii).

[Section 1(4)]. Factory means factory as defined in Section 2(m) of Factories

Act. - - Industrial or other establishment specified in Section 2(ii) are - * Tramway

or motor transport services * Air transport services * Dock wharf or jetty * Inlandvessels * Mines, quarry or oil-field * Plantation * Workshop in which articles are

produces, adopted or manufactured. - - The Act can be extended to other

establishment by State/Central Government.

Presently, the Act applies to employees drawing wages upto Rs 6,500. [Section

1(6)]. Every employer is responsible for payment to persons employed by him on

wages. [Section 3].

WORKMEN'S COMPENSATION ACT 1923

This Act is the earliest national legislation to provide the compensation to certain

classes of workmen by their employers for injury which may be suffered by the

workmen as a result of an accident during the course of employment. The general

principle is that a workman who suffers injury in course of his employment should

be entitled to compensation and in case of fatal injury his dependants should be

compensated.

MINIMUM WAGES ACT 1948

The Act prescribes minimum wages for all employees in all establishments or

working at home in certain employments specified in the schedule of the Act.

Central and State Governments revise minimum wages specified in the schedule

INDUSTRIAL DISPUTES ACT 1947

Origin

The Industrial Disputes Act, 1947 came into existence in April 1947. It

was enacted to make provisions for investigation and settlement of industrial

disputes and for providing certain safeguards to the workers.

The Act contains 40 sections divided into 7 chapters.


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Chapter I deals with the title, definitions, etc Chapter II contains the various authorities under the Act. These

authorities include Conciliation Officers, Labour Courts and Tribunals.

Chapter III contains the main scheme of the Act such as reference of

disputes to Labour Courts and Industrial Tribunals.

Chapter IV lays down the procedure, power and duties of the authoritiesconstituted under the Act.

Chapter V contains provisions to prohibit strikes and lockouts,declaration of strikes and lockouts as illegal, and provisions relating to

lay-off and retrenchment and closure.

Chapter-VI contains provisions of various penalties under the Act. ChapterVII contains miscellaneous provisions.Objective of the Act

The objective of the Industrial Disputes Act is to secure industrial peace and

harmony by providing machinery and procedure for the investigation and settlement

of industrial disputes by negotiations.

The Act also lays down:

(a) The provision for payment of compensation to the Workman on account of

closure or lay off or retrenchment.

(b) The procedure for prior permission of appropriate Government for laying

off or retrenching the workers or closing down industrial establishments

(c) Unfair labour practices on part of an employer or a trade union or workers.

Applicability

The Industrial Disputes Act extends to whole of India and applies to every

industrial establishment carrying on any business, trade, manufacture or

distribution of goods and services irrespective of the number of workmen

employed therein. Every person employed in an establishment for hire or reward

including contract labour, apprentices and part time employees to do any


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manual, clerical, skilled, unskilled, technical, operational or supervisory work,

is covered by the Act.

This Act though does not apply to persons mainly in managerial or administrative

capacity, persons engaged in a supervisory capacity and drawing > 1600 p.m

or executing managerial functions and persons subject to Army Act, Air Force andNavy Act or those in police service or officer or employee of a prison.

MATERNITY BENEFIT ACT 1961

The Maternity Benefits Act, 1961, gives her the assurance that her rights will be

looked after while she is at home to care for her child.

The object of the Act is to regulate the employment of women in certainestablishments for certain periods before and after childbirth and to provide for

maternity benefits and certain other benefits.


This act applies to women who work in factories, mines, plantations, circus

industry, shops and establishment with more than 10 employees. It does not

apply to employees covered by the Employees State Insurance Act, 1948. It

can be extended to other establishments by the State Governments

Every women employee who has actually worked in an establishment for a period

of at least 80 days during the 12 months immediately proceeding the date of her

expected delivery, is entitled to receive maternity benefits i.e. medical bonus,

maternity leave, nursing breaks under the Act.

INDUSTRIAL EMPLOYMENT (STANDING ORDERS) ACT 1946

The Act requires employers in industrial establishments to clearly define the

conditions of employment by issuing standing orders duly certified. Model

standing orders issued under the Act deal with classification of workmen, holidays,

shifts, payment of wages, leaves, termination etc.


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The Industrial Employment Act requires employers in industrial establishments to

clearlydefine the conditions of employment by issuing standing orders duly

certified. Modelstanding orders issued under the Act deal with classification of

workmen, holidays, shifts,payment of wages, leaves, termination etc. Generally,

the workers are classified as

Apprentice/Trainee;

Casual;

Temporary;

Substitute;

Probationer;

Permanent; And

Fixed Period Employees

THE MINES ACT, 1952

The Act seeks to regulate the working conditions in mines by providing for

measures to be taken for the safety of workers employed therein and certain

amenities for them.

THE CONTRACT LABOUR (REGULATION & ABOLITION) ACT, 1970

The Act was passed to aid of workers who are employed through contractors and

who have no direct link with industry for which work is done. The Act regulates

the employment of contract labour in certain establishments and prohibits such

employment in certain circumstance.s.

WHICH COURT TO APPROACH IN CASE OF A LABOUR DISPUTE?

Judicial System in India


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The judicial system in India is quite well-established and independent. The

Supreme Court of India in New Delhi is the highest Court of Appeal. Each State

has a High Court along with subsidiary District Courts, which enforce the rule of

law and ensure fundamental rights of citizens, guaranteed by the Constitution of

India.

India has a three-tier court system with a typical Indian litigation starting from a

District Court and reaching its logical conclusion in the Supreme Court of India.

The High Courts along with the various State level forums, situated mostly in the

State capitals, constitute the middle rung of this three-tier system. District level

courts are the courts of first instance in dispute resolution except in cases where

they are prevented from being so by virtue of lack of pecuniary jurisdiction. Cases

involving violation of fundamental rights are filed in respective High Court orSupreme Court.

A number of special courts and tribunals have been constituted in India to deal

with specific disputes: -

1. Tax Tribunals

2. Consumer Dispute Redressal Forums

3. Insurance Regulatory Authority of India

4. Industrial Tribunals

5. Debts Recovery Tribunals6. Company Law Board

7. Motor Accidents Claims Tribunals

8 Labour Courts

Where to file?

Most of the labour disputes are referred to the Labour Courts/Industrial Tribunalsthrough the Department of Labour under the respective State Government. The

process for labour dispute starts with filing of a petition before Labour Conciliation

Officer and in case no compromise is possible, the said officer sends a failure

report to the Government. After consideration of the said


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report, the Government may send a reference to the Labour Court/Industrial

Tribunal. In certain matters, the labour dispute can be directly filed in the court

concerned.

Labour Courts These courts are found in every district and they form the courtsof original jurisdiction under which various labour laws and rules are enforced.

Appellate Labour Courts These courts hear only the Appeals and revisions

originating from the judgements and orders of the subordinate original labour

courts and officers, under the provisions of various labour and related laws.

a) When an industrial dispute has been referred to a Labour Court for adjudication,it is the duty of the Labour Court to

(i) Hold proceedings expeditiously, and(ii) To submit its award to the appropriate Government soon after the

conclusion of the proceedings.

b)However, no deadline has been laid down with respect to the time within whichthe completion of proceedings has to be done. Nonetheless, it is expected that

these Courts hold their proceedings without getting into the technicalities of a

Civil Court.

c) It has been held that the provisions of Article 137 of the Limitation Act do notapply to reference of disputes to the Labour Courts. These Courts can change

the relief granted by refusing payment of back wages or directing payment of

past wages too.

Court Fee

No Court fee is payable on the petitions filed before Labour Courts and Industrial

Tribunals.

What matters fall within the jurisdiction of Industrial Tribunals?

1. Wages, including the period and mode of payment

2. Compensatory and other allowances

3. Hours of work and rest intervals

4. Leave with wages and holidays


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5. Bonus, profit sharing, provident fund and gratuity

6. Shift working otherwise than in accordance with standing orders

7. Classification by grades

8. Rules of discipline

9. Retrenchment of workmen and closure of establishment

What matters fall within the Jurisdiction of Labour Courts?

1. The propriety or legality of an order passed by an employer under the standing

orders

2. The application and interpretation of standing order

3. Discharge or dismissal of workmen including re-instatement of, or grant of relief

to, workmen wrongfully dismissed.

4. Withdrawal of any customary concession or privilege

5. Illegality or otherwise of a strike or lock-out; and

6. All matters other than those being referred to Industrial Tribunals.

Stages of adjudication in labour or industrial disputes

The first is receiving a reference from the appropriate Government or filing of the

labour dispute in the Labour Court. The next step is sending notice to the

Management and after filing of the response by them, the matter is fixed for

adjudication. The fourth step is recording the evidence of the parties and hearing

the arguments. It is appropriate to mention here that advocates cannot appear inLabour Courts/Industrial Tribunals, unless permitted.

The final conclusion of the dispute

After hearing the parties, the Labour Court/Industrial Tribunal decides the dispute

and the said final decision is called an Award. A copy of the award is to be


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published by the Labour Department as per rules. Copies of the same are also sent

to the parties concerned.

Execution of Awards

In case the management does not comply with the terms of the award, the

workman may pray for its execution by moving an application before the

concerned Conciliation Officer.

Mediation in Labour Disputes

Mediation is an exercise of resolving a dispute by settlement with the help of a

Mediator who is a neutral third party. The mediator may be:

a) A judicial officer (retired or sitting judge)b) An Advocatec) An otherwise trained professionalWhen a sitting judicial officer acts as a mediator in a case, his services are

available free of cost and without any other charges on any of the parties.

Important Authorities Under The Labour Law In India

Ministry of Labour and Employment , Government of India

The Ministry of Labour and Employment, a branch of the Government of India,

is the apex body for formulation and administration of the rules and

regulations and laws relating to labour and employment in India.

The main objectives of the Ministry of Labour and Employm ent are the

following:

Labour Policy and legislation; Safety, health and w elfare of labour; Social security of labour; Policy relating to special target groups such as w omen and child labour; Industr ial relations and enforcem ent of labour laws in the Centr al sphere; Adjudication of industrial disputes through Central Government Industrial

Tribunals cum Labor Courts and National Industr ial Tribunals.


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A.Main Secretariat of Ministry of Labour and Employmenti.Industrial Relations division

ii.Child and Women Labour Division

iii.Directorate General, Labour Welfare

iv.Economic and Statistics Division

v.International Labour Affairs Section

vi.Labour Conference Section

B. Attached Offices

i.Office of the Chief Labour Commissioner ( Central), New Delhi (Also

known asCentral Industrial Relations Machinery)

ii.Directorate General, Employment and Training, New Delhi

iii.Labour Bureau, Chandigarh

iv.Directorate General, Factory Advice Service and Labour Institutes, Bombay

C. Subordinate Officesi.Directorate General, Mines Safety, Dhanbad

ii.Office of the Welfare Commissioner, Allahabad, Bangalore, Bhubaneswar,

Calcutta, Hyderabad, Jabalpur, Karma(Bihar) and Nagpur


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IMPORTANCE OF LABOUR LAWS IN INDIA

Compared to other countries, India has much greater need and importance of labor

laws work. Such a condition is caused by certain deficiencies in Indian labor force

that are not found in its counterpart in other countries. It is these defects ofdeficiencies that increase the importance of labor laws activity in the country.

Briefly, the following are the reasons why labor laws work in India assumes

greater importance than in other countries.

1. Lack Of Strong Labour Union Movement:In India, even today the workers are no united into a class. Keeping in view the

numbers, labor Union movement is still in its infancy. Even in the labor union thatdoes exist, there is a lack of enlightened leadership, and there is no unity between

these unions themselves. In absence of properly organized labor Union the workers

can neither, place their demands effectively before the employer, nor can they

think clearly and systematically of their own interests. As this is force lacking in

India, it is essential that the welfare of laborers in the country be efficiently looked

after by the employers and the Government.

2. Illiteracy:As compared with other countries, the percentage of educated workers is very low,

most of them being illiterate. Consequently, they are not in a position to receive

advanced industrial training, understand the problems in industries their own

interests and those of nation as a whole. This can prove a source of harm not only

to the workers but also to the country. Hence efficient, and become responsible

citizens of the country.

3. Problem Of Absenteeism And Migration:Compared to the workers of other countries the Indian laborer is more restless and

does tendentious towards frequent migration because life in the town does not

provide for his needs, and the atmosphere in general does not suit him. Also due to

inadequate level of wages the laborer cannot comfortably settle down in one place.


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This may in turn also give rise to Absenteeism. This workers migratory tendency

can be curbed by providing him with adequate facilities and conditions, and this

also shows a positive effect over the absenteeism in the factory.

4. Low Level Of Health And Nutrition:The Indian worker as compared with his counterpart in most European countries is

unhealthy and ill fed. This shows a definite affect over the production potential.

Hence, he is very great need of inexpensive nutritive food and good facility in case

of hospitalization.

5. Extreme Poverty:The percentage of people under the poverty line in our country is comparatively

high than other countries. So the standard of living is very low. An Indian workers

is unable to provide a healthy living for his family and in the case off female

workers she is not provide with assistance in case of need. Hence, the labor welfare

has much to do in the country. It must assist them by providing them maternity

benefits, in old age i.e., provident fund, pensions and gratuity etc.

6. Lack Of Training:As the percentage of trained workers in India is very low, it is necessary to have

training facilities for such a vast labor force.

7. Lack Of Healthy Recreation:Healthy recreation is also at a premium in the country, the efficiency of labor force

is diminished by energy being employed in all kinds of undesirable channels.

Hence, it is essential that recreation and enjoyment of a healthy kind be provided.

8. Industrial Backwardness Of India:In India, industrial progress is being aimed through the medium of the five

year plans, but industrial progress is dependent on the efficiency of the labor force.


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The welfare work motivates the workers and maintains efficiency and productivity.

So, we can say that the importance of these activities is great for India in

comparison to western countries.

DOES LABOUR LAWS OF INDIA NEED A CHANGE?

Modern labour regulation is what we look forward to but what it offers us is truly

disappointing. In our country, India, our labour regulation really needs an upgrade

from top to the bottom. Only if the regulations are updated and modernise, it will

attract foreign investments which will further lead to the creation of numerous jobs

and hence, the economy of India will rise high.

The Desi Laws Are Much Disorganised.

India has one of the largest labour and industrial environments in the whole world

and as a result of it; we need to give more importance to this area. However, what

is being done by the body of legislation is not up to the mark.

Hereunder mentioned are few age old, chaotic and self contradictory Acts, which

more than benefiting the common people; put them into legal doldrums.

The Contract Labour Act, 1970 Beedi and Cigar Workers Act, 1966

Trade Unions Act, 1926

Minimum Wages Act, 1948

However, the Industrial Disputes Act, 1947 is hugely referred in todays modern

labour law industries and it is still considered as the most important weapon in the

legal battle for both the workman and the company. Just before the independence

of India, the Industrial Disputes Act, 1947, in short known as the IDA, came into

existence with incorporation of certain rules and regulations regarding the method

and procedures of hiring and firing related to the industrial sectors. This Act is

supposed to make it difficult for the company to fire anyone.


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The Industrial Disputes Act, 1947 went through an amendment during mid-80s.

Now any company with more than a hundred workers, need to take State

Governments permission before hiring workers. How many of them actually do

that is another question!

However, this Act has indirectly harmed the growth of industries like the

manufacturing sector. Most of the Indian Labour laws (including the IDA) dont

give you the permission of free contracting.

If a fashion garment manufacturer, whose demand is always unpredictable, wants

to hire workers at a higher price because of the rise in sudden demand but also

wants to make it clear that they serve a months notice or so and terminate the

service of the workers, in case the demand goes down. But in this situation, the

India labour law becomes a hindrance.

A contract like this is not feasible and has no legal value since the Industrial

Disputes Act clearly specifies how and when the workers may be retrenched. Thus

we do not see these kinds of contracts. Initially these labour laws seem to favour

the poor workers and their interests.

Chances of possibilities

Hundreds of companies do not hire eligible workers, with a fear that they will not

be able to lay them off in case of need. Then why hire these workers initially? This

leads to a good number of unemployment too. Many foreign companies do not feel

comfortable in investing in India as they think that it is not feasible to do business

in the current legal scenario of India.

However, there is no such data post 1980 which shows that the number of workers

engaged in companies with 100+ workers have reduced. This reflects the markets

response towards the amendment made in the Industrial Disputes Act during the

middle of 1980.

Companies, which are considered to be in a more economically stable position than

a worker, should not be given the opportunity to retrench the service of a worker at

their own sweet will. But on the other hand, companies should be allowed to enter

in different kinds of contracts as per the need and circumstances of a particular

situation.


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Strict rules regarding the hiring and firing policy across the globe.

The Work Bank has conducted a research on the hiring and firing policies of

companies across various countries and 100 points were given to the country

which has the most rigid rules regarding the employment policy.

India scores 48 and ranks among the countries with most unfavorable labor laws.

China is moderately below India with a score of only 30 but surprisingly

Singapores score in very near to zero. Now it is proved that most nations with less

rigid labor regulations are more economically efficient than other countries.

Governments need to encourage and make understand the workers about the need

and essence of reform of labour regulation. It is the responsibility of the

Government to convince the workers to support the reform procedures. But this

reform will only be successful, if the Governments assure the workers of some

complimentary policies which will provide the social security and benefit in the

welfare of the workers.

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