Labour Laws in India: Reforms, Acts and Policies

labour laws in indiaLabour laws in India are quite complex and governed by many acts which were enacted from time to time to address the growing needs of labour regulations. The Ministry of Labour and Empoyment has responsibility to protect and safeguard the interests of workers in India. Basically labour laws consist of a collection of laws, administrative rules which reflect or explain the legal rights as well as legal restrictions on the workforce and their organisations. Labour laws are formulated to protect the interest and rights of labour workforce.

Labour laws are basically divided into two categories:

  • Collective Labour Laws: It contains the laws related to the tripartite agreement between employee, employers and trade unions.
  • Individual Labour Laws: It is concerned about the rights of individual employees at workplace.
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Objective of Labour Policy or Labour Legislations

Labour legislations have sought to achieve the following objectives:

  • Establishment of Justice – Social, Political and Economical
  • Provision of opportunities to all workers irrespective of caste, creed, religion etc.

Let us now briefly look at some important labour laws in  India:

Labour Laws in India: Trade Unions Act, 1926

This act provides an opportunity to the workers to form their own unions and get their unions registered. A registered trade union shall at all-time continue to have no less than 10% or 100 of the workmen.

Employment Act, 1946

Under the provisions of this act, every employee of industrial establishment employing 100 or more workmen needs to precisely defines and point out the conditions of employment with in the workplace.

Minimum Wages Act, 1948

It was enacted to safeguard the interests of workers mostly in the unorganized sector by providing for fixation of minimum wages in certain specific employments. It binds the employers to pay their workers the minimum wages fixed under this act from time to time.

Industrial Dispute Act, 1947

Industrial dispute is defines as any dispute or difference:

  • Between employers and employees; or
  • Between employers or workmen; or
  • Between workmen; or
  • In terms of employment; or
  • With the conditions of labour

The act was constituted in 1947 in order to limit or prevent or restrict the unfair labour practices by employers, workers or trade unions through the imposition of fines and imprisonment

The act says no company can fire an employee or close down without having government approval for at least 100 workers/employees.

Employee State Insurance Act, 1948

The act applies to all factories using power and employing 20 or more persons on wages. The scheme is administered by a corporate called Employee State Insurance Corporation. The benefits extended are:

  • Sickness and extended sickness benefits
  • Maternity benefit
  • Disablement benefit
  • Dependents benefit
  • Funeral benefit
  • Medical benefit

The Factories act, 1948

The objective of the act is to protect human being from being subject to unduly long hours of bodily strain and manual labour. In order to maintain the interest and efficiency of the employees/workers, the employer will provide several provisions like training facility, occupational health center, and promotion opportunities etc. to them with in factories/industries.

The Employee Provident Funds & Miscellaneous Provision Act, 1952

The act was passed on 4th March, 1952. The objective of the act is to provide substantial security and timely monetary assistance to industrial employees and their families when they are in distress and/or unable to meet family and social obligations and to protect them in old age, disablement, death of breadwinner and some other contingencies.

  • The statutory rate of contribution to PF by the employees and the employer is 10% of the pay of the employee.
  • The central government on the recommendation of the central board of trustees credits the rate of interest annually to the accounts of provident fund subscribers.

Mines Act, 1952

This act provides for health and safety of mine workers or persons employed in coal and oil mines.

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The Maternity Benefit Act, 1961

This act came into effect on 1st November, 1967. It was enacted to promote the welfare of working women. It prohibits the working of pregnant women for a specified period before and after delivery. It also provides for maternity leave and payment of certain monetary benefits to women workers during the period when they are out of employment because of pregnancy.

The Payment of Bonus Act, 1965

As per this act, the workers in any industry for any skilled or unskilled labour including manual, supervisory, managerial, administrative, technical or clerical should receive yearly bonus.

The Contract Labour Act, 1970

The act prohibits companies from hiring temporary workers. Women are not permitted to work in night shift.

The Payment of Gratuity Act, 1972

The act came into existence from September 6th, 1972. The objective of the act is to provide a scheme of compulsory payment of gratuity to employees engaged in factories, mines, oil fields, plantations, ports, railway companies, motor transport undertakings, shops or other establishments. Gratuity is payable to an employee on the termination of his employment after he has rendered continuous service for not less than 5 years.

Child Labour Act, 1979

This law made it illegal for child to work in hazardous industries like factories with heavy and dangerous machinery.

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