04/14/2024

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Labour legislation – iPleaders

This article is written by Shiwangi Singh and further updated by Upasana Sarkar. This article deals with the evolution and history of labour jurisprudence in our country, the challenges it faced, and the factors that led to its growth. It also deals with various aspects of labour legislation. It also gives a detailed understanding of the new Codes that have been introduced in recent times.

Table of Contents

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  • Introduction
  • What is labour legislation
  • Emergence, evolution, and development of labour law in India 
  • Objectives of labour legislation
  • Principles of labour legislation
  • Factors influencing labour legislation
  • Factors specific to India
  • Classification of labour legislation
  • Requirement of labour legislation
  • Purpose of Labour Laws in India 
  • Elements of Labour Law
  • Impact of constitutional provisions on Labour Laws
  • Constitutional background concerning Labour Laws
  • Labour laws in India
    • Apprentices Act, 1961
    • Factories Act, 1948
    • Workmens Compensation Act, 1923
    • Trade Unions Act, 1926
    • Child Labour (Prohibition And Regulation) Act, 1986
    • Maternity Benefit Act, 1961
    • Minimum Wages Act, 1948
    • Employees State Insurance Act, 1948
    • Payment of Bonus Act, 1965
    • Payment of Gratuity Act, 1972
    • Plantation Labour Act, 1951
    • Employees Provident Funds and Miscellaneous Provisions Act, 1952
    • Mines Act, 1952
    • Working Journalist (Conditions of Service) and Miscellaneous Provisions Act, 1955
    • Beedi and Cigar Workers (Conditions of Employment) Act, 1966
    • Building and Other Construction Workers (Regulation of Employment Service) Act, 1996
    • Contract Labour (Regulation & Abolition) Act, 1970
  • Labour reform issues 
  • Recent amendments to Labour laws in India 
  • Invisible labour 
  • Post Labour Codes
  • Important case laws concerning labour legislation
  • Significant points regarding  the Industrial Relations Code
  • Conclusion 
  • Frequently Asked Questions (FAQs)
  • Reference

We are living in a dynamic, ever-changing world. This world has always been regulated by some laws and rules, and as the needs of society grow due to technological, economic and social changes, it calls for immediate action for the formation of new laws. Every sector needs some laws to work which must be removed and formed according to the new society. Life and Laws have moved together in history and they must do so in future. Law is like a citadel which requires regular repairs, revamping and replacement. A plethora of labour laws were introduced for the betterment of the livelihood of the workmen. 

Labour law plays an important role in governing the between the workman and the employers. It was implemented in the Indian legal system to protect the interests of the employees and safeguard them from being exploited by employers. The rights of the employees, their wages, holidays, demands, unions, and many more are governed by the labour laws of India. It plays a crucial role in building a connection between the workmen and the government. 

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Labour legislation is a body of law formed for the working class of people to provide them with legal rights, and also restrict them with rules and regulations. It defines the rights and obligations of the working class. Labour law covers several areas-

  • Certification of Labour Unions The Labour Union is issued with a formal document which ensures them the right to represent on behalf of all the labourers. This Union acts as an exclusive bargaining agent.
  • Collective Bargaining The workers through their unions put demands before their employers, like the terms of their employment, payment, leave, health and safety policies and the number of working hours.
  • Labour-Management Relations The head of any working organisation has to resolve conflict among his labourers because any misunderstanding between his employees will create a downfall in his work progress.
  • Workplace health and safety It ensures that the employees are getting a safe environment to work in and are not physically or mentally abused by the work culture because a better environment will only make them work with all their might.
  • Employment standards These include annual holidays, working hours, unfair means of dismissal of labourers, and compensation provided to the labourers who got terminated or have left the job.

Emergence of labour legislation

The emergence of labour laws has its roots in the 18th and 19th centuries. The labour law emerged as a result of the industrial revolution that took place in those centuries. The Industrial Revolution changed the rural culture to industrial culture which led to various developments. It was due to the increasing capitalisation of the market. At that time, a lot of problems took place between the labour class and the employers. To safeguard the interests and the demands of the labour class, labour laws were enacted in various countries which gave certain rights to the workers working in an establishment. It protected the workers from being exploited by the rich people of industrial society.

The labour laws were first enacted by the Western Countries. England was the first country where workers were exploited by rich upper-class employers. This was due to uncontrolled and unregulated capitalisation. The laissez-faire system was also one of the reasons that took place due to industrialisation. The labour laws were enacted in 1802 to prevent child labour, to limit working hours, and to abolish night shifts in England when the UK Parliament passed bills relating to labour legislation. After England, many other countries also started enacting laws regarding labour classes. Various laws regarding health, safety, welfare, and working hours were passed by those countries. France was one of the countries where labour laws were enacted after the French Revolution, which took place in 1841. Germany, Japan, and the United States of America also introduced labour laws after World War I in 1935. 

Evolution of labour legislation

The evolution of labour laws started with the establishment of the International Labour Organization (ILO) in 1919. It was due to the implementation of the Treaty of Versailles whose objective is to make various policies, and programmes relating to their works and its standards. 187 countries of the World are members of this organisation whose Constitution was drafted by the Labour Commission. It led to the formation of an executive body which was known as a tripartite organization that included representatives from three bodies, i.e., the employers, the workers, and the government. Certain issues relating to the labourers were looked into by ILO. Laws regarding working hours, night shifts, minimum age, unemployment, and maternity protection were being laid down by it to safeguard the rights of labourers. It became a specialized agency of the UN which was supervised by a committee of experts.

India, also, had labour laws before independence. Some of the laws regarding labour classes were The Indian Slavery Act, 1843, The Indian Trade Unions Act 1926, and The Societies Registration Act, 1860. These laws were repealed after India became independent. The Industrial Disputes Act, 1947, was enacted in 1947 which replaced all the previous Acts. Various rights of the workers were introduced to the Indian Constitution for protection from any kind of exploitation. Some rights relating to the labourers that were incorporated in the Constitution are equal work equal pay, abolition of child labour, abolition of bonded labour, decent living wages, maternity benefits, and right to work, just and human working conditions. These are the rights of the workers that are being safeguarded by the Indian Constitution working in an establishment. In the 20th century, these laws were codified and implemented by the Indian Parliament. With the changing times, labour laws started evolving over some time.

Development of labour legislation 

The roots of labour legislation lie in the relentless struggle faced by the workers at their masters work. There was inequality between two classes of people. The contract between labour and capital could never be struck on equitable terms. Such practices required a change, and this need became the basis for the formation of labour laws.

The Industrial Revolution was an epoch-making event. It transformed the agricultural-based society into an industrial and materialistic one. It gave a great opportunity to the masters to get the best work from their workers. They exploited them excessively for larger profits and greater outcomes.

At that time the laws were of no relief for the workers. Most of the contracts were made verbally and in case of breach, the workers were severely punished and imprisoned. Exploitation was at a large scale long hours of duty, extremely low wages, ill-treatment, and no safety or welfare provisions. The State never interfered in these matters, so the employers took the most advantage of it and exploited the workers vigorously.

The Industrial Revolution indeed made a great shift in society but it created political and economic gaps, and it became the responsibility of the society to fill those gaps. It took the help of social devices to take care of the gaps which resulted in the formation of labour laws. Labour legislation could be called the natural children of the Industrial Revolution.

The labour legislation is the product of the Industrial Revolution. It was made to stabilise the abnormality caused due to some circumstances. Unlike other laws, it was made to rectify specific labour conditions, therefore they are specific and not general in orientation, philosophy and concept.

In India, the Constitution is the basic framework of all the laws which includes labour laws too. The labour laws fall under the concurrent list which means both the Centre as well as the State can make laws regarding the working class but the State has to keep in mind that the laws made by them must not have any conflict of interest with the Central laws. The Apprentice Act of 1850, was enacted before independence which stated that orphans are allowed to find jobs after reaching 18 years of age. The labour laws were enacted at a time when the workers demanded better wages and a proper working environment. The new laws that were implemented by the Indian Parliament fixed the working hours to eight hours with a mandatory break after four or five hours of work, restricted the employers from giving night shifts to women workers, made the employers pay extra wages to the workers for overtime, and abolished child labours. The Trade Unions Act of 1929, and the Factories Act of 1948, were enacted to safeguard all the rights of the workers working in an establishment. A decent salary with a proper working environment was allotted to the employees to improve the productivity of the goods. These Acts were enacted to solve the issues between the employers and the employees, and also to protect the interests of both parties.

The main objective of labour legislation is to establish a cordial and peaceful relationship between employers and employees. It aims to maintain harmony between the labour organizations and the public, which would help in improving the working conditions and its environment. Some of the important objectives of labour laws are as follows-

  • Establishment of all kinds of justice for the working people social, economic, and political.
  • The availability of equal opportunities to all workers, irrespective of caste, creed, religion and beliefs for their overall personality development.
  • Protection of weaker sections of workers who are not financially well off to protect themselves.
  • Maintenance of industrial peace.
  • Protection and improvement of living standards of the labourers.
  • Protection of workers from all sorts of exploitation mentally or physically and creating a better working environment.
  • Grant rights to workmen to unite and form their unions so that they could bargain collectively with their owners for the betterment of their livelihood.
  • Keep checks on the government about their active participation in the working areas for social well-being.
  • Ensures human rights and human dignity.

There are various principles of labour legislation-

  • Principle of Social Justice It ensures social equality for people and ensures that opportunities arent denied to them based on religion, caste or any other prejudicial grounds. No matter whichever place they come from they must be provided with equal opportunities to work. Their social status should not be considered a ground for anything and they should be treated in a well-mannered way. The profits earned by a company must be distributed on fair grounds between the workers and the owner.
  • Social Equity It mentions that the maintenance of labour is based on the social equity of labour. As the time and circumstances keep changing it demands new laws and rules to suit workers needs accordingly. This intervention of the government in bringing new Acts and amendments according to the situation prevailing is based upon social equity. Equity means to be fair and impartial. Social equity means to form equal working standards for the people with the help of provisions and obligations to do so. Laws should be flexible enough to meet the demands of the industrial society.
  • International Uniformity The International Labour Organisation (ILO) plays an important role by creating agreements with different countries and providing its recommendations on general conditions of employment, wages, hours of work, the health of the labourers and women etc.
  • National Economy While forming any labour law it is crucial to assess the general economic condition of the country under consideration because the national economy directly affects labour legislation.
  • Social Security It mentions that the state must protect every citizen who contributes their efforts towards the promotion of the country and for the welfare of the state. This would make the workers more hard-working and efficient and increase our industrial power and potential.

Labour laws were imposed by governments in the earlier times also. It is considered as a set of compliances that set the tone for regulating the employer-employee relationship and the treatment of the labour force in the workplace. Various factors that influence the implementation of labour laws are as follows-

  • Impact of contemporary events
    1. Along with the Industrial Revolution, the revolutionary thinking of people like Rousseau, J.S Mill, Hegel, Marx and Engels impacted labour jurisprudence. The French and the Russian Revolution greatly influenced the thought process of the public and set the pace of labour jurisprudence. 
    2. The World Wars also made the labourers realise their core importance, that unless they sweat, it would be hard for the nation to fight and win the rough battles, therefore the masters need to provide a quality of life to their workers.
    3. The development in the field of science, technology, communication and telecommunication brought the people of different parts of the world closer. This made the people who lived in underdeveloped countries aware of the treatment given to workers in the different parts which created an urge in them to fight for their well-deserved rights.
  • Gradually, the labourers got the right to vote in political elections for their representative who would in turn support their demands and work for the legislation to get passed, this is how the workers used their political powers for the betterment of their lives.
  • Karl Marx, in his analysis of capitalism, mentioned that the exploitation of the workers was inherent in the capitalist economic system. Therefore, he advocated the overthrow of the capitalist system. There were echoes of slogans like the workers of the world unite, you have nothing to lose but your chains, which created fear in the capitalist world and they were left with no choice rather to agree to protective labour legislation. There was the formation of communist and socialist parties which strengthened the trend for progressive labour legislation.
  • Philanthropists, humanitarians like Hume, Place, and Shaftesbury, and other social reformers influenced the shape of labour legislation.
  • The establishment of the International Labour Organisation (ILO) was a very potent force in the formation of labour laws all over the world. The acceptance of the principle that labour is not a commodity and the slogan that Poverty anywhere constitutes a danger to prosperity everywhere, have influenced the course of labour legislation in all the countries.
    1. It has initiated proposals for labour legislation, had elaborate discussions about it and adopted Conventions and Recommendations.
    2. ILO has tried very much to form uniform labour standards despite diverse and uneven economic conditions in different parts of the world. It has done a singular service in the field of labour legislation.
  • Early labour legislation came into being because of the pressure from the manufacturers of Lancashire and Birmingham, because the labour employed in factories and mills in India was paid much less in comparison to their British counterparts.
  • The workers got immense support from the freedom fighters and nationalist leaders who made tireless efforts to get protective labour legislation enacted. Many laws were formed because of the pressure from the freedom struggle.
  • The leaders of the National Movement promised to enact better labour laws and provide equal justice to everyone after independence, which was even included in the Preamble, Fundamental Rights and Directive Principles of State Policy of the Indian Constitution. The leaders made sure that the workers would no longer be treated as a commodity.

Several statutes regarding labour laws have been introduced by the Indian Parliament. It has been classified into four categories, which are as follows-

  • The first one is the central legislation that is given in the Fifth Schedule of the Constitution, which is based on Industrial Relations.
  • The second one is the Industrial Employment (Standing Orders) Acts of the States and Union Territories. 
  • The third one is the Factories Act, 1948, or the Shops & Establishments Act, which is legislated as per the provisions of different States.
  • The fourth one is based on labour and social laws of India like the Payment of Gratuity Act, 1972, the Maternity Benefit Act, 1961, and many more. 

Different labour Acts have been enacted in India to ensure that people in different professions or jobs, whether in public or private sectors, should get equal rights and decent earnings for their livelihood. Their basic rights must be protected and they should be provided with an environment, which is safe and healthy for work. It makes sure that any issues between the employer and the employees which are related to employment disputes are tried by a statutory body which has the prior recognition of the State. It determines that no employment is done by unfair means and prohibits exploitation or subjugation of one individual to another. These labour laws, therefore, safeguard the people from being exploited or oppressed by their employers. If such an incident occurs, then they have the right to ask for relief. They can go to the court and file a suit and seek justice.

The main purpose of labour laws that are enacted by the Indian Parliament is to solve disputes between employers and employees and to maintain a harmonious relationship between the parties. It is made in such a way as to align with current social and economic challenges. The important purposes of labour legislation are as follows-

  • It helps people get jobs conveniently by creating a legal arena.
  • It helps both the employees and the employees to discuss their problems regarding the work and solve them peacefully.
  • It helps in creating clean and healthy environmental conditions for the employees, which in turn increases productivity.
  • It mentions certain grounds and restrictions beyond which tell them what they should do and also abstain from doing certain things.
  • It specifies the rights and responsibilities of both the employers and the employees.
  • In our country, general legislation considers individuals as citizens but labour legislation considers them as workers. For a very long time, the labourers have faced unjust situations. To safeguard their interests and demands labour legislation is entirely bent towards them, it doesnt think of general justice it thinks of social justice. It is completely designed for the labourers.
  • Labour legislation is focused on the problems that arise in the work environment of the workmen which include the number of hours of working, wages provided, industrial disputes, and working conditions of the people. Labour legislation is mainly targeted toward workers and employers; others are least affected by labour legislation.

For example- laws based on wages, compensation for injury or womens employment affect an individual as a worker whereas laws based on marriages, property, and sales tax affect an individual as a citizen. Different roles of people lead to the formation of different laws, it is role-relation that determines whether particular legislation falls under labour legislation, social legislation or general legislation.

  • Labour legislation aims at the equality and security of the labourers. They work in creating a better living environment for them, and also in promoting the work culture so that profit is earned in abundance which would be beneficial for them also.
  • Unlike other general legislation, labour legislations need frequent revisions and improvements, otherwise, it would hold no importance and would become outdated. The absence of frequent revisions would create a gap with current industrial requirements.

The Indian Constitution plays an important role in the formation of labour laws. Some of the Constitutional provisions have a huge impact on legislating labour laws. The provisions that play a significant role in safeguarding the interests of the people are as follows-

  • The fundamental rights of the Constitution, such as Article  14, Article 16, Article 19, Article 21, and many others, protect the rights and interests of the labour classes. It also states various ways of safeguarding them.
  • The directive principles of the Constitution also help in keeping a harmonious relationship between employers and employees. It tries to maintain the socio-economic situation of the people.
  • The provision of Article 39 clearly states that the labour power of men, women, or children must not be overused by employers.
  • The provisions of Article 41 state that all citizens have the right to work.
  • The provisions of Article 42 state that women must be granted maternity leave. It deals with the upliftment of the working conditions and states that a suitable environment should be provided to the employees.
  • Article 43 of the Indian Constitution states that proper working conditions and living wages must be provided to the labourers.

The Government of India with the help of the Supreme Court makes various labour-friendly laws and also safeguards them.

India is a quasi-federal nation which is a Union of States. The Indian Constitution guarantees certain powers to the Centre as well as States and Union Territories. So Article 246 of the Constitution gives power to both the Central Government and State Government to make laws and implement them accordingly. Three lists are present in the Seventh Schedule of the Constitution, which are as follows-

The laws relating to labour legislation are present in the Concurrent List. The Entries provided in List III of the Seventh Schedule of the Constitution are as follows-

  • Entry No. 22 – Subjects relating to industrial and labour disputes, and trade unions are mentioned in this Entry.
  • Entry No. 23 – Subjects regarding employment and unemployment of the employees, and social security and social insurance are mentioned in this Entry.
  • Entry No. 24 – Subjects relating to the welfare of labour including workmens compensation, employers liability, provident funds, conditions of work, invalidity and old age pensions and maternity benefits are mentioned in this Entry.
  • Entry No. 36 – It deals with the laws in connection with the factories.

All of these laws are stated in the Concurrent List except the one related to the Union Employees of the Industrial Disputes Act, 1947, which is given in List I – Union List. Therefore, it can be seen that both the Central Government and the State Government are empowered to make laws in connection with labour matters. The Indian Parliament has enacted and passed the labour laws throughout the Indian Territories. So it is uniform for all the States. Some of the States have modified a few laws according to their convenience to suit their needs. Several Acts such as the Apprentices Act, Factories Act, Employees State Insurance Act of 1948, and those relating to bonuses, gratuities, provident funds, and others are uniform all over the country. 

Labour laws play a significant role in safeguarding the interests of the labourers and keeping a harmonious relationship between employers, employees, and the government in India. It is also considered as employment law that protects the workers from being exploited by the employers. It made employees aware of their rights and stated their responsibilities. Labour laws ensure proper relationship between employer and employee, prevent conflicts, maintain industrial peace, lay down rules relating to disciplinary action against indiscipline, and many more. 

Apprentices Act, 1961

The main aim of the Apprentices Act of 1961, is to provide practical training to skilled workers under the supervision of their instructors. It promotes new skilled manpower. It is also for engineers and diploma holders.

Obligations of the employer

  • If the employer himself is not qualified in his work field he must ensure that the apprentice gets a well-qualified trainer for his learning experience.
  • The employer must provide adequate instructional staff who would give him both practical and theoretical knowledge to learn about the work.
  • The employer could only hire apprentices in prescribed ratios in his different work fields.
  • Employers will pay prescribed stipends to the apprentices.
  • The employer will make proper arrangements for the practical training of the apprentice.

Obligations of the apprentice

  • To learn his work skills diligently and become skilled in his work before the expiry of the training period.
  • To attend all his practical and theoretical classes regularly.
  • To abide by all the rules given by his seniors or the employer during his training period.
  • To follow all the obligations prescribed in his contract of apprenticeship.

Factories Act, 1948

The main aim of this Act is to formulate safety measures and promote the health and welfare of the workers working at the factories. It also keeps a check on the hazardous growth of the factories by overall checking before the establishment of any factory.

Applicability of the Act

  • It applies to the whole of India including Jammu and Kashmir.
  • It applies to all manufacturing units that fall under the definition of factory.
  • It applies to all the factories that use power or employ 10 or more workers, and if not using power, employ 20 or more workers on any day of the year.

The Act consists of 120 sections and 3 schedules:

Schedule 1 talks about the list of industries that undertake hazardous processes within them.

Schedule 2 talks about the permissible level of certain chemical substances that could be emitted in the work environment.

Schedule 3 talks about the diseases caused due to the effects of work in the industries.

Provisions of the Act

  • The environment in the factories should be kept clean. There should be a proper arrangement for the disposal of waste and ventilation. 
  • Reasonable temperature should be maintained for the comfort of the workers.
  • Dust and fumes emitting devices should be checked at regular intervals and should not emit above permissible limits.
  • Overcrowding should be avoided, and an ample number of latrines, urinals and spittoons should be available.
  • Workers should be provided with proper lighting and clean drinking water.
  • Adequate arrangement for washing, sitting, and storing clothes when not worn during working hours. Workers should be provided with resting areas during breaks, and first aid boxes should be available and maintained.
  • In the case of large factories, an ambulance room should be present if 500 or more workers are employed, and a canteen if 250 or more workers are employed. The workspace should be well-lit and ventilated.
  • Safety tools for protection of the eyes from dust, gas and fumes should be provided. The workers should also not misuse any appliances and adequate firefighting equipment should be available.
  • No worker is obliged to work for more than 48 hours a week. A weekly holiday is compulsory.
  • If a worker works for more than 9 hours then he should be paid double the wages. A worker cannot work in two factories, there is a restriction on double employment.
  • For women earlier night shifts were not available but later this act was amended to allow night shifts for women workers from 7.00 pm and 6 am.

Workmens Compensation Act, 1923

The main aim of the Workmens Compensation Act, 1923, is to provide workmen or their families some relief in case of an accident that may occur during their employment and cause death or disablement of workmen.

Employers liability for compensation

  • If the worker gets injured during his employment which may cause death, permanent total disability, permanent partial disability or temporary disability
  • If the worker gets any disease which occurred due to his occupation.

The employer is liable to pay compensation to the employees as a disablement benefit only when they are injured during employment.

Employees who are protected under this Act

The following workers will be protected under this Act-

  • Employees of railways who are not permanent and come under sub-divisional, district or administrative offices.
  • Crew members of aircraft along with their captains.
  • Workers who work abroad as per Schedule II of the Workmen Compensation Act, 1923.
  • Persons who work in construction sites, docks, mines, factories, and other places as specified in the Schedule II.
  • Persons who are associated with works relating to vehicles, like drivers, mechanics, helpers, and so on.

Amount of compensation needed to be paid

Section 4 of the Workmen’s Compensation Act, 1923, states the amount of compensation that the employees will receive, which is as follows-

  • Temporary disabilities: The employee who suffers temporary disablement will get a compensation of up to 25% of the employees monthly wages.
  • Permanent partial disabilities: The employee who suffers permanent partial disabilities will get that amount of compensation, which is stated in Part II Schedule I of the Act.
  • Permanent total disabilities: The employee who suffers permanent total disabilities will get a compensation of 60% of his/her monthly wage or Rs.1,20,000, whichever is higher. 
  • Death: In case an employee dies due to an accident during employment, his family members will get a compensation, which will be 50% of the deceaseds monthly wages or Rs.1,20,000, whichever is higher.

Trade Unions Act, 1926

This Act was formulated to make the registration of trade unions lawful so that they can initiate collective bargaining. The Act applies to the whole of India and applies to all kinds of associations of workers, and employers.

A trade union is a group formation between workmen and employers between workmen and workmen or between employers and employers who work to regularise and improve labour management relations.

Features of registered Trade Union

Section 13 of the Trade Unions Act, 1923, states the following features-

  • It has a common seal.
  • It has a perpetual succession.
  • It can sue others and can be used by others.
  • It can own a property in its own name. The property can be both movable and immovable.

Child Labour (Prohibition And Regulation) Act, 1986

This Child Labour (Prohibition And Regulation) Act, 1986, was formulated to prohibit children below fourteen years of age into factories, mines or any hazardous workstations.

Provisions of the Act

  • No child should be pushed to work for an excessive number of hours. He shall work for a fixed period each day which shall not be more than 3 hours and it should also be made sure that he has taken proper rest.
  • Children should be made to work in safer environments.
  • Children should be provided with a weekly holiday.
  • They should not be made to work in construction areas of railways, slaughterhouses, automobile workshops, mines, plastic units and fibreglass workshops, beedi-making, and several others which are mentioned in part A of the Schedule.
  • Ban on employment of children as domestic servants at hotels, restaurants, resorts, spas, motels, and tea shops.
  • A toll free number- 1098 is available for children in distress and to help them with any sort of problem they might be facing.

Maternity Benefit Act, 1961

This Act ensures that no woman should worry about their rights, income and job while they are looking after their child and spending quality time with them.

  • A woman must have been working in an establishment for about 80 days in the past 12 months to ask for maternity benefits.
  • Under Section 11A, a creche facility must be present in establishments with more than 50 employees.
  • Women are allowed to visit the creche four times a day which also includes an interval for them to rest.
  • The creches should be within 500m of the workplace.
  • Creches are mandatory for firms, companies and consultant companies.

This Act provided gratuity to workers engaged in mines, factories, oilfields, plantations and other establishments. Gratuity is payment for long service, as a statutory retiral benefit. If an employee has given his contribution to his service for 5 years or more , then he is entitled to receive gratuity irrespective of his wage. Gratuity is given in the following cases:

  • On his superannuation
  • On his resignation or retirement
  • The maximum amount of gratuity provided could be Rs. 20,00,000.
  • In case of death or disablement due to an accident or disease, the employer will have to pay the amount to his nominee or his legal heir.
  • An eligible employee must apply for his gratuity before 30 days from his payable date.
  • An employer cannot reject an application for gratuity even if it is submitted after 30 days for a valid reason.
  • If an employee feels that he has received less amount of gratuity than he deserved then he can file a complaint case.

Minimum Wages Act, 1948

The main aim of the Minimum Wages Act, 1948, is to fix minimum rates of wages in certain occupations. The provision of minimum rate of wages is prescribed by the Government which means the owner must pay his workers wages as fixed by the Government.

  • Wages should be paid in cash.
  • For fixation of wages, that occupation must be mentioned in the schedule originally or should get added to the schedule.
  • Every employer should maintain a register of wages at the workplace specifying the minimum rate of wages payable, the number of days overworked by the worker, the gross wages, and the date of the payment.

Objectives of this Act

The following are the objectives of the Minimum Wages Act-

  • An establishment must fix the ordinary working days along with following details-
    • The number of working hours of the employees must be fixed by the employers as per the provisions of this Act and it must have at least one break.
    • The employers must provide the employees with one three-day weekend out of a full week for rest.
  • When an employee in a particular establishment is working in two or more booked occupations, his pay will be based on the amount of time he spends on each of the projects and a certain rate of pay for all work completed.
  • An establishment is required to maintain all the documents and records of all the employees’ work, pay, and receipts.
  • In an establishment, legislators with the proper qualifications will assign and define the task of reviewing and selecting the examiners for the corresponding.

Employees State Insurance Act, 1948

This Act was formulated to ensure that employees get various health benefits at the time of their illness, injury, and maternity. They will get medical benefits, maternity relief, compensation to the family members in case of the death of employees, and various other health benefits. The employees who are working in an establishment, industries, or factories will get the benefits of this Act. This Act was formulated to ensure that the employees and their family members do not suffer at the time of the workers’ illnesses or deaths. It is a self-financing health insurance scheme which is made from the wages of the employees and contributions of the employers.

Features of this Act

Employees State Insurance Act plays an important role in looking after the welfare of the workers in following ways-

  • Staff members can be recruited and gratuity and other benefits can be provided to them under this Act.
  • Funds can be taken from the Central Government for providing benefits and facilities to workers.
  • Social security officers can be recruited by this Act.
  • A particular amount of money can be collected from the employees compensation for regulating its functioning and providing facilities to other employees.
  • The Director General can change the implementation strategies in accordance with the requirements.
  • Budget of all the expenditures is maintained for keeping a proper record as it is done to provide compensation and other benefits to the employees. 

Benefits provided under this Act

Employees State Insurance Act, 1948, provides various benefits and facilities to employees. Some of them are as follows-

  • Medical benefits: If an employee is unable to work during the period of his treatment, his salary does not get deducted. In case of severe medical illness of his family members, the employee is provided with a certain percentage of compensation.
  • Maternity benefits: A woman employee, who is pregnant, gets a benefit of extra leave before and after their delivery, which is known as maternity leave. She will get full salary at the time of her maternity leave.
  • Insurance benefits: Insurance benefits are provided to all the employees working in private as well as government sectors.
  • Disablement benefits: The disabled employees are provided with extra benefits like reservation of those individuals of various categories.
  • Unemployment benefits: These benefits are provided to those individuals who are unemployed but are capable enough to perform jobs. Loans are also given at a low rate of interest for startups.

Payment of Bonus Act, 1965

The objective of the Payment of Bonus Act, 1965, is to grant payment of bonuses to the employees of an establishment based on production, productivity, gain, or profit. It states the minimum bonus that is to be paid to the workers and the eligibility for receiving the bonus. It also states the grounds for the disqualification for bonus, calculation of bonus, and maximum and minimum bonus payable to the employees working there.

Payment of Gratuity Act, 1972

The Payment of Gratuity Act, 1972, was formulated to grant payment of gratuity as a reward for statutory retirement benefits or for servicing in an establishment for a long period. Employees who are working in factories, mines, railways, oilfields, ports, plantations, shops, or any other establishments shall receive gratuity payments irrespective of their wages. It has to fulfil the condition that the employee must have completed 5 years of work or more in that establishment at the time of the termination of his services. 

Plantation Labour Act, 1951

Criminal litigation

The main purpose of the Plantation Labour Act, 1951, is to fix the time limitation of work for the workers. It is introduced to look into the welfare of the plantation workers, and to regulate the conditions of work. Section 19 of this Act states that if on any day an employee works more hours than normal days in a plantation, or more than 48 hours in a week, then the worker should be paid double the rate of his ordinary wage for overtime. It was also stated that no worker should be permitted to work more than 9 hours a day and more than 54 hours in a week. Therefore, this Act specifies the period of work.

Benefits provided to Women and Night shifts

This Act does not permit women and children to work in the plantation between 7 p.m. to 6 a.m. except with permission of the State Government. Women working as nurses and midwives are exempted from this provision provided under Section 25 of the Plantation Act.

It also provides maternity benefits and sickness relief in the form of an allowance after a certified medical report is issued by a certified medical practitioner. This benefit is given at a particular rate and time as prescribed by the State Government. This Act also contains a provision for providing crche facilities in plantations under Section 12 of this Act. 

Employees Provident Funds and Miscellaneous Provisions Act, 1952

The Employees Provident Funds and Miscellaneous Provisions Act, 1952, was enacted to institute provident funds for employees. It also includes pension funds and deposit-linked insurance funds for the workers who are working in an establishment. These funds are made by the contributions of both the employers and the employees. This fund is very beneficial for the employees as it gives a lumpsum amount with interest on the total amount that is paid to the employees at the time of their retirement.

Types of scheme under this Act

The three types of schemes under this Act are as follows-

  • Employees Provident Fund Scheme, 1952: This scheme was introduced to provide a post retirement benefit to the employees. It is provided to a particular class of employees of an establishment or their legal heirs, if an employee dies under an establishment to which this Act applies.
  • Employees Pension Scheme, 1995: This scheme was introduced to provide a retiring pension, superannuation pension, or permanent total disablement pension to the employees of an establishment. Other pensions, like widow or widowers pension, orphan pension, or children pension are also granted under this Act.
  • Employees Deposit- linked Insurance Scheme, 1976: This scheme provides insurance benefits to the employees of an establishment or a class of establishments if an employee dies while he is in service. 

Mines Act, 1952

The Mines Act of 1952 was introduced to provide proper maintenance of the health, safety and welfare of the mine workers. This Act is applicable to the following employees-

  • Working in boreholes, oil wells, and borings.
  • Working under the ground or opencast areas.
  • Work that is carried out in or adjacent to the mines.
  • Working in workshops and stores in the precincts of the mine.
  • Working in transformers, power stations, or substations that supply electricity to the mines.

Provisions regarding leave with wages and overtime

  • Annual leave with wages: Section 52 states that a person who has completed one year of his service in an establishment must be allowed leave with wages. It’s calculation is done based on the rate of one day for every 15 days of work performed by him.
  • Payment in advance in certain cases: Section 54 states that when a person working in a mine is granted leave for not less than four days, he is entitled to get their wages for the time he worked there before the leave begins.

It states the maximum time a worker is permitted to work in a mine. Section 28 states that no workers should be allowed to work more than 6 days in a week in mines. Employees working in a mine must not work more than 48 hours in a week. It says that an employee should not be allowed to work in a mine for more than 10 hours on any day inclusive of overtime. 

Workmens inspector and safety committee

Chapter VI-B deals with workmen’s inspector and safety committee.

  • It states that where 500 employees or more are employed in a mine, three persons who are suitable to be workmens inspectors must be appointed by consulting the registered Trade union.
  • It states that the duties of the workmen’s inspector will be to inspect all roadways, inclines, equipment, and workplaces. 
  • It states that a safety committee must be made where more than 100 employees are employed. The constitution of this safety committee will be the responsibility of the owner, agent or manager.

Working Journalist (Conditions of Service) and Miscellaneous Provisions Act, 1955

This Act was formulated to ensure proper working hours, adequate wages, breaks, and leaves. It states that if any journalist is working more than 6 hours in daytime and more than 5.30 hours in a night shift on any particular day, then that person should be paid compensation with rest hours equal to hours for which he/she has worked overtime.

Important provisions of this Act

  • It states that the journalists are permitted earned leave on full wages for medical grounds on providing the medical certificate.
  • Wages are fixed by the Central Government and are revised timely at proper intervals. The government also have the power to make recommendations regarding wage board.
  • A wage board is also constituted that includes three persons representing the employers, three persons representing the journalists, and four independent persons who will be the judges of the High Court or Supreme Court.
  • The wage board has the power to make recommendations regarding fixed or revised rates of wages of journalists or employers of an establishment.
  • The interim rates of wages of these journalists are fixed by the Central Government by the notification of the official gazette.
  • It also deals with provisions regarding the maintenance of muster rolls, records, and registers of the journalists working in an establishment.

Beedi and Cigar Workers (Conditions of Employment) Act, 1966

Beedi and Cigar Workers (Conditions of Employment) Act, 1966, was enacted to provide for the welfare of the employees and to regulate their working conditions. It restricts the daily working hours to a maximum of 10 hours a day inclusive of overtime and a maximum of 54 hours a week.

Provisions of this Act

  • The premises of an establishment must be kept clean and free of odours that can emanate from open drains, privies, or any other kind of nuisance. It should maintain a specific standard of cleanliness by whitewashing, four-colour washing varnishing, or painting.
  • The premises of an establishment must be well ventilated. There must be a proper lighting system with a specific temperature that is required for preventing illness and injury to the health of the employees.
  • The employers of an establishment must take all the necessary precautions to keep away from the premises, such as dust, fume, or other impurity that are likely to be detrimental or offensive to employees health if those are inhaled by them.

Building and Other Construction Workers (Regulation of Employment Service) Act, 1996

This Act was formulated for regulating the working conditions of the employees who work in buildings and other construction services. It also provides measures for the health, safety, and welfare of these workers. It also states that the workers who work overtime should be compensated by paying wages at a rate twice the ordinary rate of wages.

Provisions of this Act

  • Section 4 deals with the constitution of the State Advisory Committee. The State Building and Other Construction Workers Advisory Committee is formed by the State Government, which consists of a chairperson, two members of the State Legislative Assembly, the chief-inspector, one member nominated by the Central Government, and seven to eleven members nominated by the State Government.
  • Section 45 states that the employers must pay compensation to the employees, if they fail to comply with the provision of this section.

Contract Labour (Regulation & Abolition) Act, 1970

The Contract Labour (Regulation & Abolition) Act, 1970, was formulated to prevent the employment of contract labour in some specific circumstances and for regulating their working conditions. It keeps a check on the working time of the workers. It makes it mandatory for all contractors to make a Register of Overtime in Form XXIII and maintain it properly and regularly that it will include every detail and information relating to the name of the employee, overtime calculation, hours of extra work, and others.

Provisions of this Act

  • Central Advisory Board: Section 3 of this Act deals with the composition of the Central Advisory Board that consists of a Chairman, the Chief Labour Commissioner, and eleven to seventeen members who are nominated by the Central Government. It also states that the number of members who are nominated for representing the employees must always be more than the number of members representing the employers.
  • State Advisory Board: Section 4 of this Act deals with the composition of the State Advisory Board that consists of a Chairman, the Labour Commissioner of that state, nine to eleven members who are nominated by the State Government, and other members who are appointed by the State Government to act in their absence. It also states that the number of members who are nominated for representing the employees must always be more than the number of members representing the employers. It is the duty of the Central and State Advisory Boards to carry out all the necessary responsibilities.

Various issues that lead to the enactment of labour laws in India. These Acts deal with these issues and give a solution for a particular situation. The following are the issues regarding which labour laws were made-

  • Anti-discrimination measures: Employees must not be discriminated against based on race, religion, gender, sexual orientation, or disability. So various legislations are made to prevent any of these kinds of discriminatory practices. Various laws prohibit the interests of various communities like socially and economically backward classes and castes, women, and persons with disabilities.
  • Working hours: A specific time limit is fixed regarding the working hours of the employees. An employee must not work more than 9 hours in a day and 48 hours in a week. If the employee works more than the hours specified, then he should be paid for overtime at a rate that is twice the amount of ordinary wages.
  • Health and Safety Measures: The provisions of the Factories Act of 1948, state that workers should work in a healthy and clean environment. Various health and safety measures have been specified in the Acts which states that the workplace, tools, materials and equipment used by them must be kept clean and in a proper condition. These articles should be maintained properly and arrangements must be made to rectify risks involved in the use, handling, storage and transport of substances. 
  • Payment of remuneration during sickness: The employees also get sick pay in some specific jobs. If an employee falls sick, he needs to inform the employer about his illness. There are certain provisions regarding earned leave, sick leave, and casual leave.
  • Contracts of Employment: Sometimes an employee is not employed directly but he is employed through a contractor by making a contractual employment. Both the employer and the employee are bound by the employment contract. It is legally binding on them and safeguards the interests of both the parties.
  • Information and data protection policies: The data relating to the personal information of both the employers and the employees are protected under the Digital Personal Data Protection Act, 2023.  The personnel records of both the parties are protected both by computerised and non-computerised systems and no outsider can get any access to the information.

Rights and responsibilities of employers and employees

An employment agreement is made between the employers and the employees beforehand which covers various rights and responsibilities of the employees such as having fixed working hours, working in a healthy and clean environment, getting holidays, and likewise. The employees must do their work efficiently, which will increase the productivity of the goods.

Employers

The various rights and responsibilities of the employers are as follows-

  • It is the responsibility of the employers to provide a proper working environment for the employees and they have the right to take any decision regarding the management and business operation. They also must pay at least the minimum wage to the employees on time and provide them with other benefits related to employment that they are entitled to.
  • It is the responsibility of the employers to follow all the rules and guidelines of the labour laws. They must carry out their business as per the provisions. The provisions include those relating to working hours, health and safety of the workers, payment of wages, and likewise.
  • It is the right of the employers to take action against any employee if he does not follow any of the conditions related to their employment agreement and can also terminate them from their services.

Employees

The various rights and responsibilities of the employees are as follows-

  • It is the responsibility of the employees to perform their duties to the best of their abilities by following the rules and guidelines of their employment agreement. They must abide by the regulations and policies of the business and should also respect the rights of their fellow employees. 
  • It is the responsibility of the employees to work efficiently so that it increases the productivity of the goods.
  • It is the right of the employees to receive minimum wages and other benefits related to their employment. They must be treated respectfully and fairly without any kind of unnecessary harassment or discrimination. 

Codes On Wages, 2019

The Code on Wages was passed in the year 2019. Its main aim was to amend and make the previous laws related to wages stronger. It replaced laws like the Minimum Wages Act of 1948, the Equal Remuneration Act of 1976, the Payment of Wages Act of 1936 and the Payment of Bonus Act of 1965.

Issues of this Act

  • The State government usually fixes minimum wages above the binding floor price, rather than fixing a binding floor wage, the Government should fix a binding minimum wage rate so that there is no dual wage rate.
  • The Code states any dispute arising will be looked over by a Gazetted Officer. The concern was how an officer who does not have much legal knowledge would get to hear complicated questions of law.
  • Earlier by the order of a Judicial Magistrate, a person below the rank of secretary was not allowed to impose a penalty. This provision violates Article 50 of the Constitution which demands a separation of the judiciary from the executive.
  • Section 56 of the Code provides ease for the employer in the case when his employee has committed any offence. The employer would not be held liable for such an offence of his employee if he proves that he had taken all care of his work with diligence and that the offence happened without his consent, knowledge or will to get involved in any sort of illegal acts.
  • The definitions of employer, employee, establishment, wages, and workmen are kept more or less the same and these definitions will apply to all provisions of Codes on Wages, 2019.
  • The definition of establishment was amended and the new one includes any industry, trade, business, manufacture or occupation that is carried on and the Government establishment also falls under it. The definition of ‘establishment’ is widened by stating that if in any place even one employee or worker is employed, it will be considered an establishment.
  • The concept of scheduled employment was removed and the provisions of minimum wages applied to all employers and employees.
  • The term wages includes salary, allowance or any other monetary component but not bonuses and travelling allowances.
  • Floor wage has to be fixed by the Central Government by taking into consideration the living conditions of the workers and the geographical location. The minimum wage must always be above the floor wage’.
  • The Government must review the minimum wage at least every 5 years and no one must employ a worker below the minimum wage.
  • The working hours of the workers must be fixed by the State or Central Government. If an employee works overtime, he will be entitled to overtime compensation that should be at least twice the normal wage.
  • This Code also introduced payment of wages to the workers in various forms like current coins, currency, cheques or through online or electronic mode in the bank account.
  • The wages of the employees of an establishment are fixed by the employer as either daily, weekly, fortnightly, or monthly. Employees who get a fixed monthly payment are entitled to get an annual bonus. The employers are also allowed to deduct wages on certain grounds as specified in the provisions of labour laws.
  • Employers who do not follow any of the provisions or do not pay the minimum wage to the employees are entitled to be punished as specified in the Code. An employer contravening any such provisions will be punished with a maximum of three-month imprisonment along with a fine of one lakh rupees.

Industrial Relations Code, 2020

The Code on Industrial Relations was passed in the year 2020. The main objective of this Code is to reduce the conflicts between employers and employees and deal with provisions for the investigation and settlement of Industrial Disputes. It consolidated Acts like the Trade Unions Act, 1926, the Industrial Employment (Standing Orders) Act, 1946, and the Industrial Disputes Act, 1947. 

Issues related to this Act

  • The Industrial Employment (Standing Orders) Act of 1946, was enacted to make it compulsory for employers to define the conditions of employment of industrial establishments with 100 or more workers and for submitting draft standing orders to the Certifying Authority for its certification. It states the rules of conduct for the workers working in an establishment that should be informed to them.
    • This new Code on Industrial Relations increased the minimum number of workers in an establishment from 100 to 300. This, in turn, would lead to an increase in employment opportunities and make it easier and more flexible to hire more people.
    • The government made it mandatory to obtain prior permission for retrenching the employees from employment. It mandated approval of the government before lay-off or closure of an establishment which has more than 300 workers.
  • This new Code also introduced new conditions for a legal strike. Some of the conditions for conducting it are as follows-
    • The employees needed to give a 60-day notice before going on strike.
    • The strike was prohibited by the employees during the pendency of a suit before a Tribunal or a National Industrial Tribunal.
    • Strike was also prohibited before the expiration of 60 days after the completion of the tribunals proceedings.
  • Code on Industrial Relations was also enacted to set up a re-skilling fund to train all the retrenched employees that must be contributed by the employers, of an amount equal to 15 days last drawn by the worker.

Code on Social Security, 2020

The Code on Social Security deals with the social conditions of the workers. Some of the important provisions are as follows-

  • The definition of employees was widened in this Code by including some terms like inter-state migrant workers, construction workers, film industry workers, and platform workers.
  • This Code also reduced the gratuity period of journalists from 5 years to 3 years.
  • It suggested that social security funds for unorganized workers, gig workers, and platform workers should be made for the welfare of the workers.
  • This Code introduced a new provision that tells the Central Government to reduce or defer the contribution of the employers or employees towards the PF or ESI for up to 3 months in case of a natural disaster, pandemic, or epidemic.
  • It also stated the provisions for registration and cancellation of registration of an establishment as per the rules notified by the Central Government.
  • This Code also played an important role in establishing the National Social Security Board, which recommends the Central Government for the formulation of schemes for the various sections like gig, unorganised, and platform workers.

Code on Occupational Safety, Health and Working Conditions, 2020

The Code on Occupational Safety, Health and Working Conditions was implemented for proper health conditions and safety of workers working in an establishment. A few Acts that have been consolidated by this Code are the Mines Act, 1952, Factories Act, 1948, Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996, and the Contract Labour (Regulation and Abolition) Act, 1970. Some of the important provisions relating to this Code are as follows-

  • The definition of factory was modified and it states that a place where a minimum of 20 workers work for a process with power and 40 workers for a process without power is considered a factory.
  • The manpower limit of those industries dealing with hazardous items has been increased from 20 workers to 50 or more workers. This provision of the Code is mandatory for employers (contractors) to recruit a minimum of 50 workers 
  • The period of work was also limited to eight hours.
  • It also states that women must be employed in all kinds of establishments. In case of a night which is between 7 PM and 6 AM, the consent of the woman needs to be taken and her safety should be the employers responsibility.
  • Issuing an appointment letter by the employer was made compulsory in this Code.
  • Free health checkups of the employees to identify diseases at an early stage and give proper treatment must be provided to them by the employers.
  • This Code also introduced provisions that provide various benefits to inter-state migrant workers.
  • A provision for instituting a National and State Occupational Safety and Health Advisory Board was also provided in the Code.
  • A Journey Allowance was also proposed in this Code. It means an amount that needs to be paid by the employer to the employees for the journey from their native state to their place of employment. 

When someone works with all their might and completes their everyday work but is unpaid and unrecognised, then it is called Invisible Labour. Jobs like household work, childcare, and looking after the elder members of a family are unpaid and are a form of Invisible Labour. Women form the biggest part about 90 percent of this Invisible Labour. It goes unnoticed and unrecognised due to which no regulations are present for such kinds of works. No new laws talk about this zone, which has the most tedious work profile, with no weekend offs, no limited working hours, and no vacations. The worst part is that it owns no recognition and does not get any thankful chores. 

In the pre-Labour Codes, determining whether an employee falls within the meaning of the expression workman’ or not will depend on that particular case. The  Supreme Court of India would determine it after hearing the case. In the post-labour Codes, IT employees were considered a workman under the ambit of the IT Act by the High Court of Karnataka. The Government of Tamil Nadu also had a similar view and through a circular declared that employees in the IT sector would be subject to the provisions of the Industrial Disputes Act, 1948. 

Pradhan Mantri Shram Yogi Maandhan Scheme

The Pradhan Mantri Shram Yogi Maandhan Scheme was introduced by the Indian government recently. Two provisions were introduced under this scheme, which are as follows-

  • The first scheme was made for providing social security to the employees of unorganised sectors, by awarding them with a monthly pension of about  3,000 after retirement. This scheme is known as Minimum Assured Pension. It was launched to protect the interests of the workers and to look after their welfare. Hence, it would motivate the workers to work without any tension of money after they terminate employment, which will in turn increase productivity and create a conducive environment for businesses to thrive. 
  • The second scheme that was made to ensure old age protection for Unorganised Workers is known as family Pension, where the spouse of the subscriber gets 50% of the pension received by the beneficiary as family pension. Only the spouse of the pensioner can get protection under this scheme. In case the subscriber dies before attaining the age of 60 years, the spouse will be entitled to join and the scheme and continue it further by contributing regularly or exiting it in accordance with the said provisions of the scheme.

In the case of Indian Hume Pipe Co. Ltd. v. Their Workmen AIR 1960 SC 251, the Court stated that Gratuity should be considered as an amount paid as an embracement towards the employer. It should not be connected to any contract or given as a consideration or compensation that is paid in unusual circumstances. It should be paid to praise the worker for being a part of the trade of his owner for such a long time. One gives all his hard work and efforts towards his master for which he should be respected at the end for his loyalty to the service. Whenever a worker spends a long span in a work field he expects appreciation from his employer and gracious financial assistance to cope with the post-retiral difficulties.

In the case of Bombay Gas Public Ltd. Co. v. Papa Akbar and Anr., 1990, Gratuity is provided at the termination of service. The employer had to provide gratuity to his workers even though his company suffered a loss because the workers went on strike. The workers cannot be denied the gratuity they deserve. 

In the case of Amita v. Union of India (2005), the Supreme Court observed that the expression matters relating to employment or appointment deals with all employment-related matters that are both before and after the employment. It would include everything incidental to the employment and related to the terms and conditions of an employment agreement. 

In the case of The Commissioner of Income Tax and Anr. v. Texas Instruments India Pvt. Ltd. (2021), the Karnataka High Court held that the term ‘workman’ also includes employees of the IT sector for computing tax exemptions as per Section 80(JJAA) of the Income Tax Act, 1961.

In the case of Bangalore Water Supply and Sewerage Board v. A. Rajappa and Ors. (1978), the definition of industries has been broadened by the Supreme Court. It was observed that to prove whether an establishment is an industry or not, a triple test must be done- 

  • Activity should be carried out systematically in an establishment without any profit motive;
  • Systematic Activity that is performed in an establishment must be the result of cooperation between the employers and the employees.
  • The activity must be related to the production of goods and services to fulfil the needs of the people. Organisations with philanthropic components must be strongly connected to the business world. 

In the case of Indian Tourism Development Corporation Ltd. v. Fayaz Ahmad Sheikh (2023), the employer while retrenching the employees from their services did not follow the provisions of Section 25F of the Industrial Disputes Act, 1947. So when the respondents were retrenched due to the closure of the establishment, they filed a suit before the Conciliation Officer (Deputy Labour Commissioner), Kashmir Division. The Jammu and Kashmir and Ladakh High Court found that the employees were not paid retrenchment compensation during retrenchment as per the provisions of Section 25F of the Industrial Disputes Act, 1947, but later. The High Court, therefore, opined that an establishment is bound to follow the provisions of a statute. It was the employers duty to pay the retrenchment amount to retrenched employees. The Court stated a principle which says that if a person performs an act under any statute without following the conditions prescribed, he will not be entitled to receive any benefits of that Act. The Court made this principle applicable in this instant case.

In the case of Creative Garments Ltd v. Kashiram Verma (2023), the Supreme Court noticed that the permanent addresses of the employees were not mentioned in such cases where the labour dispute suits are submitted by the Unions of an establishment. The Apex Court stated that the employees whose permanent addresses are given will be provided with effective relief and the establishment must take suitable measures to ensure that the permanent addresses of all the employees are mentioned in the pleadings. It was held that when the worker approached the court for relief under the Industrial Disputes Act, 1947, the Payment of Wages Act, 1936, the Workmen Compensation Act, 1923, or any other Labour Act, their complete address must be mentioned in the suit. The address of the representative may be given if he appears in place of the worker.

The Supreme Court concluded the judgement by stating the following factors-

  • The parties must furnish their permanent addresses in the pleadings.
  • Where the representative of the party appears in the Court, the permanent addresses of the employees must be provided.
  • Permanent address is a necessary information that is required to be provided to the Court for the employees services.
  • Merely filing a suit through the Labour Unions or other authorised representatives will not be sufficient.
  • Service of notice of employees will be sent to their permanent addresses.
  • Retrenchment: The Labour Laws before the introduction of Labour Codes stated that if any establishment hires 100 or more employees, it will need the prior permission of the Government before lay-offs, retrenchments, or closure. The Industrial Relations Codes raised the number of employees from 100 to 300, and the Government can further raise the number by issuing notifications.
  • Contract labour: The use of contract labour has been increased due to economic considerations. Contract labour was not protected under old labour laws. The Industrial Relations Code introduced a new form of short-term labour fixed-term employment.
  • Trade Unions: The laws before the introduction of the Industrial Relations Code had no criteria for recognition of trade unions. This new Code made a provision that recognises trade unions’.
  • Updated provisions: The enactment of the code on Social Security introduced provisions for gig and platform workers.

The evolution of labour jurisprudence is the outcome of the relentless struggle done by workers all over the world for their well-deserved rights as well as lives. They fought for their security and the betterment of their livelihood. Labour legislation is dynamic and it holds a special place in the law society. It has special features that are inclined towards the workers. No other legislation had such a history for which all the workers around the world united to fight, it was indeed a historic journey to comprehend from the stepping blocks to the top of the mountain of Labour Jurisprudence. 

With the changing times, these labour laws will be developed further in the future. The people would benefit more from these labour laws. It would help them to work with dignity and self-respect in their workplace without being disrespected unnecessarily by the employers. The modern labour laws are enacted to protect the interests of both the employers as well as employees.  These laws set a standard for both the employers and the employees. Therefore, no employees face any kind of discrimination. All employees are treated fairly and given the proper wages and benefits. It guarantees a safe, fair, and equitable working place free from harassment and exploitation. 

Who declares minimum wages?

In India, wages are declared by the Central Government for industries where the Central Government is the appropriate authority.

Does the Minimum Wages Act apply to daily wage workers and casual employees?

Minimum wages are fixed based on employees; it doesnt matter whether they are casual, rated, temporary or permanent.

Which employees become eligible for gratuity?

Gratuity applies to a permanent employee who has completed 5 years of continuous service with any organisation.

Can an employee claim gratuity before the completion of 5 years?

Yes, one can claim it before 5 years, in case of death or disability.

What are the maternity benefits a woman is entitled to?

  • Under the said Act, an employee can request maternity leave, which can extend up to 12 weeks. Out of the 12 weeks of maternity leave, a  maximum of six weeks time period of leave can be taken before the expected date of delivery.
  • The woman must have worked at the establishment for no less than 80 days in the 12 months before the expected date of delivery.
  • Pay the employee a medical bonus in case of prenatal confinement and also in postnatal care. 
  • Even if a notice is not issued by the employee, the employer has to arrange for the payment of maternity benefits to the employee in any case.

Which employees are safeguarded by labour law and how are they differentiated?

In India, the employees who fall under the term workmen are safeguarded by labour law. Various rights are granted to these employees. It is differentiated as workmen and managerial employees. Workmen are those employees who do manual, technical, skilled, unskilled, operational, clerical, or hired work. On the other hand, Managerial employees are those who work in a managerial, supervisory, or administrative capacity. The employees who qualify as workmen following the provisions of labour laws are entitled to various statutory protections and other benefits like severance compensation, prior notice before termination of service of the employees, and likewise.

How are the employment agreements made between the employers and the employees?

The employer-employee relationship comes into existence as soon as the agreement is made between the parties. The employment agreement can be made either expressly or impliedly, oral or written.  Mostly, the employment agreement is made by writing and executing an employment contract to avoid any disputes and problems in future relating to the terms of employment.

Are there any prescribed terms and conditions laid down by labour law regarding employment?

Various terms and conditions regarding employment are prescribed in State Acts, which deal with working hours, payment of wages, leave entitlements, holidays, statutory bonuses, gratuity payments, procedures for termination of employment, and so on. These are regulated and mandated by the statutes that contain those provisions in implied form. These terms are conditions stated in the employment agreement at the time of the formation of an employer-employee relationship.

What is the importance of collective bargaining agreements?

Collective bargaining agreements are used to establish better employment conditions after several rounds of negotiations between employers and members of a trade union of an establishment. It is a well-known method of settling demands between the parties and it takes place at the company, industry, state and central levels depending on the number of workers working in that establishment.

Do the employees need to be given a notice of termination of employment?

It is the responsibility of the employers to give prior notice of termination of employment to the employees. The Industrial Disputes Act of 1948, states that an employer should provide a notice of termination at least one month before to the employee if he has served in that establishment for a continuous period of 240 days.

Which categories of employees enjoy special protection against termination of employment?

In case of pregnancy of a worker of an establishment, the Maternity Benefits Act protects the rights of the women from being dismissed or terminated from their jobs during that time as they are provided with maternity leave as per the provisions of this Act.

What is the minimum wage rate that is followed in India?

There is no particular minimum wage rate that has been fixed by the Government of India. It is set by the States or any particular section as per the provisions of the Minimum Wages Act, 1948. The employers are required to pay at least the minimum wage rate that is being set up by the Government.

Which Acts have been replaced by the Code on Social Security?

Some of the Acts that the Code on Social Security replaces are as follows-

  • Employees Provident Fund Act, 1952
  • Employees State Insurance Act, 1948
  • Maternity Benefit Act, 1961
  • Payment of Gratuity Act, 1972
  • Employees Exchange (Compulsory Notification Of Vacancies) Act, 1959
  • Cine Workers Welfare Fund Act, 1981
  • Unorganised Workers Social Security Act, 2008
  • Employees Compensation Act, 1923

What are the motives for the formation of labour reforms and labour codes?

The main motives for the formation of labour reforms and labour codes are as follows-

  • To increase productivity.
  • To increase the employment opportunities.
  • To see that the interests of the workers

What are the main motives behind the formation of the principles of modern legislation?

The main motives behind the formation of the principles of modern legislation are as follows-

  • To provide the employees with a healthy and clean working environment with proper safety.
  • To provide the employees maximum security and protection from exploitation.
  • To provide the employees with a fair and reasonable compensation.
  • To provide equal treatment to all the employees of an establishment.
  • To provide freedom of association.