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Labour Law

Summary of the Major Laws of the Department of Labour

Before you start employing labour in India, it's important to know about all the major laws of the department of labour. In this guide, you’ll get all the important knowledge about labour laws. Here is a summary of the major laws of the department of labour.

Major Laws of the Department of Labour: The law of the labour market, also known as the law of employment, is the set of administrative rules, laws and court decisions that address the legal rights of and limitations on working individuals and their organisations. 

It also regulates several aspects of the relationship between employers, trade unions and employees. Also, Labour law defines the rights and obligations of employees, both union members and employers, on the job. In general, the law of labour covers:

  • Employment agreement, such as annual holidays, general holidays, working hours, inhumane dismissals and layoffs, procedures, minimum wage, and severance pay
  • Health and safety at work
  • Industrial relations – union certification and collective bargaining, labour-management relations and unjust labour practices

What are the Major Laws of the Department of Labour?

Below given are the major laws of the department of labour:

1. Regulations on Wages

The Minimum Wages Act 1948 requires firms to provide the basic wage established by the government while limiting working hours to 40-hour days (9 hours per day with one hour of breaks). It is strongly discouraged to work overtime with the penalty for overtime equal to 100 per cent of the total salary.

The Payment of Wages Act 1936 stipulates that employees are paid on time and without non-authorised deductions. Section 6 stipulates that employees receive their wages in cash instead of in cash. The law also provides for tax withholdings employers must take and pay to the state or central government before distributing pay.

2. Workmen’s Compensation Insurance

A workers’ compensation insurance policy is designed for establishments that are commercial in nature. It provides legal liability protection for the employer and aids employees during financial difficulties. This policy pays employees compensation if they sustain injuries at work. This policy also covers accidents and illnesses related to work.

This kind of insurance offers financial relief to employers since it will cover legal costs incurred by employees when they press charges. Certain policies can even pay for compensation that the labour and worker justice courts order.

3. Safety and Health

The Workmen’s Compensation Act 1923 requires compensation if employees get an injury during their employment. This includes injuries or providing benefits to dependents. The rates are not high.

  • The Factories Act of 1948 existing consolidated laws governing safety in factories (replaced by 2020)
  • Occupational Safety, Health and Working Conditions Code 2020
  • The Sexual Harassment of Women at Workplace (Prevention Prohibition, Redressal as well as Redressal) Act, 2013, is designed to safeguard women and provides an avenue for women to report sexual harassment in their workplace work
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4. Employers’ State Insurance Act, 1948

  • The Employees State Insurance Corporation (ESIC) is an official body of the Ministry of Labour and Employment law owned by the Government of India
  • Everyone who earns an annual salary of up to ₹21,000 per month is covered by the ESI Act and the ESI Scheme. In the case of people with disabilities, the maximum amount of wage is limited to ₹25000 per month
  • The scope of the ESI Act is extended to all factories.

5. Employee Protection

Indian labour laws distinguish between those working in ‘organised’ sectors and those working within ‘unorganised sectors’. The law lists the editors in which different rights of labour apply. For those not in these categories, the normal contract law is applicable.

  • Employment Polygraph Protection Act

As per Article 21(3) of the constitution, Article 21(3) of the Constitution of India, an individual cannot testify against himself. The results of the polygraph test violate this law. This means nobody can use it as evidence before the justice court.

  • Family and Medical Leave Act

The Family and Medical Leave Act was adopted in 1993 to safeguard the employment of employees when they take an absence from work for family or personal reasons. Employees can have up to twelve weeks of unpaid time off each year to attend to important family issues like pregnancy, illness in the family and so on.

  • Migrant and Seasonal Agricultural Workers

They cover freedom of association and equality of wage for the same work, secure working conditions, protection of employment & Social Security, elimination of forced labour and sex discrimination based on race, removal of sexual harassment against women working in the field, security for migrants, and others.

6. Trade Unions

The Trade Unions Act of 1926 (the ‘TU Act’) regulates the governance and constitution of trade unions. Section 2(h) of the Act defines the term ‘trade unions” as any grouping created to regulate relationships.

  • Employees and employers
  • Workers and the workmen
  • Employers and employers
  • For imposing restrictions on how you conduct any trade or business

Trade unions may be temporary or permanent and can be registered or not registered. However, registration is highly recommended since it provides greater bargaining rights and rights. 

Registration is submitting an application from 7 or more individuals employed in the business or establishment and must sign up to the guidelines of the trade union. Registration is possible only if at a minimum of 10% or more than 100 union members at the date of registration.

7. Mines Act 1952

The Mines Act 1952 contains provisions for the health, safety, and well-being of those working in oil, coal, and metalliferous mining. 

The law defines mines as – any excavation in which any process with the intention of searching for or obtaining minerals has taken place or is currently being conducted and includes all:

  • Power plants
  • Wells for oil
  • Boring drill holes
  • Other crude conditioning facilities’ shafts
  • Aerial ropeways and planes
  • Opencast works conveyors
  • Railways slideways
  • The machinery works on tramways
  • Workshops

Or any facilities associated with mining activities and situated close to or within the mining zone.

  • Construction

Construction law covers every legal aspect in connection with any aspect of the building process structure or any other construction. Federal, state or local laws may trigger legal concerns related to construction.

  • Closed-down plants and layoffs

A layoff is a term that describes the dismissal of employees by an employer due to reasons that are not the employees’ fault. Layoffs are temporary in a way that demonstrates the incapacity of the employer to keep the employees employed for a short period. 

  • Earnings Garnishment

The process of garnishment is a judicial one. Also, it allows a creditor to ask the court to require an unrelated third party indebted to the debtor to transfer to the creditor the entirety of the debtor’s assets owned by the third party.

Objective and Scope of the Labour Contract Act

The Contract Labour (Regulation & Abolition) Act, of 1970 is a major legislation that oversees contract labour in India. The objective and scope of the Act are to prevent the exploitation of contract labourers and to provide proper and habitable working conditions. The Act is applicable to an establishment if the workmen are employed in the establishment as ‘contract labour’. 

The objective of the Labour Contract Act in India is to regulate the rights and obligations regarding working conditions and work environment of employers and workers employed based on the Act.

Applicability of the Labour Contract Act

The Contract Labour (Regulation & Abolition) Act of 1970, has specific applicability criteria outlined in Section 1(4) of the Act:

  1. The Labour contract Act is applicable to any establishment where twenty or more workmen are employed or have been associated as contract labour on any day during the preceding twelve months.
  2. The Labour contract act also applies to any contractor who employs or has employed twenty or more workmen as contract labour on any day of the preceding twelve months.
  3. The labour contract act extends to every establishment where workmen are employed as ‘contract labour.’ A workman is considered employed as contract labour when hired in or in connection with such work by or through a contractor, with or without the knowledge of the principal employer.

However, there are exemptions and exceptions to the labour contract act’s applicability:

  • The labour contract act does not apply to organizations or establishments where work of intermittent or casual nature is performed. Work is considered of intermittent nature if it is carried out for less than 120 days in the preceding twelve months or is of a non-seasonal character and is performed for less than 60 days in a year.
  • The labour contract act is not applicable to a person who is appointed in an advisory or managerial capacity.

FAQs: Major Laws of the Department of Labour

1. Who is considered a 'principal employer' under the Contract Labour Act?

A principal employer is defined as a person who has ultimate control over the affairs of an establishment and includes the owner or occupier of the establishment where the services of contract labour are utilized, the person who pays the wages of the contract labour or the one who is responsible for the supervision of such labour.

2. When is a license required to employ contract labour?

A license is required to employ contract labour when the establishment or contractor employs 20 or more contract labourers.

3. What are the penalties for violating the provisions of the Contract Labour Act?

The penalties for violating the provisions of the Contract Labour Act include imprisonment for a term of up to three months, a fine of up to Rs. 1000 or both.

4. Are there any exemptions available under the Contract Labour Act?

There are no general exemptions available under the Contract Labour Act. However, the appropriate government may exempt any establishment or class of establishments from any of the provisions of the Act if it is satisfied that adequate provisions for the welfare of the contract labourers have been made in the establishment.

5. Are migrant workers covered under the provisions of the Contract Labour Act?

Yes, migrant workers are covered under the provisions of the Contract Labour Act. The Act applies to all establishments employing 20 or more contract labourers, regardless of their place of origin or residence.

Conclusion – Major Laws of the Department of Labour

The Department of Labour and Employment (DOLE) is the national government agency that assists and protects the rights of workers. It implements policies, programs, projects and services to promote social justice, enhance productivity and competitiveness, and protect labour rights as well as occupational safety and health. 

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