Labour Law Advisor


Recently, amidst the nationwide lockdown, some Indian states have announced important amendments in their labor laws. Certain relaxations were provided to business establishments troubled by the COVID-19 outbreak.

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Labor Law – India (Conveyance and Relaxation)

Amidst the nationwide lockdown, a few Indian states have announced important amendments in their state labor laws. These changes aimed to provide certain relaxations to business establishments troubled by the COVID-19 outbreak. However, labor laws in relation to timely payment of wages/salaries, bonded labor and deployment of children & women have not been changed.

Understanding State Laws and Federal Laws:

Federal Law:

The legislative and executive authority between the federal and state government is the extent of various sectors governing different facets of labor and industry. Certain aspects are put in a common hamper available to both the powers.

  • Individual labor laws and collective labor laws are two modules of labor law that form the mainstay in the federal jurisdiction.
  • These are enacted and enforced and can veto state laws over common jurisdictions.
  • Federal laws form the spinal structure that augments decrees that branch down towards state jurisdictions.

State Law:

  • These are formed under the regional facets of the workforce and industrial set up.
  • Shops and Establishments Acts is the key illustration of a state law that governs any craft or profession that realizes a profit
  • They also hold power in the governance of the fabrication of merchandise for the consumers.
  • State laws reiterate and enforce Federal laws and have their jurisdictions where they enact certain laws about employee-employer relationships.

Labor Law Legislation in India:

Any law legislation in India is customarily a part of wider propaganda and in some cases like the labor law legislation, it is also intertwined with the historical aspects about the sector.

The labor laws were first generated under British Raj in the country that mostly ensured the safety of the British employees: Factories Act-1883. Since independence, the democratic constitution of our country has also taken a basic framework for labor laws from the British Rules.

The legislation considers the fact of organized and unorganized laborers, yet most of the laws govern and protect the organized (formal) sector. The unorganized or informal sector faces a huge disadvantage in legislation yet composes nearly 92% of the total workforce in the country.

Some milestones in legislation in the country include:

  • Female workforce-
  • Equal Remuneration act enacted in 1976.
  • Maternity Act
  • Industrial Disputes Act 1947
  • Industrial Employment Standing Order Act 1946
  • Payment of Gratuity Act/ Provident Fund Act
  • Workmen's Compensation Act
  • The Contact Labor (Prohibition and Regulation) Act 1970
  • Payment of Bonus Act: a minimum payable bonus is 8.33% and a maximum payable bonus is 20% of the annual wage.
  • Trade Union Act 1926
  • Minimum Wages Act 1948
  • India has endorsed four of the eight fundamental conventions enacted by the International Labor Organization (ILO):
  • Forced Labor 1930
  • Abolition of Forced Labor 1957
  • Equal Remuneration 1951
  • Discrimination (Employment and Occupation) 1958
  • India does not employ 'Hire and Fire' agenda and thus a company cannot fire an employee without appropriate accounts which may include a continuous absence of labor, abuse of colleagues, attaining retirement age, alcoholism, etc.

Labour Law Complaince in India

Labor law compliance is essentially a set of directives that govern the employment process and eliminate the possibility of exploitation of the workforce by the industrial setups or companies. Any industry in India is liable to follow the set guidelines to avoid any legal action against them which will be enforced by the jurisdictional authorities.

Labor law compliance comes under both the federal and state list enabling a wider scope for imposition, which is primarily for the safety and well-being of the employees.

Since the ID act (1948), conservation of rights of the workmen has been of primary standing and compliance with all enacted laws are indispensable to the functioning of any small-scale or large-scale industry. The laws enacted and enforced may be region-specific, hence the industries set up must be aware of the local jurisdictional guidelines. Further to this, the laws can be prudently enacted with an industry-specific agenda determining the different work environments and types of labor utilized by diverse industries.

Labor law includes guidelines that regulate employee termination as well. The major competent law that enforces compliance in the country includes:

  • Contract Labor) Act, 1970, Equal Remuneration Act, 1976.
  • Mines Act, and 1952 Minimum Wages Act, 1948, Industrial Employment (Standing Order) Act 1946, etc.
  • Building and Construction Workers (Regulation of Employment and Conditions Services) Act, 1996.

Amendments in Labor Law:

Indian labor law has seen amendments since its first major wave in 1948. Yet the present-day labor law amendments are blamed to make labor lives miserable rather than being of support.

Since the ID act passed in 1948, there have 45 major federal laws and 200 major state laws that came into effect.

It is self-evident that all amendments made must be in harmony with the fundamental rights of the workmen.

The most relevant articles to join the constitution concerning the labor laws include:

  • The Code on Wages 2019 - The Draft Code on Wages Rules: The Draft was introduced on 23rd July 2019 and has been passed by Lok Sabha.
  • Code on Social Security 2019: Introduced on 11th December 2019. Still pending as a draft.
  • Code on Industrial Relations 2019: Introduced on 28th November 2019. Still pending as a draft.
  • Code on Occupational Safety, and Working Conditions: Introduced on 23rd July 2019. Still pending as a draft.

Amendments made by Indian states during the COVID-19 outbreak

Now, we will look at some important changes made by four Indian States in their existing labor laws-

Uttar Pradesh:

On 8th May, 2020, the Uttar Pradesh Govt. has passed an ordinance named the” Uttar Pradesh Temporary Exemption from Certain Labour Laws Ordinance, 2020”. Vide this ordinance, exemptions are granted to all factories & establishments from complying with a majority of labor laws for 3 years. These exemptions are granted on fulfilling the below-mentioned conditions.

  • Details of all workers are entered on a register (electronically) as prescribed u/s 62 of Factories Act, 1948
  • The workers are not paid below the minimum wage prescribed by the State Govt.
  • The wages are paid within the time limit prescribed in section 5 of Payment of Wages Act, 1936.
  • The wages are paid only in the bank accounts of the workers
  • The provisions relating to the security & safety of the workers are adhered to ( as prescribed in Factories Act,1948 and Building & Other Construction Workers Act , 1996)
  • The workers will not be allowed to work for over 12 hours a day, under any circumstances.
  • For any death/disability occurred to any worker due to an accident arising out of/in the course of the employment, compensation will be paid as per provisions of Employees Compensation Act,1923
  • The establishments should adhere to the existing labor laws relating to bonded labor and deployment of children & women

Madhya Pradesh:

On 7th May, 2020, the Madhya Pradesh Govt. has notified amendments to certain State Labour Laws. The objective was to allow the troubled industries some specified concessions for 1000 days and to help them meet labour requirements in this pandemic situation. Here are a few important amendments made to some of the state labour laws-

SL NOActImportant Amendments
1Industrial Disputes Act,1947
  • The minimum number of workers in an industrial establishment has been increased from 100 to 300
  • 3 months' notice is necessary for laying off a worker.
  • In case of a lay off, the worker will receive 3 months' average pay or 15 days average pay for every year of continuous employment- whichever is higher
  • 2Factories Act,1948A male worker above 18 years of age is allowed to work for more than 48 hours a week subject to the conditions that
  • The workers will not be allowed to work for over 12 hours a day.
  • The spread over ( including rest intervals) will not exceed 13 hours on any given day
  • The total number of work hours , including overtime, should not exceed 60 hours a week
  • No worker is allowed to work for over 7 days at a stretch.
  • The total number of work hours in a quarter should not exceed 125.
  • No overtime work can be made obligatory or compulsory for workers
  • Any worker that has completed a minimum of 180 days is entitled for Annual Leave with Wages.
  • 3Contract Labour Act, 1970
  • Provision of deemed registration if an authority fails to pass an appropriate order within 30 days of submitting a completed application
  • Deemed provision of license if an authority fails to pass an appropriate order within 30 days of submitting a completed application
  • Gujarat:

    In a notification dated 17th April, 2020, Gujarat has exempted all registered factories from various existing provisions relating to work hours, rest intervals and so on. The exemptions will be in place till 19th July, 2020. Some of these are mentioned below-

    • An adult worker will not be allowed to work for more than 12 hours a day or 72 hours a week.
    • No worker will be allowed to work for more than 6 hours before a compulsory rest interval of at least 30 minutes on any given day
    • No female worker will be allowed to work during 7 PM and 6 AM in a factory
    • Wages will be increased in proportion to the existing wage criteria.
    • These exemptions are extended to all new projects on the condition that they remain operational for at least 1200 days.

    Himachal Pradesh:

    In a notification dated 21st April, 2020, Himachal Pradesh has exempted all registered factories from various existing provisions relating to work hours, rest intervals and so on. The exemptions will be in place for a period of 3 months (till 20th July, 2020)- subject to certain conditions mentioned below-

    • An adult worker will not be allowed to work for more than 12 hours a day or 72 hours a week.
    • No worker will be allowed to work for more than 6 hours before a compulsory rest interval of at least 30 minutes on any given day
    • Wages in relation to increased working hours ( because of the exemption) will be in proportion to the existing minimum wages specified by the State Govt.
    • Provisions of Section 59 of the Minimum Wages Act pertaining to overtime will remain in force

    The constructive status of labor law in the country is considered poor in many aspects yet has a rewarding employee protection scheme in comparison to western powers in trade. The laws are existent to ensure protection from exploitation of labour yet the status of the objective is far from accomplished.

    Even with all these laws prevalent in the country, it is a melancholic reality that the laborers' lives in India are customarily uncertain.

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