Labour legislations in INDIA Labour legislations in INDIA

BySunil Budhiraja

Lovely School of ManagementLovely Professional University

Origins of Labor LegislationsOrigins of Labor Legislations

• Labor laws emerged when the employers tried to restrict the powers of workers' organizations and keep labor costs low. The workers began demanding better conditions and the right to organize so as to improve their standard of living.

Laws related to working conditions, safety, health, and environment

Laws related to Wages and Reward

Laws related to Industrial Relations

Laws related to Social Securities

Laws related to Equality and Empowerment of Women

•The Factory Act, 1948

•The Payment of Wages Act, 1936•The Minimum Wages Act, 1948•The Payment of Bonus Act, 1965

•The Trade Unions Act, 1926•The Industrial Disputes Act, 1947

•The Workmen’s Compensation Act, 1923•The Employees’ State Insurance Act, 1948•The Employees’ Provident Fund & Miscellaneous Provisions Act, 1952•The Payment of Gratuity Act, 1972

•The Maternity Benefit Act, 1961 •The Equal Remuneration Act, 1976

The Factories Act, 1948The Factories Act, 1948

• A social legislation which has been enacted for occupational safety, health and welfare of workers at work places.

• Being enforced by technical officers i.e. Inspectors of Factories, Dy. Chief Inspectors of Factories who work under the control of the Chief Inspector of Factories and overall control of the Labour Commissioner, Government of National Capital Territory of Delhi

Applicability Applicability

• The industries in which ten (10) or more than ten workers are employed on any day of the preceeding twelve months - engaged in manufacturing process being carried out with the aid of power or twenty or more than twenty workers employed in manufacturing process being carried out without the aid of power.

Salient features Salient features 1. Approval of Factory Building Plans before

construction/extension, under the Delhi Factories Rules, 1950

2. Grant of Licences under the Delhi Factories Rules, 1950, and to take action against factories running without obtaining Licence.

3. Renewal of Licences granted under the Delhi Factories Rules, 1950, by the Dy. Chief Inspectors of Factories

4. Inspections of factories by District Inspectors of Factories, for investigation of complaints, serious/fatal accidents as well inspections to check compliance of provisions of this Act relating to :-Health, Safety, Welfare facilities, Working hours, Employment of young persons and annual Leave with wages etc.

The Payment of Wages Act, 1936The Payment of Wages Act, 1936

• Objectives To ensure regular and prompt payment of wages and to prevent the exploitation of a wage earner by prohibiting arbitrary fines and deductions from his wages.

Scope and coverageScope and coverage

- Application for payment of wages to persons employed in any factory.

- Not applicable to wages which average Rs 1600/- per month or more.

- Wages include all remuneration, bonus, or sums payable for termination of service, but do not include house rent reimbursement, light vehicle charges, medical expenses, TA, etc.

Minimum Wages Act, 1948Minimum Wages Act, 1948• A tripartite Committee Viz.,"The Committee on Fair Wage" was

set up in 1948 to provide guidelines for wage structures in the country. The report of this Committee was a major landmark in the history of formulation of wage policy in India. Its recommendations set out the key concepts of the `living wage', "minimum wages" and "fair wage" besides setting out guidelines for wage fixation.

• Article 39|- The State shall, in particular, direct its policy towards securing (a) that the citizen, men and women equally shall have the right to an adequate livelihood and (b) that there is equal pay for equal work for both men and women.

• Article 43 |- The State shall endeavor, by suitable legislation or economic organization or in any other way, to give all workers, agricultural, industrial or otherwise, work, a living wage, conditions of work ensuring a decent standard of life and full enjoyment of leisure, and social and cultural opportunities.

The Payment of Bonus Act, 1965The Payment of Bonus Act, 1965• Applicability

(a) Every factory (as def. in Factories Act), & (b) Every other establishment in which 20 or more persons (less than 20 but 10 or more if appropriate Govt. notifies) are employed on any day subject to certain exemptions.ii) Employees' drawing remuneration of Rs. 3,500/- or more and those who have worked for less than 30 days are not eligible to receive bonus under the Act.iii) Bonus to be paid within eight months from the expiry of the accounting year.

EligibilityEligibility

• i) Every person (other than an apprentice) drawing salary up to RS 3,500 per month.ii) Every person drawing salary between RS 2,501/- and RS 3,500/- per month. The bonus payable to him is to be calculated as if his salary were RS 2,500/- p.m. – salary means basic pay + DA only

BenefitsBenefits

i) Subject to other provisions :— Minimum bonus shall be 8.33% of salary/wages earned or RS 100 whichever is higher.Ii) If allocable surplus exceeds the amount of minimum bonus, then bonus shall be payable at higher rate subject to a maximum 20% of salary/wages.Iii) Computation of bonus is to be worked out as per Schedule I to IV of the Act.

The Employees’ State Insurance Act, The Employees’ State Insurance Act, 19481948

• Provides for certain benefits to employees in case of sickness, maternity and employment injury.

• It applies to all factories (including Government factories but excluding seasonal factories) employing ten or more persons and carrying on a manufacturing process with the aid of power or employing 20 or more persons and carrying on a manufacturing process without the aid of power

Act does not apply to Act does not apply to

• Factories working with the aid of power wherein less than 10 persons are employed;

• Factories working without the aid of power wherein less than 20 persons are employed;

• Seasonal factories engaged exclusively in any of the following activities viz. Cotton ginning, cotton or jute pressing, decortication of groundnuts, the manufacture of coffee, rubber, sugar (including gur) or tea

Benefits Benefits • Medical benefits FULL MEDICAL CARE consists of hospitalization

facilities -includes specialist services, drugs and dressings and diets as required for in-patients.

• Sickness benefit is roughly 50% of the average daily wages and is payable for 91 days during 2 consecutive benefit periods.

• Maternity Benefit is payable to an Insured Woman in the following cases subject to contributory conditions:-

Confinement-payable for a period of 12 weeks (84 days) – anti-natal 6 weeks & post – natal 6 weeks restricted to 2 children

• Dependents benefit• Accident Benefit• Funeral expenses

Coverage and contribution Coverage and contribution

• The existing wage-limit for coverage under the Act, is Rs.10,000/- per month (with effect from 1.10.2006).

• Currently, the employee’s contribution rate (w.e.f. 1.1.97) is 1.75% of the wages and that of employer’s is 4.75% of the wages paid/payable in respect of the employees in every wage period

The Workmen’s Compensation Act, 1923The Workmen’s Compensation Act, 1923

• The Workmen’s Compensation Act, aims to provide workmen and/or their dependents some relief in case of accidents arising out of and in the course of employment and causing either death or disablement of workmen.

• It provides for payment by certain classes of employers to their workmen compensation for injury by accident.

Employer’s liability Employer’s liability

• The employer of any establishment covered under this Act, is required to compensate an employee :

• Who has suffered an accident arising out of and in the course of his employment, resulting into (i) death, (ii) permanent total disablement, (iii) permanent partial disablement, or (iv) temporary disablement whether total or partial, orWho has contracted an occupational disease

THE EMPLOYER SHALL NOT BE THE EMPLOYER SHALL NOT BE LIABLELIABLE

• In respect of any injury which does not result in the total or partial disablement of the workmen for a period exceeding three days;

• In respect of any injury not resulting in death, caused by an accident which is directly attributable to-

• the workmen having been at the time thereof under the influence or drugs, or

• the willful disobedience of the workman to an order expressly given, or to a rule expressly framed, for the purpose of securing the safety of workmen

The Industrial Disputes Act, 1947 The Industrial Disputes Act, 1947

• “Industry" means any systematic activity carried on by co-operation between an employer and his workmen (whether such workmen are employed by such employer directly or by or through any agency, including a contractor) for the production, supply or distribution of goods or services with a view to satisfy human wants or wishes (not being wants or wishes which are merely spiritual or religious in nature)

Lay-off Lay-off

• lay-off" means the failure, refusal or inability of an employer on account of shortage of coal, power or raw materials or the accumulation of stocks or the break-down of machinery or natural calamity or for any other connected reason to give employment to a workman whose name is borne on the muster-rolls of his industrial establishment and who has not been retrenched;

Lock-outLock-out

• "lock-out" means the temporary closing of a place of employment or the suspension of work, or the refusal by an employer to continue to employ any number of persons employed by him;

• “Retrenchment" means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include - (a) voluntary retirement of the workman; or

• retirement of the workman on reaching the age of superannuating

• termination of the service of a workman on the ground of continued ill-health;

Strike Strike • Sec 2q of ID Act – combination of persons indulging in

concerted action in stoppage of work or making hindrance to the normalcy of the organization.

• Illegal strikes and lockouts – strikes as weapons in the hands of trade union/work force and lockouts in the hands of employers / management

• Strikes without due notice to the employer(with in 14 days of the notice) or during the pendancy of proceedings before labour dept - same is applicable to lockouts

The Gratuity Act,1965The Gratuity Act,1965

• The Act provides for the payment of gratuity to workers employed in every factory, shop & establishments or educational institution employing 10 or more persons on any day of the proceeding 12 months. A shop or establishment to which the Act has become applicable shall continue to be governed by the Act even if the number of persons employed falls bellow 10 at any subsequent stage.

• All the employees irrespective of status or salary are entitled to the payment of gratuity on completion of 5 years of service. In case of death or disablement there is no minimum eligibility period. The amount of gratuity payable shall be at the rate of 17 days wages based on the rate of wages last drawn, for every completed year of service. The maximum amount of gratuity payable is Rs. 3,50,000/-.

• Formula is - Last Wages *15*No. of services/26

The Employees’ Provident Fund & The Employees’ Provident Fund & Miscellaneous Provisions Act, 1952Miscellaneous Provisions Act, 1952

Applicability• i) Every establishment which is a factory engaged in any industry

specified in Schedule 1 and in which 20 or more persons are employed and

• ii) Any other establishment employing 20 or more persons which entral Government may, by notification, specify in this behalf.(Infancy period of 3 years has been withdrawn by ordinance w.e.f.22-9-97)

• iii) any establishment employing even less than 20 persons can becovered voluntarily u/s 1(4) of the Act.

Eligibility Eligibility

• Any person who is employed for work of an establishment or employed through contractor in or in connection with the work of an establishment.

BenefitsBenefits

• Employees covered enjoy a benefit of Social Security in the form of an unattachable, unwithdrawable (except employees and employers contribute equally throughout the covered persons employment. This sum is payable normally on retirement or death. Other Benefits include Employees’ Pension Scheme and Employee’s Deposit Linked insurance Fund.

The Maternity Benefit Act, 1961 The Maternity Benefit Act, 1961

• OBJECT: To regulate the employment of women in certain establishments for certain periods before and after childbirth and to provide for maternity benefits and certain other benefits.

• APPLICABILITY: It extends to the whole of India and applies to i) every factory, mine, plantations, establishments for the exhibition of equestrain,acrobatic and other performances.

to every shop or establishments defined under any law applicable to such establishments in a state in which persons are employed on any day of the preceding twelve months.

• PROHIBITED PERIOD OF EMPLOYEMENT OR WORK: The employment of women, or work by women in any establishment during the six weeks immediately following the day of her delivery or her miscarriage (section-4).

PAYMENT OF MATERNITY BENEFIT: Every women shall be entitled to, and her employer shall be liable for, the payment of maternity benefit at the rate of average

daily wage for the period of her actual absence, and any period of her actual absence, and any period immediately following the date of delivery and including the actual day for her delivery (Section –5). In addition to the maternity benefit, every women shall also be entitled to receive a medical bonus of Rs.250/- if no prenatal confinement and post natal care is provided free of charge (section-8)

• ELIGIBILITY FOR MATERNITY BENEFIT:

A women shall be entitled to maternity benefit only if she has actually worked in an establishment of the employer for a period of not less then eighty days in the twelve months immediately proceeding the date of her expected delivery (section-5[2])

• MAXIMUM PERIOD OF MATERNITY BENEFIT: Maximum twelve weeks of which not more then six weeks shall proceed the date of her expected delivery (section- 5[5])

• OTHER BENEFITS: Act also provides provisions for leave for miscarriage, leave for illness arising out of pregnancy or delivery, premature birth of child or miscarriage and nursing breaks for nursing the child until the child attained the age of 15 months (section-9,10 & 11)

• DISMISSAL, DEDUCTION WAGES, ETC: No employer shall discharge or dismiss a women for her absence form work in accordance with the provisions of this Act and no deduction shall be made from the normal; and usual daily wages of a women entitled to maternity benefits. (section –12&13).

Thank u !!!Thank u !!!

Collective BargainingCollective Bargaining

• The act of negotiating contract terms between an employer and the members of a union.

• Collective Bargaining Agreement – the resulting contract from a collective bargaining procedure.

• The employer and the union must bargain with each other in good faith.

Subjects of Collective BargainingSubjects of Collective Bargaining

• Compulsory Subjects– Wages– Hours– Other terms and conditions of employment

• Illegal Subjects– Closed shops– Discrimination

Check-Off ProvisionCheck-Off Provision

• Upon proper notification by the union, union shop and agency shop employers are required to:

1. Deduct union dues and agency fees from employees’ wages, and

2. Forward these dues to the union.

� This is called a check-off provision.

StrikesStrikes

• the union call a strike if a collective bargaining agreement cannot be reached.

• A majority vote of the union’s members must agree to the action before there can be a strike.

Crossover WorkerCrossover Worker

• Individual members of a union do not have to honor the strike.

• They may:1. Choose not to strike, or

2. Return to work after joining the strikers for a time

Replacement WorkersReplacement Workers

• Workers who are hired to take the place of striking workers.

• They can be hired on either a temporary or permanent basis.

• If replacement workers are given permanent status, they do not have to be dismissed when the strike is over.

Illegal StrikesIllegal Strikes

• Several types of strikes have been held to be illegal.

• They are not protected by federal labor law.

• Illegal strikers may be discharged by the employer with no rights to reinstatement.

Employer LockoutEmployer Lockout

Act of the employer to prevent Act of the employer to prevent employees from entering the work employees from entering the work premises when the employer premises when the employer reasonably anticipates a strikereasonably anticipates a strike..