Labour Laws

Manaswita Bharadwaja, Ph.D.

Assistant Professor (OB&HR)
IMI Bhubaneswar
Related Courses
• Employee Relations
• Industrial Jurisprudence
• It is not the purpose of this course to provide an exhaustive treatment of all the
provisions of all the labour-related laws.
• The purpose of this course is to enable the students to appreciate the various
provisions in terms of actual application and compliance.
• Caselets and Newspaper Articles
 Coverage
Introduction to Labour Laws
• Definition and Scope
• Historical Evolution of Labour Laws in India
• Indian Constitution and Labour Laws
• India’s Commitments to Key International Labour Standards
New Labour Reforms: Necessity and Challenges
The Existing Laws on Wages
The Code on Wages, 2019
The Existing Laws on Occupational Health and Safety of Workers/Employees
The OSHW Code, 2020
Industrial Disputes Act, 1947
Trade Unions Act, 1926; Industrial Employment (Standing Orders) Act, 1946
The Industrial Relations Code, 2020
Existing Laws on Social Security of Employees/Workers
Code on Social Security, 2020
Sexual Harassment of Women at Workplace Act, 2013 (POSH)
 Evaluation Components
Weightag
Component Mode Duration
e
1 Class Participation … 10%

2 Group Assignment Presentation … 20%

3 Quizzes Closed Book 3 quizzes 30%

(10/15
minutes
each)
4 End Term Examination Closed Book 2 hours 40%

Total 100%
Labour Laws
 What are Laws?
• Law refers to a system of rules, regulations, and principles established
by a governing authority to regulate behaviour within a society or
community.
• Laws are designed to maintain order, ensure justice, protect individual
rights, and promote the well-being of the community as a whole.
 Categories
ØConstitutional Law
ØStatutory Law (Criminal Law and Civil Law)
ØCommon Law
ØAdministrative Law
ØInternational Law

Labour Laws belong to which category?

 What are Labour Laws?
• The term ‘labour’ means productive work especially physical work done for
wages.
• Labour laws, also known as employment laws, are laws, administrative rulings,
and precedents which address the legal rights and obligations of, and restrictions
on, working people and their organizations.
• These laws govern the relationship between employers, employees, their
representatives (trade unions/employer associations), and the government in the
workplace.
 What are Labour Laws?
• The primary objective is to regulate the rights and responsibilities of workers
and employers, and in the process,
üensuring fair and just working conditions,
üpromoting social justice,
üestablish a framework for resolving disputes in the workplace
ümaintaining industrial peace.

• Eventually, these laws try to strike a balance between the interests of employers
and employees, ensuring that workplaces are conducive to productivity and well-
being.
 Scope
• The scope of labour laws varies by country, but they generally cover a wide range
of issues related to:
Industrial relations – certification of unions, labour-management relations,
collective bargaining and unfair labour practices
Workplace health and safety
Employment standards, including general holidays, annual leave, working
hours, unfair dismissals, minimum wage, layoff procedures and severance pay.
 Scope
• Employment Contracts
• Working Hours and Conditions
• Wages and Benefits
• Discrimination and Equal Opportunity
 Scope
• Termination and Redundancy
• Collective Bargaining
• Trade Unions
• Social Security and Welfare
• Dispute Resolution
Purpose of labour legislations

• Labour legislation that is adapted to the economic and social challenges of the
modern world of work fulfils three crucial roles:
* it establishes a legal system that facilitates productive individual and collective
employment relationships, and therefore a productive economy;
* by providing a framework within which employers, workers and their
representatives can interact with regard to work-related issues, it serves as an
important vehicle for achieving harmonious industrial relations based on
workplace democracy;
* it provides a clear and constant reminder and guarantee of fundamental
principles and rights at work and establishes the processes through which
these principles and rights can be implemented and enforced.
Purpose of labour legislations

1.Worker Protection
2.Health and Safety
3.Employment Rights
4.Collective Bargaining
Purpose of labour legislations
5. Redress Mechanisms
6.Social Justice and Equity
7.Economic Stability
8.Social Welfare
Purpose of labour legislations
• labour laws aim to create a balanced and sustainable framework that
protects the rights and interests of both employers and employees
while fostering a conducive environment for economic growth and
social progress.
Purpose of labour legislations

• But experience shows that labour legislations can only fulfill these functions
effectively if it is responsive to the conditions of the labour market and the
needs of the parties involved.
• The most efficient way of ensuring that these conditions and needs are taken
fully into account is if those concerned are closely involved in the formulation of
the legislation through processes of social dialogue.
• The involvement of stakeholders in this way is crucial for developing a broad
basis of support for labour legislation and in facilitating its application within and
beyond the formal structured sectors of the economy.
Non-Compliance with the Labour Laws
• The maxim 'ignorantia juris non-excusat' implies that ignorance of the law
will not be an excuse in the court of law. The court will take action against
any person who breaks the law.
• Non-compliance with the law may expose the organization to fines,
penalties, lawsuits, credibility, loss of contract, and possibly even business
closure.
• multiple lawsuits based on discrimination, sexual harassment, wrongful
termination, breach of contract, wage law violation, violation of a person's
civil rights which could be either unintentional(negligence) or intentional.
• For instance, not commenting on the merits of the case, Infosys faced a
lawsuit in 2018 by a former employee for failure to pay overtime. In 2020,
many companies like Amazon, Disney, Google, etc., also faced lawsuits by
their former employees.
Infosys Case
 Why does a HR Manager need knowledge of Labour Laws?
• require a good hold of different laws starting from the recruitment, to their onboarding,
mandatory paper work, different benefits such as PF, ESI, bonus, gratuity etc.
• decision of dismissal
• policy decisions.
• an extra edge over others.
• Some laws are only applicable in specific work contexts, while others apply to all
organizations.
• strategically managing employees of the organization while adhering to regulations that
govern employee rights and employer obligations.
• majority of core HR functions are linked to and governed by the labour laws of the
concerned country.
• employee grievance is handled first by HR.
• can resolve conflicts timely in accordance with the law and save cost.
Why does a HR Manager need knowledge of Labour Laws?
• HR managers should have knowledge of labour laws for several important
reasons:
ØCompliance
ØEmployee Rights
ØConflict Resolution
ØPolicy Development
ØRisk Management
ØRecruitment and Hiring Practices
ØEmployee Relations
 Career Opportunities
• In India, having knowledge of labour laws can open up various job
opportunities across different sectors. Some of the jobs where expertise
in labour laws is highly valued include:
ØHuman Resources Manager/HR Business Partner
ØLabour Relations Officer
ØLabour Law Consultant/Advisor
ØEmployment Lawyer
ØCompliance Officer
ØLabour Welfare Officer
ØGovernment Official/Inspector
Case on the Tata Group
 From Industrial Relations to Employee Relations
Scope and Focus
Nature of Relationships
Legal Framework
HR Role and Function
Conflict Resolution
Understanding labour laws has always been crucial for HR
managers, but the shift from industrial relations to employee
relations has made this knowledge even more essential.
Three important pillars of implementing Labour Laws
• They are legal, HR and Admin.
• When we talk about legal department, if any case is registered either by employer
or on the employer, the legal team fights for that.
• The HR department will interact with employers directly and help them if they
have any queries.
• And then we have the Admin team, also known as the Liasoning Team, they do
the paperwork with government bodies. Example, filing for PF and ESIC amount.
 Fundamental principles of labour laws in India

• Principle of Social Justice

• Social Equity
• International Uniformity
• National Economy
• Social Security
• Health and Safety
 Constitutional Provisions
• The relevance of the dignity of human labour and the need for protecting and safeguarding
the interest of labour as human beings has been enshrined in Chapter-III (Articles 16, 19,
23 & 24) and Chapter IV (Articles 39, 41, 42, 43, 43A & 54) of the Constitution of India
keeping in line with Fundamental Rights and Directive Principles of State Policy.
• In the case of Randhir Singh vs Union of India, the Supreme Court stated that “Even
though the principle of ‘Equal pay for Equal work’ is not defined in the Constitution of
India, it is a goal which is to be achieved through Article 14,16 and 39 (c) of the
Constitution of India.
• Article 14: It provides for equality before the law or equal protection of the laws
within the territory of India.
• Article 16: It talks about the right of equal opportunity in the matters of public
employment.
• Article 39(c): It specifies that the economic system should not result in the
concentration of wealth and means of production to the detriment of the entire society.
 Constitutional Provisions
• Labour is a concurrent subject in the Constitution of India implying that both
the Union and the state governments are competent to legislate on labour
matters and administer the same. The bulk of important legislative acts have
been enacted by the Parliament.
• The legislations can be categorized as follows:
ØLabour laws enacted by the Central Government, where the Central
Government has the sole responsibility for enforcement.
ØLabour laws enacted by Central Government and enforced both by Central
and State Governments.
ØLabour laws enacted and enforced by the various State Governments which
apply to respective States.
 Constitutional Provisions
• These Directive Principles provide:
üfor securing the health and strength of employees, men and women;
üthat the tender age of children are not abused;
üthat citizens are not forced by economic necessity to enter avocations unsuited to their
age
üor strength;
üjust and humane conditions of work and maternity relief are provided; and
üthat the Government shall take steps, by suitable legislation or in any other way, to
secure the participation of employee in the management of undertakings,
establishments or other organisations engaged in any industry.
 India’s Commitments to International Labour Standards
• India, as a member of the International Labour Organization (ILO), has committed itself
to various international labour standards aimed at protecting workers' rights and
promoting decent work conditions. These commitments are reflected in India's
ratification (the action of signing or giving formal consent to a treaty, contract, or
agreement, making it officially valid) of numerous ILO conventions and its efforts to
align its labour laws with international standards.
• Forced Labour (Abolition) Convention, 1957 (No. 105)
• Freedom of Association and Protection of the Right to Organise Convention, 1948
(No. 87)
• Right to Organise and Collective Bargaining Convention, 1949 (No. 98)
• Equal Remuneration Convention, 1951 (No. 100)
 India’s Commitments to International Labour Standards
• Minimum Age Convention, 1973 (No. 138)
• Worst Forms of Child Labour Convention, 1999 (No. 182)
• Occupational Safety and Health Convention, 1981 (No. 155)
• Maternity Protection Convention, 2000 (No. 183)
• A company's office/division in a foreign country would generally be
subject to the labour laws and regulations of the host country
where the office is located.
ØPrinciple of Territoriality: Most countries apply the principle of territoriality, which means that
their laws and regulations, including labour laws, apply within their borders. This principle extends
to businesses operating within the country, regardless of whether they are domestic or foreign-
owned.
ØCompliance Requirements: Just as foreign companies operating in India need to comply with
Indian labour laws, Indian companies operating abroad must adhere to the labour laws of the host
country. This ensures that employees working for the Indian company receive the same legal
protections and benefits as local employees.
ØLegal Jurisdiction: The legal jurisdiction over matters related to employment, wages, working
conditions, and employee rights typically falls under the jurisdiction of the host country's legal
system. This means that disputes, grievances, and legal issues related to employment would be
addressed according to the laws of the host country.
ØInternational Treaties and Agreements: In some cases, international treaties, agreements, or
bilateral arrangements between countries may influence the application of labour laws to foreign
companies operating within their borders. However, the primary determinant remains the host
country's domestic laws and regulations.
 Labour Laws in India

§ Labour legislations in India comprises both central and state legislations.

§ Most of the enactments that are in force today took shape in an
economy that was insulated/protected from global forces.
§ Although the industries that emerged in this closed economy have had
to adapt to the provisions of the existing labour laws, there is a demand
to usher in labour law reforms
§ This demand may give an impression that one way to competitiveness is
through reforming the “restrictive” labour laws.
 Labour Laws in India
Labour laws in India are formulated and enacted by both the central
government and the state governments. Here's how the process generally
works:
Central Government:
The central government, through the Ministry of Labour and Employment, is
responsible for formulating and enacting labour laws that apply to industries and
sectors under its jurisdiction.
The central government introduces bills related to labour and employment in the
Parliament of India, where they undergo discussion, debate, and voting.
Once a bill is passed by both houses of Parliament (Lok Sabha and Rajya Sabha) and
receives the assent of the President of India, it becomes law.
 Labour Laws in India
State Governments:
State governments in India have the authority to formulate and enact their own
labour laws for industries and sectors within their respective states.
State labour laws cover areas such as shops and establishments, minimum
wages, contract labour, and other aspects of labour welfare and regulation
specific to each state.
Similar to the central government, state governments introduce bills related to
labour and employment in their respective state legislatures (State Assembly or
Vidhan Sabha), where they are debated and voted upon.
Once a bill is passed by the state legislature and receives the assent of the
Governor of the state, it becomes law.
Classification of Labour Laws - Bases
qThe various labour legislations can be classified in a number of
ways depending upon the object of study
§ On the basis of Purpose
§ Regulation of working conditions
§ Social security
§ Regulation of wages and bonus
§ Industrial relations and conflict prevention
§ Legislative Body
§ Central or state or both
§ Period of Enactment: Early days, pre-Independence, post-
Independence
Classification of Labour Laws – NCL2
§ The National Labour Commission (Second), in its report (Chapter
VIA) has also discussed the labour laws under the following
classifications:
§ Employment Relations
§ Contract Labour
§ Laws on Working Conditions and Welfare
§ Laws Relating to Wages
§ Laws Relating to Social Security
§ Miscellaneous Matters
Classification of Labour Laws
The classification that we will follow is as under:
§ The Regulation of Working Conditions e.g.
§ The Factories Act, 1948
§ The Shops and Establishments Act, 1953
§ The Contract Labour (Regulation and Abolition) Act, 1970
§ Other similar legislations include The Mines Act, 1952
§ The Employers’ Liability Act, 1938;
§ Legislations Related to Social Security
§ Employee State Insurance Act, 1948
§ Workmen’s Compensation Act, 1923
§ The Payment of Gratuity Act, 1972
§ The Employee’s Provident Fund and Miscellaneous Provisions Act, 1952
Classification of Labour Laws
§ Industrial Relations and Conflict Prevention
§ The Industrial Disputes Act, 1947
§ The Industrial Employment (Standing Orders) Act, 1946
§ The Trade Unions Act, 1926
§ Legislations Related to Wage and Bonus
§ The Payment of Wages Act, 1936
§ The Minimum Wages Act, 1948
§ The Payment of Bonus Act, 1965
Important Definitions
§ To understand the different labour laws, it is important to focus
on following two provisions in each of the Acts:
I. the nature of the establishment and meaning of the same (eg
‘Factory’, ‘Establishment’, ‘Shop’, ‘Mine’ etc)
II. the category of employees covered by it (the definition of
“worker”, “workman”, “employee” under the different Acts).
§ In addition, clarity on following two additional terms is also
important
I. Industry
II. Appropriate Government
 Shram Suvidha Portal
• The Shram Suvidha Portal is an online platform launched by the Government of India as part of its
efforts to consolidate and simplify labour law compliance procedures for businesses and employers. The
portal provides a single unified platform for various labour-related registrations, filings, and compliance
activities.
üUnified Registration: Employers can register online for various labour-related registrations, including the
Employees' Provident Fund Organization (EPFO), the Employees' State Insurance Corporation (ESIC), and
the Chief Labour Commissioner's Office.
üSingle Window Compliance: The portal offers a single window for filing various labour-related returns,
such as those related to EPF (Employee Provident Fund), ESIC (Employee State Insurance Corporation),
and the Labour Welfare Fund, Contract Labour Act, Minimum Wages, etc.
üTransparency and Accessibility: The portal aims to enhance transparency and accessibility by providing
employers with real-time updates, status tracking, and online verification of labour compliance records.
üComplaints and Grievance Redressal: The portal facilitates the lodging and tracking of complaints
related to labour law violations and grievances. It provides mechanisms for addressing issues related to
minimum wages, working conditions, and other labour-related concerns.
üLabour Inspection Reports: Employers can access labour inspection reports online, ensuring
transparency in the inspection process and enabling timely compliance with any observations or
recommendations.
üCompliance Dashboard: The portal offers a compliance dashboard that allows employers to monitor
their compliance status and deadlines for various labour-related obligations.
 Debate and Discussion
Were the labour reforms (in the form of the new labour codes)
necessary? (Issues with existing laws and how reforms provide
solutions)

What are the challenges pertaining to the new labour reforms? (Were
labour reforms the only way to solve the existing issues? Are these
reforms solving the issues? What are the challenges related to their
implementation?)