Overview of Labour laws/Employment laws &Industrial Relations

in India Malkangiri Ravi Kumar

Preface:

The frame work of employment law /service law applies the moment
employee joins the organisation.The employer-employee has to respect all
legal obligations in their relationship.The employers-employees relationship
is parmount for any organisation.There can no organisation without
employees. The employee contribution is immense for any organisation’s
growth, it is unethical for any organisation to undermine the employee
contribution for the growth of business /profits of the organisation.It is also
unethical for organisation for not sharing profits and not giving adeqaute
say in the affiars of the management of organisation.The employee has to
ensure that he comply with all legal obligations under employment
contract.

Who is an employee :

The definition of employee can be drawn from various Central acts and
State Acts.There is no perfect legal definition, it is defined in various
legislations depending upon the salary drawn, activities, nature of job
undertaken by employee.. The labour acts like ID Act , ESI Act, Payment of
Bonus Act, PF Act, Payment of Gratuity Act, Payment of Wages Act and
Payment of minimum wages act defined term workmen /employee.

The term Workman" is defined under the Industrial Disputes Act, 1947
"workman" means any person (including an apprentice employed
in any industry to do any manual, unskilled, skilled, technical,
operational, clerical or supervisory work for hire or reward, whether the
terms of employment be express or implied, and for the purposes of any
proceeding under this Act in relation to an industrial dispute…”

The Apprentice Act , 1961“ Worker “ means any  person who is

employed for wages in any kind of work and gets his wages directly from
the employer but shall not include as apprentice referred to this clause.
Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959
2B (b) "employee" means any person who is employed in an
establishment to do any work for remuneration;
Definition of ‘worker ‘under the Factories Act: “ Worker" means  a
person employed, directly or by or through any  agency (including
acontractor)  with  or without  the   knowledge  of  the  principal
employer, whether for r e m u n e r a t i o n or not], in any
manufacturing  process, or  in cleaning  any part  of
t h e machinery or premises used  for a  manufacturing process,  or
in any other kind  of work incidental to,  or connected with, the
manufacturing  process,  or  the  subject  of  themanufacturing
process but  does  not  include  any member of the armed forces
of the union”

Section 2(9) of ESI Act the term 'Employee' is defined under Section
2(9) as follows: Any person employed for wages in or in connection with
work of a factory or establishment to which the Act applies. ESI (Central)
(Amendment) Rules, 2010 applicable to employees whose wages does not
exceed Rs. 15,000/-

The new definition under Payment of Gratuity Act,1972 “Employees

means any persons [NOT being an Apprentice] employed for wages in any
kind of work (manual or otherwise) or in connection with work of factory,
mine, plantation, oilfield, railway company, port or other establishment” [as
amended 2010 with revision in maximum ceiling from Rs. 3.5 lac to Rs. 10
lakhs.]

Workmen’s Compensation Act is now known as Employees

Compensation Act, 1923 and the broad definition of employee includes
clerical employees & casual employees also.[compensation increased to Rs.
1,20,000 & 1,40,000]

Employers Provident Fund Scheme,1952"Employee" as defined in

Section 2(f) of the Act means any person who is employee for wages in
any kind of work manual or otherwise, in or in connection with the work of
an establishment and who gets wages directly or indirectly from the
employer and includes any person employed by or through a contractor in
or in connection with the work of the establishment.”
The Rights &Duties of Employer and Employee:

Implied Duties of Employer: Some of common well accepted duties and

other statutory duties of employer includes ;

 To pay contractually agreed wages/pay/remuneration including

bonus ,D.A allowances and other benefits. [fixing pay according to
prevailing labour market rates depending upon skill
,qaulification&experience ] ,
 Duty bound to pay national minimum wage.
 Duty bound to provide pay slip, every month giving all break up
details[taxes remittances &other statutory compliances information ]
 Duty bound to pay sick pay/sick leave provision/maternity paternity
leave provision, duty to take back women, who has availed maternity
leave.
 To treat employees with trust and confidence.
 To provide minimum holidays[CL,SL,LTC etc]
 To observe statutory provisions relating to working hours
 Duty bound to treat employee with respect, dignity and decorum,
employees human rights should be respected and onus lies on the
management to provide good working atmosphere.
 Duty bound to address the grievances of employees relating to work.
Pay and leave and adequate grievance machinery should be set up.
 Duty bound to look into complaints of discrimination and sexual
harassments at work place.
 Duty to adhere to all social security provisions for betterment of
workers/employees
 Duty to follow due procedure established by law, with regard to
dismissal, lay off and retrenchment with notice pay and
compensation.
 To permit employees for time off for duties relating to public
importance like casting vote in general elections.
 To indemnify employees[expenses incurred during course of
employment like travelling allowances]
  To provide references: There is no legal obligation on part of
employee to provide references, if there is miss –statement or
defamatory statement of employer on employee conduct ,the
employee can sue the employer under penal laws. Even negligent
miss-statement attracts penal action and compensation for loss
suffered.
 Duty to provide adequate faculties basic to employees like wash
room/resting room, drinking water .The facilities for disabled people.
The adequate facilities for women employees with nursing children
like providing crèche.
 Duty to adhere to concept of “Equal opportunities employer”. The
organization has a matter of policy ,provide employment to
disadvantage sections of society and minority groups[women
religious minority]
 Duty to give adequate opportunity to employee to present his case
during displinary proceeding or internal inquiry some cases legal
representative is allowed to represent the employee.

Implied Duties of Employees:

1. Duty to obey lawful orders.

2. Duty to use reasonable care &skill.
3. Duty to be ready and willing to work.
4. Duty to take care of the Employers property.
5. Duty to act in good faith.
6. To restraint of trade employment [breaking of contract terms]
7. Duty to issue notice before leaving job.
8. Duty to obey all contractual terms.
9. Duty to not disclose confidential information related to IPR to third
party[breaching confidentiality clause]

Essentials of Employment Contracts:

1. Your name and name of employer

 2. Date of commencement of employment
3. Title and description of job[job profile with reporting to whom]
4. The rate of pay/wages, when will be paid ,how will paid, periodical
pay revision/enhancements like Dearness Allowances in separate
sheet mentioning Basic pay with other break up components like
DA,T.A or enrolments etc
5. Your working hours &holiday entitlements
6. Notice period
7. Displinary and grievance with name of person to be contacted for any
grievances.
8. Statement whether employment is permanent or Temporary or
contractual [fixed term]
9. Signature of Head of Human Resources Department and other senior
professionals [ seal , signature with date]
10. The employee’s consent with signature

Why &How labor laws evolved in world

After Industrial revolution during 18 th and 19th centuary,there was lot of

labour unrest due to illtreatement of workers by organisation ,there was
allegations on the organisations that they are illtreating workers and
enriching themselves by not sharing their profits, powerful collective labour
movement/revolution emerged in the world for better treatment of
workers, all countries enacted the laws and regulations to regulate the
unlawful/unfair behavior of employers towards to employees.

There is always friction and conflict between employees and employers

over the issue of wages,bonus,social security measures[PF/ESI],fixation of
working hours, lay offs/retrenchment/lock outs /unfair dismissals,
maternity benefits &sickness ,discrimination, safety & environmental
concerns, right to strike to enforce their demands and maintaining trade
union or employees association for protecting collective interest. Most
organization are reluctant to recognize employee union or trade union.
Overview of International Labour Conventions

The International Labour Organises the International Labour Conferences

in Geneva every year in June.

ILO was established in 1919 through the Treaty of Versailles as an agency

of the League of Nations, the ILO became the first specialized agency
affiliated with the UN in 1946.Its activities include compiling labour
statistics, protecting international migrants, and safeguarding trade-union
rights

International labour law is one category of international law.The ILO works

various themes like.

1. Freedom of association, collective bargaining, and industrial relations

2. Forced labour

3. Elimination of child labour and protection of children and young persons

4. Equality of opportunity and treatment

5. Tripartite consultation

6. Labour administration and inspection

7. Employment policy and promotion

8. Vocational guidance and training

9. Employment security

10. Wages

11. Working time

12. Occupational safety and health

13. Social security

14. Maternity protection

15. Social policy

16. Migrant workers

17. HIV and AIDS

18. Seafarers

19. Fishermen

20. Dockworkers

21. Indigenous and tribal peoples

22. Specific categories of workers

23. Final Articles Conventions

Concept of Whistle blowing :

This is very sensitive subject to debate it is all about individual going to

public with certain confidential information because he/she believe that
the company is doing immoral , unethical or unwrongful ,which he/she
chooses to disclose to the public for betterment of society.”Whistleblowers
goes to public because they believe that they have good story”. He or she
is making a strong protest that is naturally above his /her own level of
interest and in the larger interest of society. The Whistle blowing may be
internal or external ,it depends upon the facts and circumstances of the
case.The subject of whistle blowing is not well taken by management ,it
does not mean whistle blowing is bad and totally avoided or discouraged
.There are many organisation ,who understood the whistle blower intention
and acted upon. One of the common complaint is that person has not
disclose same information to the management before going to public.
While employee will not be in position to trust his senior officer’s to share
with problems[Sometimes senior officer may colluded with wrongdoers and
undermine the issue, which ].There are many statutory enactment which is
contrary to official secrecy like Right to Information[with certain
exceptions] and there is demand for strong whistle blowing protection
laws.There is a view that nothing is secret ,if it is contrary to public
interest,the public interest is supreme and paramount in the society.
The best possible advice in this regard is strictly following ethical rules to
avoid problems of whistle blowing.

Universal Declaration of Human Rights –Right to Work:

The United Nations Universal Declaration of Human Rights states that

“Every one has the right to work& free choice of employment ,just and
favourable conditions of work,and to protection against unemployment
“paradoxically it does not mention, who should provide employment,
perhaps it is the government to hold this right.

Artcle 23 of declaration says “Every one has right to form and join trade
union for protection of his interest “

Employment /labour laws in India overview :

In India the first trade union activity surfaced during the year 1918.The
trade union were not encouraged by managements neither government
protected the concept of trade unionism.

It has been observed that there is an unhealthy trend in labour market in

the name of reccession, many organisations are resorting to
downsizing/laying off so-called excess staff or unproductive staff ,even
though organisation is not an loss making outfit nor affected due to
adverse economic situation. The litigation of unfair dismissals /mass lay off
increased three fold in labour courts and higher judiciary for violating
procedural formalities[ID Act] like unfair dismissals&inadeqaute
compensation. Many advocates for labour rights say that such lay off
/unfair dismissals are clear violations of Constitutional Law of country and
labour laws enacted to protect the labour force.

Constitution of India :Under the Constitution of India, labour is a subject in

the Concurrent List ,where both the Central & State Governments are
competent to enact legislation subject to certain matters being reserved for
the Centre.The labour legislations have different eligibility criteria for
establishments as well as to the workmen. The Matters relating to Social
Security are mentioned in Directive Principles of State Policy, chapter IV of
the constitution and the subjects in the Concurrent List. The Fundamental
Rights ,Chapter III of constitution Article 16 speaks about equal
opportunities in the matter of public employment , Article24 is about “
Prohibition of employment of children in factories, etc”

There are over 45 legislations on labour from the Central Government and
various state legislation on labour issues. The main laws relating to
labour /worker protection, welfare and rights are enumerated below:

Industrial Relations

The Trade Unions Act, 1926

The Trade Unions (Amendments) Act, 2001

The Industrial Employment (Standing Orders) Act, 1946

The Industrial Employment (Standing Orders) Rules, 1946

The Industrial Disputes Act, 1947

The Payment of Wages Act, 1936

Laws related to Wages

The Payment of Wages Rules, 1937

The Payment of Wages (AMENDMENT) Act, 2005

The Minimum Wages Act, 1948

The Minimum Wages (Central) Rules, 1950

The Working Journalist (Fixation of Rates of Wages) Act, 1958

Working Journalist (Conditions of service) and Miscellaneous Provisions

Rules, 1957
The Payment of Bonus Act, 1965

The Payment of Bonus Rules, 1975

Laws related to Working Hours, Conditions of Services and

Employment

The Factories Act, 1948

The Dock Workers (Regulation of Employment) Act, 1948

The Plantation Labour Act, 1951

The Mines Act, 1952

The Working Journalists and other Newspaper Employees’ (Conditions of

Service and Misc. Provisions) Act, 1955

The Working Journalists and other Newspaper Employees’ (Conditions

of Service and Misc. Provisions) Rules, 1957

The Merchant Shipping Act, 1958

The Motor Transport Workers Act, 1961

The Beedi & Cigar Workers (Conditions of Employment) Act, 1966

The Contract Labour (Regulation & Abolition) Act, 1970

The Contract Labour Regulation Rules

The Sales Promotion Employees (Conditions of Service) Act, 1976

The Sales Promotion Employees (Conditions of Service) Rules, 1976

The Inter-State Migrant Workmen (Regulation of Employment and

Conditions of Service) Act, 1979

The Shops and Establishments Act

The Cinema Workers and Cinema Theatre Workers (Regulation of
Employment) Act, 1981

The Cinema Workers and Cinema Theatre Workers (Regulation of

Employment) Rules, 1984

The Cine Workers’ Welfare Fund Act, 1981.

The Dock Workers (Safety, Health & Welfare) Act, 1986

The Building & Other Construction Workers (Regulation of Employment &

Conditions of Service) Act, 1996

The Dock Workers (Regulation of Employment) (inapplicability to Major

Ports) Act, 1997

Laws related to Equality and Empowerment of Women

The Maternity Benefit Act, 1961

The Equal Remuneration Act, 1976

Laws related to Deprived and Disadvantaged Sections of the

Society

The Bonded Labour System (Abolition) Act, 1976

The Child Labour (Prohibition & Regulation) Act, 1986

The Children (Pledging of Labour) Act, 1933

Laws related to Social Security

The Workmen’s Compensation Act, 1923

The Workmen's Compensation (Amendments) Act, 2000

The Employees’ State Insurance Act, 1948

The Employees’ Provident Fund & Miscellaneous Provisions Act, 1952

The Employees’ Provident Fund & Miscellaneous Provisions (Amendment)
Act, 1996

The Payment of Gratuity Act, 1972

The Payment of Gratuity Rules

The Unorganised Woekers' Social Security Act 2008

The Unorganised Workers' Social Security Rules 2008

Laws related to Labour Welfare

The Mica Mines Labour Welfare Fund Act, 1946

The Limestone & Dolomite Mines Labour Welfare Fund Act, 1972

The Beedi Workers Welfare Fund Act, 1976

The Beedi Workers Welfare Cess Act, 1976

The Beedi Worker's Welfare Cess Act Rules, 1977

The Iron Ore Mines, Manganese Ore Mines & Chrome Ore Mines Labour
Welfare Fund Act, 1976

The Iron Ore Mines, Manganese Ore Mines & Chrome Ore Mines Labour
Welfare Cess Act, 1976

The Cine Workers Welfare Fund Act, 1981

The Cine Workers Welfare Cess Act, 1981

The Employment of Manual Scavengers and Construction of Dry latrines

Prohibition Act, 1993

Laws related to Employment & Training

The Employment Exchanges (Compulsory Notification of Vacancies) Act,

1959
 The Employment Exchanges (Compulsory Notification of Vacancies) Rules,
1959

The Apprentices Act, 1961

Others

The Fatal Accidents Act, 1855

The War Injuries Ordinance Act, 1943

The Weekly Holiday Act, 1942

The National and Festival Holidays Act

The War Injuries (Compensation Insurance) Act, 1943

The Personal Injuries (Emergency) Provisions Act, 1962

The Personal Injuries (Compensation Insurance) Act, 1963

The Coal Mines (Conservation and Development) Act, 1974

The Emigration Act, 1983

The Emigration Rules, 1983

The Labour Laws (Exemption from Furnishing Returns and Maintaining

Register by Certain Establishments) Act, 1988

The Public Liability Insurance Act, 1991

Conclusion: The laws and regulations are enacted to see that employees
and employer does not cross limit, onus lies on the management to adhere
to statutory provisions to avoid litigation and it is advised to address all
problems of employees seriously. Onus also lies on the employee to
address the issue of wrong doing or unfair treatment or dismissal to top
management members before approaching the labour court or tribunals.
All efforts Alternate Dispute Resolution methods like meditation and
conciliation should be explored to address the labour /employee
grievances.

About the author :

Malkangiri Ravi Kumar

Advocate &Legal Consultant

A.P High Court, Hyderabad

mravi@justice.com