Basic Understanding Of Labor Laws In India From A Layman’s Point Of View

INTRODUCTION

Labor law, also known as employment law, is a vast body of laws, administrative regulations and legal precedents which focus upon the legal rights, restrictions on working people and their organization. 

Labor laws mediate various aspects of pre-existing relationships between trade unions, employees, and employers. Labor laws are significant for providing correct explanation about the various rights and obligations of workers, employers, and union members in a workplace.

Labor law covers various industrial relations, workplace health and safety and ensuring optimal employment standards. To maintain the mechanism of labor, it is pertinent that the labor laws are in touch with the current trends and needs.

EVOLUTION OF LABOR LAWS 

The demand for labor laws rose when there was a decline in the working conditions for workers. The tussle between the interests of laborers and their employers led to the creation of labor laws. The international labor organization was one of the first international organizations which dealt with labor issues. The agency was established as a subset of the League of Nations following the Treaty of Versailles, which led to the end of World War One.

PRE – INDEPENDENCE ERA - The evolution of labor laws in India is deeply intricate with the decisions made by the British colonialism while the decisions made by the British were intended to protect their own interest they influenced the early labor laws of India.

Due to intense pressure by the textile magnates of Manchester and Lancashire British parliament passed the factories act in 1883 which intended to make Indian labor costlier as it was a well-known fact that Indian textile goods offered a fierce competition to the British textiles in the export market. 

The factories act introduced the provisions of stipulation of eight hours of work, abolition of child labor and the restriction of women employees working in the night. While these provisions introduced through the act were welfarist the real motivation behind them was without a doubt protectionist and of greed.

The earliest Indian statute to regulate the relationship between employer and his workmen was the Trade Dispute Act, 1929 (Act 7 of 1929). Provisions were made in this Act for restraining the rights of strike and lock out, but no machinery was provided to take care of disputes.

POST INDEPENDENCE ERA - Independent India's labor laws derive some of their origins, inspiration, and strength from the views of important nationalist leaders. The connection between the dignity of human work and the need to protect and protect the human interests of work is discussed in Chapters III (Articles 16, 19, 23, 24) and IV (Articles 39,Article 41, Article 42, Article, 43, 43A and 54 of the Constitution of India as per Fundamental Rights and Directive “Principles of State Policy”). Labor law is also influenced by important human rights and the United Nations's conventions.

These include the right to work of one's choice, the right against discrimination, the prohibition of child labor, fair and humane working conditions, social security, wage protection, grievance redress, the right to organize and form trade unions, collective bargaining, participate in management, etc.

Labor law has also been shaped and influenced by the recommendations of various national commissions and commissions, including: For example, the first National Labor Commission (1969) under the chairmanship of Justice Gajendra Gadkar, the second National Labor Commission (2002) under the chairmanship of Shri Ravindra Varmashri (2002) National Commission on Labor (1991) and other rulings on labor-related matters, particularly regarding minimum wages, bonded labor, child labor, contract labor, etc.

PRESENT - According to the Indian Constitution, labor is a Concurrent List subject and both the Central and State governments are responsible for enacting laws. As a result, a number of labor laws have been enacted that consider various aspects of work, such as occupational health, safety, employment, training of apprentices, setting, reviewing and amending minimum wages, how wages are paid and how they are paid. Accidents causing injury, death, or disability, forced labor, contract labor, female labor and child labor, resolution and arbitration of labor disputes, provision of social security such as provident funds, regulation of employee state insurance, gratuities and bonus payments Regulation of working conditions for certain categories of workers such as, plantation workers, beedi workers, etc.

RECENTLY,  The Indian Parliament passed four labor codes in 2019 and 2020, which consolidate 44 existing labor laws. These are:

• The Code on Wages, 2019
• The Industrial Relations Code, 2020
• The Occupational Safety, Health, and Working Conditions Code, 2020
• The Code on Social Security, 2020

These laws aim to provide a better working environment, accelerate economic growth, and ensure 'Ease of Doing Business’. The reforms are also expected to benefit workers in both organized and unorganized sectors

MAJOR LABOR LAW LEGISLATIONS IN INDIA

THE WORKMEN’S COMPENSATION ACT, 1923

1. The workman's compensation act, 1923 extends to the whole of India, including the states of Jammu and Kashmir. The act came into force on July 1st, 1924. It primarily deals with awarding compensation to two employees for any injuries resulting from their employment. The act contains thirty-six sections and four schedules, which lay down the object and the purpose of the act. Because of injury to any Workman, an employer is liable to provide compensation to such an employer or to such an employee’s dependent in case of such an employee’s passing. The Allahabad High Court in the Works Manager, EI Railway Versus Mahavir while interpreting the primary goal of the act stated – “a person is responsible for the consequences arising out of a situation wherein he, on his own responsibility and for his own profits, sets in motion agencies which create risks for others.”
2. The primary objective of the workman's compensation act is to provide justice and Social Security to two employees, and not to punish the employer. The act does not aim to be punitive in its nature, rather it works towards providing justice to an employee and not doling out punishment to the employer. Section 3 is an important section of the function, as it is responsible for laying down the very basis for the liability to pay compensation. Section 3 not only provides the basis on which compensation needs to be provided, it is also in-depth discusses the exceptions wherein such compensation is not payable.
3. The prominent features of the workman's compensation act 1923 are as follows-
4. Section 3 of the act is undoubtedly the most potent and vital part of the function, as it deals with the very basis for the liability to provide compensation. If any injury occurs to an employee by an accident arising out of or in the course of his employment, the employer is liable to pay compensation with the provisions mentioned in this section. However, the section also deals with certain provisions wherein the employer is not liable to pay compensation which are-
5. In the occurrence of any injury which does not result in either a total or a partial disablement of the employee/ Workman for a time of more than three days. In any circumstance where an injury has not resulted in a partial or a total disablement of offer Workman, the employer is not liable to pay compensation.
6. In the occurrence of any injury which has not resulted in death/ permanent total disablement of the Workman caused by any injury which can be attributed to 3 circumstances - the Workman being under the influence of drinks or drugs at the time, an instance where the Workman has willfully disobeyed an expressed order from the employer which was for securing the safety off the Workman and lastly if the Workman has willfully removed or disregarded any safety provision provided by the employer while fully knowing that its purpose is for the workman's own safety during the course of his employment.
7. However, all these defenses available to an employer become void in case of death of the Workman. It has been held that in the event of death of such an employee/ Workman even if such a diseased Workman had been negligent or had disobeyed expressed orders from employer, such an employer will be held liable to provide compensation to the dependents off the deceased employee/ Workman as the injury occurred which resulted in the death of such a Workman took place solely during the course of the employment. 
8.  It is potent that there must be a personal injury caused to such a Workman/ employee. Under normal circumstances, the word injury shall comprise merely physical or bodily harm which has been caused due to an accident, however for the purpose of this act the scope of the term injury has been broadened. Here in the word, injury is not merely limited to physical or visible injury. It also comprises any nervous breakdowns or mental strain on the employee. In the case of Indian News Chronicle Versus Mrs. Luis Lazarus, the Workman was forced to frequently communicate to a heating room from a cooling plant. Due to communicating between such shifting temperatures, the employee contracted pneumonia, which resulted in his death five days later. The honorable court held that the injury cannot be confined to merely physical or bodily injury, as the injury occurred in the case happened due to the employment.
9. To seek compensation under the act, it is to be proved that the injury arose out of or in the course of employment. The onus to prove the same befalls upon the claimant. It is the duty of the claimant/ employee to prove in the court of law that the injury they received a card due to them fulfilling the requirements of their employment and not while doing any activity for their own benefit or accommodation. In the case of Janki Ammal Versus Div Engineer, Highway, Kozhikode the honorable court held that it is the duty of an employee to prove the that at the time of the injury they were working or engaged in the employers' business or acting upon their orders to further their interests but not their own.
10. Under section 17 of the workman's compensation act, any agreement which has come into existence before or after the commencement of this act where a worker has relinquished their right to compensation from their employer is invalid. Section 17 prohibits contracting out as it schemes to either remove or reduce the liability of any person (employer) to pay compensation under this act, which is simply contradictory to the very object and the purpose of the act. The act aims to enable the Workman, and they are dependents to recover compensation from their employers therefore it declares any such contract which prohibits or forbids the Workman/ employee to receive their compensation from their employer in case of any injury arising during their employment. Section 17 is the most powerful and ineffective guardian for uneducated and helpless workmen from corrupt and fraudulent employers.

THE MATERNITY BENEFIT AMENDMENT ACT, 2017

1. The maternity benefit act was passed in the December 1961 by legislature the act dealt with the regulation of guidelines about the employment of women before and after pregnancy, childbirth, miscarriage, and any medical complication arising from the same. 
2. The Maternity Benefit (Amendment) Bill was brought in and passed in Lok Sabha on 9thMarch, 2017, by the Rajya Sabha on 20th March 2017 and the same received President’s assent on 27th March 2017. Ministry of Labor and Employment vide notification dated 31st March 2017 appointed 1st April 2017 to enforce the provisions of Maternity Benefit (Amendment) Act 2017 the amendment introduced recent changes such as extending the period of childbirth leave from 12 weeks to 26 weeks for the first two children. The act aimed to provide stringent measures for unlawful dismissal of pregnant female employees and ensured them job security during and after the completion of their pregnancy.
3. A new provision of crèche facilities wherein a working mother could look after her newborn while continuing to work and work from home has also been added. According to section 5(5) of the Act, if the nature of the work assigned to a woman allows her to work from home for a certain period and conditionally, the employer must allow the female employee to work from home.
4. Section 11A (1) of the Act requires every establishment with fifty or more employees to provide childcare facilities within a prescribed distance, either separately or together with shared facilities. Employers must allow women to attend daycare four times a day, including breaks.
5.  As per the maternity benefit amendment act, it is the duty of the employer to ensure that all the provisions mentioned under the act are available to the female employees and that the female employees are made aware of these benefits at the time of their appointment. This intimation to the female employees can either be made in writing or electronically. It is recommended that the employers may recommend their HR policies to include all the provisions of the amended maternity benefit act.
6. Section 12 of the Maternity Benefits Act 1961 emphasizes that any dismissal of a pregnant woman is unlawful, and such employers may be punished under section 21 of the Act.
7. Section 2 of the maternity benefit act states that the provisions under the ACT are available and applicable to all the establishments which are factories. This includes shops and those establishments which employ ten or more than ten people. The act is also applicable to all mines and plantations. As per the provisions of the act, any woman who has completed 80 days in the 12 months immediately preceding the date of her expected delivery is entitled to the maternity leave. She is entitled to a period of 26 weeks, in which not more than eight weeks shall be preceding the expected date of her delivery.
8. The maternity benefit app also provides an additional 30 days of maternity leave in cases of sickness, premature delivery or medical termination of the pregnancy.
9. To avail the benefits of the act, it is not pertinent that a female employee should be employed on a contractual basis. Any woman employee can avail the benefits of the act, irrespective of the fact if she has been employed in a direct capacity or through any agency.
10. Section 5 (4) of the act also provides a period of maternity leave of up to 12 weeks for commissioning and adopting mothers from the date of commissioning/ adopting. As per Section 3 (b, a) of the act, a commissioning mother means a biological mother who has used her eggs to create an embryo and has implanted the same in and another woman.

THE INDUSTRIAL DISPUTES ACT, 1947

1. According to the preamble of the Indian constitution, the primary objective of this act is to make provisions for the investigations and settlement of industrial disputes. In Claridge & Co. Ltd. Vs. Industrial Tribunal the court held that it is the purpose of this act to provide smooth functioning machinery for a just and equitable settlement by independent tribunals.
2. The act came into force on 1st April in 1947, and it extends to the whole of India, including the state of Jammu and Kashmir. Although the section 1 of this act stipulates that the extent of this act is throughout India, it needs to be noted that the subject of the act falls under the concurrent list of the Indian constitution, which gives the states the power to make their own laws on the subject.
3. In the case of, Management of Bangalore Woollen, Cotton & Silk Mills Co. Ltd. vs. B. Dasappa, the Supreme Court, had held that the scope of investigation taking place under the industrial disputes act is very wide and includes almost all the disputes or differences which are connected with employment or terms of employment or different conditions of Labor.
4. Section 2 as of the industrial dispute acts defines who is a Workman according to the act. Any person, including an apprentice who is employed in any industry to do any skilled or unskilled, manual, supervisory, technical, clerical, or operational work either for hire or reward, whether the terms of employment are express or implied, is considered a Workman.
5. Section 4 of the industrial disputes act 1947 provides for the establishment of a work's committee in industrial establishments wherein one hundred or more workers are employed to provide measures to secure and preserve good relations between the employers and their workmen.
6. Section 25 F of the act deals with the prominent requirement to ensure protection of the rights of the workers. This section deals with ensuring conditions which are precedent to the retrenchment of workers, such as notice and compensation requirements.
7. A huge drawback of the industrial dispute acts arises in the form of section 22, which deals with the prohibition of strikes and lockouts. The section poses a significant restriction upon the right to strike, especially during certain stages of the dispute resolution process. This grossly limits the workers’ rights to protest unfair labor practices, and that is them against a huge disadvantage.
8. Critics of the act often argued that the act enacted in 1947 has sadly been unable to keep up with the changing dynamics of modern industries and workforce, which has made it redundant in contemporary times.

NEED FOR REFORMS IN LABOR LAWS IN INDIA

The incessant need for labor law reform in India stems from several factors reflecting changing economic conditions, the protection of workers' rights, and the need to improve productivity and international competitiveness. The main reasons why labor law reforms are considered necessary in India are: 

1. Adapting to economic changes: The Indian economy has undergone a major shift from traditional agriculture to manufacturing and services. Labor law needs to evolve to support these sectors more effectively, including focused guidelines that consider new types of work arrangements.
2. Globalization and Competitiveness: As India becomes an integral part of the global economy, labor laws must ensure the international effectiveness of businesses. This includes streamlining regulations to help businesses adapt to market demands and economic conditions, while ensuring fair wages and safe working conditions for workers.
3. Technological advances: The rise of automation and digital platforms has created new types of employment that are not adequately addressed by existing labor law frameworks. There is a rising need to establish conditions of employment and ensure protection for people in precarious or irregular employment.
4. Informal Sector: A sizable portion of India's workforce is employed in the grossly unregulated informal sector. Reforms being made must extend labor protection to workers in this sector and ensure access to social security, health benefits and safe working conditions.
5. Simplification and Consolidation: India's labor laws have been criticized for their complexity and fragmentation, with hundreds of state and central laws often overlapping and contradicting each other. Simplifying and consolidating these laws will help improve compliance, reduce litigation, and make it easier for businesses to understand and comply with regulations.
6. Improving industrial relations: reforms will help create better industrial relations between employers and employees. Illuminating roles, responsibilities, and rights can help minimize conflicts and foster a more harmonious work environment.
7. Improving worker protections: While the focus is often on making the environment more business-friendly, reforms are also needed to improve worker protection and rights. This includes ensuring fair wages, grievance redress mechanisms, gender equality and measures against workplace harassment and discrimination.
8. Compliance with International Standards: India is a signatory to various international labor conventions. Reforms can help ensure domestic laws are in line with international standards, improve worker protection, and improve India's international image.
9. Promoting formal employment: Through labor law reform, governments can encourage employers to move from informal to formal employment practices. This tends to provide more security and benefits to workers, thereby contributing to overall economic stability.

Overall, India needs better labor laws to balance the interests of employees and employers in a manner that promotes justice, economic growth, and development for all.

THE NEW LABOR CODE – A CRITICAL ANALYSIS 

Laws related to labor fall under the concurrent subject list, which means that both the state and the center assume the power to make laws on this subject. It is estimated that there are forty-five central laws and one hundred state laws on labor related subjects. This not only leads to severe overlapping of provisions, but great ambiguity for the citizens fighting for their causes in the courts. 

The four laws are yet to be implemented throughout India as there have been various delays due to the following factors–

• Lack of coordination between the union and the state.
• Political and economic repercussions from the COVID-19 pandemic.
• Lack of awareness and training to implement significant changes.

THE CODE ON WAGES, 2019

1. The code on wages, 2019 was passed on July 30th, 2019, in the Lok Sabha and August 2nd, 2019, in the Rajya Sabha. The code was introduced in the Lok Sabha by the Minister of Labor Mr. Santosh Gangwar. It seeks to regulate wage and bonus payments in employment where any industry, trade, business, or manufacture is being conducted.
2. The code of wages 2019 aims to consolidate four pre-existing laws - Minimum Wage Act 1948, Payment of Wages Act 1936, Payment of Bonus Act 1965 And Equal Renumeration Act. The code aims to consolidate all the provisions of these four legislations and shape them in accordance with the needed labor reforms.
3. The code extends the provision of ensuring minimum wages for employees working in all these sectors-industrial, commercial or agriculture. This is a drastic change from previous labor law legislations, which were targeted towards a specific sector.
4. To bring down a significant decrease in disputes related to wage components, the code has produced a comprehensive definition of what constitutes wages. A standardized definition will be a great assistance to employers for conformity with minimum wage regulations without any vagueness among all sectors.
5. The code stresses upon the principle of equal pay for equal work, irrespective of gender. It aims to ensure that there is no discrimination based on gender at ages, which is a critical element to promoting a fair and just work environments for all.

THE INDUSTRIAL RELATIONS CODE, 2020

1. The industrial code relations 2020 is part of a series of New Labor law reforms being introduced in India to consolidate and amend the previously existing laws of labor to end any ambiguity about the provisions.
2. The industrial relations gold, 2020 is consolidating three major central labor laws - the trade unions act, 1926, the industrial employment standing orders act 1946, and the industrial disputes act 1947. The major aim of consolidating these acts is to simplify and to modernize these labor laws.
3. The code promotes new provisions which introduce a sense of greater flexibility for the employers in terms of hiring and laying off workers, especially in the forms which employ less than three hundred workers. This includes in making the process of conducting layoffs, retrenchments and closures for employers without government permission very easy and smooth.
4. The code mandates the drafting of standing orders rules of conduct for workers by employers in establishments with three hundred or more workers. This provision was previously for establishments with 100 or more workers. The drafting of the standing orders must include details about conditions of recruitment, discharge, disciplinary action, holidays, and other work-related conditions. 
5. The Code enthusiastically encouraged the use of technology and transparent processes in the application of Labor laws to ensure wider accessibility and a better enforcement of the provisions.

THE OCCUPATIONAL SAFETY, HEALTH AND WORKING CONDITIONS CODE, 2020

1. OSH code is a key labor law legislation in India doctored to regulate the occupational safety, health and working conditions of workers over various sectors. The legislation aims to consolidate thirteen existing national labor law into one simple, sophisticated code to simply law legislations in India.
2. The OSH Code applies to all establishments employing ten or more workers, but its provisions relating to factories apply to those employing twenty or more workers. Certain terms of the code also apply to specific types of businesses or industries, like factories, mines, dock work, and construction work.
3. According to OSH code, it is the duty of the employers to ensure proper health and safety of all their workers by providing them with a safe working environment. To ensure that proper equipment, facilities and training in health and safety practices is recommended.
4. Factories, construction establishments and other types of workplaces must get themselves registered under the code. facilities such as canteens, first aid, toilets and drinking water must be available at the place of work.
5. By streamlining multiple laws into a single framework, the Code aims to ensure better conformity and provide a safer, healthier, and more secure working environment for millions of Indian workers.

THE CODE ON SOCIAL SECURITY, 2020

1. The code on social security was introduced with the aim of amending the pre-existing laws regulating social security in India. It aims to standardize all social security guidelines in all the sectors.
2. The Code consolidates nine existing labor laws into a single code. These include - Employees’ Compensation Act, 1923, Employees’ State Insurance Act, 1948, Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959, Maternity Benefit Act, 1961, Payment of Gratuity Act, 1972, Cine Workers Welfare Fund Act, 1981, Building and Other Construction Workers Welfare Cess Act, 1996 and Unorganized Workers’ Social Security Act, 2008. The Code extends its coverage to all establishments and employees within its ambit, which now includes unorganized workers, gig workers, and platform workers, in addition to the traditional organized sector.
3. The Code emphasizes the use of electronic and digital means for registration, record-keeping, and transactions, which are expected to streamline processes and enhance transparency.
4. The Code provides a framework for compliance mechanisms, inspections, and penalties for non-compliance. It aims to reduce the compliance burden on businesses while ensuring strict enforcement of social security provisions.
5. It establishes mechanisms for the resolution of disputes and grievances related to social security provisions, involving various appellate bodies. The Code on Social Security, 2020 represents a significant overhaul in the landscape of social security in India, aiming to include a wider range of workers and streamline existing regulations under a unified framework. It seeks to balance the interests of employees and employers while striving towards comprehensive social security and welfare for all workers.

CONCLUSION

In conclusion, the need for labor law reforms in India is indisputable in the face of a changing economic landscape, technological advancement, and global integration. The current regulatory framework is grossly tainted by complexity and fragmentation, and calls for simplification and consolidation to promote a more business-friendly environment while ensuring strong protections for workers.