Upgrad LLM

Labour under Indian Labour Legislation and Regulations: A Critical Study

Synopsis:

The word ‘Labour’ accompanies with itself a number of speculations with both the literal and the legal meanings. The research toils largely over the meaning of the word ‘Labour’ and its implications under Indian Legislations and Regulations specifically stating the Constitution of India. The study can be called to be a critical study as it deals with the yolk of the Indian labour system. The study includes the analysis of many regulations like those of the Industrial Disputes Act; 1947, the Factories Act; 1948, the Minimum Wages Act; 1948 & the Payment of Wages Act, 1936. With regard to labour law reforms, it can therefore be said that there may be a vast perception administration failure on the part of the government of our nation, even as financial and economic circumstances have not been of any aid to comprehensive labour market working. The cumulative disconnection of trade unions from the associated or considerate political parties has made the process of managing of the industrial relations structure quite difficult and even embarrassing when it comes to the comparison of the same on an international level.

Black’s Law Dictionary defines the word ‘Labour’ as a Work, Toil or a Service in the form of a continued exertion of the more onerous and inferior kind, usually and chiefly consisted in the extended as well as protracted disbursement of muscular force of a human being, adapted to the accomplishment of specific useful ends[1]. This word being used in several legal phrases is not necessarily always a task related to business. Also, in general language & in its own literal sense, the term Labour can be used as an umbrella term covering under itself the terms, ‘worker’, ‘employee’, ‘workman’ etc. However, a major part of the ambit of the word ‘Labour’ contains in itself the people working in the industries and various establishments that are a part of the formal and informal organisations prevalent in various countries including India.

In India, this term ‘Labour’ refers to the concept of employment and becoming a part of the Indian Economy. It is mentioned in the Concurrent List [List III] of the schedule VII of the Indian Constitution and the Article 246(2)[2] of the Indian Constitution provides the power to the parliament along with the same provision to the government of different states in our country to create provisions related to the regulation, working and safeguards of the people under the term ‘Labour’ and also certain provisions so as to protect their rights from any sort of infringement which may result in the violation of any statute relating to the same prevalent in the nation and most importantly the supreme law of the land- The Constitution of India.

The Constitution of a country is described in both literal and legal terms as the fundamental law of the land and on its basis all other laws are created as well as enforced. Every organ of the state, may it be that of the executive or of the legislative or of the judiciary, it develops and derives its legal authority from the domain of the Constitution and there is absolutely no authority, no department or any branch of any State, which would be considered to be above or beyond the sphere of the Constitution or has powers unfettered or unquestionable and would be unrestricted by the Constitution. Thus, a Constitution is the highest or the fundamental and most essential law of the country which not only defines the framework of the basic political principles, in the present scenario- the framework of the employment and labour related regulations and the consequence related to the range of a worker in any industry, but also establishes the duties and legal obligations of the different governmental institutions and what they should do and the policies they should conduct in terms of procedure, powers and duties towards then nation and its citizens. A Constitution therefore can be described as the vehicle of a nation’s progress.

Thus it can be totally affirmed from the above that the Constitution of India has a bearing, both- literal and legal over the laws and statutes related to the Industrial relations and its laws thereby specifying the legal implications created upon that of an employer in an organisation and the employee or the workman in any organisation. Industrial relations affect not just the interest of workforce or labour and that of the management of an organisation, but also the social and economic goals to which the government is committed to materialise as per the provisions mentioned in the Part IV of the Constitution of India[3]. Therefore, it by default develops within the province and function of the government of the country to regulate these relations in the channels which are desirable by the society.

In a developing economy, the rules of the state cover a wider area of relationship and there is an equally greater amount of supervision over the enforcement and proper application of these specific rules. This is categorically so in developing countries with a surplus of Labour in both the formal and informal organisations, however, concerned mainly with the labour employed in the informal organisations where there is a lesser amount of job security. It is therefore a concern of the state itself to achieve a judicious growth rate in the economy and to ensure the unbiased and equitabledispersal and distribution thereof. This process nevertheless becomes even more complex in a country whereinits democratic framework is guaranteeing certain fundamental individual freedoms to its citizens. Hence, the governmental authoritiesin a developing country like that of India concern themselves not only with the contention of the rules related to work and labour but also with the framing of rules relating to industrial discipline, training, employment and so on.

The founding fathers of the Constitution of India were entirelycognizantof these implications while they were laying emphasis upon the progression of a welfare state thereby embodying certain federal arrangements. Entries about labour affairs and relations related to workmen and employment are therefore represented in all the three lists in the Indian Constitution. Yet the most important ones come under the Concurrent list as mentioned above. These are entries related to the industrial and labour disputes, formation and regulations of trade unions and many aspect of social securities and welfare like that of  employer’s’ liability, employees’ compensation, provident fund, old age pensions, maternity benefits, etc. Thus, various statutes such as the Industrial Disputes Act, 1947, the Minimum Wages Act, 1948, the Employees’ State Insurance Act, 1948, etc. come under the concurrent list. Some States of India have also enacted separate amendment Acts to some of the above legislations to meet the needs of the local population of the state in order to comply with the legal obligations created upon it under Art. 38[4] of the Indian Constitution. Such amendments are recommended either with the assent of the President of India or by promulgating certain rules pursuant to that of the powers delegated by the Central Acts.

Under the statute making powers deputized by the Central Government, the States of the nation have often noticeably been able to adopt the Central Act to the needs at the local levels without the requirement of the assent of the President of India. The Central acts thus often delegate such powers.

For instance, Section 38 of the Industrial Disputes Act, 1947[5] delegates or affirms to the appropriate government[6], which in many cases is the State Government, the power and the authority to propagate such rules and instructionswhich may be needed for making the Act operative and effective. Similarly, Section 29 and Section 30 of the Minimum Wages Act, 1948[7]and Section 26 of the Payment of Wages Act, 1936[8] delegate the law making authority to the government of the particular state in question. In pursuance to this, several States have thus disseminated separate minimum wages rules and payment of wage rules. The Factories Act, 1948 also contains certain provisions of similar nature and they have been likewise been availed of. Further, the goals and values to be secured by labour legislations and workmen have been made clear in Part IV, Directive Principles of the State Policy of the Constitution as mentioned above. Thus, the State has a duty or a constitutional obligation to secure a social order so as to  promote the welfare of the people and definite principles of policy should be followed by the State in the direction ofmaking safethe rights to adequate means of livelihood, allocation of the material resources of the community so as to sub serve the goal of common good, deterrence of concentration of wealth via the economic structures and systems, equal pay for equal work for both men and women, the health and strength of workers comprisingof men, women and children to not be abused, the participation of workers in management of industries, provisions of the conditions of work to be just and humane and that the childhood and youth are protected from exploitation and creation of provisions against moral and material abandonment.

However, there is a lack of a proper definition of the term ‘Labour’ under these numbers of statutes and the other legislations prevalent in India. Therefore this specific loophole is misused on a large scale by the employers of the organisations which in turn create the situations of exploitation being faced by the labours in the Indian economy. There are certain factors in this regard which are affected when there is no specific definition of the term ‘labour’ such as land, wages, social and employment security, unionism etc.

There has also been a continuous and seemingly endlessskirmish going on amongst labour and capital. Capital has been take advantage of the labour and thereby exploiting them to their own extreme and all-out benefit for they have better pecuniary footing and authority to command their standings. This has created an industrial unrest and economic discontent which in turn has led to a number of strikes[9] and other troubles related to that of labour.

In the Pre- Independence era, the workers were generally illiterate, poor and unconscious of their rights. Neither the government nor the Courts of Law took to their notice these labour problems ascending in the nation as they supposedly believed in the policy of non-interference and disturbance in the relations between the employer and employees of any organisation.

Even if a person may come out of the etymological scenario, a number of issues are still prevalent which imply hardships on the labour in the country. There is a general discernment that India’s labour laws and the labour assessment system are quite rough and expressively confine the independence of employers and the employees to respond to the speedily changing conditions of industry and business. Specifically talking about some shortcomings in the legislations, Chapter V-B of the Industrial Disputes Act, 1947 requires industrial establishments employing 100 or more workers to seek prior permission from the government before retrenching workers or closing down their establishments[10], and the governments are therefore tentative as well as hesitant  to sanction the decrees of retrenchment or closure for their fear of political disapproval and unpopularity as these measures will result in at least short-term unemployment.

Similarly, the Contract Labour (Regulation and Abolition) Act, 1970 does not allow the user enterprises to use contract labour at their determination and will so as to tackle the ambiguous demands for their products.   

Third, the labour laws are archaic and have been enacted decades ago and whereby reportedly more than 40 Central labour laws, lack uniformity and consistency and contain contradictory definitions of the same terms in dissimilar laws, such as that of ‘workman’ or of ‘wages’ and are not in sync with contemporary competitive economic atmosphere and all is expedientlybattered and clubbed under the term ‘core labour law reforms’.

At the equivalentstretch, the employers have also enthusiasticallycriticizedand complained against the labour inspection and practical system as being the resort to their ‘harassment’. Labour assessments are far too recurrent and inspectors are corrupt and have a persecutory mind-set.

The practical or procedural systems such as securing of registration, licensing and upkeep of registers and records in their physical forms (which may be later used as admissible evidence in the Courts of Law) and submission of information under numerous labour laws are burdensome and even monotonous. Employers and employees hence seek liberalisation of inspection and assessment of the labour administration system.

Since the year 1991, the Central government, irrespective of the ruling political parties, has been keen to introduce and familiarizethe core labour law reforms in our country. If we talk about the reforms brought about by certain political parties of the country, as against the UPA government in both of its terms, the present NDA government led by the ‘Bhartiya Janata Party’ has been creating some progression with regard to both labour law and the reforms related to the governance in the matters of Labour and their welfare.   

While the governance reforms relating to Employees’ Provident Fund Act, 1952 and the Employees’ State Insurance Act, 1948 have had comparativelya smooth sailing, the government’s labour law reforms are still facing huge confrontation and resistance.  

At the most rudimentary and fundamental level, the NDA government does not have a clear and penetratingapproach to bring together the reforms in labour laws. The government and its allied think-tanks have thus laid intothe existing labour organizations such as labour laws by disagreeing that they shield the diminutive organised sector, often at the cost of the immensecrowds of labours in the unorganised sector and they do not support in the generation of employment.

This is therefore a direct spasm on the trade unions and the related labour laws which have stood the various tests of time. While it enragedthe trade unions, it also upstretched the prospects of impressiveconveyance of welfare benefits by the government to unorganised labour. This may in turn prove to be a double disaster and a catastrophe in the near future

Secondly, the government has been allegedand perceived as being very keenly drawn towards introducingthe business-friendly improvements. It has been dependent upon a definite set of explorationand various studies which contend that pro-worker labour laws encourageredundancy as well as unemployment and casualness and upkeepthe alterations of labour laws to deliver labour supplenessand flexibility to the employers as well as the employees.

The approach and the line of thinking that bring about and are underlying these studies have been widely used notwithstandingausteredisapproval and criticisms by more than a few academicians. For illustration, one of the famous studies by P. Sarkar and S. Deakin shows to the reader that pro-worker labour laws are in elementlinked with low unemployment and that manual labour market regulation is rather a reaction to shocks in the labour market; that labour market ruling is not as bad as it made out to be.

The Central government, notwithstanding the party in power, has taken on board the pro-reform enquiry hook, line and sinker while paying no attention to the above mentioned critical research. This obviouslydisplays that the government which is supposed to be anunbiased party has certain partisan and bigotedpurposes. The trust in the state, as it were, has therefore been shaken.

Thirdly, while our nation’s unorganised sector has been positionedstraight upfront as a validation to advance the wide ranging labour law reforms, the government has done valuably little to address their interests and to stem their tides. The previous government’s Unorganised Sector Workers’ Social Security Act of 2008 is a soggy squib as it merely moored intothe already prevailing welfare schemes and certainly did not offer anything innovative and the present government hasn’t done ample to answer back to this disapproval.

The proposed Social Security Code is a colossal and comfortableassurance but, as trade unions have argued in various cases, it does not respond to many precarious questions regarding the Employee Provident Funds and the Employees State Insurance and also rips to shredsthe existing welfare boards in the states like Tamil Nadu etc. All the same, the current government claims several actions for unorganised sector labours; the trade union movement remains unimpressed and unconvinced.

Fourthly, since the government is in anurgency to principallyfamiliarizethe business-friendly reforms, the Indian government has traditionally not fashioned a discernment that it is keen to listen to the opinions of trade unions. As a result of the same, the government has now cultivated an argumentativesituation with regard to the trade unions. On their part, the unions nowadays perceive that the government is way too friendly with business organisations.

The recent reforms are taking somethought provokingstrides around the workflow by presenting a particular portal for the central labour laws and exclusive numbers for that of the employees and employers. The second phase after the above should however be the amalgamation of labour laws and doing away withthe self-contradictorydescriptions for wages, workers, etc. that develop into a basis of corruption and legal actions. The third phase after this should appraiseour country’s dysfunctional remunerations regime that sequesters 49% of wages for low wage workers; a need has been formed to create competition for Employees State Insurance Corporation and Employees Provident Fund Organizationboth are whereby badly managed organizations that have hostages, not clients and the authorities should make the employee involvement and contributions to the provident fund voluntary. The fourth phase should therebyanalyse the trade union law to make the trade unions to be more descriptive; the lobbying of trade unions and the outlawingand criminalization of politics is a combustible concoction. The final or the fifth phase should review the laws that make an occupation contract equal to that of a marriage where the divorce is impossible; coercing employers to sign contracts on paper that unendingly breed informal employment. Each phaseis to be built on the previous one.

Concluding, With regard to labour law reforms, it can therefore be said that there is a vast perception administration failure on the part of the government, even as financial and economic circumstances have not been of any aid to comprehensive labour market working. The cumulative disconnection of trade unions from the associated or considerate political parties has made the process of managing of the industrial relations structure quite difficult and even embarrassing when it comes to the comparison of the same on an international level.

References

  • Black’s Law Dictionary
  • Labour &Industrial Laws – SN Mishra
  • Constitutional Law of India- MP Jain
  • Indian Kanoon
  • Wikipedia

[1] Black’s Kaw Dictionary; [Source: https://thelawdictionary.org/labor/]

[2] Article 246(2) of Indian Constitution- Notwithstanding anything in clause ( 3 ), Parliament, and, subject to clause ( 1 ), the Legislature of any State also, have power to make laws with respect to any of the matters enumerated in List III in the Seventh Schedule (in this Constitution referred to as the Concurrent List)

[3] Part IV of the Constitution of India contains the provisions related to the Directive Principles of State Policy. [Source: https://www.mea.gov.in/Images/pdf1/Part4.pdf]

[4] Article 38 of the Indian Constitution [Source: https://indiankanoon.org/doc/1673816/]

[5] Reference: https://labour.gov.in/sites/default/files/THEINDUSTRIALDISPUTES_ACT1947_0.pdf

[6] Appropriate Government defined in Section 2(a) of IDA, 1947. [Source: https://indiankanoon.org/doc/1737494/]

[7] Reference: https://en.wikipedia.org/wiki/Minimum_Wages_Act_1948

[8] Reference: https://labour.gov.in/sites/default/files/ThePaymentofWagesAct1936_0.pdf

[9] Strikes [Source: https://indiankanoon.org/doc/7552/]

[10]Nagpur VinkarSahakari Soot GirnivsRashtriya Mill MazdoorSangh; WRIT PETITION NO. 3234 OF 2006

 

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