T.Y B.COM
SEMESTER - VI
LABOUR LAWS
(LL)
UNIT - I
---> CONCEPT OF LABOUR AND LABOUR LAWS:
Labor does not mean commodity. Labor usually referred as employees are to put more or hard physical efforts.
Laws mean a system of rules which a particular country or community recognizes as regulating the actions of its members.
Why do we have laws?
There are laws to deal with crime, business, social relationship, property and finance.
Labor laws refer to laws which specify rights and responsibilities of labor. In other words, labor laws are laws enacted by the Government to provide economic and Social Justice to workers in industries.
Labor laws provide guidelines to employers in dealing with matters of wages, working conditions and employment conditions.
Labor laws define the rights and obligations as workers, union members and employer at work place.
Labor laws are known as employment laws which address the legal rights of and restrictions on working people and their organization.
Labor laws seek to regulate the relation between an employer or a class of employers and their employees. Labor Laws cover million of working men and women as compared to any other branch of law.
---> SCOPE OF LABOUR LAWS
Generally Labor Laws deal with following areas
• Industrial Relation : Industrial relation is of a major concern at work place. Industrial relation refers to relation between employees and employer, trade union and management. It is expected to be cordial, harmonious and dispute free. There present certain labor laws focusing on maintenance of good relations at workplace. Through collective bargaining, both management and employees arrive at mutually agreed amicable solution. Moreover, The Industrial Dispute Act 1947 offers necessary guidelines to settle industrial dispute through mechanisms such as arbitration, conciliation and adjudication. Furthermore, Labor laws put restrictions on implementation of unfair labor practices and the registered trade union as per the Trade Union Act 1926, represents the employees of the establishment to deal with issues pertaining labor.
• Health and Safety of Workmen at work place : In the legal framework related to labor, workers health and safety occupy the significant place. It is the prime responsibility of the employer to offer life security at work place and medical benefits to maintain the good health of the workers. The Factories Act 1948, The Employees' State Insurance 1948 and The
Workmen Compensation Act 1923 necessitate the employer to offer the protection as well as medical care to workers by providing required benefits and amenities at work place. These include Insurance coverage, medical claim, appropriate temperature, rest room, washroom, canteen, urinals, rest pauses, crèche, uniform, safety boots and goggles, helmets, periodical medical checkup, medical treatment, first aid box, welfare officer etc.
• Employment Standard/Condition : The Industrial Employment (Standing Order) Act 1946 governs the employment- conditions such as general holidays, working hours, leaves, minimum wage, unfair dismissal, termination, layoff procedure, severance pay, week off etc. As per the act, the management is required to specify the employment terms and conditions and communicate the same to the employees.
---> SIGNIFICANCE / IMPORTANCE OF LABOUR LAWS
• Maintenance of Cordial and Dispute Free Relations : Labor laws provide broad guidelines to deal with workplace grievances, to address issues relating to working condition and also to settle industrial disputes through mechanisms such as grievance redressal procedure, collective bargaining, adjudication, conciliation and arbitration. Following legal framework results into establishment of harmonious and dispute free relations between employees and employer, trade union and management.
• Protection to workers from Exploitation by Management : Labor Laws regulate the actions of management which are not in the interest employees and completely unjust and inhumane. The management must lay down employment conditions and provide facilities-to working men and women in the industries as per The factories Act 1948 and The Industrial Employment (Standing Order) 1946. Additionally, the Trade Union Act 1926 allows the recognized and registered trade union to represent workmen to deal with matters relating to their protection. Moreover, legislations pertaining wages avoid the chance of labor exploitation in terms of economic rewards.
• Payment of fair wages : There are certain labor legislations (such as The Payment of Wages Act, 1936, the Payment of Wages (Amendment) Act, 2005, The Minimum Wages Act, 1948, The Equal Remuneration Act, 1976) which ensure the payment of fair, equitable and adequate wages to employed persons in the industries.
• Minimization of Labor Unrest : At work place, non-fulfillment of employees demand and absence of amenities result into industrial unrest among workers. However, there will not be labor unrest when the management complies with Labor Laws related to wages, working conditions, settlement of dispute etc.
• Reduces Conflict and Strikes : Industrial dispute Settlement mechanisms and collective bargaining prevent the possibility of strike and conflict at the work place. This also protects the establishment from the negative consequences of strike and lock out.
• Promotion of Appropriate Working Conditions in the Industrial System: The industrial establishments or workplace where The Factories Act 1948, The Plantation Labor Act, The Mine Act are applicable, are required to maintain the appropriate working conditions and offer the specified amenities to workmen necessary to have at the factories.
• Regulation of Employment Conditions : The Industrial Employment (Standing Order) Act 1946 regulates employment conditions such as working hours, rest period, leaves, holidays etc.
• Discrimination Prevention & Workers Rights : Labor Laws enacted based on Principle of Social Justice prevent the discrimination among workers (based on gender, caste, disability, race, nationality) and offer equal opportunities and privileges. Moreover, the registered Trade Union in the industrial establishment works for rights and welfare of workers. Similarly, implementation of The Employment Exchange (Compulsory Notification of Vacancies) Act averts the possibility of discrimination.
---> TYPES/CLASSIFICATIONS OF LABOUR LEGISLATIONS IN INDIA
Banerjee gave the following three categories of Labor Legislations
• Protective and Employment Legislation : Labor Legislations falling under this category mainly deal with protection of interests, health and safely of workers. This category of labor laws culminates The Factories Act, Minimum Wage Act, Equal Remuneration Act, Payment of Bonus Act, Apprentice Act and Employment Exchange (Compulsory Notification of Vacancies) Act. The Acts included in this classification emphasize more on protection of workers lives against industrial hazards and regular payment of fair wages for the work done.
• Social Security Legislation : Social Security means government system that provides financial assistant and medical care to people working in the industrial establishment. some of the Social Security Schemes which cover post retirement monetary benefits. While some of the legislations offer medical care facility to workers and their dependent family members, even workers who meet disability due to employment injuries are also given the compensation. In line with Social Security System, there have been enactment and implementation of certain acts namely Employees State Insurance Act 1948, Employees Provident Fund and Miscellaneous Provisions Act 1952, Payment of Gratuity Act 1972, The Maternity Benefits Act, 1961, The Workmen Compensation Act, 1923 etc.
• Regulatory Legislation : The Industrial Dispute Act, 1947, The Industrial Employment (Standing Order) Act, 1946 and The Trade Union Act, 1926 are included in the category of Regulatory Legislation. Theses legislations are meant to regulate the action of management, workers and trade union. The main objective of The Industrial Dispute Act, 1947 is to settle industrial dispute through negotiation, conciliation, voluntary arbitration, adjudication. Moreover, this act places a constraint on strikes and lockout. The Industrial Employment (Standing Order), 1946 Act requires management to specify the terms and conditions of employment and properly convey the same to the workers. The Trade Union Act, 1926 enables the formation of trade unions and specifies their rights, duties and functions.
Following is the list of Labor Legislations prevalent in India
• Legislation related to Industrial Relations
✓ The Trade Union Act, 1926 and The Trade Union Amendment Act, 2011
✓ The Industrial Employment (Standing Orders) Act, 1946
✓ The Industrial Dispute Act, 1947
• Legislation Pertaining to Wages
✓ The Payment of Wages Act, 1936 and The Payment of Wages (Amendment) Act, 2005
✓ The Minimum Wages Act, 1948
✓ The Payment of Bonus Act, 1965
✓ The Equal Remuneration Act, 1976
• Legislation Related to Working Conditions
✓ The Factories Act, 1948
✓ The Contract Labour (Regulation and Abolition) Act, 1970
✓ The Shops and Establishment Act
✓ The Dock Workers (Regulation of Employment) Act, 1948
✓ The Plantation Labour Act, 1951
✓ The Mines Act, 1952
✓ The Merchant Shipping Act, 1958
✓ The Building and Other Constructions Workers (Regulation of Employment & Conditions of Service) Act, 1996
• Legislation Pertaining to Women and Children
✓ The Maternity Benefit Act, 1961
✓ The Child Labour (Prohibition and Regulation) Act, 1986
• Legislation Pertaining to Social Security
✓ The Workmen's Compensation Act, 1923 and The Workmen's Compensation (Amendment) Act, 2000
✓ The Employees State Insurance Act, 1948
✓ The Employees' Provident Fund and Miscellaneous Provisions Act, 1952
✓ The Employees' Provident Fund and Miscellaneous Provisions (Amendment) Act, 1996
✓ The Payment of Gratuity Act, 1972
✓ The Unorganized Workers' Social Security Act, 2008
---> PRINCIPLES OF LABOUR LEGISLATIONS
• Principle of Protection : The principle of protection suggests that such legislations should be enacted and implemented as can give the protection against industrial hazards and to those workers who are not able to protect their interests on their own.
• Principle of Social Justice : The principle of social justice indicates equal distribution of wealth. opportunities and privileges. It also aims at removing diserimination among employees based on their gender, caste, religion, race, sexual preference, nationality, disabilities. Any labour law favouring or discriminating any section of the society should not be legislated
• Principle of Regulation : The principle of Regulation generally seeks to regulate the relationship between the employers and their association and workers and their organization. As the relationships between the two groups have repercussions on the society, the legisłations enacted on this principle aim at safeguarding the interest of the society. Thus, the principle of regulation should be observed to regulate the balance of power in the relationship of the two dominant groups in industrial relations.
• Principle of Welfare : The enactment and implementation of protective and social security laws promote the welfare of workers. The main objectives of such laws are to provide certain basic amenities at their work place and to improve the living conditions of workers and their family members.
• Principle of Social Security : Principle of Social Security encourages the enactment of such legislation which offer financial assistant and medicate care to not only employed persons but also their dependent family members. It also aims at providing future financial security to insured person or subscriber.
• Principle of Economic Development : Labour laws have also been enacted keeping in mind the need for economic and industrial development of a particular country. Improvement of physical working conditions, establishment of industrial peace, provision of machineries for settlement of industrial disputes, formation of forums of workers participation in management, prohibition of unfair labour practices, restrictions on strikes and lock-outs, provision of social security benefits and welfare facilities, certification of collective agreements and regulation of hours of work have direct or indirect impacts on industrial and economic development.
• Principle of International Obligation : This principle suggests the enactment of labour laws in line with recommendation given and provision of resolutions adopted by international organization such as ILO, UN and other such bodies.
---> CONSTITUTIONAL PROVISION WITH REGARD TO LABOUR LAWS
In Indian Constitution, Labour is concurrent and significant subject and both the Union and State Governments are competent authorities to legislate on labour matters and administer the same. The numbers of important legislative acts have been enacted by the parliament.
The legislations can be categorized as follows :
• Labor Laws enacted by the Central Government where the Central Government has the sole responsibility for enforcement.
• Labor Laws enacted by Central Government and enforced both by the Central and the State Government.
• Labor Laws enacted by Central Government and enforced by the State Governments.
• Labor Laws enacted and enforced by the various State Governments which apply to the respective states.
The Constitution of India provides detailed provisions for the rights of the citizens and also lays down the Directive Principles of State Policy. The Indian Constitution provides broad directive guidelines for enactment of legislations pertaining to matters related labor.
Following are constitutional provisions with respect to labor in Indian Constitution
• Article 24 - Prohibition of Employment of Children in Factories. No child below the age of 14 years shall be employed in work in any factory, mine or engaged in any other hazardous employment.
• Article 39 - The State shall direct its policy towards securing the health and strength of workers, men and women.
• The tender age of children shall not be abused.
• Citizens shall not be forced by economic necessity to enter avocation unsuited to their age and strength.
Other Provisions in Constitution are as below
• Just and humane conditions of work
• Maternity Relief
• Suitable Legislation to secure the participation of employees in management undertaking, establishment or other organization or engaged in the industry.
---> SOCIAL SECURITY
Social Security refers to any Government System that provides monetary assistant and medical care to people such as maternity relief, post retirement benefits, medical care and treatment to workers and their dependent family members, compensation for employment injuries etc.
According to International Labor Organization, social security is the protection which society provides for its members through a series of public measures against the economic and social distress resulting from sickness, maternity, employment injuries, unemployment, death and old age. These measures are also of a great importance to a country which is on the way of large scale industrialization as they improve employee's morale by providing sense of security in against industrial hazard.
Protects both an Insurer and his/her family members : Social Security protects not only subscriber but also his/her dependent family members by the way of offering benefit packages in terms of financial security and health care.
Financial Assistant and medical care benefits : Social Security schemes are designed to offer financial assistant to family members of an employee who dies, retires or suffers a disability.
Facilitator for Future : Social Security System acts as a facilitator to help people plan their own future through insurance and assistance.
Active Participation : The success of Social Security Scheme requires active participation support and involvement of both employer and employees.
Source of Security : Worker / employee is a source of social security protection for himself/'herself and his/her family members.
Responsibility of Employer : Employers are responsible for providing adequate social security coverage to all workers/employees.
Legislation Pertaining to Social Security
• The Workmen's Compensation Act, 1923 and The Workmen's Compensation (Amendment) Act, 2000
• The Employees' State Insurance Act, 1948
• The Employees' Provident Fund and Miscellaneous Provisions Act, 1952
• The Employees' Provident Fund and Miscellaneous Provisions (Amendment) Act, 1996
• The Maternity Benefit Act, 1961
• The Payment of Gratuity Act, 1972
The Unorganized Workers' Social Security Act, 2008
HISTORICAL BACKGROUND/ROOTS OF SOCIAL SECURITY
Gone are days when people used to live in joint family in India. India has always had a joint family system that took care of the social needs of all members. Traditional and culturally bound family members and relatives used to discharge a sense of shared responsibility towards one and another. And this was a great relief for the special needs and care required by the aged people and those in poor health. Due to migration, urbanization and demographic changes, the size of larger family has been decreasing. This has resulted into rise in number of nuclear family. This is where the formal system of social security has gained the importance. Moreover, awareness of social security benefits is a vital factor in widening coverage of social security scheme. In India, social security benefits are need based. Similarly, Social security is a comprehensive approach designed to prevent deprivation, to assure the individual to have a basic minimum income for himself /herself and his / her dependents and to protect the individual from any uncertainties.
TYPES OF SOCIAL SECURITY
There are two types of Social Security
• Social Assistance
• Social Insurance
Social Assistance
It refers to assistance rendered by Government to the needy persons without asking them to make contribution to be entitled to get such assistance. Social Assistance includes those benefits which are provided by Government without any contribution from workers and employer such as maternity benefits, old age pension.
Social Insurance
Social Insurance refers to a scheme of maintaining fund from the contributions made by the employee and employer with or without a subsidy from Government such as provident fund, group insurance, employees insurance, gratuity etc.
OVERVIEW OF SOCIAL SECURITY LAWS
Employees State Insurance Act, 1948 : This act covers factories and establishment v. Road Motor Transport undertaking, Hotel, Restaurants, Cinemas, Newspaper establishment, shop. Educational and Medical Institution where 10 or more persons are employed. However, in 8 States threshold limit for coverage of establishment is still 20. Under this act, employees and their family members are provided comprehensive medical care as well as cash benefit during Sickness and maternity and monetary payment in case of death or disablement.
Employees drawing wages up to Rs. 15,000 per month and permanently disable employees drawing wages up to Rs.25,000 per month are covered under this act. The ESI Scheme provides comprehensive medical care in forin of medical allowance, medical treatment, injection, specialist consultation and hospitalization to insured persons and their dependent family members. A part from these, The ESI scheme provides following benefits to the insured persons such as medical benefits, sickness benefit, maternity benefit, disablement benefit, dependent benefit, funeral expense and unemployment allowance as per Rajiv Gandhi Shramik Kalyan Yojana (Unemployment Allowance Scheme).
The Employees' State Insurance Corporation has taken up the daunting task of tailoring different benefits schemes for the needs of different groups. The expenditure on medical care is shared between ESI Corporation and the State Government in the ration of 7:1 within the prescribed ceiling which is revised from time to time. The present ESIC contribution rates are Employees 1.75% of wages and Employer - 4.75% of wages.
The Employees Provident Fund & Miscellancous Provisions Act, 1952 and The Employees' Provident Fund and Miscellaneous Provisions (Amendment) Act, 1996 : This act applies to specific scheduled factories and establishments employing 20 or more employees and ensures the payment of provident fund, superannuation pension in case of resignation and retirement and family pension in case of death during service. There exist separate laws for similar benefits for the workers in the Coal mines and tea plantations.
The Employee's Compensation Act, 1923 : This act requires payment of compensation to the Workman or his / her family in case of employment related injuries resulting in death or disability.
The Maternity Benefit Act, 1961 : The MB Act provides 12 weeks wages during maternity as well as paid leaves in certain other related contingencies.
The Payment of Gratuity Act, 1972 : The Payment of Gratuity Act provides 15 days of wages for each year of service to employees who have worked for five years or more in establishments having a minimum of 10 workers.
---> HIGHLIGHTS OF HISTORY OF LABOUR LAWS
• The need for Labor Laws was felt due to rise in demands of workers for better conations, the right to organize, to restrict the power of workers, to keep labor costs low etc.
• International Labor Organization (ILO) was one of the first organizations to deal with labor issues. ILO has played a key role in promoting international labor standards. ILO was set up in 1919 under the Treaty off Versailles.
• Post war reconstruction and protection of labor union occupied the attention of many nations immediately after World War I
• In Great Britain, the Whitley Commission, a subcommittee of the Reconstruction Commission recommended in its July 1918 Final Report that Industrial Council be established throughout the world.
• The British Labor Party had issued its own reconstruction programme in the document titled labor and the New Social Order.
• In February 1918, the third Inter-Allied Labor and Socialist Conference (representing delegates from Great Britain, France, Belgium and Italy) issued its report advocating an international labor rights body, an end to secret diplomacy and other goals.
• In December 1918, the American Federation of Labor issued its own distinctively apolitical report which called for the achievement of numerous incremental improvements via the collective bargaining process.
• The British proposed establishing an international parliament to enact labor laws which each member of the league would be required to implement. Each nation would have two delegates to the parliament, one each from labor and management. An international labor office would collect statistics on labor issues and enforce the new international laws.
• The Americans made 10 proposals, three were adopted without change.
• The first annual conference (referred to as the International Labor Conference or ILC) began on 29th October 1919 in Washington DC and adopted the first six international Labor Conventions which dealt with hours of work in industry, unemployment maternity protection, night work for women, minimum age and nigh work for young persons in industry.
• The prominent French Socialist Albert Thomas became its first Director General.
• The ILO became a member of the United Nations System after the demise of the League in 1946.
Evolution of Labor Laws in India
• The law relating to labor and employment is also known as Industrial Law in India. The history of labor legislation in India is interwoven with the history of British colonialism.
• The Industrial / Labor Legislations enacted by the British were primarily intended to protect the interests of the British Employers.
• Indian Textile goods offered stiff competition to British textiles in the export market and hence in order to make Indian Labor costlier, The Factories Act was first introduced in 1883 because of the pressure brought on the British Parliament by the textile magnates of Manchester and Lancashire. Thus, India received the first stipulation of eight hours of work, the abolition of child labor, and the restriction of women in night employment, and the introduction of overtime wages for work beyond eight hours.
• The original colonial legislation underwent substantial modifications in the post-colonial era because independent India called for a clear partnership between labor and capital.
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