Employment laws

The law relating to labor and employment in India is primarily known under the broad category of "Industrial Law". Industrial law in this country is of recent vintage and has developed in respect to the vastly increased awakening of the workers of their rights, particularly after the advent of Independence. Industrial relations embrace a complex of relationships between the workers, employers and government, basically concerned with the determination of the terms of employment and conditions of labor of the workers. Escalating expectations of the workers, the hopes extended by Welfare State, uncertainties caused by tremendous structural developments in industry, the decline of authority, the waning attraction of the work ethics and political activism in the industrial field, all seem to have played some role.

Indian labor laws divide industry into two broad categories:

  1. Factory Factories are regulated by the provisions of the Factories Act, 1948 (the said Act).

All Industrial establishments employing 10 or more persons and carrying manufacturing activities with the aid of power come within the definition of Factory. The said Act makes provisions for the health, safety, welfare, working hours and leave of workers in factories. The said Act is enforced by the State Government through their ‘Factory’ inspectorates. The said Act empowers the State Governments to frame rules, so that the local conditions prevailing in the State are appropriately reflected in the enforcement. The said Act puts special emphasis on welfare, health and safety of workers. The said Act is instrumental in strengthening the provisions relating to safety and health at work, providing for statutory health surveys, requiring appointment of safety officers, establishment of canteen, crèches, and welfare committees etc. in large factories. The said Act also provides specific safe guards against use and handling of hazardous substance by occupiers of factories and laying down of emergency standards and measures.

        2. The Shops & Establishment Act

The Shops and Establishment Act is a state legislation act and each state has framed its own rules for the Act. The object of this Act is to provide statutory obligation and rights to employees and employers in the unauthorized sector of employment, i.e., shops and establishments. This Act is applicable to all persons employed in an establishment with or without wages, except the members of the employers’ family.

This Act lays down the following rules:

• Working hours per day and week.

• Guidelines for spread-over, rest interval, opening and closing hours, closed days, national and religious holidays, overtime work.

• Employment of children, young persons and women.

• Rules for annual leave, maternity leave, sickness and casual leave, etc.

• Rules for employment and termination of service.

 

The main central laws dealing with labor issues are given below: -

1. Minimum Wages Act 1948

2. Industrial Employment (Standing orders) Act 1946

3. Payment of Wages Act 1936

4. Workmen's Compensation Act 1923

5. Industrial Disputes Act 1947

6. Employees Provident Fund and Miscellaneous Provisions Act 1952

7. Payment of Bonus Act 1965

8. Payment of Gratuity Act 1972

9. Maternity Benefit Act 1961

Collective bargaining

Collective bargaining is a technique by which disputes of employment are resolved amicably, peacefully and voluntarily by settlement between labour unions and managements. The method of collective bargaining in resolving the Industrial dispute, while maintaining industrial peace has been recognized as the bed rock of the Act. Under the provision of the Act, the settlement arrived at by process of collective bargaining with the employer has been given a statutory recognition under Section 18 of the Act. Under the Act two types of settlement have been recognized:

  1. Settlement arrived in the course of conciliation proceeding before the authority. Such settlements not only bind the member of the signatory union but also non-members as well as all the present and future employees of the management.
  2. Settlement not arrived in the course of conciliation proceedings but signed independently by the parties to the settlement binds only such members who are signatory or party to the settlement.

Section 19 of the Act prescribes the period of operation inter alia of such a settlement and envisage the continuation of the validity of such a settlement unless the same is not replaced by another set of settlement, while Section 29 prescribes the penalty for the breach of such a settlement.

Mediation and Conciliation -

Under the Act, an effective conciliation machinery has been provided which can take cognizance of the existing as well as apprehended dispute, either on its own or on being approached by either of the parties to the dispute. The Act further makes conciliation compulsory in majority of disputes.

 Investigation

Section 6 of the Act empowers the government to constitute a court of inquiry, for inquiring into any matter pertaining to an Industrial Dispute. The procedure of the court of inquiry has also been prescribed by Section 11. While the report of the court is not binding on the parties, many time it paves the way for an agreement.

Arbitration

Voluntary arbitration is a part of the infrastructure of resolving the Industrial Dispute in the Industrial adjudication. Section 10 of the Act provides for the provision for resolving the Industrial Dispute by way of arbitration, which leads to a final and binding award. However, in India arbitration is not a preferred way of resolving Industrial Disputes.

Strikes and lockouts

Workers have the right to strike, even without notice unless it involves a public utility service; employers have the right to declare lockout, subject to the same conditions as a strike. The parties may sort out their differences either bilaterally, or through a conciliation officer who can facilitate but not compel a settlement, which is legally binding on the parties, even when a strike or a lockout is in progress. But if these methods do not resolve a dispute, the government may refer the dispute to compulsory adjudication and ban the strike or lockout. However in recent times the Higher Courts have deprecated the tendency to go on strike quite frequently. Furthermore, the Supreme Court of India has also held that government employees have no fundamental right to go on strike.

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