THE DEVELOPMENT OF INDIAN LAW ON LABOUR RIGHTS
THE DEVELOPMENT OF INDIAN LAW ON LABOUR RIGHTS
By Ishita Sharma and Rishabh Moon (Research and Editorial Team)
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ABSTRACT
Labour laws acknowledge the relationship between an employee and an employer. These laws were introduced for developing a healthy and sustainable relationship between the workers, trade unions, and the employer, considering the employment standards, health and safety regulation, and financial security of the worker and the employer’s need to have better working conditions, flexible and productive workforce for better sales and growth of the business.
This article aims towards analyzing the development of Indian laws on labour rights. The objective of this article is to study the origin, background, and the need for labour laws in our country. This article will further discuss the various conventions that were ratified by India and adopted into the domestic labour regulatory framework and also analyze the future of Indian labour laws.
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INTRODUCTION
Employment Laws better known as Labour Laws identify the dynamic between an employee, employer, and the government at large. It arbitrates the relationship between the employer, employee, trade union, and the government. It spreads awareness amongst the workers regarding their work rights and also sets a standard procedure of law regarding labor work practice. Labour law summarizes industrial relations, workplace health and safety regulations and employment standards, including general holidays, annual leave, working hours, unfair dismissals, minimum wage, layoff procedures, and severance pay. The origin of Labour law can be traced back in time around 18th century, where Labour relations had been mentioned in several places by European writers while giving importance to their Guilds and Apprenticeship system, Asian scholars in the Laws of the Hindus by Manu and then several other Latin American authors and writers across the world.
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HISTORICAL DEVELOPMENT OF INDIAN LABOUR LAWS AND ESTABLISHMENT OF SOCIAL RIGHTS
Dispute between the workers and the trade unions led to the inevitable rise of labour laws during the Industrial Revolution. The workers’ constant struggle and aspirations for better working conditions and adequate security at the work place led to the expansion of labour laws on a large scale. The employers also attempted to have better working conditions for the employees appointed which resulted in broadening the scope of labour laws in the Indian constitutions.
The labour laws were originally introduced to protect the interest of British employers and industrialists. The introduction of the Factories Act was an attempt to increase the cost of Indian labour and the outcome of that was in favor of the Indian labourers. Adopting these laws resulted in 8 working hours a day, compensation for working overtime, ensuring safety and security for women workers working and night, and demolition of the evil practice of child labour.
Post World War I, Labour reforms were discussed internationally and the impact was seen in India with the introduction of the Trade Union Act of 1923 and Industrial Disputes Act, of 1929. The need was to regulate the relationship between employees and employers. In these Acts, provisions were laid down to regulate the workers’ right to form Unions for collective bargaining, to protest via strikes and lockouts.[1]
Some of the key legislation passed included the Payment of Wages Act, 1936 which empowered employers to deduct wages of employees absent from work without reasonable cause. Trade Disputes (Amendment) Act 1938, authorized government to appoint conciliation officers to settle disputes. [2]
LABOUR POLICY IN INDIA
The labour laws in India have evolved according to the need of the hour with the main aim being the economic development, social justice, and welfare of labour.
HIGHLIGHTS OF LABOUR POLICY
·????????Creating jobs and social security.
·????????Reallocation of funds to benefit the workers.
·????????Creative measures to attract investments.
·????????Social security schemes for workers in unorganized sectors.
·????????Model employee-employer relationships.
·????????Labour Law reforms in tune with the times. Empowered body of experts to suggest required changes.
·????????More labour sectors under the Minimum Wages Act and efficient functioning of the labour department.
·????????Enforcement of the Child labour Act.
·????????Modern medical facilities for workers and Rehabilitation packages for displaced workers.
·????????Restructuring in the functioning of employment exchanges. Computerization and updating of database.
FUTURE OF LABOUR LAWS
The Indian labour laws were long overdue for some significant amendments. These laws are anticipated to eventually culminate in four labour code covering wages, social security, occupational safety, health and working conditions, and industrial relations. These new labour codes are authored basis International Labour Organization (ILO) standards and a consultative process involving various stakeholders.
Some international best practices are also factored in, which include the introduction of inspector-cum-facilitator to encourage compliance. Once effective, these new labour codes will replace 29 central government labour laws currently in force. This, in turn, may have a cascading impact on state government labour laws. [3]
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·????????EMPLOYEE BENEFITS
The government has aimed to provide better social security coverage and more social security benefit because it is assumed that the people will have to fall back on social security benefits when they would no longer be able to economically productive. The new labour code allows calculating the benefits on wage as defined under the labour act instead of salary. Under the new definition of ‘wages’, all salary components except specific exclusions are covered. Also, there is a 50% ceiling on exclusions, meaning at least 50% of gross remuneration will now be covered under wages for all employee benefits calculations. [4]
This provides more benefits like higher gratuity, overtime pay and leave encashment in the hands of employees, and is considered to be the largest benefit of the new labour codes.
·????????DIGITIZATION OF COMPLIANCE AND ENFORCEMENT
The maintenance of all registers and records will be done digitally through an online platform and random inspections may happen anytime by the Government. The employers have to settle any due wages within two working days of any employee leaving. The payroll policy framework will ensure that changes are made and complied with.
·????????PROTECTION OF WORKERS’ RIGHTS
The new labour code suggests that any person employed in an organization will be called an ‘employee’ and any person who does not have supervisory roles may be called a ‘worker’.
A grievances redressal committee shall be set up by the employer where the worker can address his issues. Any worker will be eligible for additional benefits from employers such as overtime for working beyond 8 hours on any day or 48 hours in any week and leave encashment for un-availed leave at the end of the year.
·????????BALANCING OF EMPLOYER DUTIES AND EMPLOYEE RIGHTS
Labour codes address the issues faced by the employers too. Keeping in mind the effect strikes have on any business these labour codes mandate the employee to give a 14-day notice before going on any strike. A negotiating union will be formed which will have representatives from all trade unions to negotiate conditions with the employer.
·????????FIXED TERM CONTRACT HIRING
The labour codes introduce fixed-term hiring which will benefit any employer who wants deftness in hiring. While the hiring of contract labour through third parties is not permitted in core functions in an organization, there is no such restriction on hiring fixed-term employees for core functions. [5] Fixed terms employees should be offered the same benefits as any other employee.
·????????SOCIAL SECURITY FOR self-employed
Self-employment has been recognized under these new labour codes. The Government has introduced social security schemes to benefit the self-employed and such social security schemes may provide life and disability cover, accident insurance, health and maternity benefits, old age protection and other benefits to such individuals.
CONCLUSION
Labour laws were introduced to deal with various labour and industrial issues. The main goal of these Acts is economic development and social justice in the country. The need for better working conditions, social security and labour welfare has been the main cause for the growth of these labour laws. The implementation of new labour codes is a commendable step ahead. The new labour codes have incorporated many required policies and changes. Lack of awareness of labour laws is a major obstacle.
From the government’s perspective, a clear roadmap on the implementation of labour codes, timely notification of central and state rules, taking away the retrospective cost impact and providing clarity on certain aspects will go a long way to ensure adoption by the industry. [6]
[3] Accessed at Changing landscape of labour laws in India: what businesses should do to be future ready (ey.com)
[4] Accessed at Changing landscape of labour laws in India: what businesses should do to be future ready (ey.com)