A brief note on Labour Laws in India with special reference to the

recommendations of 2nd National Commission on Labour Issues

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The labour laws of our country originated partly from the views
expressed by important nationalist leaders during the period of freedom
movement, partly from the debates of the Constituent Assembly and
partly from the provisions of the Constitution and the International
Conventions and Recommendations. Under the Constitution of India,
Labour is a subject in the concurrent list where both the Central and
State Governments are competent to enact legislations. As a result , a
large number of labour laws have been enacted catering to different
aspects of labour. The dignity of labour and the need for protecting their
interests has been enshrined in Chapter-III (Articles 16, 19, 23 & 24)
and Chapter IV (Articles 39, 41, 42, 43, 43A & 54) of the Constitution of
India keeping in line with Fundamental Rights and Directive Principles of
State Policy. The Labour Laws were also influenced by the human rights
and the International Conventions and Standards. These include right to
work of ones choice, right against discrimination, prohibition of child
labour, just and humane conditions of work, social security, protection of
wages, redress of grievances, right to organise and form trade unions,
collective bargaining and participation in management. Our labour laws
have also been significantly influenced by the deliberations of the
various Sessions of the Indian Labour Conference and the International
Labour Conference. Labour legislations have also been shaped and
influenced by the recommendations of the various National Committees
and Commissions such as First National Commission on Labour (1969)
under the Chairmanship of Justice Gajendragadkar, National Commission
on Rural Labour (1991), Second National Commission on Labour (2002)
under the Chairmanship of Shri Ravindra Varma etc.

National Commissions on Labour issues
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The First National Commission on Labour was constituted on 24.12.1966
which submitted its report in August, 1969. The first National Labour
Commission had promised lot in the direction of social security, social
welfare, social insurance, wages and collective bargaining etc,. In sequel
to the recommendations made in the report of the first national
commission on labour series of labour enactments were passed. after
detailed examination of all aspects of labour problems, both in the
organised and unorganised sector. The need for setting up of the
Second National Commission on Labour was felt due to huge number of
changes occurring in the economy especially in the 90s due to
globalization, liberalization and privatization. The Second National
Commission on Labour was given two point terms of reference:
i) to suggest rationalisation of existing laws relating to labour in the
organised sector;

ii) to suggest an umbrella legislation for ensuring a minimum level of
protection to the workers in the unorganised sectors;

The Commission submitted its Report to the Government on 29.06.2002.
The Commission has comprehensively covered various aspects of labour
and given recommendations relating to review of laws, social security,
women & child labour, wages, skill development, labour administration,
unorganized sector etc.
The recommendations of Second National Commission on labour include
the following:
introduction of umbrella legislation for workers in the unorganized
sector and agricultural labour,
emphasis on up-gradation and development of skill of workforce by
training/retraining of workers,
encouragement of small scale industries, agri-business and rural sector
for higher employment generation,
bringing attitudinal change and change in the mindset and work
culture where the employer and the worker work as partners with
emphasis on participative management,
consolidation of social security legislations and establishment of social
security system,
abolition of child labour.
Review of wages and wage policy
Labour statistic and research work etc.

The Ministry had held consultations and interactions with the workers
representatives, employers organizations, experts, professionals etc.
After the number of discussions the recommendations of Second
National Labour Commission were taken into consideration while framing
the amendments in labour laws.

General Recommendations
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Following are the general recommendations made by the commission
1. The Commission recommend that the Central Government and the
State Government should have a uniform policy on holidays, only 3
national holidays be gazetted - namely Independence Day, Republic Day
and Gandhi Jayanti. Two more days may be added to be determined by
each State according to its own tradition and apart from these each
person must be allowed to avail of 10 restricted holidays in the year.

2. Flexibility in the hours of work per week and compensation for
overtime.

3. Attempt to change the basis of tenure in all jobs (permanent as well
as non-permanent) to contractual and for stipulated periods, involves a
basic change in attitude and concept. If transforming the basis of all
employment is a social necessity because it has become economic
necessity for industrial and commercial enterprises, then, it is equally
necessary to create social acceptability for the change and the social
institutions that can take care of the consequences. The fundamental
changes are
evolution of socially accepted consensus on the new perceptional jobs

the evolution of a system of constant up-gradation of employability
through training in a wide spectrum of multiple skills

the setting up of a system of social security that includes
unemployment insurance and provisions for medical facilities; and

the institution of a mandatory system of two contracts - one, an
individual contract and two, a collective contract with workers union.

4. The commission recommends that government may laid down list of
highly paid jobs who are presently deemed as workman category as
being outside the purview of the laws relating to workman and included
in the proposed law for protection of non-workmen. Another alternative
is that the Govt. fix a cut off limit of remuneration which is substantially
high enough, in the present context such as Rs.25,000/- p.m. beyond
which employee will not be treated as ordinary "workman".

5. Further the Commission recommended that it would be logically to
keep all the supervisory personnel, irrespective of their wages / salary,
outside the rank of worker and keep them out of the purview of labour
law meant for workers. All such supervisory category of employees
should be clubbed along with the category of persons who discharge
managerial and administrative functions. The Commission would also
recommend that such a modified definition of worker could be adopted
in all the labour laws.

6. Existing set of labour laws should be broadly grouped into four or five
groups of laws pertaining to:
I. Industrial relations
II. Contract Labour
III. Wages
IV. Social security
V. Welfare, working conditions Safety

I. Industrial Relations and Trade Unions
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It is necessary to provide minimum level of protection to managerial
and other (excluded) employees too against unfair dismissal or removal.
This has to be through adjudication by Labour court or Labour Relations
Commission or arbitration.
Central laws relating to the subject of labour relations are currently the
ID Act, 1947, The TU Act, 1926, Industrial Employment (SO) Act, 1946,
Sales Promotion Employees (Conditions of Service) Act, 1976. There are
State level legislation too on the subject. The commission recommend
that the provisions of all these laws be judiciously consolidated into a
single law called " The Labour Management Relations Law" or "Law on
Labour Management Relations".
The commission also recommend that the enactment of special law for
small scale units.
The commission has avoided the term 'Industry' with a view that the
persons engaged in domestic service are better covered under the
proposed type of umbrella legislation, particularly in regard to wages,
hours of work, working conditions, safety and social security.
Modification in the terms like 'strikes', 'work stoppage' etc. and the
terms go slow and work to rule must be regarded as misconduct under
Standing Orders and Provisions relating to unfair labour practice.
Commission has recommended to the withdrawal of Essential Services
Maintenance Act.
Check-off system in an establishment employing 300 or more workers
must be made compulsory for members of all registered trade unions.
Every establishment shall establish a grievance redressal committee
consisting of equal number of workers and employers representatives.
The said committee be the body to which all grievance of a worker in
respect of his employment will be referred for decision within a given
time frame .
The commission has recommended for maintenance of panel of
arbitrators by the LRC concern, to settle the disputes.
The matters pertaining to individual workers, be it termination of
employment or transfer or any other matter be determined by recourse
to the Grievence Redressal Committee, conciliation and arbitration /
adjudication by the Labour Court. Accordingly, Sec.2 a of the ID Act may
be amended.
The system of legal aid to workers and trade unions from Public Fund
be worked out to ensure that workers and their organisations are not
unduly handicapped as a result of their inability to hire legal counsel.
Strike should be called only by the recognised negotiating agent and
that too only after it had conducted a strike ballot among all the
workers, of whom at least 51% of support the strike.
Workers participation in management - the legislative teeth should be
provided.
The provisions in respect of small establishments can be in the form of
a separate law name Small Enterprises (Employment Relations Act) or
be included in the general law as a separate chapter to ensure that the
interest of the workers are fully protected, even while lessening burden
on the management and providing them with vigilance in exercising
managerial functions.
The Commission urges that these recommendations are taken up as a
whole and not in a piece-meal manner that may destroy the context of
inter-relation and holistic approach.

II. Contract Labour/Casual Temporary Workers
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The Commission has recommended that contract labour shall not be
engaged for core production / service activities. However, for sporadic
seasonal demand, the employer may engage temporary labour for core
production / service activity. As mentioned by the commission that off-
loading perennial non-core services like canteen, watch and ward,
cleaning, etc. to other employing agencies has to take care of three
aspects
1. there have to be provisions that ensure that perennial core services
are not transferred to other agencies or establishments;
2. where such services are being performed by employees on the
payrolls of the enterprises, no transfer to other agencies should be done
without consulting, bargaining (negotiating) agents; and
3. where the transfer of such services do not involve any employee who
is currently in service of the enterprise, the management will be free to
entrust the service to outside agencies. The contract labour will,
however, be remunerated at the rate of a regular worker engaged in the
same organisation doing work of a comparable nature or if such workers
does not exist in the organisation, at the lowest salary of a worker in a
comparable grade, i.e. unskilled, semi-skilled or skilled.

The Commission would recommend that no worker should be kept
continuously as a Casual or temporary worker against a permanent job
for more than 2 years.

III. Wages
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1. The Commission recommends that every employer must pay each
worker his one-month's wage, as bonus before an appropriate festival,
be it Diwali or Onam or Puja or Ramzan or Christmas. Any demand for
bonus in excess of this up to a maximum of 20% of the wages will be
subject to negotiation.
2. There should be a national minimum wage that the Central
Government may notify. This minimum must be revised from time to
time. It should, in addition, have a component of dearness allowance to
be declared six monthly linked to the consumer price index and the
minimum wage may be revised once in five years.
3. The Commission also recommends the abolition of the present system
of notifying scheduled employments and of fixing/revising the minimum
rates of wages periodically for each scheduled employment, since it feels
that all workers in all employments should have the benefit of a
minimum wage.
4. There is no need for any wage board, statutory or otherwise, for
fixing wage rates for workers in any industry.

IV. Social Security
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1. The Commission accepts the need to consider social security as a
fundamental human right.
2. The Commission recommend a system in which the State bears the
responsibility for providing and ensuring an elementary or basic level of
security, and leaves room for partly or wholly contributory schemes. This
will mean that the responsibility to provide a floor will be primarily that
of the State, and it will be left to individual citizens to acquire higher
levels of security through assumption of responsibility and contributory
participation. Such a system will temper and minimise the responsibility
of the State, and maximise the role and share of individual and group
responsibility.
3. The term 'workman' may be replaced by the term 'employee' so as to
make the Workers' Compensation Act applicable to all categories of
employees; the term 'employee' may be defined to mean any person
employed in any employment specified in Schedule II; the entries in
Schedule II may be revised so as to make it applicable to all classes of
employees progressively; and restrictive clauses, wherever they occur in
the Schedule, may be omitted.
4. The Workmen's Compensation Act should be converted from an
employers' liability scheme to a social insurance scheme, its coverage
should be progressively extended to more employments and classes of
employees, and the restrictive clauses in Schedule II of the Act should
be removed.
5. The management of ESI Scheme should be professionalized.
6. The PF Act be made applicable to all classes of establishment subject
to such exception.
7. The Commission suggests that EPFO organised an enquiry into the
working of all exempted funds by an independent agency and review the
entire scheme of granting exemptions from the provisions of the EPF
Act.
8. The Payment of Gratuity Act may be integrated with the EPF Act and
converted into a social insurance scheme.
9. An unemployment insurance scheme could play substantial role in
coping with unacceptable levels of employment resulting from the
implementation of structural adjustment programmes and other
economic reforms.
10. A provision be made for Payment of Educational Allowance to all
employees.
11. The insurance companies be required to develop two or more plans
providing coverage for major risks faced by people leaving it to
individual to choose from among them according to their capacity.
12. A National Scheme for pension for physically handicap be introduced
.
13. A National Scheme be drawn up for payment of pension to leprosy
affected persons, mentally sick people on the same lines as the pension
for physically handicap person.
14. Able bodied beggars should be given training and help to get
employment.
15. A permanent commission for disaster management should be set up
on the lines of election commission.
16. The Commission strongly recommends the constitution of high
powered national security authority preferably under the Chairmanship
of a Prime Minister of India.
17. A social security fund of India and social security of each State may
be set up. There will be three kinds of social security schemes :
o social insurance type of contributory scheme,

o subsidised insurance / welfare fund type of partly contributory and
partly socially assisted schemes and

o social assistance scheme which will be wholly non-contributory.

V Welfare Working Conditions and Safety
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The Commission recommended enactment of a general law relating to
hours of work, leave and working conditions, at the work place. For
ensuring safety at the work place and in different activities, one omnibus
law may be enacted, providing for different rules and regulations on
safety applicable to different activities. Such general law on working
conditions etc. may provide for the following
1. The law should have a provision for letters of appointment along with
a copy of Standing Orders of the establishment (in the local language);
and issue of a photo identity card giving details of the name of the
worker, name of establishment, designation, and so on.
2. It should specify the maximum number of working hours in a
day/week, and payment of overtime at double the rates of wages. The
limitation on employing workers on overtime needs to be relaxed, and
the Commission recommended that the present ceilings be increased to
double to enable greater flexibility in meeting the challenges of the
market.
3. There should be reduced working hours for adolescents, prohibition of
underground work in mines for women workers, prohibition of work by
women workers between certain hours and so on.
4. On the question of night work for women there need not be any
restriction on this if the number of women workers in a shift in an
establishment is not less than five, and if the management is able to
provide satisfactory arrangements for their transport, safety and rest
after or before shift hours.
5. No exemptions like EPZ or SEZ from labour laws.
6. Appropriate government may be empowered to grant exemptions on
case to case basis.
7. Establishment having a man power over a specified limit must provide
for a canteen.
8. Other refreshment facilities exclusively based on gender be provided
9. Deletion of Employers' Liability Act, 1938, Fatal Accident Act 1855 and
relevant provisions of these Acts may be incorporated into the W.C. Act,
1923.
A provision may be made in the Laws that all cases must be disposed of
in a span of 3 hearings, and where this is not possible, the Labour Court
should in its award give reasons for taking more hearings. The Labour
Relations Commissions may also be entrusted with the responsibility to
assess the work of the LCs particularly in the matter of expeditious
disposal of cases. With the constitution of an All India Labour Judicial
Services that the commission is recommending with a hope that to have
a dedicated and competent set of man and woman as presiding officers
of LCs who will be able to discharge responsibilities efficiently and
expeditiously.

Criticism
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The report is not consonance with the National Policy on Industry -
some of the parts of the Report consist number of negative covenants.
Validity of 4 years recognition of the Trade Unions
Strikes are weapons in the hands of few misled employees -
Commission has recommended ballot system i.e. 51% of voting
majority;
Employers features not dealt in the Report
Closure - 300 is not adequate and is unrealistic
Festival bonus - not in the interest of the employer
Employment generation should be our goal accompanied by social
benefit net
Using of the words "outsourcing", "agri business", "small scale
industries", "small and medium scale industries", "manufacturing
industry" without defining them.
Provisions of section 9A of the Industrial Disputes Actrelating to
change in conditions of ser vice diluted and rendered practically
ineffective in favour of employers.
Supervisors irrespective of salary and employees in higher bracket of
salaries to be outside the purviewof labour laws. Allow wide spread
registration of MembershipBased Organisations' of women workers
under theTU Act -trade union movement division on genderlines.
Finally it was strongly Opposition by the Trade Unions.