EMPLOYMENT LAWS IN INDIA

Employment relations in India are governed by the Constitution of India, treaties, statutes,
collective and individual contracts and judicial precedents. There are around 165 pieces of
labour legislation, including 55 central (federal) and 110 state pieces of legislation.
Employment legislation lies in the concurrent list of the Seventh Schedule of Article 246 under
the Constitution of India, which gives both the central and state governments (up to a certain
extent) the power to legislate matters that are on the list. In India most of the labour and
employment laws primarily apply only to a ‘workman’ as defined in the Industrial Disputes
Act, 1947 (‘the ID Act’)

A ‘workman’ is defined as a person who is employed to do any manual, unskilled, skilled,

technical, operational, clerical or supervisory work for hire or reward, excluding a person:

 a who is employed mainly in a managerial or administrative capacity; or

 who is employed in a supervisory capacity and draws a salary exceeding 10,000 rupees
per month or exercises functions mainly of a managerial nature. An employee is
classified as a ‘workman’ based on the nature of the duties performed and not the
designation of the employee.

These are the key laws relating to Employment in India:

1. Minimum Wages Act, 1948: The statute empowers the State and Central Governments
to notify the minimum wages payable to employees. Minimum wages are determined
based on factors including the industry, location and nature of work done.
2. Payment of Wages Act, 1936: The statute regulates the payment of wages to
employees and contains provisions, inter alia, with respect to the time and manner of
payment of wages and permissible wage deductions.
3. Equal Remuneration Act, 1976 (“ER Act”): The ER Act mandates payment of equal
remuneration to men and women workers and prohibits discrimination against women
in connection with employment.
4. Employees’ Provident Funds and Miscellaneous Provisions Act, 1952: This is one
of India’s most important security legislations. The statute provides for the institution
of a contributory provident fund, pension fund and deposit-linked insurance scheme for
employees.
5. Employees’ State Insurance Act, 1948 (“ESI Act”): The ESI Act envisages benefits
 to employees in case of sickness, maternity and employment injury.
6. Payment of Bonus Act, 1965: The statute provides for payment of compulsory bonuses
to persons employed in certain establishments under defined circumstances.
7. Maternity Benefit Act, 1961 (“MB Act”): The statute envisages provision of maternity
leave, maternity bonus and other benefits with respect to childbirth.
8. Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013 (“SH Act”): The statute prescribes a mechanism for prevention
and prohibition of workplace sexual harassment and for redressal of grievances
pertaining to workplace sexual harassment.
9. Employees’ Compensation Act, 1923: The statute provides for payment of
compensation to employees or their family in case of accidental death or disability.
10. Payment of Gratuity Act, 1972 (“Gratuity Act”): The Gratuity Act provides for the
payment of a gratuity to employees upon cessation of employment.

For employees not covered by the ID Act, the employment contract will determine whether or
not unilateral changes can be made by the employer.

Shops and Establishment Act

A commercial establishment relating to the following comes under the purview of the Act:

• A commercial or trading or banking or insurance establishment, or

• An establishment or administrative service in which persons employed or mainly engaged
in office work, or
• A hotel, restaurant, boarding or eating house, a cafe or any other refreshment house or
• A theatre, cinema or any other place of public amusement or entertainment.

Regulations under the Act

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.
• Rules for 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.
• Maintenance of registers and records and display of notices.
• Obligations of employers as well as employees