Labor Law

Body of Laws, Administrative Rulings, & Precedents Addresses relationship between and among Employers, Employees and Labor Organizations

Important acts of labor laws

The Apprentices Act 1961 The Payment of Wages Act 1936 The Workmens Compensation Act 1923 The Factories Act 1948 The Industrial Dispute Act 1947 The Employee PF & MP Act 1952 The Employee State Insurance Act 1948 The Maternity Benefit Act 1961 The Payment of Bonus Act 1965 The Payment of Gratuity Act - 1972

Existing problems: Need for Reforms

Our current labor regulation framework is: Archaic: The current legislation that governs employment regulation is the Industrial Disputes Act (IDA) 1947, the clauses for which were conceived under the British Raj Restrictive: In 1976, changes to IDA were made so that rms employing 300+ people need to seek government permission to eect lay-os, retrenchments and closures. This was further restricted to rms 100+ workers in 1982, making hiring or ring new workers extremely dicult even if they are inecient Convoluted: Further arising from the IDA of 1947, there are about 47 Unions laws and 157 State regulations that overlap

Recommendations
Consolidation and Simplification of Labor Laws and Definitions: There are few sets of laws that can be replaced by one law, eg: Equal Remuneration Act, The Minimum Wages Act, Payment of Wages Act: All can be consolidated into one Act Common definitions for things like classification of work can be provided Urgent need for changes in Contract Labor Law: Flexible employment contracts should be introduced, so that firms can employ different kinds of labor depending on volatility of market. Also, wage difference between contract and temporary should have a ceiling Effective Enforcement of Existing Laws: Grievance redressal process should be made more effective. Database should be built on all aspects relating to IR and other Labor Departments should have access to it. Single window system can also be introduced

Recommendations ( Contd.)
Indexing of Benefits and Penalties: Instead of amending the Act for wages periodically, indexing should be done by evaluating a formula connected to inflation Digitization of Employment Exchanges and Easing of Regulatory Compliances: Mandatory registration and tracking of labor force should be made necessary. Provisions of social security for the unemployed registered should be provided. Regulatory compliance for employers should be transparent and easy to follow

Challenges
Indian labor consists of a highly diverse workforce with many stakeholders. This brings in many challenges in implementation due to conflicting interests which are: Contract Labour- It has become an emergent trend due to strigent hiring and firing procedure via IDA and leads to exploitation. But removal may lead India towards socialism Equal benefits for contract and permanent labour- Trade unions demand for this and employers oppose this on various grounds Social security- Lack of social security makes redressal of IDA very tough

Challenges (Contd.)
Need for uniform & consolidated laws- Labour is a concurrent subject with 45 central laws and four times that number at state leading to confusion and implementation ambiguities Payment through cheques or bank accounts- It is difficult to implement as RBI needs to amend laws on zero-balance account Implementation problems- Gross violations take place due to poor implementation mechanisms. Formation of better departments need huge funds