Managing labour

relations
UNIT IV
Introduction to labour law

Labour law, also known as employment law, is a legal framework that governs the relationship between
employers, employees, and trade unions. It establishes rights, obligations, and protections for workers and
employers, ensuring fair treatment, safe working conditions, and the resolution of disputes.

Objectives/Purpose of Labour Law

1.Protection of Workers – Ensures fair wages, job security, safe working conditions, and protection from
exploitation.
2.Regulation of Employment Relationships – Defines terms of employment, working hours, rest periods,
and termination conditions.
3.Promotion of Industrial Harmony – Facilitates collective bargaining, dispute resolution, and trade union
rights.
4.Economic Efficiency – Ensures productive and efficient work environments by setting employment
standards.
Principles of labour law

Principle of Social Justice

This principle emphasizes providing opportunities for all citizens to reach their full potential and
pursue their goals equally, including access to education, healthcare, and employment.

Principle of Social Equality

This principle ensures that all citizens have equal opportunities in education and employment,
promoting fairness and preventing discrimination

Principle of Social Security

This principle focuses on providing a safety net for citizens who cannot provide for their basic needs,
ensuring a minimum standard of living.
Principles of labour law

Principle of Social Welfare

This principle involves the state providing relief to citizens facing calamities, illnesses, or disabilities,
ensuring their well-being.

Principle of National Economy

This principle recognizes the importance of a strong national economy, which is crucial for creating
jobs and improving living standards.
India context

A. The Preamble
•Adopted on 26 November 1949.
•Declares India as a Sovereign, Socialist, Secular, Democratic Republic.
•Ensures to all citizens:
• Justice (social, economic, political)
• Liberty (thought, expression, belief, faith, worship)
• Equality (status, opportunity)
• Fraternity (dignity of the individual, unity & integrity of the nation)
India context

B. Directive Principles of State Policy (DPSP)

•Elaborates on the Preamble's objectives.
•Guides the State to promote the welfare of the people by ensuring justice in all national institutions.
•Key directives:
• Livelihood – Adequate means for all.
• Resource Distribution – Prevent concentration of wealth.
• Equal Pay – For men and women.
• Worker Welfare – Health, strength, fair conditions, maternity relief.
• Right to Work, Education & Assistance – For those in need.
• Living Wage – Ensuring a decent standard of life.
• Worker Participation – In management of industries.
• Public Health & Nutrition – Improving standards of living.
•These principles guide legislation, interpretation, and enforcement of laws.
India context

C. Constitutional Guarantee
•Labour Policy Limitations:
• Labour legislation must comply with Fundamental Rights.
• Any law inconsistent with these rights is void.
•Fundamental Rights (Part III):
• Article 14: Equality before law & equal protection of laws.
• Article 16: Equal opportunity in public employment.
• Article 19: Freedom of speech, assembly, association, trade & profession.
• Article 21: Protection of life and personal liberty (includes livelihood).
• Article 23: Prohibits human trafficking & forced labour.
• Article 24: No child labour (below 14 years) in hazardous industries.
Role of judiciary

Judicial Contributions
•Indian judiciary has shaped industrial relations, social security, and employment laws.
•Courts innovated new strategies to ensure access to justice for weaker sections.
•Assumed a protectionist role for the poor and working-class.
•Acted as a legislative guide in areas where laws were silent or vague.

Landmark Case: People's Union for Democratic Rights v. Union of India

•Case filed for non-payment of minimum wages and violation of labour laws at Asiad project sites.
•Petition was initiated through public interest litigation (PIL) via a letter to Justice Bhagwati.
Role of judiciary

Supreme Court’s Key Rulings

•Writ Petition under Article 32:
• Labour law violations linked to Fundamental Rights (Articles 14, 21, 23, and 24).
• Denial of minimum wages = forced labour under Article 23.
• State has a duty to protect fundamental rights of workers.

•Forced Labour under Article 23:

• ‘Forced labour’ includes:
• Physical compulsion.
• Legal coercion (threat of punishment).
• Economic compulsion (poverty & destitution).
• Workers receiving wages below minimum wage = forced labour.
Labour policy in india

Indian labor policy, a concurrent subject under the Constitution, aims to ensure economic development,
social justice, industrial harmony, and worker welfare through various laws and initiatives, including the new
Labour Codes.

Key Aspects of Indian Labour Policy:

Concurrent List:

Labour is a subject in the concurrent list, meaning both the Central and State Governments can enact
legislation.

Broad Coverage:
Labour laws address various aspects, including occupational health and safety, employment, training,
minimum wages, payment of wages, compensation for injuries, bonded labor, contract labor, women's and
children's labor, industrial disputes, and social security.
Labour policy in india

Central Laws:
The Central Government enacts laws on matters like minimum wages, employee benefits (provident fund,
gratuity, bonus), retrenchment, and contract labor
State Laws:
States can expand, amend, or enact their own laws, such as Shops and Establishments Acts, which regulate
working hours, wages, leave, and holidays.
Objectives:
The main objectives of labour policy are to protect worker interests, promote a healthy work environment, and
foster economic development and social justice
Ministry of Labour and Employment:
The Ministry of Labour and Employment is responsible for formulating and implementing labour policies and
laws.
 Classification of labour laws in india

The Indian government has consolidated 29 central

labour laws into four labour codes to simplify and
modernize labour regulations. These codes aim to
ensure ease of doing business while safeguarding
workers' rights.

1. The Code on Wages, 2019

2. The Industrial Relations Code, 2020
3. The Occupational Safety, Health and Working
Conditions Code, 2020
4. The Industrial Relations Code, 2020
 Classification of labour laws in india

1. The Code on Wages, 2019

This code merges four laws related to wages and remuneration:
•The Minimum Wages Act, 1948
•The Payment of Wages Act, 1936
•The Payment of Bonus Act, 1965
•The Equal Remuneration Act, 1976
Key Impact of Code on Wages
Simplifies wage laws under one framework.
Expands coverage to all employees.
Ensures timely & fair wages for all workers.
Strengthens enforcement with stricter penalties.
Code of wages
1. Payment of Wages Act, 1936
•Ensured timely payment of wages to workers.
•Applied to employees earning up to ₹24,000 per month (before Code on Wages).
•Wages must be paid within 7 days (for <1,000 workers) or 10 days (for >1,000 workers) after the wage period.
•Allowed deductions only for specified reasons (fines, absence, advances, etc.).
•Code on Wages removes the wage limit, making it applicable to all employees.

2. Minimum Wages Act, 1948

•Established minimum wage standards for workers in scheduled employments.
•Wages determined based on skill level and geographical region.
•Reviewed at least every five years.
•Minimum wages included:
• Basic pay
• Cost of living allowance
• Special allowances (as per nature of work)
•Code on Wages removes "scheduled employment" restriction, ensuring all employees are covered.
Code of wages

3. Payment of Bonus Act, 1965

•Provided for annual bonuses to employees in firms with ≥20 employees.
•Eligibility: Employees earning up to ₹21,000/month.
•Bonus calculated based on profits or productivity.
•Bonus range: 8.33% (minimum) to 20% (maximum) of annual wages.
•Code on Wages retains bonus provisions with no major changes.

4. Equal Remuneration Act, 1976

•Prohibited discrimination in wages & recruitment based on gender.
•Ensured equal pay for equal work across all sectors.
•Applied to both public and private sector employees.
•Employers were required to maintain records of compliance.
•Code on Wages reinforces gender pay equality with wider applicability.
Industrial relations code

2. The Industrial Relations Code, 2020

This code merges laws governing employer-employee relations:
•The Industrial Disputes Act, 1947
•The Trade Unions Act, 1926
•The Industrial Employment (Standing Orders) Act, 1946

Key Provisions:
Introduces a "strike notice" requirement (60 days prior).
Simplifies trade union recognition for collective bargaining.
Provides a grievance redressal mechanism for workers.
Eases hiring and retrenchment norms for industries
(establishments with up to 300 workers do not require government
approval for layoffs).
 Industrial relations code
1. The Trade Unions Act, 1926
•Provided legal recognition to trade unions.
•Minimum 7 workers needed to form a trade union.
•Gave unions the right to negotiate, bargain, and protect workers' rights.
•Protected union activities from civil and criminal liability.
•Industrial Relations Code:
• Recognition of trade unions made mandatory.
• Introduction of Negotiating Union/Council for better dispute resolution.

2. The Industrial Employment (Standing Orders) Act, 1946

•Required industrial establishments (≥100 workers) to define service conditions (e.g., work hours, leave, misconduct).
•Applied to industries specified by the government.
•Industrial Relations Code:
• Now applies to establishments with ≥300 workers (higher threshold).
• Simplifies compliance by allowing model standing orders issued by the government.
 Industrial relations code

3. The Industrial Disputes Act, 1947

•Regulated strikes, lockouts, layoffs, retrenchment, and dispute resolution.
•Established mechanisms like conciliation officers, tribunals, and courts.
•Required government approval for layoffs in large industries (≥100 workers).
•Industrial Relations Code:
• Increases retrenchment & closure threshold to ≥300 workers.
• Stricter strike notice rules (60-day notice for legal strikes).
• Promotes voluntary dispute resolution through mediation.
Classification of labour laws in india

3. The Occupational Safety, Health and Working Conditions Code, 2020

This code merges laws related to workplace safety and welfare:
•The Factories Act, 1948
•The Mines Act, 1952
•The Contract Labour (Regulation and Abolition) Act, 1970
•The Shops and Establishments Act (various states)
•The Inter-State Migrant Workmen Act, 1979, and others
Key Provisions:
Covers health, safety, and working conditions in all industries.
Defines working hours, leave policies, and hazardous workplace safety
norms.
Ensures women’s right to work at night with safety provisions.
Provides mandatory registration for all establishments with 10+ workers.
The occupational safety, health & working conditions code
The Occupational Safety, Health and Working Conditions Code, 2020 (OSH Code) consolidates and replaces 13 existing
labor laws related to worker safety, health, and workplace conditions.

1️⃣ The Factories Act, 1948

•Regulates working conditions, safety, and health in factories.
•Covers hazardous processes, working hours, and welfare measures.

2️⃣ The Mines Act, 1952

•Ensures safety, health, and welfare of workers in mines.
•Covers provisions related to ventilation, accidents, and inspections.

3️⃣ The Dock Workers (Safety, Health & Welfare) Act, 1986
•Protects the safety and health of dock workers at ports.
•Covers provisions for equipment safety, hazardous material handling, and welfare.
The occupational safety, health & working conditions code

4️⃣ The Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996
•Regulates working conditions and safety of construction workers.
•Mandates registration of workers, welfare boards, and safety standards.

5️⃣ The Contract Labour (Regulation & Abolition) Act, 1970

•Regulates employment of contract labor and ensures proper working conditions.
•Requires licensing of contractors and welfare provisions for workers.

6️⃣ The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979
•Protects rights of migrant workers working in different states.
•Ensures equal wages, accommodation, and travel allowances.

7️⃣ The Working Journalists and Other Newspaper Employees (Conditions of Service) Act, 1955
•Ensures fair wages, work hours, and job security for journalists and newspaper employees.
The occupational safety, health & working conditions code

8️⃣ The Motor Transport Workers Act, 1961

•Regulates working conditions, safety, and welfare of motor transport workers (e.g., drivers, cleaners).

9️⃣ The Sales Promotion Employees (Conditions of Service) Act, 1976

•Covers working conditions, leave, and benefits of sales promotion employees in industries like pharmaceuticals.

The Beedi and Cigar Workers (Conditions of Employment) Act, 1966

•Protects workers in the beedi and cigar industry, ensuring fair wages, working conditions, and welfare.

1️⃣1️⃣ The Cine Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981
•Ensures job security, wages, and welfare of workers in the cinema industry.
The occupational safety, health & working conditions code
1️⃣2️⃣ The Plantation Labour Act, 1951
•Regulates working conditions, safety, and welfare of workers in tea, coffee, and rubber plantations.

1️⃣3️⃣ The Shops and Establishments Acts (various states)

•Governs working hours, leave, and conditions of employment in shops, offices, and commercial establishments.

Key Takeaways
The OSH Code replaces 13 labor laws, ensuring uniformity and simplified compliance.
Focuses on worker safety, welfare, and health across industries.
Strengthens rights of contract and migrant workers.
Mandates safe workplaces, welfare facilities, and fair working hours.

The OSH Code, 2020, aims to modernize and streamline workplace safety laws, ensuring better protection for workers
across sectors.
Classification of labour laws in india

4. The Code on Social Security, 2020

This code integrates laws related to employee benefits:
•The Employees’ Provident Funds Act, 1952
•The Employees’ State Insurance Act, 1948
•The Maternity Benefit Act, 1961
•The Payment of Gratuity Act, 1972
•The Unorganized Workers’ Social Security Act, 2008, and others
Key Provisions:
Extends EPF, ESI, and gratuity benefits to more workers, including gig and
platform workers.
Introduces a universal social security fund for unorganized workers.
Provides maternity benefits and welfare schemes for all female workers.
Enables wider digital registration of workers.
Code on social security

1️⃣ The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
Objective: Ensures post-retirement financial security through Provident Fund (PF), Pension Fund, and
Deposit-Linked Insurance.
Applicability: Companies with 20+ employees
Employee & Employer Contribution: 12% of basic salary goes to EPF account
Employee Pension Scheme (EPS): Provides pension after retirement

2️⃣ The Employees’ State Insurance (ESI) Act, 1948

Objective: Provides medical, maternity, and disability benefits to employees in case of sickness or injury.
Applicability: Factories & establishments with 10+ workers
Employee Contribution: 0.75% of salary, Employer: 3.25%
Benefits: Medical care, sickness benefits, maternity leave, disability pension
Code on social security

3️⃣ The Employees’ Compensation Act, 1923

Objective: Ensures compensation for employees injured or disabled due to work-related accidents.
Employer Liability: Mandatory compensation for death or disability
Coverage: All manual, clerical, and technical employees
No-Fault Liability: Compensation paid even if the employer was not negligent

4️⃣ The Maternity Benefit Act, 1961

Objective: Protects the employment of women during maternity and provides paid leave.
Applicability: Establishments with 10+ employees
Maternity Leave: 26 weeks of paid leave
Additional Benefits: Crèche facilities & prohibition of dismissal during pregnancy
Code on social security

5️⃣ The Payment of Gratuity Act, 1972

Objective: Provides financial benefits to employees after long-term service.
Applicability: Organizations with 10+ employees
Eligibility: Minimum 5 years of continuous service
Calculation: Gratuity = (15/26) × Last Drawn Salary × Years of Service

6️⃣ The Unorganized Workers’ Social Security Act, 2008

Objective: Provides social security schemes for workers in the informal sector.
Coverage: Street vendors, domestic workers, construction laborers, etc.
Benefits: Life & disability insurance, health & maternity benefits
Code on social security
7️⃣ The Building and Other Construction Workers’ Welfare Cess Act, 1996
Objective: Provides welfare measures for construction workers.
Cess Collection: 1-2% of construction cost used for worker benefits
Welfare Schemes: Housing, health, education, and insurance for workers

8️⃣ The Cine Workers Welfare Fund Act, 1981

Objective: Ensures social security benefits for film industry workers.
Coverage: Actors, technicians, and crew members
Welfare Measures: Health insurance, housing schemes, and pensions

9️⃣ The Beedi Workers Welfare Fund Act, 1976

Objective: Provides social security and welfare benefits to beedi industry workers.
Welfare Measures: Healthcare, education, and financial aid
Funding: Government collects cess on beedi production