Labor legislation (also known as employment law or labor
law) is the body of laws, administrative rulings, and
precedents which addresses the legal rights of, and
restrictions on, working people and their organizations. As
such, it mediates many aspects of the tripartite relationship
between trade unions, employers and employees. In other
words, Labour law defines the rights and obligations as
workers, union members and employers in the workplace.
The law relating to labour and employment in India is
primarily known under the broad category of "Industrial Law".
Labour Legislation is one of the most progressive and dynamic
instruments for achieving socio-economic progress.
Evolution of labour legislations in India:-
Scope of Labour legislations:-
Generally, labour law covers;
• Industrial relations - certifications of unions, labour-
management relations, collective bargaining and unfair labour
• Workplace health and safety;
• Employment standards, including general holidays, annual
leave, working hours, unfair dismissals, minimum wage, lay-
off procedures, and severance pay.
Objectives of Labour Legislations:-
• To protect the workers from profit seeking exploiters.
• To promote cordial industrial relations between employers
• To preserve the health safety and welfare of workers.
• To product the interests of women and children working in
• It establishes a legal system that facilitates productive
individual and collective employment relationships, and
therefore a productive economy .
Principles of Labour Legislations:-
Labour Legislations contain the principles of social justice,
social equity, social security and national economy.
• Social justice implies two things. First, equitable distribution
of profits and other benefits of industry between owner and
workers. Second, providing protection to workers against
harmful effect to their health, safety and morality.
• Social equality provides the flexibility in labour legislations to
adjust to the need of the industrial society.
• Social security envisages collective action against social risks
which constitute the crux of the labour legislation.
• National Economy provides the standards to be set for the
Classification of Labour Legislations in India:-
Labour Laws may be classified under the following 6 heads:
I. Regulative Laws/Laws related to Regulation of
Industrial Relations such as:
-Trade Unions Act, 1926
- Industrial Disputes Act, 1947.
II. Wage-related Laws/Laws governing wages such as:
-Minimum Wages Act, 1948
-Payment of Bonus Act, 1965.
-The Equal Remuneration Act, 1976
III. Protective laws/Laws related to Working
Hours, Conditions of Service and Employment such as:
- Factories Act, 1948.
IV. Welfare laws/Laws related to Deprived and
Disadvantaged Sections of the Society such as:
- Child Labour (Prohibition & Regulation) Act, 1986.
V. Laws related to Social Security such as:
- Employees’ Compensation Act, 1923.
- Employees’ State Insurance Act, 1948.
- Employees’ Provident Fund & Miscellaneous Provisions Act, 1952.
- Payment of Gratuity Act, 1972.
- Maternity Benefit Act, 1961.
VI. Miscellaneous Labour laws such as;
- Child Labour (prohibition and Regulation )Act,1986.
- Apprentices Act ,1961.
(a) Labor laws enacted by the Central Government, where the Central
Government has the sole responsibility for enforcement
Sl. No. Name of the Act
1. The Employees’ State Insurance Act, 1948
2. The Employees’ Provident Fund and Miscellaneous Provisions Act,1952
3. The Dock Workers (Safety, Health and Welfare) Act, 1986
4. The Mines Act, 1952
5. The Iron Ore Mines, Manganese Ore Mines and Chrome Ore Mines
Labor Welfare (Cess) Act, 1976
6. The Iron Ore Mines, Manganese Ore Mines and Chrome Ore Mines
Labor Welfare Fund Act, 1976
7. The Mica Mines Labor Welfare Fund Act, 1946
8. The Beedi Workers Welfare Cess Act, 1976
9. The Limestone and Dolomite Mines Labor Welfare Fund Act, 1972
10. The Cine Workers Welfare (Cess) Act, 1981
11. The Beedi Workers Welfare Fund Act, 1976
12. The Cine Workers Welfare Fund Act, 1981
(b) Labor laws enacted by Central Government and enforced both by
Central and State Governments
Sl. No. Name of the Act
13. The Child Labor (Prohibition and Regulation) Act, 1986.
14. The Building and Other Constructions Workers’ (Regulation of
Employment and Conditions of Service) Act, 1996.
15. The Contract Labor (Regulation and Abolition) Act, 1970.
16. The Equal Remuneration Act, 1976.
17. The Industrial Disputes Act, 1947.
18. The Industrial Employment (Standing Orders) Act, 1946.
19. The Inter-State Migrant Workmen (Regulation of Employment and
Conditions of Service) Act, 1979.
20. The Labor Laws (Exemption from Furnishing Returns and
Maintaining Registers by Certain Establishments) Act, 1988
21. The Maternity Benefit Act, 1961
22. The Minimum Wages Act, 1948
23. The Payment of Bonus Act, 1965
24. The Payment of Gratuity Act, 1972
25. The Payment of Wages Act, 1936
26. The Cine Workers and Cinema Theatre Workers (Regulation of
Employment) Act, 1981
27. The Building and Other Construction Workers Cess Act, 1996
28. The Apprentices Act, 1961
(c) Labor laws enacted by Central Govt. and enforced by the State Govts.
Name of the Act
29. The Employers’ Liability Act, 1938
30. The Factories Act, 1948
31. The Motor Transport Workers Act, 1961
32. The Personal Injuries (Compensation Insurance) Act, 1963
33. The Personal Injuries (Emergency Provisions) Act, 1962
34. The Plantation Labor Act, 1951
35. The Sales Promotion Employees (Conditions of Service) Act, 1976
36. The Trade Unions Act, 1926
37. The Weekly Holidays Act, 1942
38. The Working Journalists and Other Newspapers Employees
(Conditions of Service) and Miscellaneous Provisions Act, 1955
39. The Workmen’s Compensation Act, 1923
40. The Employment Exchange (Compulsory Notification of Vacancies)
41. The Children (Pledging of Labor) Act 1938
42. The Bonded Labor System (Abolition) Act, 1976
43. The Beedi and Cigar Workers (Conditions of Employment) Act, 1966
44. The Unorganized Workers’ Social Security Act, 2008
(d) There are also Labor laws enacted and
enforced by the various State Governments
which apply to respective States.
The main central laws dealing with labour issues are given
• Industrial Disputes Act, 1947
• Employees’ Compensation Act, 1923
• Payment of Gratuity Act, 1972
• Equal Remuneration Act, 1976
• Employees’ State Insurance Act,1948
• Minimum Wages Act , 1948
1.The Industrial Disputes Act (IDA),1947
• The IDA is an Act to provide for investigation and settlement of
Industrial Disputes and matters connected therewith with the
objective to maintain industrial peace and economic justice.
• It applies to existing ,i.e., not dead industry. And applies to industries
owned by the Government as well.
• Includes any workman (including an apprentice) employed in any
industry to carry out manual, skilled and unskilled, technical,
operational, clerical or supervisory work for hire or reward (drawing
Rs.10,000 or less per month as wages).
Object and significance of the Act
• Promotion of measures of securing and preserving amity and
good relations between the employer workmen.
• Investigation and settlement of industrial disputes between
employers and employers, employers and workmen, or
workmen and workmen with a right of representation by
registered trade union or federation of trade unions or an
association of employers or a federations of trade unions.
• Prevention of illegal strikes and lock-outs.
• Relief to workmen in case of lay-off and retrenchment.
• Promotion of collective bargaining.
The Industrial Disputes Act, 1947 was amended
w.e.f. 15.09.2010 to:-
• Amplify the term ‘appropriate government’ defined under
section 2(a) of the Act;
• Enhance the wage ceiling from Rs.1,600/- to Rs.10,000/-
per month to cover workmen working in supervising
• Provide direct access for the workman to the Labour Court
or Tribunal in case of disputes arising out of Section 2(A) of
• Expand the scope of qualifications of Presiding Officers of
Labour Courts or Tribunals;
• Establish Grievance Redressal Machinery;
• Empower the Labour Court or Tribunal to execute awards.
Mechanisms of Settlement of industrial disputes
Authorities and agencies for Investigation and
settlement of Industrial disputes
• Works committee.
• Conciliation officers.
• Boards of Conciliation.
• Court of Inquiry.
• Labour Tribunals /Courts.
• Grievance Settlement Authority.
• Industrial Tribunals.
• National Tribunal.
• Voluntary Arbitration.
Types of ID:-
or cat call
2.The Employees’ Compensation Act, 1923
• The Employee’s Compensation Act, aims at providing financial
protection to workmen and/or their dependents in case of
accidental injury arising out of and in the course of
employment and causing either death or disablement of
The Employees’ Compensation Act, 1923 (earlier called the
Workmen’s Compensation Act, 1923) was amended w.e.f
18.01.2010 to, inter-alia:
• increase the wage ceiling limit from Rs.4,000/- to Rs.8,000/-
per month for the purpose of calculating compensation;
• Enhancement in minimum compensation payable from
Rs.80,000 to Rs.1,20,000 (in case of death) and from
Rs.90,000 to Rs.1,40,000 (in case of permanent disability) and
funeral expenses from Rs.2,500 to Rs.5,000.
• allow reimbursement of the actual medical expenses on
treatment of injuries caused during work without any ceiling;
• make compensation gender neutral;
• dispose cases of compensation within a period of 3 months
from the date of reference.
• Increase in coverage by omission of restrictive clause in
Schedule-II and inclusion of additional hazardous activities.
• Empower Central Govt. to specify monthly wages for the
purpose of compensation and enhance minimum rates of
compensation from time to time.
The employer of any establishment covered under this Act, is
required to compensate an employee :
• Who has suffered an accident arising out of and in the course
of his employment, resulting into (i) death, (ii) permanent
total disablement, (iii) permanent partial disablement, or (iv)
temporary disablement whether total or partial, or
Who has contracted an occupational disease.
The Employer shall not be liable
• In respect of any injury which does not result in the total or
partial disablement of the workmen for a period exceeding
• In respect of any injury not resulting in death, caused by an
accident which is directly attributable to-
- the workmen having been at the time thereof under the
influence or drugs, or
- the willful disobedience of the workman to an order
expressly given, or to a rule expressly framed, for the
purpose of securing the safety of workmen.
• The payment of Gratuity Act provides for the payment of
gratuity to employees engaged in factories, mines, oilfields,
plantations, ports, railway companies, shop or other
establishments. Gratuity is a lump sum payment made by the
employer as a mark of recognition of the service rendered by
the employee when s/he retires or leaves service.
3.The Payment of Gratuity Act, 1972
When is Gratuity payable?
According to Section 4(1) of the Act, gratuity shall be payable
to an employee on the termination of his employment after
he has rendered continuous service for not less than 5 years:
a) On his superannuation, or
b) On his retirement or resignation, or
c)On his death or disablement due to accident or disease [
Herein the completion of continuous service of 5 years is not
• The Act is applicable to every factory, shop or an establishment, in
which 10 or more persons are employed, or employed on any day
of the proceeding 12 months.
• Applicable to employees who have rendered continuous service for
• Employees with less than five years will be entitled in case of death
• Employer has to pay within 30 days from the date it becomes
payable to the employee(after receiving a written application from
the employee).Otherwise a simple interest of 10% p.a. is applicable.
• Total amount of gratuity payable shall not exceed Rs.10,00,000
unless there is a contract to the contrary.
• Compulsory insurance is necessary towards gratuity from Life
Insurance Corporation, unless employer exempted from the
• Gratuity is calculated at the rate of 15 days wages for every
completed year of service or a part thereof exceeding six months.
Formula is - Last Wages *15*No. of services/26.
Applicability of the Act:
• The Payment of Gratuity Act, 1972 was amended
through notification dated 31.12.2009 to:
• Cover teachers in educational institutions w.e.f.
• Enhance the ceiling on gratuity from Rs.3.5 lakh to
Rs.10 lakh w.e.f. 24.05.2010.
4.Equal Remuneration Act, 1976
An act to provide for the payment of equal
remuneration to men and women workers and for
the prevention of discrimination, on the ground of
sex, against women in the matter of employment
and for matters connected therewith or incidental
Applicability of the Act
• Duty of employer to pay equal remuneration to men and
women workers for same work or work of similar nature
[Section 4 and 2(b)]
• No discrimination to be made while recruiting men and
women workers, except where the employment of women in
such work is prohibited or restricted under law [Section 5].
• It extends to the whole of India and applies to all
• The ESI Act was promulgated by the parliament of India in the
year 1948.It was the first major legislation on social security in
independent India to provide certain benefits to the
employees in the organized sector in case of sickness,
maternity and employment injury.
• The Act extends to the whole of India and applies to all
factories (including factories belonging to the government)
other than seasonal factories [Section 1(4)].
5.Employees’ State Insurance Act,1948
• The scheme is compulsory wherever applicable and all
workers covered under the Act must be insured. The Act,
however, does not apply to a member of the armed forces or
to a person whose wages in the aggregate exceeds Rs.15,000
• It provides benefits to employees in case of sickness,
maternity and employment injury.
• It applies to all factories (including Government factories but
excluding seasonal factories) employing ten or more persons
and carrying on a manufacturing process with the aid of
power or employing 20 or more persons and carrying on a
manufacturing process without the aid of power.
• Presently every insured employee and his employer have to
pay the Employees State Insurance Corporation at the rate of
1.75% and 4.75% respectively of the wage of the employee.
Applicability of the Act:
Amendment of the Act:-
The Employees’ State Insurance Act, 1948 was amended w.e.f.
• Improve the quality of service under the scheme;
• Enable ESI infrastructure to be used to provide health care to
workers in the unorganized sector.
Salient features of the recent amendment to ESI Act:
•The wage ceiling has been increased from Rs.10,000/- to
Rs.15,000/- with effect from 01.05.2010.
•The number of employees brought down to 10 and more with or
without power for deciding the applicability.
•The word "Inspector" has been replaced with the word "Social
•Provision for re-inspection /testing inspection has been instituted.
"Any officer of the Corporation authorized in this behalf by it may,
carry out re-inspection or test inspection of the records and returns
submitted under section 44 for the purpose of verifying the
correctness and quality of the inspection carried out by a Social
Act does not apply to
• Factories working with the aid of power wherein less
than 10 persons are employed;
• Factories working without the aid of power wherein
less than 20 persons are employed;
• Seasonal factories engaged exclusively in any of the
following activities viz. Cotton ginning, cotton or jute
pressing, decortication of groundnuts, the
manufacture of coffee, indigo, lac, rubber, sugar
(including gur) or tea
• Medical benefits FULL MEDICAL CARE consists of
hospitalization facilities -includes specialist services, drugs
and dressings and diets as required for in-patients.
• Sickness benefit is roughly 50% of the average daily wages
and is payable for 91 days during 2 consecutive benefit
• Maternity Benefit is payable to an Insured Woman in the
following cases subject to contributory conditions:-
Confinement-payable for a period of 12 weeks (84 days) –
anti-natal 6 weeks & post – natal 6 weeks restricted to 2
• Dependents benefit
• Accident Benefit
• Funeral expenses
6.Minimum wages Act, 1948
• A Minimum Wage is such a wage that it not only guarantees
bare subsistence and preserves efficiency but also provides
for education, medical requirements and some level of
• Payment of wages below the minimum wage rate amounts to
• Wage Boards are set up to review the industry’s capacity to
pay and fix minimum wages. Some states revise their
respective minimum wage rates every six months while some
do so in 5 years.
• Hence , there is no single uniform minimum wage rate across
the country and the structure has become overtly complex.
The highest minimum wage rate as updated in 2012 is Rs.
322/day in Andaman and Nicobar.
The 15th Labour conference(1957) added some norms in the
fixation of minimum wages such that revision and fixation of
wage rates are need-based. The recommendations were:
• The cost of three consumption units- husband, wife and two
children for one earner(now raised to five consumption
units).Income from women and children should be ignored.
• Satisfy the minimum food requirement of 2700 calories per
• Clothing requirement of 72 yards for a family annually.
• Rent of the minimum area as specified by Government’s
Industrial Housing Scheme.
• 20% of minimum wage should be the cost of fuel and
miscellaneous items of expenditure.
Method of fixing wages
1. Committee Method: It may ask the committee / board,
based on the advice of the board, it may fix the wage rate and
specify in Gazettee.
2. Notification Method: It can ask people to give their
proposal, which will be forwarded to the board / committee
and based on the proposals, the wage rate will be fixed in a
• In fixing or revising minimum rates of wages under this
(a) different minimum rates of wages may be fixed for--
(i) different scheduled employments;
(ii) different classes of work in the same scheduled
(iii) adults, adolescents, children and apprentices;
(iv) different localities;
• (b) minimum rates of wages may be fixed by any one or more
of the following wage periods, namely:--
(i) by the hour,
(ii) by the day,
(iii) by the month, or
(iv) by such other larger wage-period as may be prescribed;
Amendments of the Act:-
• There should be one single statutory National Floor Level
Minimum Wage (NFLMW) for the entire nation below which
wages in any employment cannot be paid.
• The Minimum Wages Act defines wages to include basic, DA
• The Minimum Wages Act should also provide for Payment of
Wage by remittance in bank account of the employee.
The labour in India consists of about 487 million workers*,
the second largest after China. India has numerous labor laws
such as those prohibiting discrimination and child labor, those
that aim to guarantee fair and human conditions of work,
those that provide social security, minimum wage, right to
organize, form trade unions and enforce collective bargaining.
India is considered to be a highly regulated and most rigid
labor law countries in the world. They need to be flexible for
their proper implementation and should be reviewed from
time to time keeping in tune with the labour and economy’s
Source: From Wikipedia as on 17 March 2013