1. Table of Contents

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   INTRODUCTION-

   • WHAT ARE LABOUR LAWS-

Labour laws (or employment laws) are a set of legal rules and regulations that govern the relationship between employers, workers, trade union and the government. They’re made to protect the workers rights, ensure their safety and to make sure that there is a healthy work environment.

Objectives of labour laws

• To protect workers rights
• To regulate employer-employee relationship
• To promote safety and health
• To enable collective bargaining
• To prevent exploitation

IMPORTANCE OF LABOUR LAW

Labour law in India is important for giving shape to the workforce scenario. It makes sure to maintain fair treatment and protection for the employees on the other hand it also protects rights of the employers. It frames the foundation of social justice by promoting equality and fairness in the workspace. Also, it further regulates the minimum wages, working conditions, and social security.

It also includes the legal framework within which industrial relations operate. Industrial relations refer to the dynamics between employers, employees, and trade unions. It includes-

• Collective bargaining

It’s a process through which employers and unions negotiate terms of employment, including wages and working conditions.

• Dispute resolution-

They use mediation and arbitration, for resolving conflicts between employees and employers.

• Workplace policies-

They make guidelines that govern employee behavior and employer expectations, promoting cooperation and productivity.

• Background –

Labour laws in Pre- independence India-

Before independence in 1947, the labour laws were introduced only to serve British employers and colonial industries. However, as time passed after all the nationalist movement, social reforms, and international influence the same labour law that were just used for British employers and British industries led to the gradual development of laws that aimed to protect Indian labours/workers.

KEY LEGISLATIONS-

1. Factories act 1881-

This was the first significant labour legislation in British India, aimed at improving working conditions, particularly for women and children in factories.

Key provision of this act-

• Child labour restrictions- the act prohibited the employment of children under the age of seven and limited the working hours for children for children aged 7 to 12 years to a maximum of nine hours a day.
• Working conditions- it mandated basic safety measure including the proper fencing of dangerous machinery, and required factories to maintain cleanliness and adequate ventilation.
• Factory inspections- the act established a system of factory inspections to ensure compliance with its provision, marking the beginning of the state intervention in labour relations in India.

2. Workmen compensation act 1923-

It’s a significant piece of legislation in India that provides financial compensation to workers for injuries or death resulting from accidents occurring in the course of their employment.

Key features-

• Scope and applicability- the act applies to various sectors, including factories, mines, and construction sites, covering both permanent and temporary workers. It ensures that all employees engaged in hazardous occupations are protected under the law.
• No-fault liability- one of the defining features of the act is its no-fault liability system, meaning employers will be liable for compensating workers for injuries or death arising from accident at work, regardless of who was at fault.
• Compensation for injuries and death- the act outlines a structured method for calculating compensation based on the severity of the injury. For instance, in cases of permanent total disability, compensation is calculated as percentage of the workers monthly wages multiplied by a specific factor. In the event of death, compensation is paid to the workers dependents.
• Legal framework- the act establishes a legal framework for resolving disputes related to compensation claims, promoting worker safety and welfare in hazardous industries.

3. Trade union act 1926-

the act was enacted during the British colonial period in India. Before the enactment of this law, trade unions in India were not recognized as legal entities, and their activities were often curtailed by the colonial government. It was established primarily to regulate the relationship between employees and their employers or between employees and each other, or to impose rules and regulations on the conduct of any business or trade. It also includes any federation that consists of two or more trade unions.

4. Payment of wages act,1936-

It regulates the wages paid to workers and the deductions that can be made from them. The act undergone various changes to ensure the effective implementation of the law and provide workers with on time payment to maintain a decent standard of living. The payment of wages act 1936, ensures the fair distribution of wages to employees earning wages below Rs. 24000 per month and protects their rights.

5. Minimum wages act-

Though it was drafted before the independence, but it was implemented after independence in 1948. Its objective is to prevent the exploitation of workers by the employers (by fixing the statutory obligation on the employer to pay the minimum wages)

LABOUR LAWS IN POST INDEPENDENCE INDIA-

After India gained independence in1947, the focus of labour legislation shifted from serving colonial interests to promoting social justice, worker’s welfare, and economic development. The Indian constitution laid a strong foundation for labour rights, and numerous laws were enacted to protect and empower workers.

CONSTITUIONAL PROVISIONS-

The constitution of India provides a strong foundation for labour welfare by guaranteeing rights and setting goals for the protection, dignity, and well being of workers. These provisions are found mainly in two parts of the constitution-

• Fundamental rights (part 3)

These are justiciable rights enforceable by courts:

• Article 14- equality before law. It ensures that all workers are treated equally without discrimination
• Article 15- prohibition of discrimination. It prohibits discrimination on grounds of religion, race, caste, sex or place of birth, ensuring fair treatment of all workers.
• Article 16- equalities of opportunity in public employment. It guarantees equal opportunity for employment in government services.
• Article 19(1)(c)- right to form associations or unions. It gives workers the right to form trade unions for collective bargaining and representation.
• Article 21- protection of life and personal liberty. It protects the right and personal liberty of every individual.
• Article 23- prohibition of forced labour. It outlaws bonded labour, human trafficking and other forms of forced labours.
• Article 24- prohibition of child labour. It bans employment of children below 14 years in hazardous industries.

Directive principles of state policy(part4)

These are not enforceable by courts but guide the government in policymaking.

• Article 38- it mandates the states to secure social ]order and promote welfare of the people.
• Article 39- it directs the states to ensures adequate means of livelihood for all citizens, equal pay for equal work for both men and women and protection against economic exploitation.
• Article 41- it ensures the right to work, education, and public assistance in case of unemployment, old age, sickness, or disability.
• Article 42 – it calls for just and humane conditions of work and maternity relief for female workers.
• Article 43- it promotes a living wage and decent standard of life for all workers.
• Article 43A (added by the 42^nd amendment) it encourages workers participation in management of industries to promote industrial democracy.

LABOUR LAWS AND 7^TH SCHEDULE

Labour laws in India are governed by the distribution of legislative powers between the union and state government, which is laid out in schedule 7 of the constitution. This schedule divides subjects into three lists

• Union list- subjects on which only parliament can make laws.
• State list- subjects on which only the state legislatures can make laws.
• Concurrent list- subjects on which both the state and union can make laws.

Labour law comes under concurrent list (list 3, entry 22-24 and others), which means both the center and state can make laws on labour matters.  If there’s a conflict between central and state laws, the central law prevails, unless the state law has received presidential assent.

Implications for labour law in India –

• Central government- frames laws like the industrial disputes act, employees provident fund act, etc.
• State government- can make rules or laws specific to their needs (e.g. Shops and establishment act).
• Dual jurisdiction- this leads to variation across states in terms of enforcement, benefits and implementation.

To overcome fragmentation and inconsistencies between central and state laws, the government introduced four labour codes (2019- 2020).

NEW LABOUR CODES –

To simplify and consolidate existing laws, the government introduced 4 labour codes. The four codes are

• Code on wages, 2019.
• The industrial relations code 2020.
• The code on social security, 2020.
• The occupational safety, health and working conditions code, 2020.

These codes will be effective from 21^st November 2025, rationalizing 29 existing labour laws. By modernizing labour regulations, enhancing worker’s welfare and aligning the labour ecosystem with the evolving world of work, this landmark move lays the foundation for a future ready workforce and stronger, resilient industries driving labour reforms for aatmanirbhar Bharat.

Benefits of labour reforms –

1. Fixed terms employees- FTEs will receive all the benefits equal to the workers working permanently, including leave, medical facilities, and social security. Gratuity eligibility after just one year, instead of five. Equal wages as permanent staff, increasing income and protection. Promotes direct hiring and reduces excessive contractualization.

2. Gig and platform workers- Gig work, platform work, and aggregators have been defined for the first time. Aggregators must contribute 1-2% of the annual turnover, capped at 5% of the amount paid/payable to gig and platform workers. Aadhar-linked universal account number will make welfare benefits easy to access, fully portable and available across states, regardless of migration.

3. Contract workers- Fixed term employees will increase employability and ensure social security, legal protection like benefits equal to permanent employees. Fixed terms employees will become eligible for gratuity after one year of continuous service. Principal employer will provide health benefits and social security benefits to contract workers. Workers to get free annual health check up

4. Women workers- Gender discrimination legally prohibited. Equal pay for equal work ensured. Women are permitted to work at night shifts and in all types of work, subject to their consent and mandatory safety measures. Mandatory women’s representation in grievance redressal committees.

5. Youth workers- Minimum wages is guaranteed for all workers. All workers to get appointed letter, promoting social security, employment history and formal employment. Worker exploitation by employers is prohibited- payment of wages during leave has been made mandatory.

6. MSME workers- All MSME workers covered under the social security code 2020, eligibility based on employment count. Minimum wage guaranteed for all workers. Workers will have access to facilities such as canteens, drinking water, and rest areas. Provisions for standard working hours, double overtime wages, and paid leave.

7. Beedi and cigar workers- Minimum wages available to all. Working hours capped at 8-12 hours per day, 48 hours per week has been capped. Overtime work beyond prescribed hours, to be consent based and pay at least double the normal wage rate. Timely payment of wages ensured.

8. Plantation workers-

They’re now brought under the OSHWC code and the social security code. Labour codes apply to plantations with more than 10 workers or 5 or more hectares. Mandatory safety training on handling, storing, and using chemicals.

There are many more benefits that workers, or employees and as well as the employer gets under the new labour codes.

1. CODES ON WAGES: The first big shift

It applies to every employee, not just those in certain scheduled roles. In these, minimum wages is guaranteed to all and not only to the scheduled employment list. The code on wages, 2019 seeks to simplify, consolidate and rationalize the provisions of 4 existing laws- the payment of wages act, 1936; the minimum wages act 1948; the payment of bonus act 1965; and the equal remuneration act 1976. It aims to strengthen workers’ rights while promoting simplicity and uniformity in wage-related compliance for employers.

2. THE INDUSTRAIL RELATIONS CODE 2020,

The industrial relations code has been prepared after amalgamating, simplifying and rationalizing the relevant provisions of the trade unions act 1926, the industrial employment act 1946, and the industrial disputes act 1947. The code acknowledges the fact that survival of worker depends upon survival of industry. In this backdrop it simplifies laws related to trade unions, conditions of employment in industrial establishment or undertaking, investigation and settlement of industrial disputes.

3. THE CODE ON SOCIAL SECURITY,2020.

The code on social security incorporates existing nine social security acts viz, the employee’s compensation act 1923, the employees state insurance act 1948, the employees’ provident funds and miscellaneous provisions act, 1952. The employment exchanges act 1959; the maternity benefit act 1961; the payment of gratuity act,1972; the cine workers welfare act, 1981; the building and other construction workers welfare cess act 1996; and the unorganized workers social security act 2008. The code extends social security to all workers- including unorganized, gig and platform workers covering life, health, maternity and provident fund benefits while introducing digital systems and facilitator-based compliance for greater efficiency.

4. THE OCCUPATIONAL SAFETY, HEALTH, AND WORKING CONDITIONS CODE 2020

The code has been drafted after amalgamation, simplification and rationalization of the relevant provisions of the 13 Central Labour Acts- The Factories Act, 1948; The Plantations Labour Act, 1951; The Mines Act, 1952; The Working Journalists and other Newspaper Employees (Conditions of Service and Miscellaneous Provisions) Act, 1955; The Working Journalists (Fixation of Rates of Wages) Act, 1958; The Motor Transport Workers Act, 1961; The Beedi and Cigar Workers (Conditions of Employment) Act, 1966; The Contract Labour (Regulation and Abolition) Act, 1970;The Sales Promotion Employees (Conditions of Service) Act, 1976; The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979; The Cine-Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981; The Dock Workers (Safety, Health and Welfare) Act, 1986 and; The Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996.