Profile Facts: Indian labour laws

Indian labour law refers to laws regulating employment in India. There over fifty national laws and many more state-level laws.

Traditionally Indian governments at federal and state level have sought to ensure a high degree of protection for workers. So for instance, a permanent worker can be terminated only for proven misconduct or for habitual absence. In Uttam Nakate case, the Bombay High Court held that dismissing an employee for repeated sleeping on the factory floor was illegal - a decision which was overturned by the Supreme Court of India. Moreover, it took two decades to complete the legal process. In 2008, the World Bank has criticised the complexity, lack of modernisation and flexibility in Indian regulations. India can boast of a quarter of the world's workforce by 2025, provided the country harnesses the potential of its young and productive population. However, the demographic dividend would become a disaster if India does not radically overhaul the labour ecosystem to enhance the productivity of the growing workforce. If reforms are not initiated, it is expected that much of the country's demographic dividend would occur in states with backward labour market ecosystems. It also ranked that states on the basis of improvement in their labour ecosystems in terms of state efforts in various areas like education and training, infrastructure, governance and the legal/regulatory structure.

Collective labour law

The Industrial Disputes Act (1947) requires companies employing more than 100 workers to seek government approval before they can fire employees or close down. In practice, permissions for firing employees are rarely granted.

Trade Unions Act 1926

Provisions of the Factories Act, 1948

Individual labour law

All India Organisation of Employers points out that there are more than 55 central labour laws and over 100 state labour laws.

The Contract Labour Act (1970) prohibits companies from hiring temporary workers. Women are not permitted to work night shifts.

Minimum Wages Act 1948

Weekly Holidays Act 1942

Beedi and Cigar Workers Act 1966

The Payment of Wages Act, 1936

The Workmen’s Compensation Act, 1923

The Factories Act, 1948

Criticism

Many observers have argued that India's labour laws should be reformed. The laws have constrained the growth of the formal manufacturing sector. According to a World Bank report in 2008, heavy reform would be desirable. The executive summary stated,

“ India’s labor regulations - among the most restrictive and complex in the world - have constrained the growth of the formal manufacturing sector where these laws have their widest application. Better designed labor regulations can attract more labor- intensive investment and create jobs for India’s unemployed millions and those trapped in poor quality jobs. Given the country’s momentum of growth, the window of opportunity must not be lost for improving the job prospects for the 80 million new entrants who are expected to join the work force over the next decade. ”

Prime Minister Manmohan Singh has said that new labour laws are needed.

(source:wikipedia)

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Indian Factories Act, 1948,

Laws - Factories Act, 1948

The Minimum Wages Act, 1948

Bare Act - The Minimum Wages Act, 1948

The Payment of Wages Act, 1936

Bare Act - The Payment of Wages Act, 1936

The Payment of Bonus Act, 1965

Bare Act - The Payment of Bonus Act, 1965

The Payment of Gratuity Act, 1972