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[Economy] Labour Laws and Industrial Relations in

India- Quick revision note

mrunal.org /2012/09/economy-labour-laws.html
1. Labour Laws and Industrial relations
2. Constitution of India: workers provisions
3. Laws for Female workers
1. Maternity Benefit Act
2. Vishaka Case
3. Factories Act
4. Equal Remuneration Act
4. Labor Laws in India
1. Trade Union Act
2. Minimum Wages Act
3. Strikes and lockouts
4. Industrial Disputes Act (IDA)
5. Labour Courts
6. Industrial Tribunals
7. Workmans Compensation Act
8. Employees State Insurance Act
9. Retirement Benefits
10. Emigration Act
6. International Labour Organisation (ILO)
7. Ministry of Labour in India
1. Important OFFICES/institutes with Labour Ministry
2. Work done by offices with labour ministry
3. Chief Labour Commissioner
4. Labour Bureau
5. Welfare Commissioners
6. Employees State Insurance Corporation (ESIC)
7. Employees Provident Fund Organisation (EPFO)
8. Board of Arbitration
8. MCQs for APFC/UPSC Exam

Labour Laws and Industrial relations

Industrial relation = interactions between employers (businessmen/bosses), employees

(workers) and the government (which makes the laws for them).
Labour laws=made by Government, they deal with a workers well being in the office: for
example working hours, hiring and firing, maternity leave, pension, union formation etc.
Constitution of India: workers provisions

Provision/how is it related?


discrimination on religion, race,caste, sex and place of birth.


Equal opportunity in Government jobs.


The right to form union.But it does not carry with it the right to achieve every object. Thus
the trade unions have no fundamental to right strike. (it is only a legal right under the
industrial dispute Act)


right to live is not merely confined to physical existence but it includes within its ambit the
right to live with human dignity.


prohibits bonded / forced labour


Child labour


Those working in armed forces etc cannot enjoy all the fundamental rights.


Free legal aid, health of workers


Social security during unemployment.


humane conditions of work + Maternity Relief.

Laws for Female workers

Maternity Benefit Act
women in the labour force who have been employed for 160 days in a year to provide leave with pay
and medical benefit.
Vishaka Case
SC gave the guidelines regarding protection of women @work places against sexual harassment.
sexual harassment of working women amounts to violation of rights of gender equality
judgment also laid down the definition of sexual harassment, the preventive steps, the complaint
mechanism, and the need for creating awareness of the rights of women workers.
Factories Act
Employer must provide crches in factories where more than 25 women are employed
Equal Remuneration Act
for the payment of equal remuneration to men and women workers for same or similar nature of work

Labor Laws in India

Here is the list of all Labor laws in India, Click On this image.

Trade Union Act

gives immunity to the trade unions against certain forms of civil and criminal action.
Provides for registration, internal democracy, a role for outsiders.
permission for raising a political fund subject to separate accounting requirements.
right to register a trade union however does not mean that the employer must recognise the
union there is in fact no law which provides for recognition of trade unions and consequently
no legal compulsion for employers, even in the organised sector, to enter into collective

Minimum Wages Act

This law governs the methods to fix minimum wages in scheduled industries (which may vary
from state to state).

Strikes and lockouts

Workers have the right to strike, even without giving notice to their boss, unless it involves a
public utility service.
Employers (bosses) have the right to lockout, subject to the same conditions as a strike.
To solve the strike/lockout, both parties can engage with negotiation/talks.

If that fails, they can go to government appointed conciliation officer whose intervention may
produce a settlement, which is then registered in the labour department and becomes binding
on all parties.
If that fails then parties can go for arbitration (private judge) or labour court.

Industrial Disputes Act (IDA)

A company with more than 100 workers must get Governments permission before mass layoffs
or closing down business.
Employer cannot change the existing service conditions / salary of a worker unilaterally without
giving a notice of 21 days to the workers and the union.
A permanent worker can be removed from service only for proven misconduct or for habitual
absence due to ill health, alcoholism and the like, or on attaining retirement age.
In other words the doctrine of hire and fire is not approved within the existing legal framework.
An employee can challenge the dismissal order in the labour court.
Industrial Disputes Act provides for setting up of Labour courts and Industrial tribunals.

Labour Courts
Labour Courts deal with matters pertaining to
1. discharge and dismissal of workmen
2. legality of strikes of lock outs etc.

Industrial Tribunals
Industrial Tribunals deal with collective disputes such as
1. wages,
2. hours of work,
3. leave, retrenchment,
4. closure of a company
5. + all matters which come under the jurisdiction of Labour Courts.
A settlement arrived at in the course of labour court/ industrial tribunals is binding on all parties to an
industrial dispute.

Workmans Compensation Act

covers all cases of accident arising out of and in the course of employment and the rate of
The injured person, or in case of death the dependent, can claim the compensation.
This law applies to the unorganised sectors and to those in the organised sectors who are not
covered by the Employees State Insurance Scheme

Employees State Insurance Act

provides a scheme under which the employer and the employee must contribute a certain
percentage of the monthly wage to the Insurance Corporation and itll run hospitals for them.

Retirement Benefits
There are two main types of retirement benefit generally available to workers.
Payment of Gratuity Act

Provident Fund Act

a worker who has put in not less

than five years of work is entitled to
a lump sum payment equal to 15
days wages for every completed
year of service.

scheme both the employee and the employer

make an equal contribution into a national fund.
The current rate of contribution is 12 percent of
the wage including a small percentage towards
family pension.

Every month the employer is

expected to contribute the required
money into a separate fund to
enable this payment on retirement
or termination of employment.

This contribution also attracts an interest,

currently 9.5 percent per annum, and the
accumulated amount is paid on retirement to the
employee along with the interest that has
The employee is allowed to draw many types of
loan from the fund such as for house
construction, marriage of children, and
education etc. As a result very little is available
at the time of retirement.

Emigration Act
regulates the emigration of Indian workers for jobs abroad.
no agency can undertake the recruitment of Indian workers with foreign employers without
possessing a registration certificate issued by the Protector General of Emigrants.

those who have not been able to organise themselves in pursuit of common objectives on
account of constraints like casual nature of employment, ignorance and illiteracy.
They donot enjoy sick leaves, maternity benefit, provident fund etc. facilities enjoyed by
organized labourers.
But Government is making various schemes to help them out for example Aam Admi Bima
Yojana, New Pension Scheme (N.P.S) etc.
91% of the working population is in the unorganised sector
Example of unorganized labourers:
1. small and marginal farmers
2. landless agricultural labourers
3. fishermen
4. building construction workers
5. leather workers
6. handloom workers
7. weavers
8. rural craftsmen
9. salt workers

10. workers in brick kilns and stone quarries

11. midwives
12. domestic workers
13. barbers
14. newspaper,vegetable and fruit vendors

International Labour Organisation (ILO)

Established in 1919
HQ- Geneva, Switzerland
India is the founding member of ILO
International Labour Organization has a tripartite governing structure, (usually with a ratio of
1. representing governments,
2. employers
3. workers

Ministry of Labour
Important OFFICES/institutes with Labour Ministry
1. Chief Labour Commissioner
2. Directorate General, Mines Safety
3. Welfare Commissioners
4. Board of Arbitration
5. Employees State Insurance Corporation (ESIC)
6. Employees Provident Fund Organisation (EPFO)
7. V.V. Giri National Labour Institute, NOIDA [He was the 4 th President of India and wrote books on
labour related matters.]
[^This list not exhaustive, Im only listing the important ones for MCQ] Work done by offices with
labour ministry
[again list not exhaustive, just providing the facts important for MCQ] Chief Labour Commissioner
Prevention, investigation and settlement of industrial disputes in the Central sphere.
Enforcement of awards and settlements.
Implementation of labour laws in industries
Verification of membership of Unions affiliated to the Central Organisations of Workers
Fixation and revision of minimum wages by notifications under the Minimum Wages Act, 1948
Labour Bureau
Compilation and publication of the Consumer Price Index Numbers for industrial and
agricultural workers
Welfare Commissioners
Providing welfare facilities to the workers employed in the mica, limestone, dolomite, iron ore,

manganese and chrome ore mines and in the beedi and cinema industries.
Employees State Insurance Corporation (ESIC)
Implementation of Employees State Insurance Act, 1948, which provides for medical care and
treatment to insured persons and their families.
Providing assistance in terms of benefits during sickness and maternity, compensation for
employment injury, pensions for dependants on the death of workers due to employment injury,
etc. to employees covered under the ESIC Act.
Employees Provident Fund Organisation (EPFO)
Administration of Employees Provident Funds
Administration of Employees Pension Scheme
Board of Arbitration
Compulsory arbitration of disputes between the Government employees and the Government on
pay and allowances, weekly hours of work and leave.


Which of the following statements are correct?
1. Supreme court laid down the guidelines against Ragging in Vishaka Case.
2. Humane conditions of work and Maternity Relief are fundamental rights enshrined in Indian
3. Workers have the legal right to strike, even without giving notice to their boss in any industry.
4. Consumer Price Index Numbers for industrial and agricultural workers are published by NSSO
5. Only Sovereign nations can become members of Governing council of ILO.
6. In Gratuity fund, both Employer and Employee have to contribute.
7. In Provident Fund Act, only Employer (boss) has to contribute.
8. In Employees State Insurance, only Employer has to contribute.
9. The office of Directorate General of Mines Safety falls under the Administrative jurisdiction of
Coal Ministry.
10. EPFO and ESIC are autonomous institutions under Finance Ministry.