Labour & Industrial Laws

Session - 2
 The Role of State

The role of government in IR depends on its

Ideological orientation
Political orientation
Socio-economic orientation
 Necessity of State Intervention in India

Guardian of people and economy of the

country
Labour organisations were weak
Constitutional Provisions
DPSP
Union list, State list and Concurrent List
First Phase: (1947 - 66)
Import-Substitution Industrialization
National capitalism
Formation of large employment employment-
intensive public enterprises.
Relative industrial peace.
Growth of public sector unionism.
Government controlled & regulated IR.
Second Phase: (1967-80)

Economic stagnation
Considerable slowdown in employment growth & declining
real wages.
Crisis in IR system: massive strikes & industrial conflict,
multiple unionism & decline in strength.
Third Phase: (1981-1991)

Initial domestic economic liberalization

Regional variation in economic development
increases.
Rise of independent enterprise unionism
 State Intervention in IR

Prevention of exploitation
Prescribing minimum labour standards
Health, welfare and safety of workers
Social security of employees
Industrial peace and harmony
Uninterrupted supply of goods and services
Regulation of employment relationship
Timely investigation and settlement of disputes
Economic growth and development
The role of the state is manifested through three main modes

Policy formulation

Legislation

Administration

Enforced through
Policy formulation Legislation
administrative system
Guiding principle of legal regulations is enshrined in the Indian
Constitution which envisages
the attainment of humane and decent employment as an
important goal of State policy

Art 39 securing to the citizens an adequate means of livelihood; equal

pay for equal work for both women and men; ensuring that the health
and safety of workers is protected and a living wage for all workers.
.
 Principles of Labour Legislations and
Industrial Jurisprudence
Social Justice
Social Equity
International Uniformity
National Economy
 Labour Legislations in India

Employment The
The Industrial The Trade
security and Industrial
Employment ( Standing Union Act,
industrial Disputes Act ,
Orders) Act, 1946 1926
relations 1947
Income security
Payment of The Payment
i.e., wages and
Wages Act, of Bonus
other
1936 Act, 1965
remunerations
Work security i.e.,
The
working conditions,
Factories
safety and
Act, 1948
occupational health
Employees
Social security Workmen
Provident Gratuity Act, Maternity
and labour Compensation
Benefit Act
Fund Act, 1952 Act
welfare
1948
 Industrial Disputes Act, 1947
Purpose To minimize the conflict between
labour and management and to ensure, as far a
possible economic and social justice.
Main Objects:
To secure Industrial Peace
To ameliorate the condition of working in an
industry
 Applicability
Extends to whole of India
Applies to every industrial establishment carrying on
any business, trade, manufacture or distribution of goods and
services irrespective of the number of workmen employed therein.
Every person employed in an establishment for hire or reward
including contract labour, apprentices and part-time employees to
do any manual, clerical, skilled, unskilled, technical, operational or
supervisory work, is covered by the act.
Does not apply to persons mainly in managerial or administrative
capacity, persons engaged in a supervisory capacity and drawing >
10,000 p.M or executing managerial functions
 What is an Industry (Section 2J)
The definition of Industry under the Act is taken from
the Supreme Court's judgement in Bangalore water
Supply and Sewerage Board v. A. Rajappa.
Triple Test formulae The organization is Prima Facie an
industry if it is
1. A systematic activity;
2. Organised by co-operation between an employer and
an employee;
3. for the production of goods and services calculated to
satisfy human wants and wishes. ( not spiritual or
pious in nature but inclusive of material things or
services geared to seek celestal bliss)
 What is an Industrial Dispute
Following activities shall be deemed to the
industrial dispute.
Dismissal of workman
Retrenchment of the workman
Termination of workman from his services
Strikes and Lockouts
 The Industrial Employment
(Standing Orders) Act, 1946
Object of the Act:
Employers to define the conditions of
employment under them and make the
conditions known to workmen employed by them
before they accept the employment .

To maintain uniformity in terms and conditions of

employment in respect of workmen belonging to
the same category . The rules made in the regard
to these conditions is called Standing Orders
 Matters to be provided in Standing
Orders under this act
Classification of workmen, e.g., whether permanent, temporary, apprentices,
probationers, or badlis.
Manner of intimating to workmen periods and hours of work, holidays, pay-days
and wage rates.
Shift working, Attendance and late coming.
Conditions of, procedure in applying for, and the authority which may grant leave
and holidays.
Requirement to enter premises by certain gates, an liability to search.
Closing and reporting of sections of the industrial establishment, temporary
stoppages of work and the rights and liabilities of the employer and workmen
arising there from.
Termination of employment, and the notice to be given by employer and
workmen.
Suspension or dismissal for misconduct, and acts or omissions which constitute
misconduct.
 The Trade Union Act, 1926
Trade Unions aim to:-
Secure fair wages for workers and improve their
opportunities for promotion and training.
Safeguard security of tenure and improve their
conditions of service.
Improve working and living conditions of workers.
Facilitate technological advancement by
broadening the understanding of the workers.
 Payment of Wages Act, 1936
Object:
To ensure that wages payable to employed
persons were disbursed by the employers
within the prescribed time limit and that no
deductions other than those authorised by
law were made by them.
 The Payment of Bonus Act, 1965
Applicability and Coverage
Employing 20 or more persons, on the basis of
profits or on the basis of production or productivity
and matters connected there with.
The minimum bonus of 8.33% is payable by every
industry and establishment under section 10 of the
Act.
The maximum bonus that can be paid in any
accounting year shall not exceed 20% of the
salary/wage of an employee under the section 31 A
of the Act.
 The Factories Act, 1948
Objects:
To regulate the working conditions in factories
and to ensure provision of basic minimum
requirements for safety, health and welfare of
workers.
Special provision In no case any women can
be employed between 10 PM and 5 AM
Employees Provident Fund Act, 1948
All establishments employing 20 or more
persons (5(or) more for Cinema Theaters) are
brought under preview of the EPF Act from
the very first date of setup.
The provisions of the Act are applicable on its
own force independently.
Provision 12% Contribution from the
Employee Salary and equal Employer
contribution towards PF Fund.
 Payment of Gratuity Act, 1952
Eligibility for gratuity
An employee who has rendered at least five years of
service becomes entitled to the said benefit.
How does it work?
An employer may offer gratuity out of the
establishments funds or may approach an insurance
company in order to purchase a group gratuity plan.
Calculation of amount of gratuity
Gratuity = Last Drawn Salary 15/26 No. of Years of
Service
 Discussion Point
Caselet : High Court upholds government
notification on gratuity for teachers
Which Principle of Labour Legislation and Industrial Jurisprudence
explains the amendment made by the State to Payment of Gratuity Act
1952?
 Discussion Point
Labour law recast to add more leave to
maternity, gratuity to be made portable
How Principle of Labour Legislation and Industrial Jurisprudence can help
us to understand the proposed changes?