Awareness of labour laws at

shop-floor level in SMEs

INTRODUCTION
SMEs have important role to play in the growth of
Indian economy.
SME units would be able to focus on business and
avoid labour problems only when there is good
understanding of the existing labour laws among the
workers as well as the employers.
The ever-changing scenario of the social, economic
and political environment, make the legal framework
complex and very dynamic.

INTRODUCTION TO
ORGANIZATIONS
ARB BEARINGS LTD.
With a tremendous focus on manufacturing quality
bearings and restrains on cost, ARB Bearings Ltd. is
among India's prominent engineering companies.

SHAKTI MINERALS AND CHEMICALS

Shakti was started in 1982 with a trading house of
minerals in Delhi. This was followed by a period of
sustained expansion, diversification and growth.

 CHIRAG MARKETING
It is one of the well-known manufacturer and supplier of
a huge array of Outdoor and Indoor Advertising,
Promotional Items and Exhibition Material.

SR CREATIONS
It was founded in 2000 in Rohtak, when manufacturing
of polypropylene woven circular sacks just started in
India. Its a manufacturer and exporter of much kind of
yarns and threads and fancy laces. They export their
finished products mainly to USA and Canada.

OBJECTIVES
Gauging the level of awareness of the labour
laws among the workers of SMEs.
To study the benefits extracted by the workers
from the existing legal framework governing
labour, employment and social security.
The project also aims at finding out the level of
satisfaction of the workers on the basis of
benefits provided by the employers.

RESEARCH METHODOLGY
PRIMARY DATA:
o Close-ended questionnaire
o No. of Questions: 15
SECONDARY DATA:
Official websites of the organizations
SAMPLE SPACE:
100 workers/labours of 4 SMEs

QUESTION-WISE ANALYSIS

1. Are you a Contractual, Temporary or

Permanent worker?
40
35
30

NO. OF RESPONSES

25

Contractu
al

20

Perm anen
t

12%

15
10

88%

5
0

COMPANY

COMPANY

CONTRACTUAL TEMPORARY

PERMANENT

ARB Bearings

37

SR Creations

20

Chirag
Marketing

12

Shakti
Minerals

19

ANALYSIS
Survey shows that there were majorly two
classes of workers- contractual and permanent.
Main reason of having contract labours was
meeting the rise in demand.
There might be a possibility that some
temporary workers were told that they were
permanent but were actually not legally
documented(temporary).

2. How many hours do you work in a day?

40

COMPANY

8
hrs.

More
than 8
hrs.

ARB
Bearings

13

27

SR Creations

20

Chirag Mktg.

15

Shakti
Minerals

19

35
30
25
20
No. of respondants.

15
10
5
0

34%
66%
Com panies

8 Hrs.
More than 8 hrs.

ANALYSIS
66% of workers said they work for more than 8
hours in a day.
According to the Factories Act,1948 (Section
51); a worker cannot be employed for more than
48 hours in a week and the total period of work
inclusive of rest interval cannot be more than 10.5
hours.
It can adversely hamper their productivity due to
the imbalance between personal and working life.

3. Do you get proper overtime benefits?

COMPANY

YES

NO

ARB Bearings 32

SR Creations

11

Chirag Mktg.

15

Shakti
Minerals

17

40
35
30
25
20
No.of respondants

15
10
5
0

40%
Com panies

60%

yes
no

ANALYSIS
60% of the workers said they were paid overtime benefits.
According to the Factories Act,1948 (Section 51); if a
worker works beyond 9 hours a day or 48 hours a week,
overtime wages being paid should be double the rate of wages.
However, there might be a possibility for that the companies
are not paying according to this law and the workers are
unaware of this.
Also, the Act states that the total working hours including
overtime should not exceed 60 in a week and total overtime
hours in a quarter should not exceed 50. We cannot comment
how many workers are aware of this law, and they are satisfied
just because they are being paid more for the overtime.

4. Does your employer pay bonuses

regularly?
COMPANY
YES
40
35
30
25

NO

ARB
Bearings

11

29

SR Creations

13

Chirag Mktg.

10

Shakti
Minerals

17

20
No. of respondants.

15
10
5
0

55%
Com panies

45%

YES
NO

ANALYSIS
45% of the workers said they were paid bonuses regularly.
There might be a possibility that rest 55% were not
satisfied with the amount of bonuses being paid or were
unaware about the provisions of the Payment of Bonus
Act, 1956.
The Payment of Bonus Act, 1965 states that Every
employee receiving salary or wages up to Rs. 10,000 p.m.
and engaged in any kind of work whether skilled,
unskilled, managerial, supervisory etc. is entitled to
bonus for every accounting year who has worked for not
less than 30 days in that year.

5. Did you get proper training regarding

safety precautions to be followed while
COMPANY
YES
NO
performing the job?
40
35
30

ARB Bearings 31

SR Creations

18

Chirag Mktg.

15

Shakti
Minerals

25

25
20
No. of respondants

15
10
5

.
iM
in

er

al

M
kt
g
g

26%

Sh
a

kt

ra
Ch
i

at
Cr
e
SR

RB

Be
a

ri

io

ng

ns

Com panies

74%

ANALYSIS
81% of the workers were aware about whom to
contact in case of any grievance.
This shows that grievance handling is given
due importance by the employers in recent
times.
Rest 19% of the workers might be new to the
organizations and were not clear about the
redressal process.

6. Do you know whom to contact in case

of any problem or grievances?
40
35
30

COMPANY

YES

NO

ARB Bearings 30

10

SR Creations

11

Chirag Mktg.

15

Shakti
Minerals

25

25
No. of respondents

20
15
10

YES
NO

5
0
ARB Bearings
Company

19%
81%

ANALYSIS
74% of the workers said they were given the
training regarding safety precautions.
This shows that safety of the workers is duly
taken care of and considered important for the
organizations productivity.
The Factories Act, 1948 (Section21-41); lay
down the rules for the purpose of securing the
safety of workers. For example, section 22 states
about the work on or near machinery in motion.

7. Do you get proper medical leave and

benefits?
COMPANY
YES
NO
40

ARB Bearings 35

SR Creations

20

Chirag Mktg.

15

Shakti
Minerals

23

35
30
25
20
No. of respondants

15
10
5
0

7%
93%
Com panies

YES
NO

ANALYSIS
93% of the sample said they are getting adequate
medical leaves and benefits by their employers.
According to Employees state Insurance Act,
1948, insured persons and their families are entitled
to medical and cash benefits. The employees
registered under the scheme are entitled to medical
treatment for themselves and their dependents, and
maternity benefits in case of women employees.
Today, most of the SMEs have tie ups with
dispensaries and hospitals to provide cash less service
to their employees.

8. Do you get proper maternity leave and

benefits?
COMPANY
YES
NO
40

ARB Bearings N/A

N/A

SR Creations

N/A

N/A

Chirag Mktg.

N/A

N/A

Shakti
Minerals

N/A

N/A

35
30
25
20
15
10

N/A
NO
Y ES

5
0

Y es
No
N/A

ANALYSIS
Data from all organizations indicate that the
maternity policies/benefits are not applicable in
any of them. This is because neither of the
organizations had female workers at the shop
floor level.
The organizations need to maintain an optimum
level of gender diversity among workers in order
to set up a healthy work environment.

9. Do you get proper compensation and

treatment in case of a mishap?
40

COMPANY

YES

NO

35

ARB Bearings 36

SR Creations

16

Chirag Mktg.

15

Shakti
Minerals

25

30
25
20
No. of respondants

15
10
5
0

35%
65%
Com panies

YES
NO

ANALYSIS
65% of the workers under study responded that
proper compensation in case of any casualty
occurring at the workplace is provided to the
workers while some of the workers under 35%
said that the compensation was not in
proportion with the level of injury happened and
others said it was totally in incongruity with the
extent of the mishap happened.
Workmens Compensation Act, 1923 was
enacted to help workmen face the hardships
resulting from accidents.

10. Is there a trade union in your

organization?
40

COMPANY

YES

NO

ARB
Bearings

40

SR Creations 13

Chirag Mktg. 0

15

Shakti
Minerals

35
30
25
20
NO. OF RESPONSES

15

No
Yes

10
5

25

22%
COMPANY

78%

Yes
No

ANALYSIS
78% of the workers said they had Trade Union in
their respective organizations.
According to The Trade Unions Act, 1926;
registration of a trade union is not compulsory
but is desirable.
One of the four SMEs did not have any Trade
union but there was a single representative for
the workers.

11. Have there been any strikes/lockouts

in your factory?
40
35

NO. OF RESPONSES

COMPANY

YES

NO

ARB
Bearings

39

30

SR Creations 8

12

25

Chirag Mktg. 0

15

20

Shakti
Minerals

11

15

No
Yes

14

10
5
0

39%
61%
Y es
No
COMPANY

ANALYSIS
According to 61% workers,
strikes/lockouts in the factory.

there

had

been

Strike Work stoppage initiated by employees.

Lockout- work stoppage initiated by an employer
In SR Creations, workers were unaware of what
constitutes a strike and hence, the discrepancy in their
responses.
In Shakti Minerals, all the new employees answered in
negation implying that there has been no strikes/lockouts
in the past 7-8 years and hence a positive development.

12. Were the strikes resolved in full consent to workers and

management?
40

COMPANY YES

NO

N/A

ARB
Bearings

31

SR
Creations

12

Chirag
Mktg.

15

Shakti
Minerals

12

11

35
30
25
20

NO. OF RESPONSES

15
10
5
0

39%

28%
Y es

COMPANY

33%

No
N/A

ANALYSIS
According to 46% workers, strikes were resolved in full
consent to workers.
The rest 54% were not satisfied with the way the issues
were resolved esp. in ARB Bearings Ltd.
However, in Shakti Minerals, almost all the employees
were satisfied with the results thereby, preventing
them to occur in the future.
Section 22 of Industrial Dispute Act, 1947 lays
down conditions and provisions to be followed before
carrying out a strike/lockout.

13. Do you get proper and healthy food in

canteen?
40
35
30

COMPANY

YES

NO

ARB
Bearings

34

25

SR Creations 3

17

Chirag Mktg. 0

15

Shakti
Minerals

25

20
NO. OF RESPONSES

15

No

10

Y es

5
0
37 %
63%
Ye
s
COMPANY

No

ANALYSIS
63% of workers say that they do not get proper healthy
food. One of the SMEs under study encountered a
strike for this very reason. This figure also includes
company where there is no provision of canteen.
As per Factory Act 1948, provision of canteen or a
lunchroom with drinking facility should be made for
workers.
Adequate and healthy food supply ensures that
workers focus on their work and gives them a feeling
that employer takes care of them.

14. Does your factory involve you in other

activities(sports, festivals etc)?
40
35

COMPANY

YES

NO

30

ARB Bearings

40

SR Creations

16

Chirag Mktg.

15

Shakti
Minerals

25

25
20
No. of Respondents

15
10
5

19%

81%
Com panies

YES
NO

ANALYSIS
81% of total respondents said that their
companies involve them in other fun activities.
Fun at work has become an established and
accepted contributor to job satisfaction,
along with task performance and organizational
behavior.
Workers at most of the places were given an
opportunity to engage in various cultural
activities

15. Are you satisfied with your pay?

40

COMPANY

YES

NO

ARB Bearings

11

29

25

SR Creations

13

20

Chirag Mktg.

10

Shakti
Minerals

17

35
30

No. of respondants

15
10
5
0

55%
Com panies

45%

yes
no

ANALYSIS
55% of the workers said they were not satisfied
with their salaries.

Employer should take care that wages should be

comparable with industries of the similar work,
as maximum strikes happen due to the wages.

RECOMMENDATIONS
Proper induction of the workers should be done.
Regularly organize Awareness Sessions about the
policies that exist in the company.
Contributions by Trade Unions.
Inculcating the culture to follow Labour laws and policies.
The organizations need to maintain an optimum level of
gender diversity

CONCLUSION
Following conclusions can be drawn on the basis
of our study:

Some policies exist, but workers are unaware.

Certain important policies dont exist.
Workers ignorance is managements advantage.
The level of awareness of laborers on the shop
floor, regarding various labor laws and policies
pertaining to their benefits, is medium.

ANY
QUESTIONS