Employees Relations and Labour Enactments

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Industrial Relations &

Labour Enactments


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The history of labour legislation in India isnaturally interwoven with the history ofBritish colonialism.

This was obviously labour legislation inorder to protect the interests of British

In the beginning it was difficult to get

enough regular Indian workers to runBritish establishments and hence laws forindenturing workers became necessary.


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It is well known that Indian textile goodsoffered stiff competition to British textiles inthe export market and hence in order to

make India labour costlier the FactoriesAct was first introduced in 1883


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Thus we received the first stipulation ofeight hours of work, the abolition of childlabour, and the restriction of women in

night employment, and the introduction ofovertime wages for work beyond eighthours. While the impact of this measure

was clearly welfarist the real motivationwas undoubtedly protectionist


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To date, India has ratified 39 InternationalLabour Organisation (ILO) conventions ofwhich 37 are in force. Of the ILOs eight

fundamental conventions, India hasratified four Forced Labour 1930,Abolition of Forced Labour 1957, Equal

Remuneration 1951, and Discrimination(employment and occupation) 1958.


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The organised and the

unorganised

many rights, benefits, and practices, which arepopularly recognised today as legitimate rightsof the workers, are those that have accrued as a

result of the struggles carried out by the earliergeneration of workers.

The attempt, prevalent in some circles to pit onesection of workers against the others, must

therefore be carefully understood and deservesto be rejected outright.


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Trade unionism and the Trade

Union Act 1926

There are almost ten major central unionorganisations of workers based ondifferent political ideologies

The first central trade union organisation inIndia was the All India Trade UnionCongress (AITUC) in 1920


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The right to register a trade union howeverdoes not mean that the employer mustrecognise the union there is in fact no

law which provides for recognition of tradeunions and consequently no legalcompulsion for employers, even in the

organised sector, to enter into collectivebargaining.


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Wage determination in the un

organised sector

For the unorganised sector the mostuseful instrument is the Minimum WagesAct 1948

This law governs the methods to fixminimum wages in scheduled industries(which may vary from state to state) by

using either a committee method or anotification method.


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In practice unfortunately, the minimumwage is so low that in many industriesthere is erosion of real wage despite

revision of the minimum wageoccasionally.

A feeble indexation system has now been

introduced in a few states only.


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Collective bargaining in the

organised sector

An important factor that is not much recognised,but which still prevails in many organised sectorunits is fixing and revising wages through

collective bargaining. The course of collective bargaining was

influenced in 1948 by the recommendations ofthe Fair Wage Committee that reported that

three levels of wages exist minimum, fair, andliving


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the fifteenth Indian Labour Conference, atripartite body, met in 1954 and defined preciselywhat the needs-based minimum wage was and

how it could be quantified using a balanced dietchart.

It is now the law, that a thirteenth month of wagemust be paid as a deferred wage to all those

covered by the Payment of Bonus Act. Theminimum bonus payable is 8.33 percent and themaximum is 20 percent of the annual wage


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Strikes and lockouts

Workers have the right to strike, evenwithout notice unless it involves a publicutility service; employers have the right to

lockout, subject to the same conditions asa strike.

Conciliation, arbitration, and

adjudication


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Colonial dispute settlement

machinery

The framework of this legislation, which is theprinciple legislation dealing with core labourissues, is of colonial origin.

This law originated firstly in the Trade DisputesAct 1929, introduced by the British, when therewas a spate of strikes and huge loss of persondays and secondly through Rule 81A of the

Defence of India Rules 1942, when the Britishjoined the war efforts and wanted to maintainwartime supplies to the allied forces.


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Interestingly the interim government on theeve of formal independence retained thisframework by enacting the IDA, which still

remains on the statute book.


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Developments after

independence

The original colonial legislation underwentsubstantial modification in the post-colonial era because independent India

called for a clear partnership betweenlabour and capital.


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The content of this partnership was unanimouslyapproved in a tripartite conference in December1947 in which it was agreed that labour would

be given a fair wage and fair working conditionsand in return capital would receive the fullest co-operation of labour for uninterrupted productionand higher productivity as part of the strategy for

national economic development and that allconcerned would observe a truce period of threeyears free from strikes and lockouts.


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Regulation of job losses

Under the present law any industrialestablishment employing more than 100 workersmust make an application to the Government

seeking permission before resorting to lay-off,retrenchment, or closure

employers resorting to any of the said forms ofcreating job losses, is acting illegally and

workers are entitled to receive wages for theperiod of illegality


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The Reserve Bank of India commissioned astudy into the causes of sickness in Indian

industry and they reported cryptically, Sickness

in India is a profitable business This chapter in the IDA, which has been

identified as offering high rigidity in the area oflabour redundancy, has been targeted for

change under globalisation and liberalisation.


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Protection of service conditions

A feature of the IDA is the stipulation thatexisting service conditions cannot be unilaterallyaltered without giving a notice of 21 days to the

workers and the union Similarly if an industrial dispute is pending

before an authority under the IDA, then theprevious service conditions in respect of that

dispute cannot be altered to the disadvantage ofthe workers without prior permission of theauthority concerned.


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Removal from service

A permanent worker can be removed fromservice only for proven misconduct or forhabitual absence due to ill health,

alcoholism and the like, or on attainingretirement age.

In other words the doctrine of hire and fire

is not approved within the existing legalframework


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Phase between organised and

unorganised

We are already witnessing a reduction inthe organised labour force and anincrease in the ranks of the unorganised.

The above law is a kind of inter-phase inthe process of regulating the transitionfrom regular employment to irregular

employment.


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Employment injury, health, andmaternity benefit

Retirement benefit


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The Ministry of Labour has theresponsibility to protect and safeguard theinterests of workers in general and those

constituting the deprived and the marginalclasses of society in particular with regardto the creation of a healthy work

environment for higher production andproductivity.

Employees Relations and Labour Enactments

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