Labour Law Compliance in India: Rules & Concepts

The successive industrial revolutions since the 18^th Century and the worker movements around the world are responsible for the labour laws we have in place today, but the history of labour and compensation for labour and labour law compliance is as old as civilization itself.

It could date back to the time of the Babylonian Civilization and Hammurabi’s code of law or much older to scriptures from Ancient India. But the modern and now accepted employment laws in modern India originated more than a century ago in as early as the 19^th Century. In subsequent years, several laws have been added and amendments made to existing laws too.

What Is Labour Law Compliance?

Labour law compliance in India involves ensuring that the labour laws instituted by the governing body, either centre or state, collective for the tripartite, employees, employers and unions, is accepted and followed. It also ensures that individual labour laws are followed, which safeguard the employee’s rights at the workplace and a better work environment is maintained throughout the duration of work.

What are the Concepts under Labour Law?

There are several concepts under labour law. The most important among them are discussed below with the questions that you must ask for each concept:

Salary

What is the remuneration you are offering an employee? What other benefits does it include? What are the total deductions from it? These questions will help you arrive at an ideal salary for the first important step in labour law compliance.

Work schedules

What is the shift timing in the company? Is it a night shift and how convenient is it for an employee? You must also look at whether the working hours are considered favourable by the employee.

Occupational safety

Occupational safety is also very important in labour law compliance. How safe is the work environment? Are there any hazards that the employees should know about? Also, look at how you can make the work environment safer for employees.

Due notice for resignation

What is the minimum duration an employee must serve as notice period before leaving the company? Why was the employee terminated, if he/she was? You must also look at the policies governing the notice period and the exit interview process itself. All of this will ensure compliance with labour laws in India even when the employee is leaving the company.

Unemployment compensation

Is there any compensation for unemployment in the country and what are the requirements for it? If anyone has been unemployed for a while, what is the compensation due from the government to help keep the search active and how long will the compensation be provided?  

Harassment protection

Are there proper laws in place in the company to help protect against harassment? How do these laws fit in with the laws instituted by the centre and the state? What is the compensation to be provided to the victims of such harassment?

Overtime compensation

Is suitable compensation provided to an employee, in line with this salary and stature, for any work done overtime? How is the quantum of work calculated? Is it pro rata as per the salary provided to the employee?

Maternity benefits

Expectant mothers must be provided the benefits that are due to them. This is another crucial point for compliance with labour laws in India. Have you, as an employer, provided them with the leave and minimum salary that is due to them and for the specified duration? What can you do to better the paternity and maternity benefits that you offer?

And many more…

List of Labour Law Compliances in India and Provisions

• The Employees Compensation Act – 1923 – To compensate employees who got injured or died at the workplace.
• The Trade Unions Act – 1926 – To define laws related to registered trade unions.
• The Payment of Wages Act – 1936 – Applies to industrial workers and the wages that must be due to them.
• The Industrial Employment (Standing Orders) Act – 1946 – Relates to classification of workmen, leave policies and authority etc.
• The Industrial Disputes Act – 1947 – For the investigation and settlement of industrial disputes.
• The Employees State Insurance Corporation Act (ESIC) – 1948 – Employment insurance against injury or sickness.
• The Minimum Wages Act – 1948 – To prevent employee exploitation and to maintain minimum standard of living for each employee.
• The Factories ACT – 1948 – Sets safety standards for workers employed in factories.
• The Employees Provident Funds and Miscellaneous Provision Act (EPF) – 1952 – Special provisions for all employees.
• The Employment Exchange (Compulsory Notification of Vacancies) Act – 1959 – For the compulsory notification of vacancies to employment exchanges.
• Income Tax Act – 1961 – Specifies that tax deductions to be applied for all individuals with an income.
• The Maternity Benefit Act – 1961 – To regulate employment of women who are to conceive and to provide benefits.
• The Apprentices Act- 1961 – Regulates the employment of apprentices in certain industries or trades.
• The Industrial Establishment (N&FH) Act – 1963 – To grant national and festival holidays to employees in industrial establishments.
• The Payment of Bonus Act – 1965 – For the payment of bonus due to an employee as a percentage of the salary.
• The Labour Welfare Fund Act (LWF) – Issued in different states or by different industries in different years to protect labour rights.
• The Contract Labour (Regulation & Abolition) Act (CLRA) – 1970 – To provide habitable housing and other facilities for labour and to prevent exploitation.
• The Payment of Gratuity Act – 1972 – Relates to the payment of gratuity after a period and the maximum amount fixed.
• The Equal Remuneration Act – 1976 – to provide for equal remuneration to men and women, and to prevent discrimination between them.
• The Interstate Migrant Workmen (Regulation of Employment and Conditions of Services) Act – 1979 – To protect the rights of inter-state migrant workmen and to provide suitable conditions for work.
• The Child Labour (Prohibition & Regulation Act) – 1986 – To prevent child labour in any industry.
• Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act – 2013 – To prevent sexual harassment at the workplace for women.
• Shops and Commercial Establishments Act – Issued separately by each state governing the licensing and operations of shops and other establishments.

Are You Looking for a Labour Law Advisor?

If there is something a business can’t do without, then that’s its people. To ensure that the people are all happy and work goes on without any interruptions, the rights of individuals must be safeguarded at the workplace. This is governed by labour laws in the country of employment and how well they are implemented in your business. Labour law compliance needn’t be difficult to manage.

Are you looking for a labour law advisor? Talk to Alp Consulting, an HR partner with over 25 years of experience in staffing and recruitment, payroll and compliance and bid your labour law compliance worries goodbye.

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