Labour Laws in India: A Perspective
By: Civis Vote
Tags: Legal, Policy, Interview, India, Labour Law

India, with its diverse demographic and evolving socio-economic landscape has seen the emergence of a diverse nature of workforce as well. From the organised to the unorganised sector, over the years there have been changes to the way labour and employment in India is perceived. This has led to several amendments to existing employment laws as well as emergence of new laws.

With an intent to understand these laws better, Sameeksha Vaishnava, a law student at the BML Munjal University and a volunteer at Civis, had a conversation with Arya Tripathy, a Business lawyer with focused practice in General Corporate, M&A, Employment and Data protection & Privacy laws, for her perspective on the changing landscape of Indian labour laws.

Photo Courtesy: Arya Tripathy

Dive into this interview to understand the what, why and how of India’s changing labour law landscape!

SV: How many labour laws exist in India today, compared to even 10 years ago?

AT: Labour law is a vast domain of law and it is difficult to say how many labour laws can apply to an organisation. When a matter is raised, the Central and State governments can enact laws, wherein each State can pass its own labour laws. If we compare to the previous laws then we can see that the laws which are enacted in recent years are nothing but the extension of laws which were made in the late 1940s. After independence, many laws were made and till this date, more clauses are added in these laws and in some cases these laws are also amended.

SV: Why are the labour laws changing?

AT: The major reason for changes in labour laws is due to the multiplicity of laws and difficulties arising to comply with these laws, from the standpoint of the Central law. In the year 2002, a 1700-page analysis was made on the changing labour laws wherein laws were classified based on their underlying theme. Labour laws are thus classified differently into various themes such as wages, social security, occupational safety and health, trade unions and industrial disputes. In recent times, a lot of amendments have taken place in these categories of laws.

In 2017, tangible steps were taken wherein 4 codes were created, under which these laws could be classified. For some of the laws, bills were enacted in the year 2020. There were in total 35 prominent central legislations and 13 more laws on occupational safety, 8 laws on social security and 3 new laws on industrial disputes.

All these laws were notified but were not made effective. The main reason that these laws were not effective were because each law is governed with rules and there was absence of rules in these areas of laws. Also, an appropriate government (At the Central and State levels) is needed in order to implement a law. A draft set of rules are usually suggested by the central government but the state governments continue to do their own tweaks. There was no clear consultation process and no time frame was given in order to implement these laws.

SV: Which is the new set of workforce that comes under the ambit of labour laws? Is there enough provision within the laws to account for a diverse set of workforces?

AT: The new set of workforces includes those working for aggregators such as Uber, Ola, Zomato etc. These companies have to recognize certain new realities that include floor wages, unorganized social security funds,and a new perspective towards gratuity, since the workforce is on a contract basis. In the unorganised sector, there is a clear dearth of laws. This sector does not have recognised trade unions. They do not have specific laws that can safeguard the rights of the unorganised labour force. Owing to changing economic and social landscape, coming up with a new law is not a straight process. The Indian government must undertake regulatory reforms in the emerging labour laws and must include laws related to this new set of workforces.

SV: What is the socio-economic impact on labour laws?

AT: When we look at the socio-economic impacts in the labour laws it is seen that these laws are amended in the favour of the society as a whole in recent years. Taking example of laws related to maternity leave. The Maternity Benefit Act, 1961 was amended in 2017 (Amendment), to enhance/ increase the maternity leave period to 26 weeks which was previously only limited to 12 weeks.

When this impact is observed then we can see that due to ongoing judicial decisions and with recent judgements coming up, the laws also change after the judgements are passed. The honourable Supreme Court of India in the case of Vishaka and ors vs the State of Rajasthan had set a milestone judgement that deals with aspects of sexual harassment of women in the workplace. The Supreme Court formulated the very famous Vishaka guidelines and made it mandatory for both private and public sectors to establish mechanisms to redress sexual harassment complaints. It is still observed that certain organisations do not have equal employment opportnites for members of the transgender community, as also equal remuneration for men and women. Employment laws are supposed to be gender neutral laws. Whenever there is a new wave of social consciousness, the labour laws are expected to provide for it.

SV: Should the States be involved as well when it comes to sanctioning labour laws?

AT: The subject labour falls under the concurrent list of the Indian constitution. Thus, the power is with both central and state governments to make laws regulating labour as well as employment. Each state can pass its own labour laws. For example, Factories Act of 1948 was passed by the central government but each state has its own version of the law. It is not materially different but some specifications change in the laws.

Rarely will there be a conflict between Centre and State; and in such a situation, constitutionally, the Centre supersedes the state. The state government is generally involved in amendments, exemptions or additions concerning the subject “labour” either by introducing a specific statute or by amending the federal statutes within the rights available to these states.

SV: What was the impact of the global pandemic on Indian labour laws?

AT: Due to the outbreak of the pandemic, industries have experienced an unprecedented economic slowdown. This has led industries to take drastic measures such as cutting wages of the employees and laying off people. Most of those impacted include inter state migrant workforce. Since the 1980s, laws that provide for the rights of such a workforce, have been in existence.

Workmen are divided in three categories; namely skilled, unskilled and manual workers. The workmen who have come from another state have to be registered as principal employers and have to be provided with what the laws of that State specify. In India, employment is ‘at will’ i.e. continued employment is not a concept. Although continued full time employment is not guaranteed, the concept of daily wage is prevalent in India. The pandemic has brought focus on these laws.