Indian labour law
Encyclopedia
Indian labour law refers to laws regulating employment in India
. There are over fifty national laws and many more state-level laws.
Traditionally Indian governments at federal and state level have sought to ensure a high degree of protection for workers. So for instance, a permanent worker can be terminated only for proven misconduct or for habitual absence. In Uttam Nakate
case, the Bombay High Court held that dismissing an employee for repeated sleeping on the factory floor was illegal - a decision which was overturned by the Supreme Court of India. Moreover, it took two decades to complete the legal process. In 2008, the World Bank
has criticised the complexity, lack of modernisation and flexibility in Indian regulations. India can boast of a quarter of the world's workforce by 2025, provided the country harnesses the potential of its young and productive population. However, the demographic dividend
would become a disaster if India does not radically overhaul the labour ecosystem to enhance the productivity of the growing workforce. If reforms are not initiated, it is expected that much of the country's demographic dividend would occur in states with backward labour market ecosystems. It also ranked that states on the basis of improvement in their labour ecosystems in terms of state efforts in various areas like education and training, infrastructure, governance and the legal/regulatory structure.
According to a World Bank
report in 2008, heavy reform would be desirable. The executive summary stated,
Prime Minister Manmohan Singh
has said that new labour laws are needed.
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
. There are over fifty national laws and many more state-level laws.
Traditionally Indian governments at federal and state level have sought to ensure a high degree of protection for workers. So for instance, a permanent worker can be terminated only for proven misconduct or for habitual absence. In Uttam Nakate
Uttam Nakate
Uttam was a Helper. He was caught napping on the job, yet the court did not grant the company the right to fire him.His case highlights the problems of Indian labour laws. After five-month-long disciplinary hearings, the company fired him in January 1984...
case, the Bombay High Court held that dismissing an employee for repeated sleeping on the factory floor was illegal - a decision which was overturned by the Supreme Court of India. Moreover, it took two decades to complete the legal process. In 2008, the World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
has criticised the complexity, lack of modernisation and flexibility in Indian regulations. India can boast of a quarter of the world's workforce by 2025, provided the country harnesses the potential of its young and productive population. However, the demographic dividend
Demographic dividend
The demographic dividend is a rise in the rate of economic growth due to a rising share of working age people in a population. This usually occurs late in the demographic transition when the fertility rate falls and the youth dependency rate declines. During this demographic window of opportunity,...
would become a disaster if India does not radically overhaul the labour ecosystem to enhance the productivity of the growing workforce. If reforms are not initiated, it is expected that much of the country's demographic dividend would occur in states with backward labour market ecosystems. It also ranked that states on the basis of improvement in their labour ecosystems in terms of state efforts in various areas like education and training, infrastructure, governance and the legal/regulatory structure.
Collective labour law
- The Industrial Disputes ActIndustrial Disputes ActThe Industrial Disputes Act, 1947 extends to the whole of India. It came into force April 1, 1947.- Objectives :The objective of the Industrial Disputes Act is to secure industrial peace and harmony by providing machinery and procedure for the investigation and settlement of industrial disputes by...
(1947) requires companies employing more than 100 workers to seek government approval before they can fire employees or close down. In practice, permissions for firing employees are rarely granted. - Trade Unions Act 1926
- Provisions of the Factories Act, 1948
Individual labour law
All India Organisation of Employers points out that there are more than 55 central labour laws and over 100 state labour laws.- The Contract Labour Act (1970) prohibits companies from hiring temporary workers. Women are not permitted to work night shifts.
- Minimum Wages Act 1948
- Weekly Holidays Act 1942
- Beedi and Cigar Workers Act 1966
- The Payment of Wages Act, 1936
- The Workmen’s Compensation Act, 1923
- The Factories Act, 1948
Criticism
Many observers have argued that India's labour laws should be reformed. The laws have constrained the growth of the formal manufacturing sector.According to a World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
report in 2008, heavy reform would be desirable. The executive summary stated,
Prime Minister Manmohan Singh
Manmohan Singh
Manmohan Singh is the 13th and current Prime Minister of India. He is the only Prime Minister since Jawaharlal Nehru to return to power after completing a full five-year term. A Sikh, he is the first non-Hindu to occupy the office. Singh is also the 7th Prime Minister belonging to the Indian...
has said that new labour laws are needed.