“Dignity of labor has to be our national duty, it has to be a part of our nature”
India has numerous statutes that protect both employers’ and employees’ rights, covering their duties, liabilities, and responsibilities. However, to benefit from these laws, both parties must be aware of them.
India, with the world’s second-largest workforce and over 1.4 billion people, is a hotspot for global investors seeking growth. Its vast talent pool and consumer base make it ideal for business expansion. However, navigating India’s complex labor landscape is crucial. From minimum wage and working hours to employee benefits and safety, the laws vary across states, making it essential to understand the local regulations before setting up in this dynamic market.
Covid Era- Adapting the new normal
Post-COVID, India’s employment landscape, like global trends, has undergone significant changes. Job disruptions and new work patterns have reshaped employment dynamics. Remote work surged in sectors like IT and BPO, though many employers now prefer a hybrid model. Moonlighting also gained traction, with mixed reactions from employers.
The “India Employment Report 2024” by the International Labour Organization highlights a paradox: while unemployment worsened pre-pandemic, there has been improvement since. With 82% of the workforce in informal jobs, the report stresses the need for targeted private-sector partnerships to address underemployment. The rise of digital technologies underscores the importance of upskilling, leading the Indian government to launch initiatives like Skill India Mission, Pradhan Mantri Kaushal Vikas Yojana, and the National Apprenticeship Promotion Scheme.
To align with the demands of the modern economy, the government has pushed for structured apprenticeship programs, with the Ministry of Skill Development issuing compliance notices and encouraging the use of CSR funds for apprenticeships. Additionally, wage-related litigation, especially over unpaid overtime, is on the rise, and alternative dispute resolution methods, such as arbitration, are increasingly favored for resolving employment disputes.
Case Chronicles: Unraveling the Key Judgments Shaping Labour Laws
M.C. Mehta v. State of Tamil Nadu
In the instant case, Shri MC Mehta invoked Article 32, for violation of fundamental rights of children guaranteed under Article 24. The Court found Sivakasi was the main offender who was employing many child laborers, engaging them in the manufacturing process of matches and fireworks which is qualified as a hazardous industry and held that employing children under the age of 14 years in this industry is prohibited. The Court restated that children below the age of fourteen must not be engaged in any hazardous industry and must ensure all children get free education till the age of 14 years. The Court further also looked at Article 39 (e) which states that the children’s tender age should not be exploited but instead, the opportunities for their healthy growth and development. Therefore, the Court directed the employer Sivakasi must pay a compensation of Rs. 20,000 for violation of the Child Labour (Prohibition and Regulation) Act, 1986.
Workmen of M/S Firestone Tyre and Rubber Co. of India v. Management
In the case of Workmen of M/S Firestone Tyre and Rubber Co. of India v. Management, employees were terminated based on a domestic inquiry. During the case, the 1971 amendment to the Industrial Tribunal Act introduced Section 11A, giving Tribunals appellate authority over such inquiries. The Tribunal ruled in favor of the employer, leading the workers to appeal to the Supreme Court. The Court recognized the Industrial Disputes Act, 1947, as employee-friendly but ruled that Section 11A didn’t apply because the case began before the amendment. The section would only apply to cases initiated after the amendment.
A New Dawn: The Evolving Landscape of Labour Laws in India
The Indian government has recently streamlined its federal labor laws by merging 29 separate laws into four key codes: the Code on Wages, the Industrial Relations Code, the Occupational Safety, Health and Working Conditions Code, and the Code on Social Security. These reforms, as stated by Prime Minister Narendra Modi, aim to improve the working environment and boost economic growth. However, the codes are yet to be implemented.
Legal Recalibration: Navigating the New Wave of India’s Labour Law Reforms
The COVID-19 pandemic and ensuing economic downturn have driven substantial changes in India’s labor laws. Key developments include:
1. The Occupational Safety, Health and Working Conditions Code, 2020: Enacted in September 2020, this Code consolidates 13 central laws related to worker safety, health, and welfare, creating a unified framework for the organized sector.
2. The Industrial Relations Code, 2020: Also passed in September 2020, this Code replaces three major labor laws, simplifying regulations to enhance business operations in India.
3. The Code on Social Security, 2020: This Code, enacted in September 2020, merges nine existing laws, extending social security benefits to all workers, including those in the unorganized sector.
4. Suspension of Labour Laws: In May 2020, states like Uttar Pradesh, Madhya Pradesh, and Gujarat suspended several labor laws for three years to attract investment, a move met with criticism from labor rights activists concerned about worker exploitation.
5. Redefinition of Wages: In August 2021, amendments to the Code on Wages excluded allowances like house rent and overtime from wage calculations, sparking concerns over reduced take-home pay for workers.
Conclusion
In the past 18 months, India’s labor laws have seen significant reforms, with some aimed at enhancing worker welfare, while others have faced criticism for potentially undermining worker rights. As the country navigates the pandemic’s ongoing challenges, it is vital to strike a balance that protects and promotes the welfare of its workforce.
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