Legal Framework of

HRM & Labour Laws.

G.Ojha

Background I
Compliance to labour Laws is considered to
be an important function of HRM. The new
economic order, characterized by the growth
of service sector and I.T., globalization of
market, labour & capital mobility, greater
use of contract labour and sub-contracting
pose a challenge to restructure the legal
environment of business.

Background II
Pressure for the reform of labour laws, labour
administration and labour judiciary has
mounted in the wake of challenges of
liberalization and globalization.
There are 51 central laws and more than 200
state laws creating problems of interpretation
and implementation. India is the highest
labour legislated country in the world.
Labour is in the concurrent list where both the
central & state Govt. can make laws.

A few Contents of Labour

Laws.
Conditions of work.
Wages, Welfare and Forced Labour.
Trade Unions.
Women & Children.
Social Insurance.
Industrial Harmony.

Need for Labour Laws.

Need for any law arises to regulate things and
also to stop exploitation, misuse, denial etc.
For example, earlier the employers were not
providing even drinking water. But the
Factories Act,1948 had to mandate this facility
which appears so trivial now.
Protection of labour from accidents & health hazards.
For compensating workers/their dependents in case of
accidents/death.
To guarantee the right to form associations and
encourage collective bargaining.
For prevention and resolution of industrial disputes.
To provide safeguards against exploitation of women
and children in employment etc.

Constitutional Provisions
regarding Labour Laws.

The Factories Act, 1948.

It deals with the following :a) Health, Safety, Welfare of employees.
b) Working hours of adults, annual leave.
c) Employment of women & young persons.
After Bhopal gas tragedy in 1984, the Act was
amended in 1987 to put more severe
conditions
for
working
in
hazardous
situations.

The Industrial Disputes

Act,1947 I

It is for prevention, investigation and

settlement of industrial disputes and certain
other purposes.
The Act provides elaborate machinery for
settling disputes. The machinery comprises
both internal as well as external agencies.
Conciliation
External

Arbitration
Adjudicatio
n.

The Industrial Disputes

Act,1947II

The Act prohibits strikes and Lockouts in

Public Utility Service without notice and some
other conditions.

Strikes and lockouts are also prohibited when

the process of dispute settlement is on and
when a settlement or award is in operation.
Employers unfettered freedom to lay off and
retrench workers and to close the plant has
been curtailed. The employer is required to
obtain prior permission for any of these
actions from specified authorities.

The Payment of Wages Act,1936

I
The Act seeks to regulate payment of wages
to employees.
Many a times, wages are not paid in time and
regularly. Often, unauthorized deductions are
made.

The Payment of Wages Act,1936

II
Employers Obligations.
I.

Payment of wages.

II. Fix wage periods which should not exceed

one month
III. Pay wages on 7th or before in any month
where the number of employees is less
than 1000 and by 10th or before where
employees are more than 1000
IV. Pay wages
circulation.

in

currency

which

is

V. Not to make unauthorized deductions.

in

The Equal Remuneration

Act,1976
The Act provides for payment of equal
remuneration for equal work to men and
women employees.
The Act also ensures that there is no
discrimination in recruitment and promotion
of men & women.
The Act is inspired by the Directive Principles
of State Policy which places both the sexes on
equal footing in matters of employment and
remuneration.

The Child Labour

(Prohibition & Regulation)
Act, 1986 I

Prohibition of employment in certain occupations.

Child is a person who has not completed 14 years
of age.
The working hours of a child at a stretch should
not exceed three hours with a rest interval of one
hour. The total working hours will be five hours
and one hour of rest.

The Child Labour

(Prohibition & Regulation)
Act, 1986 II

No overtime engagement.

No employment between 7 p.m. and 8 a.m.

The establishments covered under the Act are
shops, commercial establishments, workshops,
firms, residential hotels, restaurants, theatres,
other place of amusement or entertainment.

The Contract Labour (Regulation &

Abolition) Act,1970
To regulate employment of contract labour in certain
establishments and to provide for its abolition in
certain circumstances.
The Act is applicable to all establishments and
individual contractors employing 20 or more
workmen. It is also applicable to any principal
employer employing 20 or more workmen through a
contractor. The contractor who wishes to engage 20
or more workmen must get himself licenced for this
purpose.
Section 10 is the most important section which
enables the appropriate Govt. to abolish contract
labour system in a process, operation or other work.
Air India & SAIL judgments of the Apex Court.

The Minimum Wages Act,1948

The Act provides for fixation of minimum
wages
in
sweated
and
unorganized
industries.
The Appropriate Govt. fixes the minimum
wages for a period not exceeding 5 years.
Minimum wages can be fixed on time work or
piece work at piece rate.
For violation, employers can be imprisoned or
fined or both.

The Maternity Benefits

Act,1961 I
The objective is to provide certain facilities
to working women during delivery of a child.
The Act covers all women employees
whether employed directly or through a
contractor.
Women employees including a temporary
employee is eligible if she has served the
employer for at least 80 days in the 12
months preceding the date of her expected
delivery.
The benefits are 12 weeks leave with pay as
well as certain non-cash benefits.

The Maternity Benefits

Act,1961 II
Cash Benefits

Non-Cash Benefits

Leave with average pay for six Light work before delivery.
Two nursing breaks until the
weeks before delivery.
Leave with average pay for six
child attains the age of 15
weeks after delivery.
months.
Medical bonus if the employer No discharge, dismissal or
does not provide free medical
change in service conditions
care.
during the maternity leave.
Additional leave up to one
month in case of illness due to
premature birth or illness due
to pregnancy.
Six weeks leave with average
pay
from
the
date
of
miscarriage.

The Employees Provident Fund (and

Miscellaneous Provisions) Act, 1952
.IMinimum requirement of 20 persons in a factory or
establishment. Membership is from the date you join
the organisation.

The Act is divided into 3 parts, viz.,

a) The Employees Provident Fund Scheme, 1952.
b) The Employees Pension Scheme, 1995.
c) The Employees Deposit Linked Scheme, 1976.

Under the Employees Provident Fund Scheme,1952,

matching contribution from Employer and Employee @
10% of Wages/Salary in case of sick establishment or
industries like Jute, Beedi, Bricks, Gum.
In all other establishments 12% of the wages/Salary
will be the monthly contribution from both sides.

The Employees Provident Fund (and

Miscellaneous Provisions) Act, 1952
.II
An amount equal to 8.33% of the employees pay shall
be remitted to the Pension Fund and the balance of
the Employers contribution will continue with the
Provident Fund.

Towards the EDLI Scheme, only the Employer is

required to Contribute @ 0.25% of the Wage/Salary.
Non refundable/ Partial withdrawal/ Advances are
provided to pay for house building, Marriage &
Education of children etc.
Voluntary Provident Fund.

The Employees
Compensation Act, 1923. I
The purpose is to make the Employer an insurer of
the workman who sustains loss caused by injuries
or death.
Five conditions are important as follows to create
the employers liability to pay compensation :a) Personal injury to workman.
b) Injury to be caused by an accident.
c) Accident must arise out of and in course of
employment
d) Injury must result either in death of the workman
or in his total or partial disablement for a period
exceeding three days.
e) Contracting an occupational disease.

The Employees
Compensation Act, 1923. II
Disablement is of two types- Partial & Total.
Again, Partial Disablement is of two types :A. Temporary partial.
B. Permanent partial.
Arising out of suggests the cause of accident and
In course of employment points to the
circumstances, place and time of accident.
Notional extension of Employers Premises.
The Maximum compensation is paid where the
injury results in permanent total disablement which
is 60% of monthly wages X relevant factor or Rs.
1.40 lakhs whichever is more.

The Shops & Establishment

Act, 1953. I
To provide for rights and obligations to employees
and employers in an unorganized sector of
employment, i.e., shops & establishment.
A State Legislation.
Not applicable to members of the Employers
family.
Compulsory registration of shop/establishment
within 30 days of commencement of work.
Communication of closure of the establishment
within 15 days of the closure.
Hours of work per day/week.
Lays down opening & closing hours, closed days,
overtime work, national & religious holidays,

The Shops & Establishment

Act, 1953. II
Rules for employment of children, young
persons.
Rules for annual leave, maternity leave,
sickness, casual leave etc.
Rules for employment & termination of
service.
Obligation of employers & employees.
The Act must be referred to at the start of
an enterprise.
It should also be referred to when framing
personnel policies and rules.

Questions?

Thanking You!