LABOUR REFORMS IN INDIA

PRITEE JOSHI(51)
SNEHAL KADAM(53) SAURABH KAMBLE(55)

SHREYA KAPADIA (57)

RIJUTA KARALKAR(59)

Labour Market In India

Workforce(2005)
Rural workers Organised sector Unorganised sector

32%

60%
8%

Labour unrest
Maruti Suzuki- labor strike at Manesar and Gurgaon in 2011 Air India- 2011 Hyundai-2010 Honda & Scooter India Limited Gurgaon in 2005

Need for labor law reforms

Multiple and parallel legislation
Issues relating to appropriate government and jurisdiction Multiplicity of authorities Lack of uniformity in definitions Minimum wages Sectoral Demands Labour standard and size of establishment Better enforcement of workers rights Labour laws and the unorganised sector

LABOUR LAWS:

TRADE UNION ACT (1926)

It legalizes the formation of trade unions by allowing employees the right to form and organize unions and also strengthen bargaining power of workers Act aims to provide law for the registration of trade unions and get it registered under the act.

A trade union formed with at least 7 members may apply for registration with documents.

OBJECTIVES
Lay down conditions governing the registration of trade unions Defines obligations of trade unions Prescribe rights and liabilities of a registered trade union. It also stipulates the purpose for which funds can be utilized

WHAT IS A TRADE UNION?

Definition: An organization of workers or employees formed mainly to -Negotiate with the employers on various
employment related issues Improve the terms and conditions at their workplace

Enhance their status in society.

Objectives of a Trade Union

Collective bargaining Safeguard jobs
Cooperate with employers Political activities Social activities

INDUSTRIAL DISPUTE ACT (1947)

Ever expanding complex multi product/project companies with diverse and conflicting interests of workmen and employers, growing labor consciousness, resulting in strikes and lockouts, lead to the outcome of Industrial dispute Act, 1947

Main provisions of the Act are:

Settlement machinery

Aims at promoting security, amity and good relations . Prevent illegal strikes and lockouts and explains the contingencies when these can be lawfully resorted . Provide conditions and relief to workmen in the matters of lay-offs, retrenchment, dismissals etc. The provision for payment of compensation to the Workman. Unfair labour practices on part of an employer.

Labor Force in India (Millions)

600 500

400
300 200 263.8 100 0 1983-84 1993-94 2004-05 2009-10 334.2 419.6 503.4 Labour Force (Million)

Source:Statistical outline of India, http://labour.nic.in/report _to_people

Projected Labour Force in India (Millions)

575 570 565 560 555 550 545 540 535 530 525 520

574
563

Projected Labour Force (Million)

552
541

2011-12

2012-13

2013-14

2014-15

Source:http://labour.nic.in/report _to_people

Growth Rate of Labour force (% per annum)

4 3.5 3 2.5 2 1.5 1 0.5 0 1983-1994 1994-2000 2000-2005 2.06 1.73 0.98 0.51 2.58 3.71

3.3
2.95 2.7

All India
Rural Urban

Source:Statistical outline of India, http://labour.nic.in/report _to_people

Labour Force Participation Rates Per Thousands of Population.

600 400 200 0 1983 600 400 200 0 1983 1993-94 1999-2000
Source:Statistical outline of India, http://labour.nic.in/report _to_people

548

561 331

540 302 Rural Male Rural Female

332

1993-94

1999-2000

536

542

542 Urban Male

155

164

147

Urban Female

Growth of employment in Organized Sector

(% per annum)
2 1.72 1.5 1 Public Sector 0.5 0 0.44 Private Sector Total Organised 1.53

1983-1994
-0.5 -1

1994-2008
-0.65

Source:Statistical outline of India, http://labour.nic.in/report _to_people

Root Cause Analysis

Pitfalls of Labour Laws

Voluminous and Ambiguous

Concepts like liberalization, globalization or privatization

Cost of compliance higher than Cost of violation

Less expenditure on social services and social security

Differences in socio economic conditions that prevail in India

ILO recognizes the right of employees to organize themselves

Labour Market Rigidity

Position taken by different stakeholders