The ppt describes the various aspects of labour laws prevailing in India, with the reference of past and future.

1. LABOUR LAWS
I N I N D I A

2. WHAT IS LABOUR ?
According to S.E. Thomas,
“Labour connotes all human efforts of body or mind which are
undertaken in the expectation of reward.”

3. CHARACTERISTICS OF LABOUR
1. Labour is Perishable
2. Labour cannot be separated from the Labourer
3. Inelastic Supply of labour
4. Labourer is a Human being and not a Machine
5. A Labourer sells his Labour and not Himself
6. Difficult to find out the Cost of Production of Labour

4. SHRI BANDARU DATTATREYA
The Ministry of Labour &
Employment is one of the oldest
and important Ministries of the
Government of India.
The main responsibility of the
Ministry is to protect and
safeguard the interests of
workers in general and those
who constitute the poor,
deprived and disadvantage
sections of the society.
Minister of State for Labour and
Employment (Independent Charge)

9. LABOUR FORCE AS PER ANNUAL
EMPLOYMENT-UNEMPLOYMENT SURVEY
2013-14
• Labour Force Participation Rate (LFPR) is estimated to be 52.5 per cent
at All India level or in other words 52.5 per cent of the persons aged 15
years and above, was either working or seeking work during the
reference period.
• In the rural sector, the LFPR is estimated to be 54.7 per cent whereas in
the urban sector the LFPR is 47.2 per cent.
• Female LFPR is significantly lower as compared to LFPR among males. At
All India level, female LFPR is estimated to be 25.8 per cent as compared
to 74.4 per cent for males.

10. • The Worker Population Ratio (WPR) is estimated to be 49.9 per
cent at All India level or in other words about 50 per cent of the
persons aged 15 years & above are employed.
• In rural areas, the WPR is estimated to be 52.1 per cent as
compared to 44.6 per cent in the urban areas.
• The female WPR is estimated to be 23.8 per cent at All India
level as compared to the male WPR of 71.4 per cent.

13. WAGES
DEFINITION :
Wages refer to the remuneration which is paid by the employer to the
employee in lieu of the services provided by the latter engaged in a
production or related process.
Wages in India is reported by the Labour Bureau, Government of India
• Wages in India increased to 272.19 INR/Day in 2014 from 255.65
INR/Day in 2013.
• Wages in India averaged 146 INR/Day from 1965 until 2014, reaching an
all time high of 272.19 INR/Day in 2014 and a record low of 3.87
INR/Day in 1965.

18. TYPES
OF
LABOURS
BONDED
LABOUR
MIGRANT
LABOUR
CHILD LABOUR
CONTRACT
LABOUR

20. MIGRANT LABOUR
Migrant labour; casual and unskilled workers who move about
systematically from one region to another offering their services
on a temporary, usually seasonal, basis. Migrant labour in various
forms is found in South Africa, the Middle East, western Europe,
North America, and India.

21. CHILD LABOUR

26. LABOUR LAWS
• The labour movement has been instrumental in the
enactment of the laws protecting labour rights in the 19th and
20th centuries. The history of labour legislation in India can be
traced back to the history of British colonialism. The influences
of British political economy were naturally dominant in
sketching some of the early laws.
• In the 19th century at least 80% of the population was
working class. In order to be considered middle class, they
have to have at least one servant. Most servants were females

27. 1. BRITISH PERIOD
• In the beginning it was difficult to get enough regular Indian
workers to run British establishments and hence laws for
indenturing workers became necessary. This was obviously
labour legislation in order to protect the interests of British
employers.
• In that period, cotton mills, jute mills and coal mines
employment to 2,12,720; 1,44,879 and 89,995 persons
respectively. Nearly 7,00,000 workers were employed in
modern factories worked by mechanical power, alone.

28. • This early phase of industrialization was marked by
inhuman exploitation of the workers who were paid a
mere pittance and made to work for long hours in
insanitary conditions, with hardly any provision for
periodical rest or prescribed holidays.

29. 2. POST INDEPENDENCE PERIOD
• An important factor that is not much recognized, but which
still prevails in many organised sector units is fixing and
revising wages through collective bargaining.
• The course of collective bargaining was influenced in 1948
the recommendations of the Fair Wage Committee, which
reported that three levels of wages exist – minimum, fair, and
living.
• These three wage levels were defined and it was pointed out
that all industries must pay the minimum wage and that the
capacity to pay would apply only to the fair wage, which

31. • Labour laws emerged when the employers tried to restrict the
powers of workers' organizations and keep labour costs low.
The workers began demanding better conditions and the
right to organize so as to improve their standard of living.
• Employer‘s costs increased due to workers demand to win
higher wages and better working conditions. This led to a
chaotic situation which required the intervention of
government. In order to put an end to the disputes between
the ever warring employer and employee, the government
enacted many labour laws.

32. a) Laws relating to children and women :
o The Child Labour Prohibition Act
o The Maternity Benefit Act
o The Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013
b) Laws relating to specific matters :
o Wages
o Indebtedness
o Welfare
o Housing
o Forced Labour

33. c) Laws relating to specific industries :
o Factories and Workshops
o Mines and Minerals
o Transport, i.e (a) Railways (b) Ports and Docks (c) Inland Water (d) Air
(e) Road
o Shops and Commercial Establishments
o Construction Works
o Agriculture
d) Laws relating to trade unions and industrial relations :
o Trade Union Act 1926

34. e) Laws relating to Social Security :
o Employee‘s Compensation
o Maternity Benefits
o Insurance
o Retirement Benefits
o Bonus Schemes
o Payment of Gratuity

35. Labour laws Labour
Functioning

36. PROBLEMS IN LABOUR LAWS :
1. ARCHAIC LAWS
• In the pre-independence period, British colonialists in India suppressed
labour rights, trade unions and the freedom of association among
workers. As a result, labour activism became a part of the Indian freedom
struggle.
• In 1950, the newly framed Constitution of India looked to undo these
wrongs by including fundamental labour rights, along with complex labour
laws. These laws made hiring additional workers increasingly difficult.
• Despite several decades of economic progress, these laws have not been
amended or reformed in order to foster a friendlier climate for business.

37. PROBLEMS IN LABOUR LAWS :
2. Labour productivity
• India has low labour productivity in comparison with other developing
nations.
• As a result, in the early days of offshoring, Western firms showed greater
interest in setting up manufacturing facilities in Thailand, Mexico, China,
Vietnam and Philippines rather than in India
• All of these countries had as bad a record of bureaucratic corruption as
India did at the time, but labour productivity was found to be higher

38. PROBLEMS IN LABOUR LAWS :
3. Politics
• In Kerala alone, for example, there were nearly 363 strikes between 2005
and 2012, causing loss of working days.
• In addition, in the 1970s and 1980s, Indian politics was dominated by
socialists who created the impression that profit making by private
enterprises is undesirable
• Policymakers also further strengthened India’s complicated labour laws

39. PROBLEMS IN LABOUR LAWS :
4. Complexity
• Labour is a subject in concurrent list of the Constitution of India. Thus
both centre and states can enact laws on labour matters.
• There are about 45 central government laws and more than 100 state
statutes, sometimes overlapping or contradicting.

40. PROBLEMS IN LABOUR LAWS :
5. Rigidity
• India has one of the most rigid labour regulatory frameworks in the
world.
• Example- Industrial Disputes Act of 1947 stipulates that a firm with 100
employees or more cannot close down without government permission.
• Such laws curtail the growth of a firm by forcing it to hire fewer workers
and remain small

41. PROBLEMS IN LABOUR LAWS :
6. Cost of compliance
• There are also high costs involved in complying with several labour laws
Example- under the Factories Act, firms with 10 or more workers and firms
which use electric power are required to keep records and file regular
reports on matters such as overtime work, wages, attendance, sick leave
and worker fines

42. NEED FOR FLEXIBILITY IN LABOUR….
1. To emphasize on the need for labour force to change according to the
market fluctuations which happens because of increase in specialized
products that requires firms to quickly change the size, composition,
and at times the location of the workforce.
2. To emphasizes on lowering the labour costs and increasing
productivity because of rising competitiveness.
3. The political economy perspective which advocates free markets where
there would be no government intervention and interference of trade
unionism.

43. 4. In order to achieve faster growth rate, emphasis should be
laid on labour intensive sectors by skill development of the
labour force and flexibility of labour laws.
5. The fact that flexibility is not just related to ‘hire and fire
strategy’ and that business units will have to function under
legitimate restrictions.

44. • Flexibility in labour laws has also been advocated by the Planning
Commission Deputy Chairman Mr. Montek Singh Ahluwalia (2006).
• According to him flexibility in labour laws would attract more
investment and would be able to create more jobs albeit ruling out the
hire and fire policy. The labour market flexibility varies from state to
state and labour laws contribute to these disparities between states.

46. ACCORDING TO ECONOMIC SURVEY
2015-16
• The contract labour hiring grew faster in states with relatively more
rigid labour laws, the survey said medium-sized formal sector
manufacturing firms reported labour regulations as a significant barrier
to growth, “specifically the dismissal norms under the Industrial
Disputes Act.”
• The Industrial Disputes Act 1947 requires firms with more than 100
workers to seek government’s approval before retrenching workers.
The law has encouraged factories to employ contract workers to stay
out of the rule books even though entrepreneurs feel ‘contract labour
is not the ideal solution’ for them.

47. • Only 35 per cent of the 10.5 million new manufacturing jobs created
between 1989 and 2010 were in the formal sector.
• Also, in the total number of establishments that rose by 4.2 million from
1989 to 2010, the formal sector growth stood at only 1.2 per cent.
Though the informal sector kept unemployment levels low, these jobs
were “much worse than the formal sector ones,” according to the survey.
• A recent survey conducted at the finance ministry's request, the survey
said 70 per cent workers’ prefer receiving cash instead of the money
going into their EPF account. The workers said they preferred ‘spending
the money sooner, suggesting either that workers are liquidity
constrained or impatient.’

49. 1.Amendments to the Industrial Disputes Act,
1947:
• Industrial unit owners and employers can lay off employees or
shut down units if the company employs up to 300 employees
without permission of the government as against the earlier
maximum limit of 100 employees.
• In case such retrenchment, the worker may raise an objection
in three months as opposed to no time limit earlier; and
• A labour union can be formed if there is 30 per cent of the
total membership as against the earlier 15 per cent.

50. 2. Amendments to the Factories Act, 1948:
• Those factories operating without power may employ
a maximum of 40 labourers (as opposed to 20 earlier)
and the factories operating with power may employ a
maximum of 20 labourers ( as against 10 earlier)
• Any employee with a grievance against his employer
for the violation of this Act may seek redressal in any
court of law.

51. 3. Amendments to the Contract Labour Act,
1970:
• This act is now applicable to establishments
employing 50 contract workers, the earlier threshold
being 20. This increase in upper limits ensures better
compliance be small entrepreneurs and contractors.

52. IMPACTS OF AMENDMENTS…..
1. Companies now have the flexibility to hire employees or lay
them off to adjust to the demand-supply scenario that exists
in the markets at any given time.
2. Loss- making businesses can be dumped without delay or
without loss of precious resources.
3. With the reduced thresholds for labour union memberships,
inter-union conflicts and multiplicity can be reduced or even
completely avoided.

53. 4. The management-labour interface reduces, leading to fewer
conflicts and lessens the losses due to these conflicts .
5. With the Amendments in the Factories Act reducing the
number of workers in a factory, companies now have
reduced burden of compliance, allowing factory a
management greater accent on production innovation and
harnessing efficiencies.

56. “LET’S START WITH TRUST,” SAID
MODI, WHILE INAUGURATING THE PANDIT
DEEN DAYAL UPADHYAY SHRAMEV JAYETE
EVENT ORGANISED BY THE LABOUR
MINISTRY.
“EASE OF BUSINESS IS THE FIRST AND
FOREMOST REQUIREMENT IF MAKE IN
INDIA HAS TO BE MADE SUCCESSFUL,” HE
SAID.
ASSERTING THAT SHRAMEV JAYATE IS
ESSENTIAL TO BOOST ECONOMIC
DEVELOPMENT, MODI SAID IT IS
IMPORTANT TO BRING BACK DIGNITY OF
LABOUR AND RESPECT THOSE WHO
CHOOSE TO UNDERTAKE VOCATIONAL
TRAINING OR WORK AS APPRENTICES.

57. SCHEMES BY GOVERNMENT
1. A dedicated Shram Suvidha Portal: That would allot Labour
Identification Number (LIN) to nearly 6 lakhs units and allow them to
file online compliance for 16 out of 44 labour laws.

58. 2. An all-new Random Inspection Scheme: Utilizing technology to
eliminate human discretion in selection of units for Inspection, and
uploading of Inspection Reports within 72 hours of inspection
mandatory.
3. Universal Account Number: Enables 4.17 crore employees to have
their Provident Fund account portable, hassle-free and universally
accessible
3. Apprentice Protsahan Yojana: Will support manufacturing units mainly
and other establishments by reimbursing 50% of the stipend paid to
apprentices during first two years of their training
4. Revamped Rashtriya Swasthya Bima Yojana: Introducing a Smart Card
for the workers in the unorganized sector seeded with details of two

60. UNLOCKING GROWTH……

61. a) By 2020, when the global economy is expected to run short of 56
million young people, India, with a youth surplus of 47 million, could
fill the gap. Over 25 per cent of the world’s workers are Indian. And
300 million young people are set to enter the labour force by 2025.
With an average age of 29, India’s population is in the middle of a
demographic boom.
b) Over the last decade, the compounded annual growth rate (CAGR) of
employment has slowed to 0.5 per cent, with 13.9 million jobs created
in 2012 when the labour force increased by 14.9 million.
c) The Maternity Benefit Act (1961) is largely underutilised. In 2012, just
2,441 women claimed maternity benefits across 84,956 factories. Only
3,289 factories provide crèches, with 58 in Gujarat and 2,389 in Tamil
Nadu.

62. d) According to the National Skill Development Corporation (NSDC), we
need 120 million skilled people in the non-farm sector. Amendments
to the Apprenticeship Act are welcome.
e) Women workers require legislation too. Female employees of
government schemes like Indira Kranti Patham or Anganwadi Worker
remain out of the purview of laws. Scheme-based workers should be
treated as regular employees and offered decent wages and social
security.
f) A modern labour law that encourages employers to keep more
workers in formal roles, with work-linked wages and social security
benefits is vital. Flexibility to undertake layoffs, ensuring adequate
benefits and a reasonable notice period, is needed.

63. g) With no labour laws applying to apprentices, care must be taken to
ensure that they are not transformed into contract labour. MGNREGA
should be restructured and linked to apprenticeship programmes in
industry and agriculture.
h) Labour reforms must be linked to the ease of doing business, creating
a habitat where jobs can be fostered. Reforms must be linked to
worker benefits, while simultaneously easing the compliance burden
on small and medium enterprises.
i) The labour law must be rationalised by defining minimum wages and
linking them to inflation. Minimum wages ought to be revised
annually, with penalties for their violation dramatically raised.

64. j) Equally, contract labourers must be protected. They should be
covered by the Workmen’s Compensation Act (1923) for accidents,
with inflation-linked wages and limited social security benefits from
the Employees State Insurance Act (1948) and Maternity Benefits Act
(1961) extended to them.

65. ‘Make in India’ can only be a success if the
labourers are also wooed with sweeteners. India
is a land of human- resource plenty. If Indian
industries have to flourish, the scales cannot be
tipped against the major Indian resource that is,
‘The Common Man’

66. REFERENCES
Labour Bureau of India : www.labourbureau.nic.in
 Ministry of labour, government of India : www.labour.nic.in/
 4th Annual Employment-Unemployment Survey 2013-14
 NSSO Data
 Economic Survey of India 2015-16
 National Skill Development Corporation (NSDC)

67. SUBMITTED BY:-
PRACHI GUPTA 8612