Laws related to Industrial Relationship

The objective of the Minimum Wages Act of 1948 is to ensure that a minimum rate of wages is paid to all those who are engaged in wage employment. The state and union governments are empowered to declare minimum wages (Section 3) for employment categories given in schedule I and II of the act. The act also specifies the structure of minimum wage (Section 4) and the procedure for fixing and revising minimum wages at regular intervals (Section 5).

Laws Related to working hours, Conditions of services, and employment:

The factories Act of 1948 is one of the most important legislations covering the manufacturing sector. The act provides safeguards for workers to protect their health, provides for safety at the workplace when dealing with machinery, improves the physical conditions of the workplace, and provides welfare amenities.

The act also restricts the hours of work, provides for overtime and spread of working hours (Sections 51, 54, 55 and 56 ),employment of young persons (Sections 69, 70, 71,72, and 73) and places restriction on employment of women during the night hours (Section 66).

Factories are approved, licensed, and registered under the factories Act (Section 6) and authorities are appointed by the government [i.e. Chief Inspector of factories and Inspectors (Sections 8 and 9) The Certifying Surgeons (Section 10)] to ensure implementation of the act. The act also provides for the appointment of welfare officers in factories employing more than 500 workers (Section 49) and safety officers (Section 40 B) with appropriate qualifications.

While the factory worker is protected and given rights under the act (Section 111A), there are obligations placed on workers to abide by the rules set in the interests of health, safety and welfare (Section 111) Violating workers are liable to be punished.

The Shops and Commercial Establishments Act of 1961 has seen enactments from most states of India. In fact, state acts existed even before the central act came into force in 1961. With the growth of the IT and ITES sector, the act has become significant due to the nature of the work, IT and ITES firms are covered by the act. The act deals with important work related aspects like restrictions on working hours, the period of work, extra wages for overtime, and earned and sick leave. The act also prohibits employment of children, underage people, and women during night hours and lays down the procedure for dismissal, discharge and termination of employment. In the interest of encouraging firms function better, a many states have made amendments in the state acts, particularly to allow employment of women during night hours and even permit 24 hour operations.

Laws related to equality and empowerment of women:

The Maternity Benefit Act, 1961 a social welfare oriented law aimed at empowering women, provides security (both employment and financial) for women employees working in certain establishments (except those dismissed for gross misconduct since the act prohibits discharge/dismissed during the period or pregnancy), for defined periods before and after child birth.

Thus, Section 5 of the act makes, it a right for, women to avail maternity benefits including pay and leave and employees liable to provide the same. Some states have added provisions that provide for additional benefits such as free medical aid, maternity bonus, provision of crèches, and additional rest intervals.

The act also provides for cash and non cash benefits, including a maximum period of leave of 12 weeks, divided equally between pre and post birth periods. Non cash benefits include a reduced work lo-ad (Section 4.3) a medical bonus of the employer does not provide pre and post natal support (Section 8) and two nursing breaks every working day till the child attains 15 months (Section 11).

Article 39 of the Constitution of India directs the state to ensure that there is equal pay for equal work for men and women. The act has been enacted to fulfill the directive set by the constitution. The Equal Remuneration Act, 1976 act stipulates that there should be no discrimination between genders in matters of remuneration for the same type of work (Section 4) and in recruitment and, subsequently, in promotions, training, or transfers (Section 5) unless the law explicitly prohibits employment of women.

Laws related to Social Security:

The workmen’s Compensation Act of 1923 is the earliest social security legislation in India enacted with the purpose of making the employer liable to pay compensation to employees who are affected by personal injury arising out of accidents. Compensation is payable for partial disablement [Section 2 (1) (g)] and total disablement [Section 2 (1) (1)].

The claim for compensation has to arise from event that is out of and in the course of employment, and hence necessarily has not taken place in the formal place of work. The expression out of course of employment refers to the causal connection between accident and employment while in the course of refers to the time of accident. If only one condition is fulfilled then the claim for compensation-n is not admissible.

The Employee State Insurance Act of 1948 has been enacted with the objectives of securing financial relief in cases of sickness, maternity, disablement and for providing medical benefits to employees of factories and establishments, and their dependents. The act is also applicable to non seasonal factories using power and employing 10 or more employees, and non power using factories and certain other establishment employing 20 or more employees. Employees and employers make contribution to the scheme and various benefits are given to eligible employees like:

Sickness Benefit – in cash [Section 46 (1) (a)]

Maternity Benefit – in cash [Section 456 (1) (b)]

Disablement Benefit – in cash [Section 46 (1) ( c)]

Dependents’ Benefit – in cash [Section 46 (1) (d)]

Funeral expenses – in cash [Section 46 (1) (e)]

Medical Benefit – as service and kind [Se5ction 46 (1) (e)]

The Employees’ Provident Funds and Miscellaneous provisions Act, 1952, is a social security legislation for employees working in factories and other establishment s. a dedicated Provident fund has been created with contributions from employer and employee. The objective is to provide monetary assistance to employees and their families, when they are in distress, unable to meet family and social obligations, and to protect them in old age, disablement, early death (of the employee) and in some other contingencies

Gratuity is an additional financial benefit given to employees of organizations irrespective of salary or status, when their services end because of superannuation, retirement or resignation or death, or disablement (Section 4). The Payment of Gratuity Act, 1972 act provides for gratuity payment to all employees at the prescribed rates (currently 15 days for every year of service).

Five years’ continuous service (as defined in Section 2 A) is required in order for an employee to be eligible (except in case of death or disablement) to receive gratuity. The maximum amount receivable as gratuity is Rs 350,000.

Guidelines for Handling Sexual harassment Complaints

There is no specific legislation in India that deals with sexual harassment of women at the work place. The Supreme Court of India, on the basis of a petition filed by NGOs and social activists has framed certain guidelines and norms to handle cases of sexual harassment of women.

The RC defined sexual harassment in the work place to include the following:

1) Sexually determined behavior (whether directly or by implications)
2) Physical contact and advances
3) A demand or request for sexual favors
4) Sexually colored remarks
5) Showing pornography
6) Any other unwelcome physical, verbal or non verbal conduct of a sexual nature.
Employers are now bound to take action against those employees guilty of sexual harassment. As per the SC guidelines, it is the duty of the employer to prevent or deter acts of sexual harassment as well as put in place a procedure for resolution, settlement or prosecution of acts of sexual harassment. The employer has to give publicity to the norms within the workplace and necessary amendments have to be made in the employee code of conduct.

All organizations have to put in place a complaint mechanism in the form of a complaint committee, a special counselor or support services. The committee should be headed by a woman and half the members of the committee should be women. The participation of representatives from external agencies like the government or NGOs is also suggested so that pressures on the committee can be prevented. Confidentiality should be assured and maintained, so that the complainant (or the victims, who can be drawing salary or an honorary worker) has the confidence to raise the issue.

The judgment also specifies that employees should be allowed to raise issues of sexual harassment at workers’ meetings. Employer
–employee meetings should also discuss issues related to te prevention of sexual harassment.

In many cases, victims face harassment from parties who are outside the organization. To take acre of such situations, where a third party is involved, the employer has to take necessary steps to support the victim and assist in punishing the offender. The judgment is considered as a landmark one that protects the rights off women workers in India. The Government of India is considering introducing a comprehensive legislation related to the prevention of sexual harassment at the workplace.

Applicability of labor laws to the IT/ ITES sector

One of the questions asked in whether the IT and ITES (BPO) sector is outside the coverage of labor legislations or act that regulates the conditions of work for IT / ITES employees.

From the nature of work performed, it can be seen that IT / ITES companies are covered by The shops and Commercial Establishments Act of 1961. The act deals with working hours, overtime rate, spread overs, employment of women and young persons at night, etc. Many states have come with state specific acts that are more suited to the requirements of the state.

ITES / BPO employees fall easily within the definition of workmen under the Industrial Disputes Act, unless they are in the managerial cadre. In the interest of facilitating the sector, many state governments have declared IT/ITES companies as public utility services where restrictions on strikes and lockouts exist (Section 22 of ID at 1947) Similarly, exemptions from applications of labor law are a common feature of special economic zones (SEZs).

The given relaxations do not mean that the IT / ITES industry is outside the purview of all labor legislations that provide a protective cover to the employees. Many governments have also allowed self certification instead of inspections, and the firms are expected to abide by the law of the land. At the same time, there are views about the company directors being held personally liable for non-compliances, even those of very trivial nature.