Labour Laws in India

Work helps you gain a sense of pride and self-satisfaction by reaffirming that you can support yourself. With work, you earn money to cover bills and pay for activities in your leisure time. It's becoming more common to see people with disabilities in a wide range of jobs throughout the community.

Employment law regulates the relationship between employers and their employees. It governs- 

• what employers can expect from employees,
• what employers can ask employees to do,
• and employees' rights at work.

Provisions under the labour law for over time in India

Employment Responsibilities, Issues and Rights:

1. Statutory Rights and Responsibilities -

A legal right of an individual cast duties and obligations on other private individuals or society towards such individuals. It also exists in the nature of an enforceable privilege sanctioned by legislation done in the context of certain established social structures. The Supreme Court of India, in the State of Rajasthan Case1, has defined the term 'legal right' as an interest which the law protects by imposing corresponding duties on others. In the same case, the Supreme Court has defined the term 'right' (e.g. liberty) as an exemption from the subjugation of legal power of another.

The main areas of employment that are covered by the law are contracts of employment, working hours and holidays, time off when sick (and sick pay), health and safety, data protection, and anti-discrimination (gender, race, religion, sexual orientation and disability.)

2. Anti-discrimination -

The right not to be discriminated against on the grounds of gender, race, religion, sexual orientation, disability.

India does not have a single comprehensive legislation on discriminatory practices at the workplace instead, there are various legislations that prohibit certain kinds of discriminatory practices, and protect the interests of vulnerable communities such as workmen, women, persons with HIV and AIDS, persons with disabilities and members of certain socially backward classes.

It provides:

• Protection against harassment. Every employer is required to constitute an Internal Complaints Committee (“ICC”) that will inquire into sexual harassment complaints.
• Employer’s Obligation to Provide Reasonable Accommodations. Employers are required to ensure compliance with certain accessibility standards

3. Contracts of Employment -

When a workman is employed for work through a contractor and not directly through an employer, he is engaged in ‘contractual employment.’

Employment contracts are legally binding on both the employer and employee and serve to protect each other’s rights and responsibilities.

By law In India, Contractual Employment is regulated by the Contractual Labour (Regulation and Abolition) Act, 1970. The Act applies to an establishment or a company employing more than 20 workers on a contractual basis. As per this law, a contractual worker is a workman employed for contractual work through a contractor and not directly through an employer. A contractor is defined as a supplier of contractual labour to the principal employer.

Employees who believe they have been dismissed or otherwise treated unfairly have the right to take their case to an independent Employment Tribunal, providing certain rules are met about how long they have been employed, and the procedures that have been followed by their employer.

4. Working Hours-

As per the Factories Act 1948, every adult (a person who has completed 18 years of age) cannot work for more than 48 hours in a week and not more than 9 hours in a day. According to Section 51 of the Act, the spread over should not exceed 10-1/2 hours.

No employee is supposed to work for more than 48 hours in a week and 9 hours in a day. Any employee who works for more than this period is eligible for overtime remuneration prescribed as twice the amount of ordinary wages.

There are specific rights and responsibilities that apply the in the case of maternity and parental leave.

Indian laws have provided for maternity benefit through the Maternity Benefit Act, 1961 ("MB Act"). The MB Act, applicable to an establishment with 10 or more employees, provided for paid maternity leave of 12 weeks to a female employee who has worked for 80 days in the preceding 12 months with the employer.

Many companies have a staff handbook that contains information on aspects such as:

•  Pay, benefits and hours of work
• Holiday and other authorised time off
• Sickness
• Health, safety and welfare
• Discipline and grievance
• Joining and leaving procedures
•  Anti-discrimination and equal opportunities

Ask for a copy of the handbook and read through it. This will describe how your organisation puts into practice the requirements of employment law, as well as describing the systems used within the company. Here are some of the aspects that may well appear in it.

5. Health and Safety -

There may be specific health and safety regulations and codes of practice that apply to your workplace and job.

There may be specific measures put in place by the employer to provide protection for you and others against any risks arising from the particular work being carried out, the environment being worked or the tools, materials or equipment being used.

The Occupational Safety, Health and Working Conditions Code (OSH) is a bill, currently under consideration for enactment by the Indian Parliament. The proposed OSH Code repeals and replaces 13 labour laws relating to health, safety and working conditions. It must be noted that the OSH code does not apply to self-employed persons working from private houses.

It is obligatory for an employer/occupier to ensure the provision and maintenance of plant and systems of work that are safe and without health risks. Arrangements should be made to rectify risks involved in use, handling, storage and transport of articles and substances. 

According to the draft OSH Code (2019), every employer is liable to comply with the Occupational Safety and Health standards made under this Code and of the regulations, rules, bye-laws and orders made thereunder. Furthermore, every employer must provide and maintain, as far as is reasonably practicable, a working environment that is safe and without risk to the health of the employees and the regulation expands to designers, importers and suppliers of equipment in establishments must take reasonable steps to ensure the safety of the worker.

Both the Factories Act 1948 as well as draft OSH Code require the employer to protect workers' health and safety. However, that is applicable only to the employees. Platform workers are not covered under the labour law yet.

6. Sickness absence and sick pay -

The sick pay arrangements relevant to the particular job that you are doing.

 The rules about how and when employees must notify their employer if they are unable to come to work because of ill-health, and the implications of not following these rules.

Working hours and holiday entitlements. The working hours and the rest that you are entitled to.

State laws generally provide for about 15 days of earned/regular leave a year. Employees also benefit from up to 10 days of sick leave and a possible 10 additional days of 'casual leave'. Indian law regulates and prohibits the use of contract workers.

7. Data protection 

The Data Protection Act applies to data held by an employer about an employee and covers both computerised and non-computerised systems.

Who you report to on matters to do with your personnel record, and the procedure to follow to report any changes in your situations.

 What type of information is in your personnel record, and who has access to it.

There is no express legislation in India dealing with data protection. Although the Personal Data Protection Bill was introduced in Parliament in 2006, it is yet to see the light of day. The bill seems to proceed on the general framework of the European Union Data Privacy Directive, 1996. It follows a comprehensive model with the bill aiming to govern the collection, processing and distribution of personal data. It is important to note that the applicability of the bill is limited to personal data' as defined in Clause 2 of the bill.

The bill applies both to government as well as private enterprises engaged in data functions. There is a provision for the appointment of, Data Controllers, who have general superintendence and adjudicatory jurisdiction over subjects covered by the bill. It also provides that penal sanctions may be imposed on offenders in addition to compensation for damages to victims.

The bill is clearly a step in the right direction. However due to the paucity of information, the bill is still pending.

Here are four common business mistakes that can lead to employment lawsuits.

1. Misclassifying Independent Contractors/Employees

It’s important to understand the difference between an independent contractor and an employee when making new hires.

Classifying someone as an independent contractor allows the business owner to avoid providing benefits and paying certain taxes, but misclassifying a worker as an independent contractor instead of an employee can result in hefty state and federal penalties and leave your business vulnerable to potentially costly lawsuits.

Unfortunately, there’s no single test to determine whether a worker is an employee or an independent contractor. Each state may have a different definition or test to determine worker classification, but generally, regulators examine the amount of control the worker has over the manner and means of performing his or her duties.

2. Failing to Implement an Employee Handbook

Small businesses may not recognize the importance of an employee handbook, but it should not be overlooked. The handbook is a formal delineation of the company’s expectations regarding performance, provides an overview of the benefits provided to each employee, and generally summarizes the relationship between the employee and the employer. Employee handbooks protect businesses from legal liability by demonstrating the company’s compliance with labor laws and serving as a reference point if an employee later challenges you in court.

In addition to creating and distributing the handbook to new hires, it is important to also formalize your employee’s acknowledgement of the handbook to indicate that he or she understands and is willing to comply with company policies. On the flip side, it’s important that your company adheres to the policies outlined in the handbook and provides all the benefits promised to employees.

The policies you choose to include and the language used to convey such policies can be scrutinized in the event of a legal dispute. Some courts and employees interpret the language in employee handbooks as a contract that creates binding obligations on employers.

A common example of this problem is when an employee interprets the handbook as a promise of continued employment so long as he or she is not in violation of any of the written policies.

Another similar example is when an employee disputes his or her termination because the disciplinary actions taken prior to termination did follow a system described in the handbook.

3. Mishandling Employee Break Times

Something as small as a ten minute break can be the subject of litigation for many employers.

Though each state’s laws may differ, meal and rest break lawsuits are one of the fastest growing areas of business litigation. For example, in California, every company is required to create a meal and rest break policy, as well as evidence that this policy is regularly communicated to employees. The laws can be very specific. As an example, California law requires a meal break of at least 30 minutes must be provided to an employee no later than five hours after he or she begins work for the day. Employers are not only required to provide these breaks, but also maintain records of when the employee started and stopped the meal break.

An employment attorney can assist your company to create fair rest and meal break policies. Be sure to communicate these policies to your employees regularly.

4. Improperly Handling Employee Complaints

Employers may subject themselves to legal action if they fail to properly respond to complaints relating to mental harassment. It’s important to record all complaints and take appropriate remedial action, which could mean conducting investigations and/or reprimanding an offending coworker. Keep in mind that it’s against the law to punish someone for complaining about harassment and discrimination and that illegal retaliation can include less obvious actions like adjusting the complaining employee’s responsibilities or excluding him or her from meetings.

Employers should also acknowledge complaints relating to workplace settings that impose difficulties for employees with disabilities.

Examples of reasonable accommodation include providing a reasonable amount of medical leave or allowing a flexible schedule to allow the worker to receive medical treatments, purchasing ergonomic products, adjusting the heights of desks or monitors, etc.

By knowing and taking simple steps to appropriately address employee concerns, a business can shield itself from the cost and hassle of a discrimination lawsuit and the damage those suits inflict on the company’s reputation.

Conclusion: 

The need to discern employment-related concepts, employment relations, employment conditions and working conditions are different yet interrelated concepts.

A more equitable balance of power in employment relations is needed in most parts of the world to create fair employment growth, improve health and reduce health inequalities. Historically, worker participation has been associated with the development of collective labour rights, the labour movement and the policies and labour markets developed by modern welfare states. The degree of control and participation that workers have is thus not only a key factor for promoting a more egalitarian decision-making process within the firms, but also a "protective factor" of workers' health. The state must take responsibility to ensure the real participation of less powerful social actors.

Employment relations are the relationships between buyers and sellers of labour, as well as the practices, outcomes and institutions that emanate or impinge upon the employment relationship. In wealthy countries, employment relations are often subject to the provisions of the law or a hiring contract, while in middle-income and poor countries most employment agreements are not explicitly subject to any formal contract, and a high proportion of total employment is in the informal economy.

About The Author:

Adv. Achin Sondhi is a lawyer with more than 4 (four) years of experience in Civil, Criminal, and Commercial Litigation and Arbitration. He co-heads the Litigation and Arbitration practice at the Jaipur and Delhi offices of the firm. He is recognized for his excellent litigation practice in the Hon’ble Supreme Court and different High Courts, District Courts, and Tribunals, and also provides specialized litigation services to clients ranging from large multinational corporations to smaller, privately held businesses and individuals.