|
| Labour Regulations |
Labour laws are governed by several Acts, and the most important are summarised below.
The Industrial Disputes Act governs the conduct of industrial relations and provides the framework for fair and just settlement of disputes by negotiation, arbitration, conciliation, compromise or adjudication.
The Trade Unions Act provides for the registration of trade unions, to manage industrial relations on behalf of the workers. Collective bargaining, conciliation, arbitration and adjudication usually negotiate wages in the organised sector.
The Equal Remuneration Act provides for payment of equal remuneration to men and women workers for the same work and prevents discrimination against women in matters of recruitment and also in relation to matters such as promotion, training or transfer.
The Minimum Wages Act empowers the Government to fix minimum wages for employees working in specified employment categories, especially in industry. It provides for review and revision of minimum wages already fixed after suitable intervals not exceeding five years. India’s minimum wages range between Rs. 1800 (Euro 31) and 5000 (Euro 85) per month depending on the location and skill levels, but are very low by the standards of Europe and other developed economies.
The Payment of Bonus Act provides for a minimum bonus of 8.33% of salary, and a maximum of 20 % of the annual income. For bonus calculations, the upper limit of salary is fixed at Rs. 3.500 (Euro 60) per month (even if the salary is higher, say Rs 5,500 (Euro 95)). All establishments employing twenty or more persons even for one day during a year are required to pay bonus. New units are exempted till they start making profits or for five years of operation, whichever comes first.
The Payment of Gratuity Act provides for payment of gratuity to employees having completed five years service, at the rate of 15 days’ salary for each completed year of service, payable at the time of retirement/ settlement, and tax-free upto Rs. 350,000 (Euro 6000). Every establishment having more than ten employees is required to register under this Act, within five years of being set up.
The Employees Provident Fund and Miscellaneous Provisions Act provides for the retirement benefits in the form of provident fund, family pension and deposit-linked insurance to employees. Companies employing more than 20 persons are covered by the Act, and employee and employer are required to contribute a minimum of 10% of the basic salary to the regional Employee Provident Fund; these contributions attract tax exemptions/concessions.
The Employees State Insurance Act provides for medical care benefits in case of sickness, maternity, employment injury and pension for dependants in the event of the death through accidents at the workplace. The Act specifies a deposit of 6.5% of the salary, of which 1.75% is to be contributed by the employee, the rest by the employer, and applies to all employees with salaries below Rs 6500 (Euro 110) per month under this Act.
The Maternity Benefit Act regulates the provision of maternity and other benefits to women employees for a certain period before and after childbirth. A woman employee is entitled to post natal leave of six weeks, with full pay.
The Factories Act is the principal legislation for regulating various aspects relating to safety, health and welfare of workers employed in factories. It forbids employment of children less than 14 years of age in any factory, prescribes a 48-hours limit per week for adult workers, and sets the minimum standards of lighting, ventilation, safety and welfare services, which employers must provide in their factories.
The Workmen’s Compensation Act provides for payment of compensation to workmen and their dependants in case of injury and accident (including certain occupational disease) arising out of and in the course of employment and resulting in disablement or death. Compensation is determined on the basis of loss of earning ability created by the accident, and
The Contract Labour Act regulates establishments and contractors employing at least twenty workmen as contract labour on any day during the year, and provides for the welfare and health of contract labour involved in any activities that are not intermittent or casual in nature. All contract workmen employed for more than 150 days during a year, are entitled to wages and other benefits on the same lines and terms as regular employees, and are to be absorbed as regular employees of the establishment.
Employment Contracts
In most cases, staff services and commercial positions are non-unionised and usually governed by negotiated employment contracts. Individual appointments provide for some flexibility in remuneration, designation and work scope; however, they cannot bind the employee’s right to terminate employment or to execute a bond, and in case of women, must provide gender-related rights such as special fund maternity leave and exemption from night shift duties.
Employment contracts are normally terminable with one-to-three months notice, and carry the usual clauses for protection of: |
 |
The company’s proprietary information |
|
Restrict unionism |
|
Insurgent activity and insubordination. |
|
| Disputes between the employee and employer concerning misdemeanour, malfeasance, theft and piracy of official secrets, intellectual property and restricting basic rights through coercion, harassment or prejudice, are settled in the Civil Courts, while non-payment of wages and dues are addressed by the Labour Courts. |
| |
|
|
