Important Industrial Laws of India

The industrial sector in India plays a crucial role in its economic growth. The industrial sector is a major contributor to the GDP and employs millions of people.

Every worker must know about laws envisioned to protect their rights. Industrial law governs relations between employers and employees in both public and private sectors.

Industrial law covers industrial disputes, unfair dismissal, occupational health and safety, and trade unions. Industrial law originated from the English law of ‘industrial remedy’ – a judicial system applied by courts to control social unrest or other public disorder.

History of industrial laws

The Indian legal system can trace its origins to Manusmriti and the common law system. The Indian Constitution has a long and detailed chapter on industrial matters. The statute explicitly states that the state can intervene in industrial matters to protect public interest.

The Indian Industrial Laws came into effect on 1st January 1948. The Government of India had to take legal remedial steps because of the growing industrialisation and increasing number of industrial establishments in the country.

The British Parliament passed the Industrial Disputes Act of 1947, which came into effect in India on 1st November 1947. However, the act was ineffective in regulating labour relations between employers and employees in this country. Therefore, the government enacted the following laws to regulate industrial relations:

• The Factories Act, 1948 (Act No. XXVIII of 1948);
• The Mines Act, 1952 (Act No. XXIX of 1952);
• The Industrial Disputes Act, 1947 (Act No. XXXI of 1947).

In India, in addition to the constitutional provisions, several industrial laws hav been formulated:

• The Factories Act 1948
• The Employees’ Provident Funds and Miscellaneous Provident Act, 1952
• Apprentice Act 1961
• Workmen’s Compensation Act, 1923
• Payment of Wages Act 1936

Factories Act, 1948

The Factories Act of 1948 is the first act passed by Parliament to regulate the working conditions of factory workers in India. The act was enacted on 8th August 1948 and applied to all factories and industries in India. The Factories Act applies equally to both male and female workers.

The act regulates other industrial establishments or industrial laws like employing ten or more persons (excluding servants), small-scale industries, including people owned by an organisation like cooperative societies with members who are not employees but shareholders in their enterprises.

The Employees Provident Funds and Miscellaneous Provident Act, 1952

The Employees Provident Fund and Miscellaneous Provident Act, 1952, is an act enacted by the Parliament in India for regulating the establishment of the Employees Provident Fund Organization. This act also provides guidelines for the constitution of a provident fund organisation.

Furthermore, the act lays guidelines for the constitution of a provident fund commissioner appointed by the Central Government with such powers as may be necessary to discharge his functions and duties under this act.

The act stipulates that no person shall be qualified to be appointed as an employee unless he has been employed in any public service or employment under local authority within two years immediately before his appointment.

Apprentice Act 1961

The Apprentice Act 1961 is an industrial law governing the relationship between an apprentice and their employer. An apprentice is a trainee learning a trade under a skilled worker’s supervision and receiving instruction in that particular trade.

An apprentice must be paid for his services at least with wages payable to other workmen employed by the employer. However, suppose the apprentice has not acquired sufficient knowledge or skill for him to be capable of earning such a wage. In that case, he shall receive only such portion thereof as reasonably representing his share in the profits made during the period employed by the employer. An employer cannot treat his apprentice as an enslaved person or a convict.

Workmen’s Compensation Act, 1923

The Workmen’s Compensation Act of 1923 is an industrial law that provides compensation to workers injured on duty. Compensation is also provided to their dependents. The act has provisions to compensate disabled workers.

The act defines a “workman” as any person employed in any industrial undertaking or business by the owner or agent of such undertaking or by an employee thereof, except people employed under a contract for a period not exceeding 12 months.

This protection has three elements:

• An essential qualification that the claimant should satisfy;
• A definition of what constitutes employment; and
• Provisions for the payment of awarded or denied benefits

Payment of Wages Act 1936

The Payment of Wages Act 1936 is a statute passed by the Indian Parliament to regulate paying wages, allowances, and gratuities to employees in India.

The act provides for minimum and maximum wages for various workers and payment of gratuity at the time of retirement or death, respectively. The act mandates employers to pay specific amounts as dearness allowance (DA), which has been increased from its earlier level so that it may cover all types of work by an employee.

Minimum Wages Act, 1948

The Central Government introduced the Minimum Wages Act of 1948 as a part of industrial laws to ensure that the minimum wage was not below a certain amount. This act has been amended several times over the years. Currently, the act provides an annual increment of 0.75%. This act provides a fair wage for workers in India who do not have any other source of income besides their salaries.

Employers pay the minimum wages directly or through contractors employing them on behalf of other companies or organisations such as factories and shops. Because these companies require someone to work for them, they will pay them at least what they would be able to afford if they were working independently from each other. This provision ensures employees are not tempted with more money than that offered by their employers.

Maternity Benefit Act 1961

The Maternity Benefit Act 1961 is an industrial law providing maternity benefits for female employees, and the act provisions the following:

• To provide medical facilities and maternity leave to employed pregnant women
• Payment of maternity benefit payable to a woman employee on the birth or adoption of her child under two years old and whose service ends within 12 months after delivery or adoption, whichever may be earlier
• To provide maternity allowance. Financial support to families with no source of income other than employment so that they do not suffer financial hardships caused by childbirth/adoption as per the rules framed under this act.

Payment of Gratuity Act 1972

The Payment of Gratuity Act 1972 is a law that provides for the payment of gratuity to an employee who is dismissed, dies, or retires. The provisions of this act apply to all employees, regardless of salaried or casual, permanent or temporary, as well as both domestic and foreign nationals employed in India.

The basic pay scales determine the amount payable laid down under sections 2(3)(b) and (c) of the Payment Commission Act 1971. However, the pay shall not exceed two months’ basic pay at any time.

Every industrial worker should know these industrial laws and acts

The Industrial Laws of India are a set of rules that govern the relationship between employers, workers, and their unions. The British introduced these laws in 1894, and they have been amended several times since.

The categories of industrial laws include:

• The Factories Act (1947)
• The Mines Act (1951)
• The Industrial Disputes Act (1948)

Employers should follow all applicable labour laws when hiring new employees or existing employees who are members of unions representing their workers. This covers the following aspects:

• Paying overtime wages after working more than 8 hours per day or 40 hours per week if they work at home for one employer for more than three months consecutively;
• Providing proper nutrition during breaks;
• Giving adequate rest time between shifts so as employees do not fatigue by straining too many muscles unnecessarily, subsequently causing them to be ill later.

Conclusion

All industrial workers should be aware of these industrial laws meant for the worker’s benefit to ensure they make informed decisions. Industrial law regulates or controls the activities in industries and protects workers from exploitation.

Industrial law protects workers’ rights, privileges, obligations, and responsibilities and simultaneously aims to end unfair labour practices. Both employees and management benefit from understanding their exact rights, duties, and liabilities because of industrial law.