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India Factfile - Labour Laws |
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| Outsourcing
Services |
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Accounting
& Finance |
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Financial Accounting |
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General Ledger |
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Accounts Payable |
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Accounts Receivable |
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Billing |
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Payroll |
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Bank Reconciliation |
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Financial Analysis |
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Budgeting & Forecasting |
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Tax
Preparation Services |
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| India is a member of the
International Labour Organisation and complies with conventions which
it has ratified. It has enacted comprehensive legislation to provide
a good working environment for labour and protect their interests.
The government continuously reviews various labour laws in line with
changing circumstances. The following are the key labour laws: |
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| 1. |
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Industrial relations are regulated by
the Industrial Disputes Act, which
provides for just and equitable settlement of disputes through negotiations,
conciliation, arbitration or adjudication. |
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| 2. |
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The Factories
Act, 1948, regulates working conditions in factories. The
Act prescribes minimum standards for working conditions and facilities
related to manufacturing processes, handling and storage of materials,
discharge of effluents, fire precautions, working hours and health
facilities etc. |
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The Minimum
Wages Act, 1948, empowers the appropriate Governments to
fix and revise the minimum wages and allowances payable to workers
and also to regulate the conditions of work such as hours of work,
overtime, etc. for workers in the notified employment under their
respective jurisdiction. |
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The Payment
of Bonus Act, 1956, requires payment of bonus to employees
as defined under the Act. According to the Act, "employee"
means any person (other than apprentice) employed on a salary or wage
not exceeding Rs. 3,500 per month in any industry to do any skilled
or unskilled, manual, supervisory, managerial, administrative, technical
or clerical work for hire or reward. However, according to Section
12 of the Act, the bonus is payable to employees whose salary or wage
exceeds Rs. 2,500 per month, has to be calculated as if his salary
or wage were Rs. 2,500 per month. The above wage ceilings were last
revised on 9th July, 1995 and made effective from 1 April 1993. |
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The Payment
of Gratuity Act is applicable to factories, mines, oil
fields, plantations, ports, railways, motor transport undertakings,
companies, shops & commercial establishments and to other establishments
to which the Government extends the law. The Act provides for payment
of gratuity at the rate of 15 days' wages for each completed year
of service or part thereof in excess of six months subject to a maximum
of Rs. 3,50,000. In case of seasonal establishments, gratuity is payable
at the rate of seven days' wages for each season. |
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The Employees’
Provident Funds and Miscellaneous Provisions Act, provides
for retirements benefits to employees in the form of provident fund,
family pension and deposit linked insurance. As on 31 March, 2003,
the Act covered 180 specific industries/classes of establishments.
Coverage under the Act is presently restricted to establishments employing
20 or more persons. The rate of contribution is 12% in respect of
175 industries/ establishments employing 20 or more persons. Under
the Act, employers are required to make a matching contribution. |
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The Employees’
State Insurance Act, is applicable in the first instance,
to non-seasonal factories using power and employing 10 or more persons
and non-power using factories employing 20 or more persons. Under
the enabling provisions contained in the Act, the Act is being extended
by the State Governments to new classes of establishments, namely,
shops, hotels, restaurants, cinemas, including preview theatres, road
motor transport undertakings and newspaper establishments employing
20 or more persons. It covers employees drawing wages not exceeding
Rs. 7,500 with effect from 1 April 2004. The Act provides medical
care in kind and cash benefits in the contingency of sickness, maternity
and employment injury and pension for dependents in the event of the
death of a worker because of employment injury. . |
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In addition to the above Acts, several
states have enacted Shops and Establishment
Acts which regulate working hours, prescribe minimum standards
of working conditions and provide for overtime and leave salary payments
to workers in certain categories of shops and other establishments. |
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