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15 Major Labour Law Acts Every Employer Must Know About

The central government is already executing a series of changes in the four labour law codes.

Their primary objective is to simplify the complicated labour laws and ensure ease of carrying business. From retrenchment to the inclusion of contract labour in the mainstream workforce, the 29 labour laws have been clubbed into four codes. The challenges faced by establishments to ensure compliance led to the formulation of these new laws. Besides, they will also help employees understand and prevent violations through a better understanding.

Although the new laws may get implemented by the end of the current fiscal year, all employers need to know about their old forms. It will help them understand what changes have been made and their consequences better. Without knowing the entire picture, one may not understand the significance of these amendments.

So, let us tell you about 15 labour laws that every employer must know:

1. Indian Industrial Disputes Act of 1947

Primarily aimed to settle industrial disputes, this law also deals with the provision of compensation in case of lay-offs and retrenchment and unfair labour practices. In its initial form, the law mandated companies with 300 or more employees to obtain government permission for lay-offs. However, an amendment in 1982 reduced the threshold to 100 workers.

2. Minimum Wages Act of 1948

The objective of this act is to fix minimum wage limits for employees in different sectors. The law is applicable for both the skilled and unskilled workers to help them get a fair wage at work and reduce exploitation.

3. Payment of Wages Act, 1936

This act helps regulate the payment of wages and prevent unauthorised deductions on the part of the employer. It also helps stop unnecessary delays and fixes the mode of payment. Currently, the modes of payment are limited to cash, cheques or bank transfers.

4. Worker’s Compensation Act of 1923

Renamed as the Employee’s Compensation Act in 2009, it deals with the rate of compensation in case of unfortunate incidents, such as death or disabilities. From INR 80,000, the compensation was raised to INR 1,20,000 in case of death, and INR 1,40,000 from INR 90,000 in case of permanent disabilities.

5. Maternity Benefits Act, 1961

It is a relatively new labour law that was deduced to meet the expectations of the increasing number of women in the workforce. It helps acknowledge the challenges faced by mothers during the prenatal phase and improves their job security.

6. Payment of Bonus Act, 1965

According to this Act, the employees are subjected to a minimum of 8.33% bonus in some fields of work, depending on product benefits and revenue generation. However, the maximum limit of the bonus is set at 20% of the wage of an employee.

7. Employees Provident Fund and Miscellaneous Provisions Act

Many amendments have been made to this Act since its inception in 1952. However, the main objective of this act is to ensure adequate emergency funds for the employees. It also offers some tax benefits to the employees after retirement.

8. Sexual Harassment of Women Employees at Workplace Act, 2013

Any kind of sexual harassment can be challenged with the help of this act that came into being only recently. It is aimed to make the workplace safer for women and encourage them to contribute to the nation’s economy. From lewd comments to asking for sexual favours, everything single thing comes under this Act to be challenged legally.

9. Unorganised Workers Social Security Act, 2008

It extends social security for the unorganised or independent workers, who work from home, are self-employed, or on a daily wage. In the latest amendments, this will be replaced by the Code on Social Security.

10. Factories Act of 1948

Amended in 1987, the Factories Act aims to reduce occupational health and safety hazards for factory and dockworkers in India. Replaced by the Occupational Safety, Health and Working Conditions Code in 2020, this law also aims to achieve work efficiency in the industrial sector.

11. Employment of Children Act of 1938

Widespread awareness of the consequences of employing child labour has led to several amendments to this law. It prevents the employment of children under the age of 15 in all sectors and under 17 in specified fields.

12. Employees State Insurance Act, 1948

This labour law aims to offer certain benefits to the working population in case of illness, maternity, and injuries. Amended in 2010, it extended medical benefits to dependent family members, including commuting accidents and acknowledging third- party participation to commission the healthcare centres.

13. Payment of Gratuity Act, 1972

It helps provide timely gratuity payment to the workers employed in factories, railways, mines, oilfields, plantations and other establishments. The gratuity can be regarded as a reward for long-term, uninterrupted services.

14. Inter-State Migrant Workmen Act of 1979

This law aims to enhance working conditions, including but not limited to, wages for migrant workers. It has been clubbed under the Occupational Health, Safety and Working Conditions Code in 2020.

15. Weekly Holiday Act, 1942

It is meant for people employed in the retail stores, theatres and restaurants. According to the Act, all stores should remain closed at least once every week. Apart from that, the State Governments will have the power to instruct closure of the shop for an hour in the afternoon, on a weekday.

Know the labour laws

As mentioned earlier, most of these laws have been amended in the 2020 Labour Code Legislation that will be implemented soon. However, understand the evolution of these laws will give clarity to the employers, as well as employees to prevent violations. One should know how their situation improved over time to help build confidence and increase productivity.