business environment
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MODULE – 4
LaBOUR ENVIRONMENT
Dharmendra Pandey
Assistant Professor
@profdpandey
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Module IV- Labour Environment
o Labour legislation in India
o Social Security benefits
o Industrial disputes- causes and preventive
measures
o Settlement of Disputes
o ILO
o Trade Union- meaning and function,
o Trade Union Act
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Labour Legislation in India
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Labour Environment
Introduction
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Labour – an active and important factor of production;
It embodies both physical and mental labour;
It covers all the levels of hierarchy from top
management to the workers at the shop floor level.
• Labour environment –
a) refers to the conditions which affect the working
environment of labour and management and the
relationship between the two (Labour & the Mgmt.).
b) It is greatly conditioned by the socio-economic and
cultural factors, and the labour laws in force.
A Congenial labour environment:
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Promotes domestic and foreign investment;
Increases efficiency, productivity and competitiveness of
business organisations;
Increases the level of motivation, and work satisfaction;
Results in better utilisation of productive assets;
Promotes employment;
Promotes industrial peace;
Increases the role and status of workers in the society;
Promotes work culture; and
Promotes growth of the economy.
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Need for Labour Legislation (Laws)
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Protection of labour interests is also held as one of the
important responsibilities of the State (government) in
democratic countries.
Article 42 and 43 of the Directive Principles in the
Constitution of India imposes an obligation on the State
to secure, by suitable legislation, for all workers: work,
a living wage and decent working conditions.
From time to time, the government has been bringing
various forms of Labour Legislations in India, to protect
the interest of labour.
Labour is an item included in the Concurrent List in the
Constitution, which implies that both Union and State
governments can legislate on this matter.
Labour Legislation (Laws) in India
1. Payment of Wages Act, 1936: Ensures that industrial
workers receive payment of their wages at regular
intervals and that no unauthorised deductions are made
from their wages.
2. Minimum Wages Act, 1948: empowers the Government
to fix, review, revise, and enforce minimum wages of
workers employed in all scheduled employments.
3. Payment of Bonus Act, 1965: provides for the payment
of bonus to all employees working in industrial
establishments and drawing up to Rs. 3,500 p.m.
Labour Legislation (Laws) in India
4. Bonded Labour System (abolition) Act, 1976: This Act
abolishes bonded labour system in India. Under the Act,
every bonded labourer stands freed and discharged from
any obligation to render any bonded labour.
5. Trade Unions Act, 1926: The Act lays down procedure
for registration of trade unions and defines their rights
and liabilities. Members of registered trade unions get
protection against various civil and criminal liabilities
which they are likely to incur in promoting and
safeguarding their legitimate interests.
Labour Legislation (Laws) in India
6. State Acts on Shops and Commercial Establishments:
covers all wage earners employed in shops, commercial
establishments, restaurants, theaters, cinemas, and other
places of work. These Acts contain provisions related to
opening and closing hours, hours of work, rest intervals,
overtime rates, and weekly holidays.
7. Factories Act, 1948: provides for the licensing,
registration, and inspection of factories, for protecting
the interests of workers by ensuring for them better
work conditions, and safe and healthy working
conditions in factories.
Labour Legislation (Laws) in India
8. Industrial Disputes Act, 1947: The main objectives of
the Act are: •
Promotion of measures for securing good relations
between employers and workers;
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Investigation and settlement of disputes between labour
and employers, workmen and workmen, employers and
employers;
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Prevention of illegal strikes and lockouts; and
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Providing relief to workers adversely affected by
retrenchments (layoffs).
Labour Legislation (Laws) in India
9. Equal Remuneration Act, 1976 – This Act seeks: •
to protect the interests of women labour;
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equal remuneration to women workers (as that paid to
men workers) for same / similar work;
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that women are not discriminated against in matters of
recruitment or service conditions.
Social Security
Benefits and
Welfare of the
Labour:
Welfare and Amenities within the Organization:
1. Lavotaries.
2. Washing and bathing facility.
3. Crèches.
4. Rest shelters and canteens.
5. Drinking water.
6. Arrangement of prevention of Fatigue.
7. Health service including occupational safety.
8. Administration arrangements inside a plant to
look after welfare.
9. Uniforms and protective clothing.
10. Shift allowance.
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:Welfare and Amenities outside the Organization:
1. Maternity benefits.
2. Social security measures like insurance,
gratuity, PF and rehabilitation.
3. Benevolent funds.
4. Medical facilities, including programmes for
Physical fitness and efficiency, family planning and
child welfare.
5. Educational facility including adult education.
6. Housing facility and Transportation.
7. Recreational facility.
8. Holiday facility, LTC.
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A.Acts that provide security in cases of
employment injury, maternity and sickness:
1. The workmen’s Compensation Act, 1923.
2. The Maternity Benefits Act, 1961.
3. The Employees’ State Insurance Act, 1948.
B. Acts that cover the risks of old age and
unemployment:
1. The Employees’ Provident fund and
Miscellaneous Provisions Act, 1952.
2. The Payment of Gratuity Act, 1972.
3. The Industrial Disputes Act, 1947.
4. The coal mines Provident Fund, Family Pension
and Bonus Act, 1948.
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Social Security Measures (benefits) in India
1. Workmen’s Compensation Act, 1923: It provides
compensation to workers in case of industrial accidents
and injury. Under this Act compensation is paid by the
employer and the amount of compensation depends
upon the nature of injury and the salary of the worker
concerned. There is no wage limit for coverage under
the Act. It covers all workers employed in factories,
mines, plantations, mechanically propelled vehicles,
construction workers, and certain other hazardous
occupations. The Act is, however, not applicable to the
persons who are covered by Employees State Insurance
Act, 1948.
Social Security Measures (benefits) in India
2. Employees’ State Insurance Act, 1948:
The purpose of this Act is to provide compulsory
and contributory health insurance facilities to
workers. It provides for medical care and
treatment (to workers and to their families), cash
benefit during sickness, maternity benefits,
employment injury, pension to the dependents on
the death of worker. The Act covers employees
working in organised industrial sector and whose
monthly income is less than Rs. 7,500.
Social Security Measures (benefits) in India
3. Employees’ Provident funds and Miscellaneous
Provision Act, 1952 :
The Act provides for provident fund (PF), family pension,
and deposit linked insurance for employees working in
industrial establishments. The pay (Basic pay + D.A)
limit for the purpose of coverage under the Act is Rs.
6,500 p.m. The scheme is compulsory and contributory.
Both, the employer and the employee contribute equally
(a fixed percent of employee’s monthly pay) on a
monthly basis into the PF account of the employee with
the PF department (of government). Interest is credited
on a regular basis on the accumulated balance in the
account. On retirement (or death), the money is given to
the employee (or to his family).
Social Security Measures (benefits) in India
4. Payment of Gratuity Act, 1972:
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The Act covers employees working in factories, mines,
oilfields, plantations, ports, railways, companies, shops
or other establishments employing more than 10
persons;
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There is no wage ceiling for getting benefit under this
Act;
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On completion of 5 years of service, the employee is
entitled to gratuity payable at the rate of 15 days wages
for each completed year of service, subject to a
maximum of Rs. 3.5 lacs.
Industrial Disputes
Introduction
• There are conflicts between employers and workers;
• These conflicts (disputes) have different forms;
• From the side of workers, the protests may be in the
form of: strikes, go slow, gheraos, demonstration etc.;
• From the side of employers, it could be in the form of:
retrenchment, dismissals, lockouts etc.
• Industrial disputes result in loss of production and
decline in national income;
• It is, therefore, in interest of all, to look into factors
responsible (causes) for such disputes and the methods
used to remove them.
Causes of Industrial Disputes
1. Workers demand for more wages (wages not rising in
proportion to rise in prices);
2. Workers demand for bonus the increase in bonus: There
is an increasing feeling among workers that they should
have greater share in the profits. Non-acceptance of this
fact by the employers becomes a source of friction;
3. Demand for improved working conditions – such as
normal working hours, lunch time, holidays and leaves,
better occupational health & safety measures at
workplace, drinking water, clean washrooms, medical
facilities, canteens, restrooms, etc. – their absence or
lacking may cause workers protest.
Causes of Industrial Disputes
4. Labour retrenchment or dismissal;
5. Non-implementation of Labour Acts, awards and
agreements, standing orders by the employers;
6. Workers indiscipline and violence – resulting into
lockouts. When the managements think that labour
productivity has failed to rise commensurate with the
rise in wages, consequently, the managements think that
it is better to close down than pay inflated wages to an
undisciplined labour force;
Settlement of Industrial Disputes
Under the Industrial Dispute Act (IDA), 1947, the following
arrangement exists for the prevention and settlement of
industrial disputes: 1. Works Committees – these are joint committees
comprising members from both, management and the
workers, and is set up in order to promote harmonious
relations between the two groups. These committees
provide a forum for negotiations between workers and
management at the factory level.
2. Conciliation - under this, all establishments employing
50 workers or more, are required to establish Grievance
Settlement Authority (GSA). All labour disputes have
to be initially referred to it. If the decision of the GSA is
not acceptable to all the concerned parties, then it is
referred to a conciliation officer appointed by the
Government for the purpose.
Settlement of Industrial Disputes
If a settlement is arrived, the conciliation officer sends his
report with the Memorandum of Settlement (signed by
all the parties to the dispute) to the government. If the
settlement is not arrived, the reasons for non-settlement
are recorded and a report (of non-settlement) is sent to
the government, which may then constitute a Board of
Conciliation (consisting of a Chairman – an independent
person, and members from both management and
workers). The Board then reports to the government
about the success or failure of its efforts;
3. Arbitration - In arbitration mechanism, the concerned
parties, by mutual agreement, can refer the dispute to an
arbitrator (an external third person, acceptable to all)
before the same has been referred for adjudication.
Settlement of Industrial Disputes
In case the matter is not solved by arbitration, it is then
referred to court (i.e. for adjudication);
4. Court of Enquiry – Whenever the industrial dispute is
not settled by conciliation and arbitration, the matter is
referred to a court of enquiry. The court will investigate
the whole dispute and will submit its report to the
government (within a period of six months from the date
of commencement of its inquiry). The case will then be
referred to either a Labour Court or an Industrial Tribunal
for adjudication;
5. Adjudication (to deliver judgment) – Under the IDA,
1947 the adjudication mechanism is divided into two,
depending upon the type of problem - The labour Court,
and the Industrial Tribunals. The latter could be of two
types, viz., State Tribunals, and National Tribunals.
Settlement of Industrial Disputes
5 a) Labour Courts – Set up by State governments; Decide
matters (contained in the 2nd Schedule of IDA, 1947) like
disputed orders of the employers, dismissals, suspensions
of employees, legality of strikes, lock-outs etc. The labour
courts decide matters speedily and report to the
government.
5 b) Industrial Tribunals – These tribunals decide matters
(contained in 3rd Schedule of IDA, 1947) related to wages,
bonus, allowances, other benefits, working conditions,
discipline, retrenchment etc.). When set up by the State
Govt. they are called State Tribunals. National Tribunals
are set up by the Central Govt. to decide upon matters of
national importance or which affect industrial
establishments situated in more than one State.
Trade Unions
Definition: According to V.V. Giri, “Trade Unions are
voluntary organisations (associations) of workers
formed to promote and protect their interests by
collective action”;
Functions of Trade Unions (According to National
Commission on Labour):
1. To secure for workers fair wages;
2. To safeguard security of tenure and improve conditions
of service;
3. To improve opportunities for promotion and training;
4. To provide for educational, cultural and recreational
facilities;
5. To co-operate in and facilitate technological advance by
broadening the understanding of workers;
Trade Unions
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To promote interests of workers in their industries;
To promote production and productivity, discipline and
high standards of quality;
To promote individual and collective welfare.
Trade Union Act, 1926
Objectives – To lay down the procedure for registration of
Trade Unions, defining their rights and liabilities,
regulating their activities, and making them more
purposeful for the society.
• The Act extends to the whole of India.
Provisions of the Trade Union Act, 1926
Section 3: Appointment of Registrars The appropriate Government is empowered to appoint a
Registrar of Trade Unions for each State. It may also
appoint Additional and Deputy Registrars of Trade
Unions.
Section 4: Mode of Registration Any seven or more members of a Trade Union may apply
for registration of the Trade Union under this Act:
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by subscribing their names to the rules of the
Trade Union; and
by complying with the provisions of this Act
with respect to registration.
Provisions of the Trade Union Act, 1926
Section 5: Application for registration
Application for registration of a Trade Union shall be
made to the Registrar and shall be accompanied by:
- A copy of the rules of the Trade Union;
- Statement of the following particulars:• The names, occupations and addresses of the
members making the application.
• The name of the Trade Union and the address of
its head office.
Where a Trade Union has been in existence for more than
one year before the making of an application for its
registration it needs to submit a statement of the assets
and liabilities held by it.
Provisions of the Trade Union Act, 1926
Section 6:
A Trade Union shall not be entitled to registration under this
Act, unless its executive body is constituted in
accordance with the provisions of this Act, and its rules
provide for the following:
- the Name of the Trade Union;
- the Object for which the Trade Union has been
established; and
- the purposes for which the general funds of the Trade
Union shall be applicable.
Provisions of the Trade Union Act, 1926
Section 8, 9: Registration
The Registrar, on being satisfied that the Union has
complied with all the requirements of this Act in regard
to registration, shall register and issue a certificate of
registration to the Trade Union.
Note:
The Registrar cannot refuse to register a Trade Union if
the application for registration complies with the
technical requirement as laid down in this Act.
Provisions of the Trade Union Act, 1926
Section 10: Cancellation of Registration
The certificate of registration of a Trade Union may be
withdrawn or cancelled:
• On the application by the concerned Trade Union;
• If the Registrar is satisfied that the certificate has been
obtained by fraud or mistake.
Section 12: Registered office - All communications and
notice to a registered Trade Union may be addressed
to its registered office. Notice of any change in the
address of the head office shall be given within
fourteen days of such change to the Registrar in
writing.
Provisions of the Trade Union Act, 1926
Section 13: Every registered Trade Union: – Shall have separate legal existence and be known by
the name under which it is registered.
– It would have perpetual succession and a common
seal;
– Shall have power to acquire and hold both movable
and immovable property;
– Can sue and be sued.
Provisions of the Trade Union Act, 1926
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Section 15: Objects on which general funds may be
spent Payment of salaries, allowances and expenses to office
bearers, expenses for the administration, compensation
to members for loss arising out of trade disputes;
Allowance to members or their dependants on account
of death, old age, sickness, accidents or unemployment;
Provision of educational, social or religious benefits for
members or for the dependants of members;
Upkeep of a periodical published for the purposes of
discussing questions affecting employers or workmen;
Any other object notified by the appropriate
Government in the official Gazette.
Provisions of the Trade Union Act, 1926
Section 18: Immunity from civil suit to certain cases
No suit or other legal proceeding shall be maintained in
any Civil Court against any registered Trade Union or
its member in respect of any act done in contemplation
or furtherance of a trade dispute to which such member
or the Trade Union is a party.
Section 27: Dissolution
When a registered Trade Union is dissolved, notice for
the dissolution signed by seven members and by the
Secretary of the Trade Union shall, within fourteen days
of the dissolution, be sent to the Registrar.
International Labour Organization (ILO)
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International Labour Organization
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The International Labour Organization (ILO) was
established in 1919 after World War I at Versailles;
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India become member of ILO in 1919;
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ILO considers Labour peace essential for universal
prosperity.
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It (ILO) is a tripartite UN agency that brings together
governments, employers and workers of its member
states in common action to promote decent and
productive work, throughout the world.
Key ILO Conventions
To promote its objectives, ILO has from time to time
passed certain conventions (agreements between
member States). Some of them are: 1. Freedom of Association and Protection of the Right to
Organize (1948)
2. Abolition of Forced Labour (1957);
3. Equal Remuneration (for work of equal value) (1951);
4. Elimination of Discrimination (a regards employment
and occupation) (1958);
5. Minimum Age (1973).
Role of ILO in Promoting Industrial Relations:
1. Promoting International labour standards (decent
working conditions, and enhanced labour productivity);
2. Promoting freedom, equity, security and dignity at work
place;
3. A common platform (of employers, employees,
governments, NGOs, and other experts) for
international dialogue on labour issues;
4. It generates a worldwide Public Awareness for events,
campaigns and issues concerning labour;
Role of ILO in Promoting Industrial Relations:
(continued)
5. Effort towards prohibition of Child Labour worldwide;
6. Protecting the rights of Migrant workers;
7. Promoting - Health, Safety, Welfare, and Social
Security measures for workers worldwide;
8. Effort towards workers skills enhancement & training.
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