Aug 12,2019 | 20 min read

Indian Employment Law Update: Overview on 2017 and 2018 and The Lineup for 2019 by Advocate Kanchan Khatana

Author - Advocate Kanchan Khatana and Associate Kantika Mukherjee

The article will briefly discuss the overview on the employment law developments which took place in 2017 and 2018, and shall focus on the major employment law reforms lined up for 2019.

Indian employment law overview on 2017

Amongst the most significant labor reforms that took place in 2017 were:

· Maternity Benefit Amendment Act, 2017 which contains the extension of maternity leave to 26 weeks, putting India amongst the top 3 nations in generosity of maternity benefits;

· The enactment of the Rights of Persons with Disabilities Act, 2016, which identifies 21 categories of disabilities and conforms with the principles of the United Nations Convention on the Rights of Persons with Disabilities;

· Raising the remuneration threshold for eligible workers under the Employees' State Insurance Act, 1948 towards providing coverage to more workers.

The Code on Wages Bill, 2017 had also proposed to replace 4 federal labor laws: The Minimum Wages Act, 1948; The Payment of Wages Act, 1936; The Payment of Bonus Act, 1965; and The Equal Remuneration Act, 1976. 

The other legislative applications made in 2017

There are proposed amendments towards the current Employees Provident Fund and Miscellaneous Provisions Act, 1952 ("EPF Act"), the Employees Compensation Act 1923, better safeties for those employed in shops, minimum wage for contract laborers, amendments to the Employee State Insurance Act and the Factories Act and firming up the laws concerning the Sexual Harassment at The Workplace (Prevention, Prohibition and Redressal) Act and Rules, 2013.

Indian employment law overview on 2018

· The Payment of Gratuity (Amendment) Bill, 2017 (“Gratuity Bill”) has been introduced in the Parliament on 2017 to allow the Government the option to; recommend the gratuity ceiling from INR 10,00,000 to INR 20,00,000, and the period of maternity leave that shall be deemed to constitute continuous service. . 

· The Government had also promised to review the Indian employment laws for reducing the multiplicity of employment legislation and also has required consolidating 44 central employment laws into 4 labor codes:

1. Consolidating the Industrial Disputes Act, 1947, the Industrial Employment (Standing Orders) Act, 1946 and the Trade Unions Act, 1926; 

2. Consolidating social security laws for instance the Employees Provident Funds and Miscellaneous Provisions Act, 1952, the Employees State Insurance Act, 1948, Maternity Benefit Act, 1961, the Employees Compensation Act, 1923, etc.;

3. Consolidating the Minimum Wages Act, 1949, the Payment of Wages Act, 1936, Payment of Bonus Act, 1965 and Equal Remuneration Act, 1976; and

4. Labour Code on Occupational Safety, Health and Working Conditions

· The Government has proposed the introduction of a National Employment Policy for addressing the growing rate of joblessness in India.    

· Regarding transgender individuals, the Transgender Persons (Protection of Rights) Bill, 2016, inter alia, pursues to prohibit the discrimination of transgender individuals in terms of service, healthcare services and access towards facilities. 

· Amendments to the Factories Act, 1948, are mainly intended at permitting the state government to increase the number of overtime hours that workers could work and propose rules concerning exemptions that can be given to many categories of workers.

· The Contract Labor (Regulation and Abolition) Act, 1970 (“CLRA”), aims to exclude employees who are regularly working in the establishment of the contractor from the definition of the term ‘contract labor’ for the purposes of the CLRA.  

· Proposals to Provident Fund Contributions have been made in the budget 2018 and these proposals are indicative of the efforts to offer greater benefits and facilities to workers.

Indian employment law line up for 2019

· The government shall push for passing 2 codes: the Code on Wages and the Code on Occupational Safety Health and Working Conditions as a priority before taking up the other two codes; the Code on Industrial Relations and the Code on Social Security, which might be taken up later after additional consultations with industry as well as trade unions.

· The government is also planning to establish a new labour legislation that will merge 44 labour laws under 4 categories-- wages, social security, industrial safety and welfare, and industrial relations. 

· It is probable that the laws relating to social security, which includes the Employees' Provident Fund and Miscellaneous Provisions Act, Employees' State Insurance Corporation Act, Maternity Benefits Act, Building and Other Construction Workers Act and the Employees' Compensation Act shall be merged for creating a single social security law or code. 

· The laws like the Factories Act, the Mines Act and the Dock Workers (Safety, Health and Welfare) Act, shall be merged for creating a single type on industrial safety and welfare. 

· The Minimum Wages Act, the Payment of Wages Act, the Payment of Bonus Act, the Equal Remuneration Act and a few others are could be merged. 

· The Labour Code on Industrial Relations would combine Industrial Disputes Act, 1947, the Trade Unions Act, 1926, and the Industrial Employment (Standing Orders) Act, 1946. 

· The government likewise approved a Memorandum of Understanding (MoU) amongst Brazil, Russian Federation, India, China, South Africa, concerning Cooperation in the Social and Labour Sphere. The MoU has been signed on 3rd August, 2018 in the BRICS Labour and Employment Ministers (LEM) Meeting. 

· An additional Memorandum of Understanding (MoU) has been signed amid India and Italy for training and education in the labour and employment sector. 

· The ministry also incorporated the category of 'Fixed Term Employment Workman' for every sector in the Industrial Employment (Standing Orders) Act, 1946.

· The ESI Corporation has permitted a Scheme called "ATAL BIMIT VYAKTI KALYAN YOJANA" for insured people covered under the ESI Act, 1948, where the money goes directly to the insured individuals' bank accounts in case of joblessness and when they look for new engagement. 

Need Free Legal Advice or Assistance Online?

For any General Advice related matter, please Post Your Requirement anonymously and get free proposals OR find the Best Lawyers and book a free appointment directly.


Lex Comply - Knowledge Dossier (10 July 2020)

Insolvency proceedings under the IBC By Ramasamy Santhanak

Agreement on Intellectual Property Rights

Shareholder Agreement

Joint Venture Agreement

Permanent Employment Agreement

Memorandum of Association of a Company

Zero Hours Workers Contract



Kanchan Khatana

Ms. Khatana carries over 15 years of extensive experience in steering matters across Employment Law, Corporate Law, Regulatory Compliance, M& A, Prevention of Sexual Harassment,Civil and Criminal Law for many Multinational corporations.