Sep 16,2016 | 6 min read

Labour Laws in India: All Proposed Reforms & Amendments

The current scenario

Below are some features of the present labor laws:

  • According to the Factories Act of 1948, normal working hours for adults are 9 hours per day amounting to 48 hours per week. Further, the working hours for young workers are 4.5 hours per day.
  • In case of paid vacation, the Act lays down that any worker who has worked at least 240 days in a year is entitled to a paid leave of 12 working days. However, the duration differs for adults and child workers. While an adult worker is entitled to 1 day of leave for every 20 days of service the ratio for child workers is 1:15.
  • Workers are entitled to paid days-off during public and religious festivals, including memorial ad religious holidays. The main three national public holidays recognized by the constitution are - Republic Day (January 26), Independence Day (August 15) and Gandhi Jayanti (October 2).
  • The Trade Union Act of 1926, last revised in 2012, provides for freedom to form associations or unions or co-operative societies. It also lays down the procedure for registration of such a Union guaranteeing the enjoyment of all the rights promised to them.
  • The Constitution, under the Industrial Dispute Act, guarantees the right to strike. All citizens have the right to assemble peacefully without arms. The Act lays down that members of the union must inform the employer at least six weeks prior to the proposed date of strike, who then should notify the appropriate government within five days.

For further details about all the above labor laws and more, you can refer to this article.

Problems with labor law in India

But, the labor laws in India are fraught with loopholes and are very restrictive. There is no ease of making workforce adjustments in line with changing market conditions. This hinders the smooth working of the economy. Some of the problems with these laws are given below:

  • Chapter 5B of the Industrial Disputes Acts of 1947 requires prior approval of the appropriate government before any layoff, retrenchment or closure in establishments employing 100 workers or more.
  • Section 9A of the Act mandates 21 days notice before affecting any change in established conditions of service of any employee.
  • The Contract Labor (Regulation and abolition) Act of 1970 provides for engaging contract workers for temporary, seasonal work but not for work of a perennial nature. Since regular worker are becoming less productive, more expensive, hard to put to immediate work and legally challenging to lay off in the face of falling demand, the employers find this feature of the Act very restrictive.

Proposed changes to labor laws on a Union scale

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