Labour and Employment Laws in India

Labour and Employment Laws in India


Labour Law or Employment Law is the body of laws, administrative rulings, and precedents which addresses the legal rights of, and restrictions on, working people and their organizations. Generally Labour Law covers-

  • Industrial Relations-certifications of unions, labour-management relations, collective bargaining and unfair labour practices,
  • Workplace health and safety,
  • Employment standards, including general holidays, annual leave, working hours, unfair dismissals, minimum wage, layoff procedures and severance pay.


It establishes a legal system that facilitates productive individual and collective employment relationships, and therefore a productive economy. By providing a framework within which employers, workers and their representatives can interact with regard to work-related issues, it serves as an important vehicle for achieving harmonious industrial relations based on workplace democracy. It provides a clear and constant reminder and guarantee of fundamental principles and rights at work which have received broad social acceptance and establishes the processes through which these principles and rights can be implemented and enforced.


Chapter III Fundamental Rights (Articles 16, 19, 23, 24) and Chapter IV Directive Principles of State Policy (Articles 39, 41, 42, 43, 43 A & 54) of the Constitution provides for the labour and employment laws.

Entry No.55: Regulation of Labour & Safety in Mines & Oil Fields Entry No.22: Trade Unions; Industrial and Labour Disputes
Entry No.61: Industrial Disputes concerning Union Employees Entry No.23: Social Security and Insurance, Employment & Unemployment
Entry No.65: Union Agencies & Institutions for “Vocational Training” Entry No.24: Welfare of Labour including Conditions of Work, Provident Funds, Employer’s Liability, Workmen’s Compensation, Invalidity and Old Age Pensions and Maternity Benefits.


Two Broad Categories of Labour Law:

1) Collective Labour Law: It relates to the tripartite relationship between employee, employer and union.

2) Individual Labour Law: It concerns employees’ rights at work and through the contract for work.

The law relating to labour and employment in India is primarily known under the broad category of “Industrial Law“.


Laws related to Industrial Relations

1.Trade Unions Act, 1926

2.Industrial Employment Standing Order Act, 1946

3. Industrial Disputes Act, 1947

Laws related to Wages

4. Payment of Wages Act, 1936

5. Minimum Wages Act, 1948

6. Payment of Bonus Act, 1965.

7. Working Journalists (Fixation of Rates of Wages Act, 1958

Laws related to Working Hours, Conditions of Service and Employment

8. Factories Act, 1948

9. Plantation Labour Act, 1951

10. Mines Act, 1952

11. Working Journalists and other Newspaper Employees’ (Conditions of Service and Misc. Provisions) Act, 1955

12. Merchant Shipping Act, 1958

13. Motor Transport Workers Act, 1961

14. Beedi & Cigar Workers (Conditions of Employment) Act, 1966

15. Contract Labour (Regulation & Abolition) Act, 1970

16. Sales Promotion Employees Act, 1976

17. Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979

18. Dock Workers (Safety, Health & Welfare) Act, 1986

19. Building & Other Construction Workers (Regulation of Employment & Conditions of Service) Act, 1996

20. Building and Other Construction Workers Welfare Cess Act, 1996

21. Cine-Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981

22. Dangerous Machines (Regulation) Act, 1983

23. Dock Workers (Regulation of Employment) Act, 1948

24. Dock Workers (Regulation of Employment) (Inapplicability to Major Ports) Act, 1997

25. Employment of Manual Scavengers and Construction of Dry Latrines (Prohibition) Act, 1993

26. Industrial Employment (Standing Orders) Act, 1946

27. Mines and Mineral (Development and Regulation Act, 1957

28. Plantation Labour Act, 1951

29. Private Security Agencies (Regulation) Act, 2005

Laws related to Equality & Empowerment of Women:

30. Maternity Benefit Act, 1961

31. Equal Remuneration Act, 1976

Laws related to Deprived and Disadvantaged Sections of the Society:

32. Bonded Labour System (Abolition) Act, 1976

33. Child Labour (Prohibition & Regulation) Act, 1986

34. Children (Pledging of Labour) Act, 1933

Laws related to Social Security:

35. Workmen’s Compensation Act, 1923

36. Employees’ State Insurance Act, 1948

37. Employees’ Provident Fund & Miscellaneous Provisions Act, 1952

38. Payment of Gratuity Act, 1972

39. Employers’ Liability Act, 1938

40. Beedi Workers Welfare Cess Act, 1976

41. Beedi Workers Welfare Fund Act, 1976

42. Cine workers Welfare Cess Act, 1981

43. Cine Workers Welfare Fund Act, 1981

44. Fatal Accidents Act, 1855

45. Iron Ore Mines, Manganese Ore Mines and Chrome Ore Mines Labour Welfare Cess Act, 1976

46. Iron Ore Mines, Manganese Ore Mines and Chrome Ore Mines Labour Welfare Fund Act, 1976

47. Limestone and Dolomite Mines Labour Welfare Fund Act, 1972

48. Mica Mines Labour Welfare Fund Act, 1946

49. Personal Injuries (Compensation Insurance) Act, 1963

50. Personal Injuries (Emergency Provisions) Act, 1962

51. Unorganised Workers’ Social Security Act, 2008


The main purpose of the Act is to provide practical training to technically qualified persons in various trades. The objective is promotion of new skilled manpower. The scheme is also extended to engineers and diploma holders. The Act applies to areas and industries as notified by Central government [Section 1(4)].

Obligation of Employer

  • Every employer is under obligation to provide the apprentice with the training in his trade in accordance with the provisions of this Act and the rules made there under.
  • If the employer is not himself qualified in the trade, he has to ensure that a person who possesses the prescribed qualification is placed in charge of the training of the apprentice.
  • Every employer has to provide adequate instructional staff, possessing such qualifications as may be prescribed for imparting practical and theoretical training and facilities for trade test of apprentices.
  • Every employer is under an obligation to take apprentices in prescribed ratio of the skilled workers in his employment in different trades [Section 11].
  • In every trade, there will be reserved places for scheduled castes and schedules tribes [Section 3 A]. Ratio of trade apprentices to workers shall be determined by Central Government.
  • Employer can engage more number of apprentices than prescribed minimum [Section 8(1)].
  • The employer has to make arrangements for practical training of apprentice [Section 9(1)].
  • Employer will pay stipends to apprentices at prescribed rates. If the employees are less than 250, 50% of cost is shared by Government. If employer is employing more than 250 workers, he has to bear full cost of training.


Objective of the Act

  • To ensure adequate safety measures and to promote the health and welfare of the workers employed in factories.
  • To prevent haphazard growth of factories through the provisions related to the approval of plans before the creation of a factory.

Applicability of the Act

  • Applicable to the whole of India including Jammu & Kashmir.
  • Covers all manufacturing processes and establishments falling within the definition of ‘factory’.
  • Applicable to all factories using power and employing 10 or more workers, and if not using power, employing 20 or more workers on any day of the preceding 12 months.


Definition of Industrial Disputes

As per Section 2(k) of Industrial Disputes Act, 1947, an industrial dispute is defined as any dispute or difference between employees and employers, or between employers and workmen, or between workmen and which is connected with the employment or non-employment or the terms of employment or with the conditions of labour, of any person.

Objective of the Act

The Act lays down:

(a) The provision for payment of compensation to the Workman on account of closure or lay off or retrenchment.

(b) The procedure for prior permission of appropriate Government for laying off or retrenching the workers or closing down industrial establishments.

(c) Unfair labour practices on part of an employer or a trade union or workers.

Important Provisions of the Act

  • Defines industry, industrial dispute, layoff, lockout, retrenchment, trade union, strike, wages, workman etc.
  • Provides machinery for investigating and settling disputes through works committees, conciliation officers, boards of conciliation, courts of enquiry, labour courts, tribunals and voluntary arbitration.
  • Reference of dispute for adjudication.
  • Awards of labour courts and tribunals.
  • Payment of wages to workers pending proceedings in High Courts.
  • Rights of appeal.
  • Settlements in outside conciliation.
  • Notice of change in employment conditions.
  • Protection of workmen during pendency of proceedings.
  • Strike and lockout procedures.
  • Lay-off compensation.
  • Retrenchment compensation.
  • Proceedings for retrenchment.
  • Compensation to workmen in case of transfer of undertakings.
  • Closure procedures.
  • Reopening of closed undertakings.
  • Unfair labour practices.
  • Recovery of money due from employer.
  • Penalties.
  • Obligations and rights of employees.


Applicability of the Act

  • The payment of Bonus Act provides for payment of bonus to persons employed in certain establishments on the basis of profits or on the basis of production or productivity and for matters connected therewith.
  • It extends to the whole of India and is applicable to every factory and to every other establishment where 20 or more workmen are employed on any day during an accounting year.

Eligibility for Bonus

  • Every employee receiving salary or wages upto Rs. 10,000 p.m. and engaged in any kind of work whether skilled, unskilled, managerial, supervisory etc. is entitled to bonus for every accounting year if he has worked for at least 30 working days in that year.
  • Where an employee has not worked for all the working days in an accounting year, the minimum bonus of one hundred rupees or, as the case may be, of sixty rupees, if such bonus is higher than 8.33 per cent, of his salary or wage for the days he has worked in that accounting year, shall be proportionately reduced.
  • However employees of L.I.C., Universities and Educational Institutions, Hospitals, Chamber of Commerce, RBI, IFCI, UTI, IDBI, NABARD, SIDBI, Social Welfare institutions are not entitled to bonus under this Act.


Applicability of the Act

  • The Act provides for a scheme for the payment of gratuity to employees engaged in factories, mines, oil fields, plantations, ports, railway companies, shops or other establishments. The Act enforces the payment of ‘gratuity’, a reward for long service, as a statutory retiral benefit. Every employee irrespective of his wages is entitled to receive gratuity if he has rendered continuous service of 5 years or more than 5 years.
  • It is not paid to an employee gratuitously or merely as a matter of boon. It is paid for the service rendered by him to the employer (Delhi Cloth & General Mills Co. Ltd vs The Workmen & Ors., 1967 AIR 469).
  • Gratuity is payable to an employee on termination of his employment after he has rendered continuous service for not less than five years:
    • on his superannuation,
    • on his resignation,
    • on his death or disablement due to employment injury or disease,
  • The payment of gratuity shall be forfeited:
    • to the extent of the damage or loss caused by the employee to the property of the employer,
    • where the service of the employee is terminated due to misconduct.


Applicability of the Act

  • The Workmen’s Compensation Act, aims to provide workmen and/or their dependents some relief in case of accidents arising out of and in the course of employment and causing either death or disablement of workmen.
  • It provides for payment by certain classes of employers to their workmen compensation for injury by accident.

Act does not apply where workman covered under ESI Act, 1948

Since a workman is entitled to get compensation from Employees State Insurance Corporation, a workman covered under ESI Act, 1948 is not entitled to get compensation under Workmen’s Compensation Act, as per Section 53 of ESI Act, 1948.

Employees Entitled To Compensation

Every employee (including those employed through a contractor but excluding casual employees), who is engaged for the purposes of employers business and who suffers an injury in any accident arising out of and in the course of his employment, shall be entitled for compensation under the Act.

Employers Liability for Compensation (Accidents)

The employer of any establishment covered under this Act, is required to compensate an employee:

    1. Who has suffered an accident arising out of and in the course of his employment, resulting into
      • death,
      • permanent total disablement,
      • permanent partial disablement, or
      • temporary disablement whether total or partial, or
    2. Who has contracted an occupational disease.


The Trade Unions Act, 1926 provides for registration of trade unions with a view to render lawful organisation of labour to enable collective bargaining. It also confers on a registered trade union certain protection and privileges.

The Act extends to the whole of India and applies to all kinds of unions of workers and associations of employers, which aim at regularizing labour management relations. A Trade Union is a combination, whether temporary or permanent, formed for regulating the relations not only between workmen and employers but also between workmen and workmen or between employers and employers.


Registration of a trade union is not compulsory but is desirable since a registered trade union enjoys certain rights and privileges under the Act. Minimum seven workers of an establishment (or seven employers) can form a trade union and apply to the Registrar for it registration.

Legal Status of a Registered Trade Union

  • A registered trade union is a body corporate with perpetual succession and a common seal.
  • It can acquire, hold sell or transfer any movable or immovable property and can be a party to contracts.
  • It can sue and be sued in its own name.
  • No civil suit or other legal proceeding can be initiated against a registered trade union in respect of any act done in furtherance of a trade dispute under certain conditions.
  • No agreement between the members of a registered trade union shall be void or voidable merely on the ground that any of its objects is in restraint of trade.


Objective of the Act

The object of the Act is to regulate the employment of women in certain establishments for certain periods before and after childbirth and to provide for maternity benefits and certain other benefits.

Applicability of the Act

This act applies to women who work in factories, mines, plantations, circus industry, shops and establishment with more than 10 employees. It does not apply to employees covered by the Employees State Insurance Act, 1948. It can be extended to other establishments by the State Governments.

Persons entitled to maternity benefit

  • Every woman is entitled to the payment of maternity benefit at the rate of the average daily wage for the period of her actual absence immediately preceding and including the day of her delivery and for the six weeks immediately following that day.
  • The average daily wage is calculated on the basis of the amount payable to her for the days on which she has worked during the period of three calendar months immediately preceding the date from which she has absented herself on account of maternity, or one rupee a day, whichever is higher.
  • To be eligible for maternity benefit, a woman should have worked in an establishment for not less than 160 days in the twelve months immediately prior to the date of her expected delivery.
  • Every woman is entitled to the payment of maternity benefit at the rate of the average daily wage for the period of her actual absence immediately preceding and including the day of her delivery and for the six weeks immediately following that day.
  • The average daily wage is calculated on the basis of the amount payable to her for the days on which she has worked during the period of three calendar months immediately preceding the date from which she has absented herself on account of maternity, or one rupee a day, whichever is higher.
  • To be eligible for maternity benefit, a woman should have worked in an establishment for not less than 160 days in the twelve months immediately prior to the date of her expected delivery.
  • The maximum period for which any woman can be entitled to maternity benefit is twelve weeks.
  • This includes six weeks up to and including the day of her delivery and six weeks immediately following that day. If a woman dies during this period, the maternity benefit will be payable only for the days up to and including the day of her death. However, if she delivers a child and dies during the delivery or during the period of six weeks following the delivery, the employer will be liable for the maternity benefits of the entire period of six weeks immediately following the day of her delivery. If the child dies during this period, the liability will be only up to and including the day of the death of the child.
  • In case the woman dies before receiving the benefit, the amount must be paid to her nominee or legal representative.

Creche Facility Under Maternity Benefit Amendment Act, 2017

The Maternity Benefit Act had come into force on April 1, 2017. The Maternity Benefit (Amendment) Act, 2017 is a landmark law which has enhanced the maternity benefits already available under the parent Maternity Benefit Act, 1961.

The Act has increased the duration of paid maternity leave available to working mothers from 12 weeks to 26 weeks. However, for women, who already have two surviving children will be only entitled to a paid maternity leave of 12 weeks.

Further, the Maternity Act has introduced provisions for adopting mother and commissioning mothers who are entitled to maternity benefit leave of 12 weeks from the date on which the child is being handed over to the mother.

Provision of Creche under this Act

Section 11A, introduced by the Maternity Act is that any establishment which has 50 or more employees shall have the facility of creche. The term ’employees’ has been used to make the provision gender neutral, because though a woman is biologically endowed to give birth, however, the responsibility to take care of a child lies with both the father and the mother. Therefore, even if an establishment consists of only males, such establishment should have a creche facility so as to enable fathers to bring their children to the creche.

Recent Developments in the field of Employment & Labour Law

The Central Government has formulated the following codes, which are yet to be implemented:

1. Code on Wages 2019:  Seeks to replace the extant Minimum Wages Act, 1948, Payment of Wages Act, 1936, Payment of Bonus Act, 1965 and Equal Remuneration Act, 1976. This Code was passed by both Houses of Parliament and also received the Presidential assent on 8th August, 2019. However, the Code is yet to be enforced by way of a notification by the Central Government.

2. Occupational Safety, Health and Working Conditions Code, 2019:  Seeks to replace 13 labour laws relating to safety, health and working conditions. These laws include: Factories Act, 1948; Mines Act, 1952; Dock Workers Act, 1986; Contract Labour Act, 1970; and Inter-State Migrant Workers Act, 1979. This Code was introduced in the Lok Sabha on 23rd July, 2019 and has since been referred to a standing committee for its comments.

3. Industrial Relations Code, 2019:  Seeks to replace the extant ID Act, TU Act, and Industrial Employment (Standing Orders) Act, 1946. This Code was introduced in the Lok Sabha on 28th November,2019 and has since been referred to standing committee for its comments.

4. Code on Social Security, 2019:  Seeks to replace nine extant labour laws on social security in India including the EPF Act, the Maternity Benefit Act & the Unorganised Workers’ Social Security Act, 2008. This Code was introduced in the Lok Sabha on 11th December, 2019 and has been referred to a standing committee for its comments.


Constitution of India


Author: Komal Bansal,
Law Student, 1st Year, Law Centre-1, Faculty of Law, University of Delhi

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