In India, a number of labour legislations have been enacted to promote the condition of the
labour keeping in view the development of industry and national economy. But for industrial
regeneration, it is necessary that the partners of the industry must care their respective
defects. Since independence both legislation and public opinion have done a lot to better the
conditions of the workers but unfortunately the employers have not responded very
appreciably. The present article is related to the study of Labor Welfare Practices in India. It
also includes its present scenario and the study ends with conclusion. The objective of this
article are three fold, first – to study the various aspects which includes concept, necessity and
scope of Indian Labor Welfare Practices in present scenario with special reference to Indian
Labour Laws, second – to study about the various agencies of Labour Welfare Practices in
India and lastly – the conclusion drawn from the above study. The emphasis has been given to
the necessity and scope of Labour Welfare Practices. It is an endeavour to demonstrate the
connectivity between Labour Welfare Practices and Indian Labour Laws. It is also sought to
be demonstrated how Labour Welfare Practices contribute towards building healthy industrial
relation. Finally, this research-article discusses various dimensions of Labour Welfare Work
and Indian Labour Laws.
The rise in industrial jurisprudence has eliminated the idea of master and servant, where the
boss and the contractor principle arose, where the former could appoint the latter but could no
longer expel it. An employee’s benefit is now secured in many ways by Legislation.
In MC Mehta case, the Court served as a worker’s defender and sometimes has been a
lawmaker where labour law is silent or vague. However, several labour regulations and
constitutional changes in response to the call, were made by the judiciary. It has also
expanded to protect the interests of workers, the fundamental freedom to equality curves,
trading in the right to life and freedom provided by human beings by the rule of law. This
expression has been extended significantly by the Supreme Court
Economic and social justice for all its people. The Fundamental Rights and Directive
Principles of State Policy enshrined in our Constitution include a special mention given their
supreme position significance in directing and shaping the country’s labour laws.
Rights for Workers enumerated under the Indian Constitution in accordance with Industrial
In specific, Article 24 of the Constitution specifies that no child under the age of 14 will be
engaged in any industrial production or factory.
Article 38, it was explicitly stated that “the state shall strive to promote the welfare of the
Article 39, ordains that it shall be the duty of the State to apply certain principles of social
justice in making laws. It says citizens are not forced by economic necessity to enter
avocations unsuited to their age or strength.
The Condition that is diverted by Article 42 also directs the State to make provision for just
and fair assurances Working life and maternity opportunities. The State shall always seek to
guarantee, by relevant law provided through sufficient commercial entity Agricultural, or in some other way, to all staff Job, a living wage, manufacturing or otherwise, working
conditions guaranteeing a decent standard of life with complete satisfaction.
Article 43 provides that the State shall take the required action by way of relevant laws or in
any other means to guarantee the involvement of Staff in the management of enterprises,
establishments, or other decision-making activities that are active in each enterprise.
Adoption of measures on social security of workers under the International Labour
In 1952 the International Labour Organization introduced the Convention on Social Security
(Minimum Norms), which combines widely agreed fundamental values and standard social
security requirements. The implementation of socio-economic growth concepts which had
secured advances in this area across the world. Accordingly, a variety of social welfare laws
and regulations were enforced in India. To enhance the quality of labour maintenance with a
view to the growth of industry and the national economy.
LAWS RELATING TO WAGES IN INDIA
Minimum Wages Act, 1948
The Minimum Wages Act, 1948 (the Minimum Wages Act) provides for fixing of minimum
rates of wages in certain employments. The minimum wages are prescribed by States through
notifications in the State’s Gazette under the Minimum Wages Rules of the specific State.
In terms of the provisions of the Minimum Wages Act, an employee means (i) any person
who is employed for hire or reward to do any work, skilled or unskilled manual or clerical, in
a scheduled employment in respect of which minimum rates of wages have been fixed; (ii) an
outworker, to whom any articles or materials are given out by another person to be made up,
cleaned, washed, altered, ornamented, finished, repaired, adapted or otherwise processed for
sale for the purposes of the trade or business of that other person; and (iii) an employee
declared to be an employee by the appropriate Government.
The term “wages” has been defined to mean all remuneration capable of being expressed in
terms of money which would, if the terms of the contract of employment express or implied
were fulfilled, be payable to a person employed in respect of his employment or work done in
such an employment and includes house rent allowance but does not include:
i. the value of:
a. Any house accommodation or supply of light, water and medical attendance;
b. Any other amenity or any service excluded by general or special order of the
ii. Any contribution paid by the employer to any personal fund or provident fund
or under any scheme of social insurance;
iii. Any travelling allowance or the value of any travelling concession;
iv. Any sum paid to the person employed to defray special expenses entailed on
him by the nature of his employment; or
v. Any gratuity payable on discharge.
Further, the Minimum Wages Act requires the employer to pay to every employee engaged in
schedule employment wages at a rate not less than minimum rates of wages as fixed by a
notification without any deduction (other than prescribed deductions, if any).
Payment of Wages Act, 1936
The Payment of Wages Act, 1936 (the Payment of Wages Act) is an Act to regulate the
payment of wages to certain classes of employed persons. The Payment of Wages Act seeks
to ensure that the employers make a timely payment of wages to the employees working in
the establishments and to prevent unauthorized deductions from the wages.
According to the Payment of Wages Act, all wages shall be in current coin or currency notes
or in both. It is, however, provided that the employer may, after obtaining the written
authorisation of the employed person, pay him the wages either by cheque or by crediting the
wages in his bank account.
Payment of Bonus Act, 1965
The Payment of Bonus Act, 1965 (the “Bonus Act”) provides for the payment of bonus to
persons employed in certain establishments in India either on the basis of profits or on the
basis of production or productivity and is applicable to every establishment in which 20 or
more persons are employed and to all employees drawing a remuneration of less than Rs
10,000. Those employees who have worked for less than thirty days are not eligible to
receive bonus under the Bonus Act. The Bonus Act provides for the payment of bonus
between 8.33% (minimum) to 20% (maximum).
LAWS RELATING TO SOCIAL SECURITY IN INDIA
Employees Provident Funds and Miscellaneous Provisions Act, 1952
The Employees Provident Funds and Miscellaneous Provisions Act, 1952 (the “EPF Act”)
provides for the institution of provident funds, pension funds, and deposit-linked insurance
funds for employees and applies to all establishments employing 20 or more persons or class
of persons. An establishment to which the EPF Act applies shall continue to be governed by
this Act, notwithstanding that the number of persons employed therein at any time falls below
On account of 2014 Amendment to the said Act, The definition of “excluded employee” has
been amended whereby the members drawing wages exceeding Rs 15,000 per month have
been excluded from the provisions of the PF Scheme. Accordingly, the wage ceiling for an
employee to be eligible for the PF Scheme has been increased from Rs 6,500 per month to Rs
15,000 per month. It further provides that every employee employed in or in connection with
the work of a factory or other establishment is required to become a member of the Provident
The 2014 Amendment further lays down the following changes:
a. New members (joining on or after 1 September 2014) drawing wages above Rs
15,000 per month shall not be eligible to voluntarily contribute to the Pension
b. The pensionable salary shall be calculated on the average monthly pay for the
contribution period of the last 60 months (earlier 12 months) preceding the date of
exit from the membership.
c. The monthly pension for any existing or future member shall not be less than Rs
1,000 for the financial year 2014-2015.
d. The contribution payable under the Insurance Scheme shall also be calculated on a
monthly pay of Rs 15,000, instead of Rs 6,500.
e. In the event of death of a member (on or after 1 September 2014), the assurance
benefits available under the Insurance Scheme has been increased by twenty percent
(20%) in addition to the already admissible benefits.
Contributions to the Provident Fund are to be made at the rate of 12% of the wages by the
employers with the employee contributing an equal amount. The employee may voluntarily
contribute a higher amount but the employer is not obliged to contribute more than the
prescribed amount. Further, the EPF Act contains provisions for transfer of accumulations in
case of change of employment.
In terms of power conferred under s 143(11) of the Companies Act, 2013, the Central
Government has issued the Companies (Auditor’s Report) Order, 2015 (CARO), which came
into force on 10 April, 2015. Clause (vii) (a) of Paragraph 3 provides that:
The [Statutory] Auditor has to report, inter alia, on the following:
i. Is the company regular in depositing undisputed statutory dues, eg, Provident Fund,
Investor Education and Protection Fund, Employees’ State Insurance, income tax,
wealth tax, service tax, sales tax, customs duty, excise duty, cess and any other
statutory duties with the appropriate authorities?
ii. If not paid regularly, the extent of the arrears of outstanding statutory dues as on the
last day of the financial year concerned for a period of more than six months from the
date they became payable, then it shall be indicated in the report.
iii. If such non-payment of dues is on account of any dispute, then the amount involved
and for the forum where the dispute is pending should also be mentioned.
The CARO is, however, not applicable to a banking company, an insurance company, s 8
company, one person company, small companies and certain class of private companies, as
specified under the CARO.
Employees’ State Insurance Act, 1948
The Employees’ State Insurance Act, 1948 (the ESI Act) is a social welfare legislation
enacted with the objective of providing certain benefits to employees in case of sickness,
maternity and employment injury. In terms of the provisions of the ESI Act, the eligible
employees will receive medical relief, cash benefits, maternity benefits, pension to
dependants of deceased workers and compensation for fatal or other injuries and diseases. It
is applicable to establishments where 10 or more persons are employed. All employees,
including casual, temporary or contract employees drawing wages less than Rs 15,000 per month,are covered under the ESI Act. This limit has been increased from Rs 10,000 to Rs
15,000 w.e.f. May 1, 2010.
The Government enacted as the Employees’ State Insurance (Amendment) Act, 2010 (No.18
of 2010). All the provisions of the ESI (Amendment) Act 2010 (except s 18) have come into
effect from June 1, 2010. The salient features of the ESI (Amendment) Act are as under:
• facilitating coverage of smaller factories;
• enhancing age limit of dependent children for eligibility to dependants benefit;
• extending medical benefit to dependant minor brother/sister in case of insured persons
not having own family and whose parents are also not alive;
• streamlining the procedure for assessment of dues from defaulting employers;
• providing an Appellate Authority within the ESI Corporation against assessment to
avoid unnecessary litigation;
• continuing medical benefit to insured persons retiring under VRS scheme or taking
• treating commuting accidents as employment injury;
• streamlining the procedure for grant of exemptions;
• third party participation in commissioning and running of the hospitals;
• opening of medical/ dental/ paramedical/ nursing colleges to improve quality of
• making an enabling provision for extending medical care to other beneficiaries
against payment of user charges to facilitate providing of medical care from under
utilised ESI Hospitals to the BPL families covered under the Rashtriya Swasthaya
Bima Yojana introduced by the Ministry of Labour & Employment w.e.f. 1.4.2008;
• reducing duration of notice period for extension of the Act to new classes of
establishments from six months to one month;
• empowering State Governments to set up autonomous Corporations for administering
medical benefit in the States for bringing autonomy and efficiency in the working.
The employer should get his factory or establishment registered with the Employees’ State
Insurance Corporation (ESIC) within 15 days after the Act becomes applicable to it, and
obtain the employer’s code number. The employer is required to contribute at the rate of 4.75% of the wages paid/ payable in
respect of every wage period. The employees are also required to contribute at the rate of
1.75% of their wages.
It is the responsibility of the employer to deposit such contributions (employer’s and
employees’) in respect of all employees (including the contract labour) into the ESI account.
Labour Welfare Fund Act (of respective States)
The [State] Labour Welfare Fund Act provides for the constitution of the Labour Welfare
Fund to promote and carry out various activities conducive to the welfare of labour in the
State so as to ensure full and appropriate utilisation of the Fund.
Payment of Gratuity Act, 1972
The Payment of Gratuity Act, 1972 (the Gratuity Act) applies to (i) every factory, mine,
oilfield, plantation, port and railway company; (ii) every shop or establishment within the
meaning of any law, for the time being in force, in relation to shops and establishments in a
State, in which 10 or more persons are employed or were employed on any day of the
preceding twelve months; and (iii) such other establishments or classes of establishments, in
which 10 or more persons are employed or were employed on any day of the preceding
twelve months, as the Central Government may, by notification, specify in this behalf.
The Gratuity Act provides for a scheme for the payment of gratuity to employees engaged in
factories, mines, oilfields, plantations, ports, railway companies, shops or other
establishments. The Gratuity Act enforces the payment of “gratuity”, a reward for long
service, as a statutory retiral benefit.
Every employee, who has completed continuous service of five years or more, irrespective of
his wages, is entitled to receive gratuity upon termination of his employment, on account of
(i) superannuation; or (ii) retirement; or (iii) death or disablement due to accident or disease.
However, the completion of continuous service of five years shall not be necessary where the
termination of employment of any employee is due to death or disablement.
The gratuity is payable even to an employee who resigns after completing at least five years
The gratuity is payable at the rate of fifteen days wages for every year of completed service,
subject to an aggregate amount of Rupees ten lacs only. However, if an employee has the
right to receive higher gratuity under a contract or under an award, then the employee is
entitled to get higher gratuity.
LAWS RELATING TO WORKING HOURS, CONDITIONS OF
SERVICE AND EMPLOYMENT:
Factories Act, 1948
The Factories Act, 1948 (the Factories Act) lays down provisions for the health, safety,
welfare and service conditions of workmen working in factories. It contains provisions for
working hours of adults, employment of young persons, leaves, overtime, etc. It applies to all
factories employing more than 10 people and working with the aid of power, or employing 20
people and working without the aid of power. It covers all workers employed in the factory
premises or precincts directly or through an agency including a contractor, involved in any
manufacture. Some provisions of the Act may vary according to the nature of work of the
Some Major provisions of the Factories Act are explained below:
a. Section 11 of the Act provides that every factory shall be kept clean and free from
effluvia arising from any drain, privy or other nuisance. Section 13 of the Act focuses
on ventilation and temperature maintenance at workplace. Every factory should work
on proper arrangements for adequate ventilation and circulation of fresh air.
b. Section 18 of the Act specifies regarding arrangements for sufficient and pure
drinking water for the workers.
c. Section 19 further mentions that in every factory there should be sufficient
accommodation for urinals which should be provided at conveniently situated place. It
should be kept clean and maintained.
d. Section 21 of the Act provides from proper fencing of machinery. And that any
moving part of the machinery or machinery that is dangerous in kind should be
e. Further s 45 of the said Act specifies that every factory should have a properly
maintained and well equipped first aid box or cupboard with the prescribed contents.
For every 150 workers employed at one time, there shall not be less than 1 first aid
box in the factory. Also in case where there are more than 500 workers there should
be well maintained ambulance room of prescribed size and containing proper facility.
Industrial Employment (Standing Orders) Act, 1946
The Industrial Employment (Standing Orders) Act, 1946 (the IESO Act) is applicable to
every industrial establishment wherein 100 or more workmen are employed or were
employed on any day of the preceding twelve months. The IESO Act Amis to bring uniform
terms and conditions of service in various industrial establishments. The IESO Act requires
every employer in an industrial establishment to clearly define and publish standing orders
with respect to conditions of employment / service rules and to make them known to the
workmen employed by it. The Act further specifies that every employer is required to submit
to the Certifying Officer five draft copies of the standing orders which he intends to adopt for
Further, the IESO Act requires display of standing orders in a prominent place for the
knowledge of workers.
Shops and Commercial Establishments Act (of respective States)
The Shops and Commercial Establishments Act(s) of the respective States generally contain
provisions relating to registration of an establishment, working hours, overtime, leave,
privilege leave, notice pay, working conditions for women employees, etc. The provisions of
the Shops and Commercial Establishments Act apply to both white collar and blue-collar
employees. IT and IT-enabled services have been given relaxations by various State
Governments in respect of the observance of certain provisions of their respective Shops and
Commercial Establishments Act.
Contract Labour (Regulation & Abolition) Act, 1970
The main objectives of the Contract Labour (Regulations & Abolition) Act, 1970 (the
Contract Labour Act) are: (i) to prohibit the employment of contract labour; and (ii) to
regulate the working conditions of the contract labour, wherever such employment is not
The Act defines a “worker” as a workman who shall be deemed to be employed as “contract
labour” in or in connection with the work of an establishment when he is hired in or in
connection with such work by or through a contractor, with or without the knowledge of the
The Contract Labour Act regulates the employment of contract labour in certain
establishments and provides for its abolition in certain circumstances. It applies to every
establishment or contractor wherein/with whom 20 or more workmen are employed or were
employed on any day of the preceding twelve months as contract labour. The Government
may, however, by notification in the Official Gazette, make the provisions of the Contract
Labour Act applicable to establishments or contractor employing less than 20 workmen.
The Contract Labour Act is not applicable to establishments in which work only of an
intermittent or casual nature is performed.
The Contract Labour Act prohibits the employment of contract labour on jobs that are
perennial in nature. For such jobs, permanent employees need to be employed.
The Contract Labour Act provides that no contractor shall undertake any work through
contract labour, except under and in accordance with a licence issued in that behalf by the
In terms of s 7 of the Contract Labour Act, the principal employer has to make an application
in the prescribed form accompanied by the prescribed fee payable to the registering officer
The Employee’s Compensation Act, 1923 (formally known as “The Workmen
Compensation Act, 1923″)
The Employee’s Compensation Act, 1923 (the EC Act) aims to provide financial protection to
workmen and their dependents in case of any accidental injury arising out of or in course of
employment and causing either death or disablement of the worker by means of
This Act applies to factories, mines, docks, construction establishments, plantations, oilfields
and other establishments listed in Schedules II and III of the said Act, but excludes
establishments covered by the ESI Act.
The Act provides for payment of compensation by the employer to the employees covered
under this Act for injury caused by accident. Generally, companies take insurance policies to
cover their liability under the EC Act.
Inter-state Migrant Workmen (Regulation of Employment and Conditions of Service)
The Inter-state Migrant Workmen (Regulation of Employment and Conditions of Service)
Act, 1979 (the ISMW Act) is an Act to regulate the employment of inter-state migrant
workmen and to provide for the conditions of service and for matters connected therewith.
The ISMW Act applies to (i) any establishment in which five or more inter-state migrant
workmen are employed or who were employed on any day of the preceding twelve months;
and (ii) every contractor who employs or who employed five or more inter-state migrant
workmen on any day of the preceding twelve months.
For the purpose of the ISMW Act, an inter-state migrant workman means any person who is
recruited by or through a contractor in one state under an agreement or other arrangement for
employment in an establishment in another state, whether with or without the knowledge of
the principal employer in relation to such an establishment.
Weekly Holiday Act, 1942
The Weekly Holiday Act, 1942 provides for the grant of weekly holidays to persons
employed in shops, restaurants and theatres. The Act provides that every shop shall remain
entirely closed on one day of the week, which day shall be specified by the shop-keeper in a
notice permanently exhibited in a conspicuous place in the shop. Further the state government
may require in respect of shops or any specified class of shops that they shall be closed at
such hour in the afternoon of one week-day in every week in addition to weekly day off.
The Plantation Labour Act, 1951
The Plantations Labour Act (PLA) seeks to provide for the welfare of labour and to regulate
the conditions of workers in plantations. This Act empowers the State Governments to take
all feasible steps to improve the lot of the plantation workers. The passing of PLA has helped
in creating conditions for organising the workers and the rise of trade unions.
The Act defines an employer as, the person who has the ultimate control over the affairs of
the plantation and where the affairs of the plantation are entrusted to any other person, such
other person shall be the employer in relation to that plantation. Plantation: Any plantation to which this Act applies and includes offices, hospitals,
dispensaries, schools and any other premises used for any purposes connected with such
The Act makes it mandatory for every employer to get their plantation registered within 60
days of its coming into existence.
LAWS RELATING TO EQUALITY AND EMPOWERMENT OF WOMEN
Equal Remuneration Act, 1976
The Equal Remuneration Act, 1976 provides for the payment of equal remuneration to men
and women workers for the same work and prevents discrimination, on the ground of sex,
against women in the matter of employment, recruitment and for matters connected therewith
or incidental thereto. This Act applies to virtually every kind of establishment.
Maternity Benefit Act, 1961
The Maternity Benefit Act, 1961 (Maternity Benefit Act) regulates the employment of
women in certain establishments for a certain period before and after childbirth and provides
for maternity benefits and certain other benefits including maternity leave, wages, bonus,
nursing breaks, etc, to women employees.
The Maternity Benefit Act, 1961 applies to (a) a factory, mine or plantation including any
such establishment belonging to Government and to every establishment wherein persons are
employed for the exhibition of equestrian, acrobatic and other performances; (b) every shops
or establishments within the meaning of any law for the time being in force in relation to
shops and establishments in a State, in which ten or more persons are employed, or were
employed on any day of the preceding 12 months.
Except for s 5A and 5B, the provisions of the Maternity Benefit Act shall not apply to the
employees who are covered under the Employees’ State Insurance Act, 1948 for certain
periods before and after child-birth and for which the ESI Act provides for maternity and
other benefits. The coverage under the ESI Act is, however, at present restricted to factories
and certain other specified categories of establishments located in specified areas. The
Maternity Benefit Act is, therefore, still applicable to women employees employed in
establishments which are not covered by the ESI Act, as also to women employees, employed in establishments covered by the ESI Act, but who are out of its coverage because of the
Under the Maternity Benefit Act, an employer has to give paid leave to a woman worker for
six weeks immediately following the day of her delivery or miscarriage and two weeks
following a tubectomy operation. The maximum period for which a woman shall be entitled
to maternity benefit shall be 12 weeks, of which not more than six weeks shall precede the
date of her expected delivery.
A pregnant woman is also entitled to request her employer not to give her work of arduous
nature or which involves long hours of standing, etc, during the period of one month
immediately preceding the date of her expected delivery or any period during the said period
of six weeks for which the woman does not avail leave of absence. When a woman absents
herself from work in accordance with the provisions of the Maternity Benefit Act, it shall be
unlawful for her employer to discharge or dismiss her during or on account of such absence.
PROHIBITIVE LABOUR LAWS
Bonded Labour System (Abolition) Act, 1976
The Bonded Labour System (Abolition) Act, 1976 ( Bonded Labour Abolition Act) is a
prohibiting legislation which provides for the abolition of the bonded labour system with a
view to prevent the economic and physical exploitation of the weaker sections of the society,
and matters connected therewith or incidental thereto.
Under the Bonded Labour Abolition Act, the term “bonded labour” has been defined to mean
any labour or service rendered under the bonded labour system.
The term “bonded labour system” has been defined to mean the system of, forced or partly
forced, labour under which a debtor enters or has, or is presumed to have, entered into an
agreement with the creditor to the effect that:
i. In consideration of an advance obtained by him or by any of his lineal ascendants or
descendants (whether or not such advance is evidenced by the document) and in
consideration of the interest, if any, due on such advance; or
ii. In pursuance of any customary or social obligation; or
iii. In pursuance of any obligation devolving on him by succession; or
iv. For any economic consideration received by him or by any of his lineal ascendants or
v. By reason of his birth in any particular caste or community.
The debtor would render, by himself or through any member of his family, or any person
dependent on him, labour or service, to the creditor, or for the benefit of the creditor, for a
specific period or for an unspecified period, either without wages or for nominal wages.
Section 3 of the Bonded Labour Abolition Act provides that the provisions of this Act shall
have effect notwithstanding anything inconsistent therewith contained in any enactment other
than this Act or in any instrument having effect by virtue of any enactment other than this
Section 20 of the Bonded Labour Abolition Act provides that whoever abets any offence
punishable under this Act shall, whether or not the offence abetted is committed, be
punishable with the same punishment as is provided for the offence which has been abetted.
For the purpose of this Act, “abetment” has the meaning assigned to it in the Indian Penal
Throughout the industrial enterprise, employees are the dominant partners, and the industry
cannot thrive without collaboration, commitment, dedication, honesty, and character. There
will always also be a reliable and essential partnership between the boss and the employee.
The industry’s income must, therefore, be divided by businesses, employees, and the
environment. At the same time, workers must be safe, secure, and adequate welfare; healthy
working conditions should be provided to ensure that not only the employers reaped but also
society and the nation will prosper successfully. Social and economic labour enhancement is
very crucial to keeping industrial peace, and to secure industrial peace, social and economic
labour enhancement is indeed very necessary.