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Labour laws in India


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Labour laws in India

The trade performance of India is influenced by productivity changes in the manufacturing sector, recovery of global economy and world trade, continued trade promotion and trade facilitation efforts of the government, and an apprizing Indian Rupee against the US dollar.

Numerous labour laws are made which regulates employment in India for the smooth functioning of industrial relations in the country. There over fifty national laws and many more state-level laws.

In the year 2003–04, the Indian economy appeared to be bouncing in terms of growth, inflation and balance of payment. The GDP too have grown by 8.1%. According to the Monthly Economic Report, by the Ministry of Finance, Government of India the overall industrial growth during the period April–August 2004 stood at 7.9%; 2.0% more than in same period of previous year, mining, manufacturing and electricity too saw growth during April–August 2004.

Though female participation in the workforce varies in rural area from that in urban areas women constitute a significant proportion of the labour force. According to a survey conducted from July to December 2004 of National Sample Survey Organization (NSSO) reported the female workforce participation rate in rural areas declined to 281 per 1000 compared to 299 during the period July to December 1999-2000.
While conforming to the essentials of the laws of contracts, a contract of employment must adhere also to the provisions of labour laws and the rules contained under the Standing Orders of the establishment.

The Minimum Wages Act 1948 has classified workers as:
  • Unskilled
  • Semi-skilled
  • Skilled
  • Highly skilled
Conventionally union and state government ensure a high degree of protection for workers. It can be seen as a permanent worker can be sacked only for proven misconduct or for habitual absence like in Uttam Nakate case, the Bombay High Court gave a decision that dismissing an employee for repeated sleeping on the factory floor was illegal. The labour law may be collective or individual.

Collective labour law

  • The Industrial Disputes Act (1947) requires companies employing more than 100 workers to seek government approval before they can fire employees or close down. In practice, permissions for firing employees are rarely granted.
  • Trade Unions Act 1926

Individual labour law

There are more than 55 central labour laws and over 100 state labour laws according to All India Organization of Employers.

  • The Contract Labour Act (1970) prohibits companies from hiring temporary workers. Women are not permitted to work at night shifts.
  • Minimum Wages Act 1948
  • Weekly Holidays Act 1942
  • Beedi and Cigar Workers Act 1966

In 2008, the World Bank has criticized the complexity, lack of modernization and flexibility in Indian regulations.

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