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Important Industrial Laws of India

India is where the industrial sector has played a significant role in its economic growth. The industrial sector contributes a large percentage of the GDP and employs millions of people.

Every worker must know about these laws to protect their rights. Industrial law is the body of laws governing relations between employers and employees in both public and private sectors.

It also covers industrial disputes, unfair dismissal, occupational health and safety, trade unions, etc. Industrial law originated from the English law concept of “industrial remedy” – a judicial system applied by courts to control social unrest or other public disorder.

History of Industrial laws

The Indian legal system traces its roots to Manusmriti and the common law system. The Indian Constitution has a long and detailed chapter on industrial matters, which makes it clear that the state must intervene to protect the public interest.

The Indian Industrial Laws came into force on 1st January 1948. The Government of India had to take legal steps because of the growing industrialisation and the increasing number of industrial establishments in the country.

The British Parliament passed the Industrial Disputes Act of 1947, which came into force in India on 1st November 1947. It was insufficient to regulate labour relations between employers and employees in this country. So, the government enacted the following laws to regulate industrial relations:

  • The Factories Act, 1948 (Act No. XXVIII of 1948);
  • The Mines Act, 1952 (Act No. XXIX of 1952);
  • The Industrial Disputes Act, 1947 (Act No. XXXI of 1947).

In India, several industrial laws are in addition to the constitutional provisions which include:

  • The Factories Act 1948
  • The Employees’ Provident Funds and Miscellaneous Provident Act, 1952
  • Apprentice Act 1961
  • Workmen’s Compensation Act, 1923
  • Payment of Wages Act 1936

Factories Act, 1948

The Factories Act of 1948 is the first act passed by Parliament to regulate the working conditions of factory workers in India. It was enacted on 8th August 1948 and applied to all factories and industries in India. The Factories Act applies equally to both male and female workers.

It also regulates other industrial establishments or industrial laws like employing ten or more persons (excluding servants), small-scale industries, etc., including those owned by an organisation like cooperative societies with members who are not employees but shareholders in their enterprises.

The Employees Provident Funds and Miscellaneous Provident Act, 1952

The Employees Provident Fund and Miscellaneous Provident Act, 1952 is an act of Parliament in India which provides for establishing the Employees Provident Fund Organization. This act also provides for the constitution of a provident fund organisation.

It provides for the constitution of a provident fund commissioner appointed by the Central Government with such powers as may be necessary to discharge his functions and duties under this Act.

It also provides that no person shall be qualified to be appointed as an employee unless he has been employed in any public service or employment under local authority within two years immediately before his appointment.

Apprentice Act 1961

The Apprentice Act 1961 is an industrial law which regulates the relationship between an apprentice and their employer. An apprentice is a trainee who learns a trade under a skilled worker’s supervision and receives training and instruction in that particular trade from them.

An apprentice must be paid for his services at least with the wages payable to any other workman employed by such employer. Still, suppose he has not acquired sufficient knowledge or skill for him to be capable of earning such a wage. In that case, he shall receive only such portion thereof as may reasonably represent his share in the profits made during such period when employed by that employer. An employer should not treat his apprentice as an enslaved person or a convict.

Workmen’s Compensation Act, 1923

The Workmen’s Compensation Act of 1923 is an industrial law that provides compensation to workers who are injured while on duty and to their dependents. It also includes giving compensation to disabled workers.

The Act defines a “workman” as any person employed in any industrial undertaking or business by the owner or agent of such undertaking or by an employee thereof, except those employed under a contract for a period not exceeding twelve months.

There are three elements involved in providing this kind of protection:

  • An essential qualification that the claimant must meet;
  • A definition of what constitutes employment; and
  • Provisions for payment of awarded or denied benefits

The Payment of Wages Act 1936

The Payment of Wages Act 1936 is a statute passed by the Indian Parliament, and it deals with paying wages, allowances and gratuities to employees in India.

The Act provides for minimum and maximum wages for different workers and for payment of gratuity at the time of retirement or death, respectively. It also mandates employers to pay specific amounts as dearness allowance (DA), which has been increased from its earlier level so that it may cover all types of work done by an employee.

Minimum Wages Act, 1948

The Central Government introduced the Minimum Wages Act of 1948 as a part of industrial laws to ensure that the minimum wage did not remain below this level. This act has been amended several times over the years, and today it provides an annual increment of 0.75%. This Act aims to provide a fair wage for workers in India who do not have any other source of income besides their salaries.

Employers pay the minimum wages directly or through contractors who employ them on behalf of other companies or organisations such as factories, shops, etc. Because these companies need someone to work for them, they will pay them at least what they would be able to afford if they were working independently from each other. So that there is no temptation for employees who might want more money than what their employer offers them.

Maternity Benefit Act 1961

The Maternity Benefit Act 1961 is also an industrial law providing maternity benefits for female employees, and the Act also provides for the following:

  • To provide medical facilities and maternity leave to pregnant women who an employer employs
  • Payment of maternity benefit payable to a woman employee upon the birth or adoption of her child under two years old and whose service ends within 12 months after delivery or adoption, whichever may be earlier.
  • To provide maternity allowance. Financial support to families with no source of income other than employment by an employer so that they do not suffer due to financial hardship caused due to childbirth/adoption etc., as per rules framed under this act.

Payment of Gratuity Act 1972

The Payment of Gratuity Act 1972 is a law that provides for payment of gratuity to an employee who gets dismissed, dies or retires from employment. The provisions of this act apply to all kinds of employees, whether salaried or casual, permanent or temporary, and in respect of both home workers and foreign nationals employed in India.

The basic pay scales determine the amount payable laid down under sections 2(3)(b) and (c) of the Payment Commission Act 1971; however, it shall not exceed two months’ basic pay at any time.

Every industrial worker should know these Industrial laws and acts

The Industrial Laws of India are a set of rules that govern the relationship between employers, workers and their unions. The British introduced these laws in 1894, and they have been amended several times since then.

The main categories of industrial laws include:

  • The Factories Act (1947)
  • The Mines Act (1951)
  • The Industrial Disputes Act (1948)

Employers must follow all applicable labour laws when hiring new employees or existing ones who are members of unions representing their workers. It includes:

  • Paying overtime wages after working more than 8 hours per day or 40 hours per week if they work at home for one employer for more than three months consecutively;
  • Providing proper nutrition during breaks;
  • Giving adequate rest time between shifts so as not to fatigue themselves out strains too many muscles unnecessarily, leading them towards illness later down the road when trying hard

Conclusion

All industrial workers need to know about these industrial laws. They are meant for the worker’s benefit so he can make informed decisions. Industrial Law regulates or controls the activities in the industries and protects workers from exploitation.

Industrial law protects workers’ rights, privileges, obligations, and responsibilities while ending unfair labour practices. Both employees and management benefit from understanding their exact rights, duties, and liabilities because of industrial law.

FAQs

What do you mean by Industrial Dispute?

Industrial dispute means a dispute between employers or workers during working hours related to the industry's employment or working conditions.

Which person can raise an industrial dispute?

Industrial dispute can be raised by any person who is a workman employed in the industry except Army, Navy, Air person and Police service in a managerial or administrative capacity.

What is the importance of Industrial law in India?

The Industrial laws have helped bring a beneficial working environment for the workers and ensure they are not exploited. The working environment favours them by providing basic essential facilities.

Which laws does industrial law includes?

Any law that regulates the employees working conditions for employers are incorporated under industrial laws.

About Author

Hi, My Name is Pranjal Rai; I am a law graduate and had completed my graduation from Amity University Lucknow and currently residing in Varanasi, Uttar Pradesh. I was having keen interest in writing articles and as of now, I got 13 articles published and had previously worked as an editor in a website.