A country like India has various and a highly complicated labour laws framework, which is very important for every employer, their HR departments and the business leaders. By just knowing about the labour laws it is not going to help; it is important to understand these labour laws. So whether you are launching a new business, a startup or managing a growing enterprise, or you are navigating compliance in a multinational company, having the knowledge of Labour Laws in India is important. This blog will provide a comprehensive overview of the Labour Act in India, which will help you to stay informed and compliant.
What Is Labour Legislation?
Before diving deep into the legal waters of India about the Labour Laws and rights, it is important to know and understand “What is Labour Legislation”. In simple terms, labour legislation refers to the body of laws, administrative rulings, and precedents that address the legal rights and restrictions on working people and their organizations.
The labour legislation definition includes rules regarding employment conditions, daily/monthly wages, working hours, industrial relations, health, safety, and welfare of employees. In India, this legal framework is shaped by both central and state laws.
How Many Labour Laws Are There in India?
Throughout history, India has been a country which has had over 40 central labour laws and more than 100 state laws spreading and covering different aspects of employment and labour. With so many laws in place and most of them overlapping each other, it leads to having issues which are complex issues, and compliance is also difficult.
To prevent further confusion and misunderstandings, the government of India introduced the Labour Law reforms, which help in consolidating the central labour laws into four comprehensive labour codes:
- The Code on Wages, 2019
- The Industrial Relations Code, 2020
- The Occupational Safety, Health and Working Conditions Code, 2020
- The Code on Social Security, 2020
These codes are aimed at streamlining and modernising the Labour Law Act in India, which will help in improving the performance of the businesses while also protecting the workers’ rights.
Types of Labour Legislation in India
There are different types of Labour Legislation in India, which can be broadly classified into the following categories:
- Regulative Legislation: This law covers laws like the Trade Unions Act, 1926 and the Industrial Disputes Act, 1947.
- Protective Legislation: Protective Legislation will deal with working hours, health, safety and welfare, such as the Factories Act, 1948.
- Wage-Related Legislation: This law is inclusive of laws like the Minimum Wages Act, 1948 and the Payment of Wages Act, 1936.
- Social Security Legislation: This code includes laws like the Employees’ Provident Funds Act and the Employees’ State Insurance Act.
- Employment and Training Legislation: Such as the Apprentices Act, 1961.
Key Labour Laws in India for Private Companies
Let’s break down the labour laws in India for private companies that HR and employers must understand:
1. The Code on Wages, 2019
This replaces four previous laws, including the Minimum Wages Act. It sets universal definitions for wages and establishes payment norms.
2. The Industrial Relations Code, 2020
Governs trade unions, conditions for strikes and lockouts, and dispute resolution. Important for maintaining industrial peace.
3. The Occupational Safety, Health and Working Conditions Code, 2020
Applies to all establishments employing 10 or more workers. Covers health, safety, and working conditions.
4. The Code on Social Security, 2020
This amalgamates with Nine Social Security Laws, which cover PF, ESI, Maternity benefits, gratuity and more.
Labour Law Working Hours: What Employers Should Know
A very important element of employment laws in India is the working hours and their regulations. So, what are the actual working hours in India for the private company as per the law?
- Legal Working Hours in India: As per the Labour Law, working hours, employees are allowed to work 8 hours a day and 48 hours a week.
- Overtime: If the employees are working beyond their 48 hours a week, then they must be compensated at twice the ordinary rate of wage.
- Rest and Weekly Holidays: One day off is compulsory, which is usually the Sunday of every week.
This whole line with the Labour Act working hours is governed under the Factories Act and the new Occupational Safety Code.
Employee Working Hours in India
In practice, many companies follow a structure of 9 hours per day, which also includes breaks and lunch period, etc. But the employers have to ensure that there is:
- Proper following of the working hours as per the labour law in India.
- Absolute accuracy in tracking the hours for compliance.
- Clear and transparent communications with the employees.
Rules and Regulations for Employees
There are rules and regulations for the employees, which generally include the following aspects:
- Terms of appointment and probation
- Leave policies (sick leave, earned leave, maternity leave, etc.)
- Disciplinary procedures
- Grievance redressal
- Code of conduct and ethics
All of the above rules and regulations must be in adherence with the relevant provisions of the Labour Act Rules.
Labour Policy in India: Overview
India’s Labour Policy mainly focuses on promoting fair wages, safe working conditions and social security and job creation. The main key objectives will include:
- Protecting worker rights
- Promoting harmonious industrial relations
- Ensuring skill development and employability
The new labour codes are the representation of a major step in achieving these objectives.
Recent Amendments in Labour Laws
There are some recent amendments in Labour Laws, and the developments also include:
- Initiation of four labour codes
- Prominence on digital compliance and e-registration
- Supply for gig and platform workers in the Social Security Code
- Growth in the threshold for standing orders under the Industrial Relations Code
- Compulsory appointment letters for all employees
These are the new changes in the labour laws in India, which are aimed at increasing transparency, reducing disputes and also simplifying the compliance.
Right to Work in India
The right to work in India is not explicitly a fundamental right, but it is also indirectly a law which is protected under Article 21 (Right to Life and Personal Liberty) and also the Directive Principles like Article 39 and 41. It also places a duty on the state to promote conditions that also secure employment for all.
Private Ltd Company Rules for Employees
For the private companies, the internal policies should follow the:
- Minimum wage and working hours norms
- Gratuity and provident fund contributions
- Maternity and leave benefits
- Termination and notice period regulations
All Private Limited Companies should make it a point to follow a proper Labour Law Compliance Checklist.
Compliance Checklist for Employers
- Exhibit labour law abstracts and notices
- Continue having the employee registers
- On-time payment of wages
- Allowance to PF, ESI, and professional tax
- Systemic audits and inspections
- Making sure of a safe and healthy workplace
List of Labour Laws in India (Major Ones)
Here’s a list of labour laws in India that employers should be aware of:
- The Factories Act, 1948
- The Shops and Establishments Act (varies by state)
- The Payment of Wages Act, 1936
- The Minimum Wages Act, 1948
- The Payment of Bonus Act, 1965
- The Payment of Gratuity Act, 1972
- The Maternity Benefit Act, 1961
- The Contract Labour (Regulation & Abolition) Act, 1970
- The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
- The Employees’ State Insurance Act, 1948
With the appearance of the new codes, many of these will be integrated.
Labour Law and Industrial Law
Both the Industrial Law and the Labour Law are very closely linked. While both laws focus on different rights, the labour law deals with individual and collective relations at work, while industrial laws focus more on industrial disputes, strikes, trade unions and dispute resolution mechanisms.
Conclusion: Why Understanding Labour Laws Is Essential
Having the apprehension and execution of Labour Laws in India is not only about legitimate compliance. It is about building trust, steadiness and fruitfulness in the workplace. For the HR executives and proprietors, this knowledge will empower better decision-making, reduce legal risks and ensure that the employee rights are respected.
With the latest developments in Labour Laws in India and refinements taking place, staying streamlined is more important than ever. So, whether it is interpreting Labour Law working hours per day, drafting a grievance policy, or even getting ready for the audits, an informed HR team is the key to a company’s success.
