INTRODUCTION
India is one of the majors when it comes to providing services, the country has been ruling the service industry for quite some time now by handling both Indian companies and providing services to foreign entities, therefore such a big workforce needs to be conceptually clear about the Law which is available to them for their protection. This blog will explore major/important labour laws and their clauses every employee should be aware of their importance and role.
In India, a salaried employee has not been defined under the labour laws of the country. Still, under the Industrial Disputes Act of 1947[1], there is given the meaning “WORKMAN” and in its definition, it says that any person who is not working in any managerial or administrative capacity. So to answer our question we will divide our response into two categories which is:
- Workman
- A person in an Administrative or Managerial capacity who is not a workmen
- WORKMEN
Under section 2(s) of the Industrial Disputes Act of 1947[2], a workman is “any person, including an apprentice, employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical, or supervisory work, and who is eligible to be a member of a trade union.”
ONE OF THE MAJOR LABOUR LAWS THAT THEY SHOULD BE AWARE OF:
The Industrial Disputes Act, of 1947
By offering a mechanism for the resolution of potential employer-employee disputes, the Act’s primary goal is to foster industrial peace and harmony. The Act applies to all businesses and organizations that come under its purview, including government-owned corporations and public-sector enterprises.
One of the most important points that this law covers is related to layoffs[3] and Retrenchment[4]
Layoff protection: Workers who have completed at least one year of continuous service with the employer and have been laid off for causes outside of their control are protected from layoffs under the Act. The affected employees must receive at least one month’s notice of the layoff, or payment in place of notice, from the company. Additionally, the company must compensate laid-off employees at a rate equal to 50% of their lost wages during that time. When work restarts, laid-off employees have the right to preference over new hires when it comes to employment.
Retrenchment Protection: According to the Act, retrenchment refers to when an employer terminates an employee’s employment for any cause other than disciplinary action. According to the Act, employees are protected from layoffs under certain conditions. For instance, if an establishment has employed 100 or more workers on average per working day over the previous 12 months, the employer must first acquire approval from the relevant government authority before laying off any employees. Additionally, the company must give retrenched employees notice and compensation.
The Act outlines the steps a company must take when retrenching employees. The employee must receive either advance notification or payment instead of notice from the employer, whichever is later. Additionally, the employer is required to compensate the employee at a rate of 15 days as the average pay for each year of service that has been finished, or any portion thereof that is longer than six months. The compensation cannot be more than the worker’s salary for two years. Retrenched employees must be given priority for reemployment over new hires who lack the same qualifications and experience if the employer chooses to do so.
- A PERSON IN AN ADMINISTRATIVE OR MANAGERIAL CAPACITY WHO IS NOT A WORKMEN
In India, the employment of persons who come under the exception by the Industrial Disputes Act of 1947 who hold managerial or administrative jobs are not protected by any specific laws, but the employees have other alternative methods to protect their rights and safeguard themselves from employers through:
Employment Contract: It is an exhausting document that the employees are required to sign before they start working for an organization, in this document, they can mention the terms related to payout benefits, notice periods, and Insurance, so employees need to be careful while signing this document and should keep in mind as it is not just the salary which is to be negotiated but also the terms of entitlements if the employee is laid off, as one of the most important criteria to look for.
Breach of contract: An employee can start a plea on breach of a contract if there are instances where the terms are not met and the employer has not fulfilled any of the obligations in the contract of employment, this would give the employee the power to move to court for the nonfulfillment of the terms and condition mentioned.
THE IMPORTANCE OF THE LAW THROUGH AN EXAMPLE.
The importance can be understood from the landmark case of Workmen of M/S Firestone Tyre & … vs. Firestone Tyre & Rubber Company[5] on 13 February 1976, where the court analyzed the legality and applicability of the Section 25F of the Industrial Disputes Act, 1947, which co-relates to the requirements for layoffs of employees.
There arose a conflict when the Firestone Tyre & Rubber Company decided to dismiss from their positions some of the employees following a dispute then the employees went to the doors of court and contended that this termination was done in contradiction of Section 25F[6] of the Industrial Disputes Act. The Supreme Court of India then examined the facts and circumstances of the case and determined that Section 25F was obligatory, meaning all the requirements of the provisions needed to be fulfilled before terminating any employee and also said that any termination which in violation of the Clause would be considered illegal and would also make the employees eligible for their complete Back Pay upon their reinstatement.
This ruling created a significant impact on the importance of safeguarding employee rights and job security under Section 25F of the Industrial Disputes Act in India.
CONCLUSION
India is currently a market where landing a job is still considered one of the tough things to achieve, in this type of scenario the working employees must be familiar with the relevant labour laws that govern their rights and protections. One such important piece of legislation would surely be the Industrial Disputes Act of 1947, the legislation deals with numerous aspects that are related to various disputes between employers and employees. The Act covers various components like fair pay, appropriate notice periods, and a preference for re-employment the safeguard employees from layoffs and job cuts. However, Individuals who are not in managerial or administrative positions are not classified as employees and have alternate options to safeguard their rights which includes employment contracts having the ability to seek legal remedies if their contracts are violated. These are some of the very basic laws that an employee must know to seek help when their rights are being infringed upon. Also to foster an effective and mutually beneficial work culture in the Indian service industry both employers and employees need to possess the awareness of laws in force that are in place for exercise in violation of their rights.
Author(s) Name: Raghav Ladia (Institute of Law, Nirma University)
References:
[1] The Industrial Disputes Act 1947, s2 [(s)
[2] The Industrial Disputes Act 1947, s2 (s) (iii)
[3] The Industrial Disputes Act 1947, S 2 (kkk)
[4] The Industrial Disputes Act 1947, S 2(oo)
[5] Workmen Of M/S Firestone Tyre & … vs. Firestone Tyre & Rubber Company (1976) 1775, 1976 SCR (3) 369
[6] The Industrial Disputes Act 1947, S 25F
