There is a view that the Indian Labour Legislation has vowed its commitment to the welfare of workers alone. Despite numerous legislations, the enforceability always seemed to lack in India, thus defeating the very purpose. Labour market flexibility is a very important factor that influences the flow of foreign direct investment in any country. A need was seen for having fewer laws, like a unified labour code and ensuring better enforcement.
This approach has not only made India's rank in World Bank's ranking of countries for "Ease of Doing Business" better, but it has also been in furtherance of the 'Make in India' campaign by the Prime Minister.
In order to make India a business friendly nation in line with changing market conditions, initiatives have been undertaken by the government since 2014, and have been going on; with the most recent amendment in maternity and child labour law and some are in the pipeline, simplifying and consolidating laws dealing with industrial relation, wages, social security, industrial safety and welfare.
These reforms have given a breather to industry and have drawn many foreign investors.
I. The Maternity Benefit (Amendment) Act, 2017
The Maternity Benefit (Amendment) Act, 2017 has come into force on March 28, 2017 after receiving the assent from the President on March 27, 2017. The major changes brought by the amended Act, compared with the provisions of the earlier Act, are given hereunder:
|Particulars||The Maternity Benefit (Amendment) Act, 2017|
|Duration of maternity leave||
The following new provisions have added by the amendment:
|Maternity leave for adoptive and commissioning mothers||
|Option to work from Home||
|Employer to inform the woman of maternity benefits||
It is anticipated that as now the employer will have to pay full wages for 26 weeks. The aforesaid amendments may have an adverse impact on job opportunities for women. The amendment is silent on paternity leave. The women who work in the unorganised sectors are not covered due to their unstructured employment conditions.
II. The Child Labour (Prohibition and Regulation) Amendment Act, 2016
The Child Labour (Prohibition and Regulation) Amendment Act, 2016 has come into force on July 30, 2016. The major changes brought by the amended Act compared with the provisions of the earlier Act, are given hereunder:
|Particulars||The Child Labour (Prohibition and Regulation) Amendment Act, 2016|
|New Category of person called "Adolescent"||
|Definition of child||
|Prohibition of employment of children in any occupation and process.||
|Power of Central Govt.||
|Regulation of work Conditions of Adolescent||
|Schedule- List of hazardous occupations and processes||
- Regulation will be a challenge as the amendment does not provide the criteria to determine if an enterprise is a family enterprise or not.
- Amendment legalises child labour in "family business" and is silent on regulation of working hours, overtime, weekly holidays etc. for such child labour, thereby, making this provision exploitable for employment of child labour.
III. The Employees' State Insurance (Central) Amendment Rules, 2016
The Employees' State Insurance Rules, 1950 ensure implementation of the provisions of the Employees' State Insurance Act, 1948. The Rules have been amended 4 times since June 2016.
The major changes brought by the various amendments are as under:
|Amendments with effect from||Particulars||Change by Amendment|
|June 14, 2016||Employee exempted from contribution||
|October 6, 2016||Rates of employer's and employee's contribution||
|December 22, 2016||Wage limit for coverage of an employee||
|January 20, 2017||Insured Mother||
- Amendments to have a financial impact on employer's contribution as they cover more employees due to increase in the wage limit and the benefits will have to be provided to insured women as well.
IV. The Payment of Wages (Amendment) Act, 2017
The Payment of Wages (Amendment) Act, 2017 changes the method of payment of wages to the employees. Now the employer can pay wages to its employees by the following modes without obtaining written authorisation (as required earlier):
- in coin or currency notes; or
- by cheque; or
- by crediting them into his bank account.
The relevant government may notify establishments, whereby the employer should pay the wages only by cheque or crediting the wages in employees' bank account (and not through cash).15
V. Ease of Compliance Rules, 2017
In order to facilitate the ease of doing business in India, the Ministry of Labour and Employment has notified the Ease of Compliance rules to maintain registers under various labour laws, which have been in effect since February 21, 2017.
Prior to the aforesaid amendment, almost every labour statute required the employer to maintain registers providing details of employees, working hours, overtime, wages, leaves, etc. Thus, compliances under every statute resulted in multiple efforts by the employer in maintaining separate registers, which was a major drawback under the Indian Labour Laws. Therefore, in order to avoid overlapping/ redundant fields and to save costs and efforts, maintenance of combined registers was introduced by way of these new rules, thereby ensuring better compliances of labour laws.
Further, the rules provide that combined registers may be maintained either electronically or otherwise, without obtaining any prior permission. The enactments on which these rules would be applicable are:
- Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996
- Contract Labour (Regulation and Abolition) Act, 1970
- Equal Remuneration Act, 1976
- Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979
- Mines Act, 1952
- Minimum Wages Act, 1948
- Payment of Wages Act, 1936
- Sales Promotion Employees (Conditions of Service) Act, 1976 and
- Working Journalists and Other Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act, 1955
VI. Other initiatives by the Central Government16
In furtherance to the "Ease of Doing Business" initiative, the Government of India is keenly following the benchmarks set by Doing Business Project of the World Bank to improve the business environment in India. The Ministry of Labour & Employment has introduced online registration process for the Employees' Provident Fund Origination ("EPFO") and the Employee's State Insurance Corporation ("ESIC"), with no registration cost and manual intervention. Also, on the discretion of the employer, registration for both EPFO and ESIC can be done through the common registration form which is available at the e-Biz Portal of Department of Industrial Policy and Promotion ("DIPP") since March 9, 2016. Establishments can also file online a common Electronic Cum Challan Receipt ("ECR") for both EPFO and ESIC on Shram Suvidha Portal.
The Ministry has also launched common registration service on the e-biz Portal of DIPP for 5 Central Labour Laws including Employees Provident Fund & Miscellaneous Provisions Act, 1952, Employees State Insurance Act, 1948, Building & Other Construction Workers (Regulations of Employment and Conditions of Service) Act, 1996, Contract Labour (Regulation and Abolition) Act, 1970 and Inter-State Migrant Workmen (Regulations of Employment and Conditions of Service) Act, 1979.
Further, single online common Annual Return under 9 Central Labour Acts has been made operational on Shram Suvidha Portal since April 24, 2015 to ensure simplified filings of the single online return by the establishments instead of filing separate returns, under the said 9 Acts.
* These amendments are only Central Amendments and do not include the State Amendments
1 Section 5(3)
2 Biological mother who uses her egg to have a surrogate child
3 Section 5(4)
4 Section 5(5)
5 Section 11A
6 Section 2 (ia)
7 Section 3A
8 Section 2 (ii)
9 Section 3
10 Section 4
11 Rule 52
12 Rule 51B
13 Rule 50
14 Rule 2 (6A)
15 Section 6
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