UNIT-I

1) Evolution of Indian Workers: Meaning, Its various Phases, Need for

Labour Legislation in India
2) The concept of Labour Welfare: Definition, Scope & Objectives, Welfare
work and Social work

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1) Evolution of Indian Workers: Meaning, Its various Phases, Need for Labour
Legislation in India

MEANING: The law relating to labour and employment in India is primarily known
under the broad category of "Industrial Law". Industrial law in this country is of recent
vintage and has developed in respect to the vastly increased awakening of the workers
of their rights, particularly after the advent of Independence. Industrial relations
embrace a complex of relationships between the workers, employers and government,
basically concerned with the determination of the terms of employment and conditions
of labour of the workers. Escalating expectations of the workers, the hopes extended by
Welfare State, uncertainties caused by tremendous structural developments in industry,
the decline of authority, the waning attraction of the work ethics and political activism in
the industrial field, all seem to have played some role.
The term 'Labor Legislation' is used to cover all the laws which have been enacted to
deal with employment and non- employment, wages, working conditions, industrial
relations, social security and welfare of persons employed in industries.

PHASES:
A. Pre-1918 Phase:
The setting up of textiles and jute mills and laying of the railways since 1850 payed the
way for that emergence of industrial activity and, in turn, labour movement in India.
Some researchers have traced the origin of labour movement in India dated back to
1860. However, most of the writers on the subject trace the history of labour movement
in India since 1875.

The first labour agitation, under the guidance and leadership of Mr. S. S. Bengalee, a
social reformist and philanthropist, started in Bombay in 1875 to protect against the
appalling conditions of workers in factories, especially those of women and children and
appealed to the authorities to introduce legislation for the amelioration of their working
conditions.
The broad features of the labour movement during the pre-1918 phase may be
subsumed as:
(i) The movement was led mostly by the social reformers and philanthropists and not by
the workers.
(ii) There was, in fact, no trade union in existence in the true sense.
(iii) The labour movement was for the workers rather than by the workers.
(iv) The movement was confined to the revolt against the conditions of child labour and
women workers working in various industries under appalling conditions.

B. 1918-1924 Phase:
The phase 1918-1924 is considered as the era of formation of modem trade unionism in
the country. The trade union movement got momentum just after the close of the World
War I. The postwar economic and political conditions contributed to the new awakening
of class consciousness among the workers. This led to the formation of trade unions in
the truly modem sense of the term.
As a result, Ahmedabad Textile Labour Association (1917), led by Shrimati Ansuyaben
Sarabhai; the Madras Labour Union (1918), led by B. P. Wadia; Indian Seamen’s
Union, Calcutta Clerk’s Union; and All India Postal and RMS Association were formed.
The various factors that influenced the growth of trade union movement in India
during this phase may be briefly catalogued as follows:
1. The wretched conditions of workers on account of spiralling prices of essential
commodities during the post-World-War I led workers to form trade unions to improve
their bargaining power and, in turn, living conditions.
2. The political scenario characterized by the home-rule movement and the martial law
in Punjab made the politicians to recognize the workers movement as an asset to their
cause.
3. The Russian Revolution also swayed the labour movement in India showing a new
social order to the common man in the country.
4. The setting up of the International Labour Organisation (ILO) in 1919 also gave a big
fillip to the labour movement in India.

The All India Trade Union Congress (AITUC) was formed in 1920.

C. 1925-1934 Phase:
With increasing hardships of workers, the signs of militant tendencies and revolutionary
approach in trade unionism got expression into violent strikes since 1924.

Another important feature of this period was the passing of two Acts, namely, the Trade
Unions Act 1926 and the Trade Disputes Act, 1929 which also gave a fillip to the growth
of trade unionism in India. The former Act provided for voluntary registration and
conferred certain rights and privileges upon registered unions in return for obligations.
The later Act provided for the settlement of trade unions.
D. 1935-1938 Phase:
The Indian National Congress was in power in seven provinces in 1937. This injected
unity in trade unions. As a result, the All India Red Trade Union Congress itself with the
AITUC in 1935.
In 1938, one of the most developments took place was the enactment of the Bombay
Industrial Disputes Act, 1938.
E. 1939-1946 Phase:
Like World War I, the World War II also brought chaos in industrial front of the
country. Mass retrenchment witnessed during the post-World War II led to the problem
of unemployment .This compelled workers to join unions to secure their jobs. This
resulted in big spurt in the membership of registered trade unions from 667 in 1939-40 to
1087 in 1945-46.

F. 1947 and Since:

Proliferation of trade unions in the pattern of proliferation of political parties has been a
distinguishing feature in the trade union history of India during the post-Independence
period. In May 1947, the Indian National Trade Union Congress (INTUC) was formed
by the nationalists and moderates and was controlled by the Congress Party. Since by
then, the AITUC is controlled by the Communists.
At present, there are 8 central trade union organisations. Of these, four major
federations with their national network are:
1. All India Trade Union Congress (AITUC)
2. Indian National Trade Union Congress (INTUC)
3. Bhartiya Mazdoor Sangh (BMS)
4. Centre of Indian Trade Unions (CITU)
Table 26.2: gives some idea about the growth of the trade union movement in India.

TIMELINE OF EVOLUTION
1700 To 1900’s: Slavery due to imperialism, Exploitation of labour, Bonded labour,
Master – slave relationship
1900 To 1920’s: Workmen status defined by acts Employer – employee relationship
established. Wages paid Legal recognition of workmen. End of slavery.
1920’s To 1947: Trade union’s were organizing workers Trade unions being recognised
by workers and factory managers Collective bargaining. Workers movements.
1947 To 1960’s: Independent India believed in a socialist society.
Worker welfare by labour officers. Laws like EPF, ESIC, minimum wages, and bonus
act. Beginning of labour welfare administration and personnel function
1970’s To 1980’s: Trade unions – mgt conflicts – COD, MOU, etc.
Productivity bargaining. Workers participation in management, Empowerment of
workers – upliftment of workers status and role.
1990’s To 2000 : Globalization, international markets, new economy. Developing
“people" as a key resource HRD replaces personnel management
2001 Onwards: Advent of the “Knowledge Era". Growth of service sector. Rightsizing of
organizations to compete globally. Managing “human assets" with a long term strategic
focus on “development and retention" “People management" need replaces HRD with
HRM. Hr is aligned to business goals. HRM to SHRM
Need for Labour Legislation in India
(1) Establishment of justice- Social, Political and Economic
(2) Provision of opportunities to all workers, irrespective of caste, creed, religion, beliefs,
for the development of their personality.
(3) Protection of weaker section in the community.
(4) Maintenance of Industrial Peace.
(5) Creation of conditons for economic growth.
(6) Protection and improvement of labour standards.
(7) Protect workers from exploitation:
(8) Guarantee right of workmen to combine and form association or unions.
(9) Ensure right of workmen to bargain collectively for the betterment of their service
conditons.
(10) Make state interfere as protector of social well being than to remain an onlooker.
(11) Ensure human rights and human dignity.

To protect the workers from profit seekingexploiters.

To ensure that the service conditions should beclearly spelt out by the employer to
theemployee.
To improve and regulate the working conditionsof workers employed in different
factories andestablishments. To make statutory provision for the regulartrainings of a
certain number of apprentices indifferent trades.
To ensure that the employees are paid their wageson fixed dates and there should be no
deductionmade from the wages.
To promote industrial relations and industrialpeace between employers and employees.
To preserve the health, safety and welfare ofworkers.
To protect the interests of women and childerenworking in the factories.
To maintain the dignity of employees in therorganizations.

(1) Improves industrial relation i.e. employee-employer relations and minimizes

industrial disputes.
(2) Prospects workers form exploitation by the employers or management
(3) Helps workers in getting fair wages
(4) Minimizes labour unrest
(5) Reduces conflicts and strikes etc.
(6) Ensures job security for workers
(7) Promotes welcome environment conditions in the industrial system
(8) Fixes rest pauses and work hours etc.
(9) Provides compensation to workers, who are victims of accidents.

2) The concept of Labour Welfare: Definition, Scope & Objectives,

Welfare work and Social work
Definition:
According to Balfour committee, “Labour welfare refers to the efforts made by the
employers to improve the working and living conditions over and above the wages paid
to them. In its widest sense it comprises all matters affecting the health, safety, comfort
and general welfare of the workmen, and includes provision for education, recreation,
thrift schemes, convalescent homes”. It covers almost fields of activities of workers e.g.,
social, economic, industrial and educational.
According to Labour Investigation Committee. “Anything done for the intellectual,
physical, moral and economic betterment of the workers, whether by the employers, by
the government or by other agencies over and above what is laid down by law or what is
normally expected on the part of the contractual benefits for which worker may have
bargained.”
In the words of Prof. H.S. Kirkaldy. “The whole field of welfare is one in which much
can be done to combat the sense of frustration of the industrial workers, to relieve them
of the personal and family worries, to improve their health, to offer them some sphere in
which they can excel others and to help them to a wider conception of life.”
welfare may be understood to mean “such services, facilities and amenities which may
be established in or in the vicinity of undertakings to enable the persons employed in
them to perform their work in healthy and peaceful surroundings and to avail of facilities
which improve their health and high morale.”

Labour welfare implies the setting up of minimum desirable standards of the provision of
facilities like health, food, clothing, housing, medical assistance, education, insurance,
job security, recreation etc. Such facilities enable the worker and his family to lead a
good working life, family life and social life.

Scope & Objectives, Welfare work and Social work

Labour welfare means the voluntary efforts made by the employer to provide better
conditions of employment in their own industries. Its main object is to secure an
improved standard of living for the workers, which effects on the worker’s psychology
and results in an increase in their productive efficiencies.

SCOPE OF LABOUR •
Working Environment
• Health facilities •
 General welfare programs
• Economic welfare programs
• Labour welfare programs

Labour welfare improves physical, mental and moral conditions of worker. Labour
welfare includes housing, medical, educational, rest rooms, recreation, canteen, games
and sports club facilities, adequate wages, reasonable working hours, insurance etc.
By providing these facilities to the workers, efficiency increases considerably. These
facilities create confidence in the worker; he feels happy and thus takes more interest in
the work.
Importance of Labour Welfare:
1. It improves the moral and mental conditions of the workers by providing facilities like
games, cultural activities and recreation etc.
2. By providing facilities workers have more confidence in their employer, which leads to
improve industrial peace.
3. When workers are promoted in a systematic way and they are heard properly then
they feel and realize their duties towards enterprise.
4. By providing all these facilities, workers feel happy and become enthusiastic. Thus
worker starts taking much interest in his work, which leads to greater efficiency.

Labor welfare has the following objectives:

 To provide better life and health to the workers

 To make the workers happy and satisfied
 To relieve workers from industrial fatigue and to improve intellectual, cultural
and material conditions of living of the workers.
The basic features of labor welfare measures are as follows:

 Labor welfare includes various facilities, services and amenities provided to

workers for improving their health, efficiency, economic betterment and social
status.
 Welfare measures are in addition to regular wages and other economic benefits
available to workers due to legal provisions and collective bargainin.
 Labor welfare schemes are flexible and ever-changing. New welfare measures are
added to the existing ones from time to time.
 Welfare measures may be introduced by the employers, government, employees
or by any social or charitable agency.
 The purpose of labor welfare is to bring about the development of the whole
personality of the workers to make a better workforce.
 Employee Welfare Benefits Schemes


Organizations provide welfare facilities to their employees to keep their
motivation levels high. The employee welfare schemes can be classified into two
categories viz. statutory and non-statutory welfare schemes. The statutory
schemes are those schemes that are compulsory to provide by an organization as
compliance to the laws governing employee health and safety. These include
provisions provided in industrial acts like Factories Act 1948, Dock Workers Act
(safety, health and welfare) 1986, Mines Act 1962. The non-statutory schemes
differ from organization to organization and from industry to industry.
Statuary welfare benefits

The statutory welfare benefits schemes include the following provisions:

1. Drinking Water: At all the working places safe hygienic drinking water should be
provided.
2. Facilities for sitting: In every organization, especially factories, suitable seating
arrangements are to be provided.
3. First aid appliances: First aid appliances are to be provided and should be readily
assessable so that in case of any minor accident initial medication can be
provided to the needed employee.
4. Latrines and Urinals: A sufficient number of latrines and urinals are to be
provided in the office and factory premises and are also to be maintained in a neat
and clean condition.
5. Canteen facilities: Cafeteria or canteens are to be provided by the employer so as
to provide hygienic and nutritious food to the employees.
6. Spittoons: In every work place, such as ware houses, store places, in the dock
area and office premises spittoons are to be provided in convenient places and
same are to be maintained in a hygienic condition.
7. Lighting: Proper and sufficient lights are to be provided for employees so that
they can work safely during the night shifts.
8. Washing places: Adequate washing places such as bathrooms, wash basins with
tap and tap on the stand pipe are provided in the port area in the vicinity of the
work places.
9. Changing rooms: Adequate changing rooms are to be provided for workers to
change their cloth in the factory area and office premises. Adequate lockers are
also provided to the workers to keep their clothes and belongings.
10. Rest rooms: Adequate numbers of restrooms are provided to the workers with
provisions of water supply, wash ba
sins, toilets, bathrooms, etc.
11. Maternity & Adoption Leave – Employees can avail maternity or adoption
leaves. Paternity leave policies have also been introduced by various companies.
12. Medi-claim Insurance Scheme: This insurance scheme provides adequate
insurance coverage of employees for expenses related to hospitalization due to
illness, disease or injury or pregnancy.
 UNIT-II
1) The Factories Act, 1948
2) The Trade Union Act, 1926
3) The Payment of Wages Act, 1936
4) The Minimum Wages Act, 1948

1) The Factories Act, 1948

Please see the PPT

2) The Trade Union Act, 1926

[Link]
29990772?next_slideshow=1

3) The Payment of Wages Act, 1936

[Link]

[Link]

4) The Minimum Wages Act, 1948

Please see the PPT
 UNIT-III
1) The Payment of Gratuity Act, 1972
2) The Payment of Bonus Act, 1965
3) The Industrial Disputes Act, 1947

1) The Payment of Gratuity Act, 1972

[Link]

[Link]
14069467?next_slideshow=1

Additional things:

Gratuity payable depends on two factors:

1) Last drawn salary and
2) years of service.

To calculate how much gratuity is payable, the Payment of Gratuity Act, 1972 has
divided non-government employees into two categories:

a) Employees covered under the Act

b) Employees not covered under the Act

An employee will be covered under the Act if the organisation employees at least 10
persons on a single day in a preceding 12 months. And once an organisation comes
under the purview ..

a) For employees covered under the Act

There is a formula using which the amount of gratuity payable is calculated. The
formula is based on the 15 days of last drawn salary for each completed year of
service or part of thereof in excess of six months.

The formula is as follows:

(15 X last drawn salary X tenure of working) divided by 26

Here last drawn salary means basic salary, dearness allowance, and commission
received on sales.

Suppose A's last drawn basic

 pay is Rs 60,000 per month and he has worked with XYZ Ltd for 20 years and 7
months. In this case, using the formula above, gratuity will be calculated as:
(15 X 60,000 X 21)/26 = Rs. 7.26 lakh

In the above case, we have taken 21 years as tenure of service because A has
worked for more than 6 months in year. Had he worked for 20 years and 5 months,
20 years of service would have been taken into account while calculating the gratuity
amount.

b) For employees not covered under the Act

There is no law that restricts an employer from paying gratuity to his employees even
if the organisation is not covered under the Act.

The amount of gratuity payable to the employee can be calculated based on half
month's salary for each completed year. Here also salary is inclusive of basic,
dearness allowance, and commission based on sales.

The formula is as follows:

(15 X last drawn salary X .. tenure of working) divided by 30

In the above mentioned example, if A's organisation was not covered under the Act,
then his gratuity will be calculated as:
(15 X 60,000 X 20) /30 = Rs 6 lakh

Here the number of years of service is taken on the basis of each completed year.
So, since A has worked with the company for 20 years and 7 months, his tenure will
be taken as 20 and not 21.

As per the government's pensioners' portal website, retirement gratuity is calculated

like this: one-fourth of a month's basic pay plus dearness allowance drawn before
retirement for each completed six monthly period of a qualifying service. The
retirement gratuity payable is 16 times the basic pay subject to maximum of Rs 20
lakh.

In case of death of an employee, the gratuity is paid based on the length of service,
where the maximum benefit is restricted to Rs 20 lakh.

2) The Payment of Bonus Act, 1965

 [Link]
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OR
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OR
[Link]

What is a bonus?
The bonus is a reward that is paid to an employee for his work dedication towards
the organization. The basic objective to give the bonus is to share the profit earned
by the organization amongst the employees and staff members.

What is Payment of bonus Act?

In India, there is a principle law relating to the procedure of payment of bonus to the
employees and that law is named as Payment of Bonus Act, 1965.
The Payment of Bonus Act applies to every factory and establishment which
employs not less than 20 persons on any day during the accounting year. The
establishments covered under the Act shall continue to pay the bonus even if the no
of employees falls below 20 subsequently.

Note: Bonus is to be paid within 8 months of closing the book of accounts.

Payment of bonus act applicability

The payment of bonus act applies to the whole of India. The Provision of this act
applies to the following factories / establishments / companies:-
 The factory defined under clause section 2 of the factories act 1948.
 Every establishment in which 20 or more persons employed on any day during an
accounting year.
 The act also applies to public sectors in some cases.
 Part-time employees also included.

When is the employee eligible for the bonus?

Every employee drawing not less than Rs. 21,000/- per month and who has worked
for not less than 30 days in an accounting year shall be eligible for the Bonus. Every
employee will be entitled to be paid by his employer in an accounting year, bonus, in
accordance with the provisions of this Act, provided he has worked in the
establishment for not less than 30 working days in that year.

Minimum Bonus

Previously, the maximum bonus payable was 20% of Rs 3500 per month. The
minimum bonus payment was capped at 8.33% of Rs 3500 per month
Any employee who earns below Rs 10000/- (bonus act amended in Feb 2007) is
eligible for bonus. As for the calculation part. Actual salary if below Rs 3500 or Rs
3500 if salary above Rs 3500 but below Rs 10000. Minimum bonus 8.33% &
Maximum bonus 20% Employees earning above Rs 10000 Legally not entitled to
bonus
3) The Industrial Disputes Act, 1947

Please see the separate PPT for this Act