What is Labour Law Compliance?

Minakshi Bindhani

28 Mar, 2023

Labour laws or labour legislation is the body of laws, administrative rulings, and precedents which address the relationship between and among employers, employees and labour organizations, often dealing with public law issues. Labour laws are a set of compliances that set a standard for treating the labour force in the workplace. Labours are the greatest asset for an organization, and the laws are enforced to ensure that their rights are protected and to safeguard them against exploitation. It regulates companies, trade unions and workers. Non-compliance with the laws and regulations may lead to financial damages against the company.

The Central and State Governments impose Labour Laws. The law compliances are not restricted to filing returns, but these records serve as evidence for the compliance of the laws. The authorities must produce them in case of any discrepancies. Some laws are enforceable only for specific work environments. And some laws are enforceable to all organizations.

Importance

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

(2) Prospects workers from exploitation by employers or management

(3) Helps workers in getting fair wages

(4) Minimises labour unrest

 (5) Reduces conflicts and strikes etc.

(6) Ensures job security for workers

(7) Promotes welcome environmental conditions in the industrial system of an organization.

(8) Fixes work hours.

(9) Provides compensation to workers in an organization who are victims of accidents.

Apart from obtaining licences and maintenance of registers, filing periodical returns, etc.,i.e. applicable under the  labour and employment legislations, the workers in India are also obligated to comply with the following  statutory provisions:

Compliances Under Labour And Employment Legislations: –

• Provide a safe working environment, including the safety of workers in an organization.
• Make rules and policies against sexual harassment constitution of ICC (in case the number of employees working in the organization is not less than 10) under the Sexual Harassment for Women at Workplace To ensure that employees work safely, healthily, and in sanitary conditions.
• The employers should provide facilities such as restrooms, first aid appliances and so on to workers employed.
• Drafting and implementation of data protection policy
• Drafting and implementation of equal opportunity policy
• Display abstracts of the Maternity Benefit Act and Payment of Gratuity Act.

Checklist Of Labour Law Compliance: –

A labour law compliance checklist is a detailed cognitive and comprehensive list used to complete the procedure. Statutory compliance under the various labour laws in India has to be ensured by organizations. A detailed checklist to check compliance with laws is given below: –

1. Factories Act, 1948^[1] – Under this Act, it provides the licensing and renewal of a licence. Rules for adequate safety measures within the factory premises. Provision of adequate welfare measures like a canteen and washroom etc., for the workers in an establishment. Payment of wages and overtime wages as per the provisions of the Act. Maintenance of registers and submission of returns in a timely.
2.  Workmen’s Compensation Act, 1923- Under this Act, it provides compensation in case of an accident or any other inevitable accident. Submission of returns in a timely under the Act.
3. Apprentices Act, 1961 –  Under this Act, it mentioned the appointment of apprentices if the organization falls under the notified industry categories. However, submission of returns as stipulated under the Act and maintenance of registers as mentioned under the Act.
4.  Employee State Insurance Act, 1948– As the Act states, the worker’s remittance of contributions every month. Maintenance of registers and submission of returns as required by the Act.
5. Contract Labour (Regulation & Abolition) Act, 1970 And Rules – This Act provides working conditions for workers in an organization. Adequate facilities like drinking water, canteen, washroom etc. for workers. Adequate facilities for women workers as well.
6. Employee’s Provident Fund And Other Miscellaneous Provisions Act, 1952- As the Act stated, monthly contribution payment. Maintenance of registers and submission of returns as per the provisions of the Act.
7. Equal Remuneration Act, 1976– The Act provides no discrimination about payment for the same work done by women and men workers.
8.  Employment Exchanges (Compulsory Notification of Vacancies) Act  1959 –  As the Act defines, intimation of vacancy to the local employment exchange when a vacancy arises.
9. Minimum Wages Act, 1948– The provision of the minimum rate of wages as prescribed by the state or central Government.
10.  Payment Of Wages Act, 1936 – The Act provides payment of wages without any unauthorized deductions. Maintenance of registers of deduction, fines, advance, wages etc. Disclosed as per the provisions of the Act and submission of annual returns timely.
11. Trade Unions Act, 1926– As the Act states, trade union registration complied with this Act’s provisions.
12.  The Indian Boilers Act, 1923 – It provides adequate safety and precautions for the workers. Appointment of trained personnel to handle the boilers in an organization.
13. Payment Of Bonus Act, 1965 – The Act mentions payment of bonuses following the provisions of the Act.
14. Payment Of Gratuity Act, 1972 – The Act mentions payment of gratuity to employees leaving the establishment after the completion of 5 years. Notice of opening to concerned labour authority. Displays required under the Act. Maintenance of registers of allocable bonuses, surplus etc.
15. Maternity Benefit Act, 1961 – The particular Act gives the benefit of grant of leave along with payment of wages after childbirth or any other maternity-related problems like abortion.
16. Industrial Disputes Act, 1947 – The Act prevents unfair labour practices in an organization. Prior permission of appropriate Government or concerned labour authority for laying off or retrenching the workers or closing down the industrial establishment. Pay compensation to workers on account of closure, layoff, or reduction.
17. Industrial Employment And Standing Orders Act, 1946 – The Act formulated service rules and obtained approval from the concerned labour authority. Display the orders in an organization’s prominent place for workers’ knowledge.

Conclusion

Every law serves a particular purpose; hence, all labour laws are employment-based, and some are establishments-based. In the event of non-compliance, an organization is subject to fines, penalties, lawsuits, and loss of credibility, and as a result, it may shut down the business.

The Labour and Employment Ministry has introduced the Working Conditions (OSHW), 2020 and Code on Occupational Safety and Health. And they have proposed one license, one registration, and one return for establishments for all Indian establishments.

The Proposed bill also suggests consolidating 13 Labour laws easing out the registration and compliance process for organizations. The Rajya Sabha passed the bill in September 2020, and 29 labour laws are consolidated into four labour codes Social Security Code 2020 and Wage Code 2020, Industrial Relations Code 2020, Code on Occupational Safety, Health & Working Conditions Code 2020.

Also Read: All about the Labor Laws: Employment Laws that you Must Know