HRM - Industrial Relations

Industrial Relations and Human Resource Management (IR&HRM) is a branch of study that is designed to prepare students for careers in the fields of employment relations, human resource management, workplace change, and adult education and training.

The students pursuing International Human Resource Management (IHRM) and HRM are expected to master a variety of relevant papers from Education Studies, Human Resource Management, Labor studies, and Psychology. As far as this chapter is concerned, we will be covering some major labor laws amended in India.

Labour Laws

There is a saying, “Avoidance of law is not considered in the court of law”. The meaning of the above statement is that everyone should know the law of the residing country. That kind of avoidance of law is not accepted by the court. A person cannot claim out of illiteracy or ignorance that he or she does not know the law.

The court needs to take action against any person who breaks the law. Such a person is liable to punishment by the court. Every individual should be aware of law, whether literate or illiterate.

Labor laws act as the backbone of human resource management. It fights for the rights of the employees and the laborers working with the company. Thus, without the engagement of labor law, there is no human resource management.

There is no validity for the human resource management without abiding the labor laws. Sometimes, non-compliance of labor laws may result in serious consequences like penalization or imprisonment or both, based on the gravity of the incident.

Let us discuss a few labor laws that are being followed in India −

Workmen's Compensation Act, 1923

Workers' compensation is a form of insurance facilitating wage replacement and medical benefits to employees injured in the course of employment in return for mandatory relinquishment of the employee's right to sue his or her employer for the sort of avoidance.

General damage for pain and suffering and punitive damage for employer avoidance are basically not available in workers' compensation plans, and avoidance is generally not an issue in the case.

These laws were first executed in Europe and Oceania, with the United States following shortly thereafter.

The Factories Act, 1948

The Factories Act 1948 was passed with the intention of protecting the health of workers. It expands the age limits for the medical examination of individuals entering factory employment, while also involving male workers in the regulations for providing seats and issuing extensive new building regulations.

According to the legislation, young persons under the age of eighteen became subject to medical examination not only on entry to the place of work, but gradually thereafter.

The Payment of Gratuity Act, 1972

It is an Act that ensures a scheme for the payment of gratuity to employees involved in factories, mines, oilfields, plantations, ports, railway companies, shops or other establishments and for matters connected therewith or incidental thereto.

This law is applicable to all establishments employing 10 or more workers. Gratuity is payable to the employee if he or she quits or retires.

The Indian government regulates that this payment be at the rate of 15 days’ salary of the employee for each year of completion of services, subject to a maximum accumulation of 10,00,000.

The Payment of Wages Act, 1936

The Payment of Wages Act formulates by when wages shall be distributed to employees by the employers.

The law also facilitates the tax withholdings the employer must reduce and pay to the central or state government before distributing the wages.

The Trade Union Act, 1926

This Act formulated the rules and protections granted to Trade Unions in India. This law was modified in 2001.

The Industrial Disputes Act, 1947

The Industrial Disputes Act 1947 formulates how employers may address industrial issues such as lockouts, layoffs, retrenchment etc. It controls the lawful processes for reconciliation and adjudication of labor conflicts.

So, an employee who has worked for 4 years, in addition to several notices and due process, must be paid a minimum of the employee's wage equivalent to 60 days before retrenchment, if the government grants the employer a permission to lay off.

Minimum Wages Act, 1948

The Minimum Wages Act states minimum wages in all industries, and in some cases, those working at home per the timetable of the Act. Central and State Governments can and do crosscheck minimum wages at their discretion.

The minimum wage is further categorized by nature of work, location and numerous other factors at the discretion of the government. The minimum wage scales between Rs.143 andRs.1120 per day for work in the so-called central sphere. State governments have their own minimum wage timetable.

The Payment of Bonus Act, 1965

This Act is applicable to an enterprise employing 20 or more individuals. The Act needs the employer to pay a bonus to individuals on the basis of profits or on the basis of production or productivity.

The Act was modified to require industries to pay a minimum bonus, even if the employer suffers losses during the accounting year. This minimum is currently 8.33 percent of the basic pay.

The Employees' Provident Fund Scheme, 1952

This Act seeks to assure the financial security of the employees in an establishment by facilitating for a system of compulsory savings. The Act provides for constructions of a contributory Provident Fund in which employees' contribution shall be at least equal to the contribution payable by the employer.

Minimum contribution by the employees shall be 10-12% of the total pay. This amount is payable to the employee after retirement and could also be withdrawn partly for certain specified tasks.

The Child Labor (Prohibition & Regulation) Act, 1986

The Child Labor Act, 1986 is one the most regimented acts, as it fights for the rights of children of all sections in India. It dictates where and how children can work and where they cannot.

The provisions of the act are meant to be regulated immediately after the publication of the act, except for part III that discusses the conditions under which a child may work.

Maternity Benefit Act, 1961

The Maternity Benefit Act formulates the employment of the women and maternity advantages mandated by law. It states the various measures and facilities that every private and public sector company is bound to follow for pregnant women.

Any woman employee, who worked in any establishment for an interval of at least 80 days during the 12 months immediately preceding the date of her expected delivery, is bound to receive maternity benefits under the Act.

These are some of the labor laws, which every private company, whether it is a small scale business or a large multinational company, has to abide to respect the law. Anyone found guilty of disobeying the law can be punished by the court.