THE INDIAN LABOUR LAW OUTLOOK

I. About Indian Labour Laws

Indian labour law refers to laws regulating labour in India. Traditionally, Indian governments at
federal and state level have sought to ensure a high degree of protection for workers, but in
practice, this differs due to form of government and because labour is a subject in the concurrent
list of the Indian Constitution.

II. Laws Relating to Wages in India

MINIMUM WAGES ACT, 1948

The Minimum Wages Act, 1948 (the Minimum Wages Act) provides for fixing of minimum
rates of wages in certain employments. The minimum wages are prescribed by States through
notifications in the State's Gazette under the Minimum Wages Rules of the specific State.

In terms of the provisions of the Minimum Wages Act, an employee means (i) any person who is
employed for hire or reward to do any work, skilled or unskilled manual or clerical, in a
scheduled employment in respect of which minimum rates of wages have been fixed; (ii) an
outworker, to whom any articles or materials are given out by another person to be made up,
cleaned, washed, altered, ornamented, finished, repaired, adapted or otherwise processed for sale
for the purposes of the trade or business of that other person; and (iii) an employee declared to be
an employee by the appropriate Government.

The term "wages" has been defined to mean all remuneration capable of being expressed in terms
of money which would, if the terms of the contract of employment express or implied were
fulfilled, be payable to a person employed in respect of his employment or work done in such an
employment and includes house rent allowance but does not include:

i. The value of:

a. Any house accommodation or supply of light, water and medical attendance; or
b. Any other amenity or any service excluded by general or special order of the
appropriate Government;
ii. Any contribution paid by the employer to any personal fund or provident fund or under
any scheme of social insurance;
iii. Any travelling allowance or the value of any travelling concession;
iv. Any sum paid to the person employed to defray special expenses entailed on him by the
nature of his employment; or
v. Any gratuity payable on discharge.
Further, the Minimum Wages Act requires the employer to pay to every employee engaged in
schedule employment wages at a rate not less than minimum rates of wages as fixed by a
notification without any deduction (other than prescribed deductions,

LATEST NEWS ABOUT THE LABOUR LAW CHANGES

Labour code on mandatory minimum wages notified; 50 crore workers to benefit

“The code ensures minimum wages along with timely payment of wages to all employees and
workers.” (labour code on mandatory minimum wages notified, n.d.)

“Government has notified the labour code on wages paving way for 50 crore workers to become
eligible for mandatory minimum wages. The bill got the assent of the President on August 8,
2019 following which ministry of law and justice has published it in the gazette.The code ensures
minimum wages along with timely payment of wages to all employees and workers. Many
unorganised sector workers like agricultural workers, painters, persons working in restaurants
and dhabas and chowkidars, who were outside the ambit of minimum wages, will get legislative
protection of minimum wages after the bill becomes an act.” (labour code on mandatory
minimum wages notified, n.d.)

III. Case Related to Minimum Wages

GREAT BOMBAY TEXTILE STRIKE:

INTRODUCTION:

“The Great Bombay textile strike was a textile strike called on 18 January 1982 by the mill
workers of Bombay under trade union leader Dutta Samant. The purpose of the strike was to
obtain bonus and increase in wages. Nearly 250,000 workers of 65 textile mills went on strike in
Bombay.

Destabilizing confrontation, the strike collapsed with no concessions having been obtained for
the workers. The closure of textile mills across the city left tens of thousands of mill workers
unemployed and, in the succeeding years, most of the industry moved away from Bombay after
decades of being plagued by rising costs and union militancy. It is one reason why some industry
in India settled in Gujarat Although Samant remained popular with a large block of union
activists, his clout and control over Bombay trade unions disappeared.
The majority of the over 80 mills in Central Mumbai closed during and after the strike, leaving
more than 150,000 workers unemployed.[4] The textile industry in Mumbai has largely
disappeared, reducing labour migration after the strikes.” (indian labour law, n.d.)

CONSEQUENCES
“One of the consequences of the strike's failure was that labour laws in the country were
mellowed and 'liberalized' since unions lost their foothold. Until 1980s, labour laws were
stringent to appease the unions. As labour market became less transparent and unified,
exploitative placement agencies popped up in the city, so a large population moved to
contractual employment, which lacked all the benefits of organised sector like provident funds or
even job security. this job insecurity also pushed a lot of the youth, especially Maharashtrian
youth into the arms of Shiv Sena, so even if their parents had been communists, the children
became Shiv Sainiks. The industries in Mumbai shut down and moved to the periphery or to
other states as the land became real estate gold mine. Mumbai's functional nature changed from
being industrial to commercial.” (indian labour law, n.d.)

IV. Current Market Scenario

INTRODUCTION
“India has emerged as the fastest growing major economy in the world and is expected to be one
of the top three economic powers of the world over the next 10-15 years, backed by its strong
democracy and partnerships.” (Indian Economy overview , n.d.)

MARKET SIZE
“India’s GDP is estimated to have increased 7.2 per cent in 2017-18 and 7 per cent in 2018-19.
India has retained its position as the third largest startup base in the world with over 4,750
technology start-ups. India's labour force is expected to touch 160-170 million by 2020, based
on rate of population growth, increased labour force participation, and higher education
enrolment, among other factors, according to a study by ASSOCHAM and Thought Arbitrage
Research Institute. India's foreign exchange reserves were US$ 405.64 billion in the week up to
March 15, 2019, according to data from the RBI.” (Indian economy overview , n.d.)