NECESSITY OF LABOUR LAW

The Labour law acts as a tool to promote worker empowerment as well as worker protection.
It regulates individual and collective employment relations. Other relevant legislation
includes Constitutional law, the civil code, the criminal code as well as the supranational ILO
Conventions. Labour law aims to correct the imbalance of power between the worker and the
employer; to prevent the employer from dismissing the worker without good cause; to set up
and preserve the processes by which workers are recognized as 'equal' partners in
negotiations about their working conditions etc. Labour law aims to prevent a race to the
bottom by placing restrictions on the contracting partners’ freedom to contract on whatever
terms they wish, and setting minimum standards over safety and pay. Labour law also
regulates the labour market: a country may choose to put legislation in place setting
maximum or minimum limits on wages or working hours, either nationally or in particular
sectors or industries.

 Improves industrial relation i.e. employee-employer relations and minimizes

industrial disputes.
 Prospects workers form exploitation by the employers or management
 Helps workers in getting fair wages
 Minimizes labour unrest
 Reduces conflicts and strikes etc.
 Ensures job security for workers
 Promotes welcome environment conditions in the industrial system
 Fixes rest pauses and work hours etc.
 Necessary for the health, safety, and welfare of workers;
 Necessary to protect workers against oppressive terms as individual
 Worker is economically weak and has little bargaining power;
 To encourage and facilitate the workers in the organization;
 To deal with industrial disputes;
 To enforce social insurance and labour welfare schemes

The days where the labourers toiled hard for a pittance are in for a welcome change. Some of
the legislations are intended to set the imbalance right. Read on to know more… The odds
have always been stacked against them. Ever since industrialisation became a force to reckon
with, the working class has been at the receiving end of the ill treatment meted out to them by
their employers. The fact that they were illiterate, unsure of themselves and disunited did
nothing to improve their situation. They were systematically exploited and discriminated
against by hordes of employers, for whom profits took precedence over everything else,
including the health and welfare of a worker. Workers were made to work for long hours
under absolutely inhuman conditions. They were paid a pittance for the work they put in. All
too often, a proportion of this pittance was taken away under one pretext or the other.
Workers could do nothing about this injustice. They had no right to discuss the terms and
conditions of their employment. The constant influx of migrants, from rural to urban areas in
search of employment, ensured that employers were always assured of cheap labour and a
submissive working class. Anyone who refused to work under these conditions would lose
his job to another worker grateful for the opportunity to earn a living. The demand for
consumer goods rose around the two World wars. Employers felt the need to go in for large-
scale production in order to cope with the demand. It was at this time that workers realized
that if they were to band together, they would be able to demand more equitable terms and
conditions of employment. This realisation led to a demand for higher wages and better
working conditions. When employers refused to heed these demands, strikes and lockouts
became the commonplace. Around this time, the government decided to impose some kind of
order in this set-up. A number of laws were enacted in order to provide relief to workers and
ensure the smooth working of the production process. Important Acts The Factories Act was
enacted to provide for the safety, health and welfare of the workers. The Workmen's
Compensation Act offered financial benefit in case workers were injured in the course of
their working hours. The Trade Unions Act was meant to facilitate the formation and
registration of Trade Unions for the purpose of protecting the rights of the working class. The
Payment of Wages Act ensured that employees' rights were protected in case employers
denied them their wages or made unauthorized deductions. The Employment of Children Act
prohibited the employment of children below the age of 15 in certain hazardous trades. Post-
independence, the government decided to take serious steps to protect the rights of the
working class. A number of acts were passed. These included the Industrial Disputes Act of
1947, the Minimum Wages Act of 1948, the Employees State Insurance Act of 1948 and the
Factories Act of 1948. The Employees' Provident Fund Act, 1952, was meant to provide
family pensions and related benefits to employees. The Payment of Gratuity Act, 1972, was
meant to provide gratuity to workers who have served at least five years in an establishment.
This was to be paid on retirement, resignation or death. Other favourable laws were the
Maternity Benefit Act, 1961, the Contract Labour (Regulation and Abolition) Act, 1970, the
Bonded Labour System (Abolition) Act, 1976 and the Equal Remuneration Act, 1976. While
the morale of employees was raised as a result of legislation, the vested interests of powerful
employers ensured that workers did not always receive the benefit of these laws. Still, the fact
that these Acts were passed that spoke of a willingness on the part of the authorities to set the
imbalance right. In the days to come, we will be dealing with each of these laws separately;
to see what each Act has promised the working class and the loopholes that have prevented
the promises from being implemented.

COMPLIANCE WITH THE LAW THROUGH RAISING AWARENESS BOTTOM-UP

Information on labour rights is lacking in many economies. Such information gaps may seem
convenient for countries with no interest in raising awareness about legislation with the
ultimate aim of improving it. The actual victim is the worker who never gets to know about
his/her rights. Employers presumably also have no interest in raising a worker’s awareness on
labour rights. They might fear that increased compliance leads to heightened cost of doing
business. They may not be aware of research findings indicating that improved working
conditions lead to higher productivity, which helps to recover the additional cost incurred in
implementing worker benefits (see Heymann and Earle, 2010). Lee and McCann (2009)
review considerable literature on the link between enforcement of labour legislation
(compliance) and level of awareness (both among workers and employers). Their study
brings forward data from Tanzania and shows that “worker’s awareness is strongly associated
with better working conditions”.

Taking into account the low level of collective representation of workers (especially in
developing countries) and budget-strapped and understaffed labour inspection systems,
workers’ rights can be better enforced through a bottom-up approach – based on individual
complaints. This approach however requires dissemination of legal knowledge to workers as
a pre-condition or first step towards compliance with the law. Labour legislation, worldwide,
requires employers to display abstracts of labour laws. However the above-referred study
indicates that this was ineffective in disseminating knowledge in US workplaces. What then
would be the optimal way to disseminate information on statutory rights?

IMPORTANCE OF LABOR LAW

Child Protection from the Workforce

The federal Fair Labour Standards Act bans the employment of children under the age of 14
unless they work in a parent’s business. The law also controls the hours' children between 14
and 16 can work and prohibits dangerous occupations for all children under 18. The
documentation necessities of the FLSA can help you avoid inadvertently running afoul of
child labour laws.

The Importance of Labour Law and Wages

The FLSA establishes a federal minimum wage — $7.25 an hour as of 2018. Employers
cannot wage their employees fewer than this hourly wage, but employees under 20 can be
paid the youth minimum wage of $4.25 per hour during their first 90 days of employment.
The federal minimum pay can offer you supervision about how to pay your employees; even
employees who make more than minimum wage often use minimum wage as a guideline for
fair pay.

Reasonable Hours and Compensation

Employers must also keep accounts of employee hours and have a trustworthy way of
tracking when and how long employees work. This statutory necessity can make it much
calmer to manage employee scheduling and to avoid breaking the FLSA.

Employer’s Obligations

Without labour and employment laws, many small business owners would be not aware of
their obligations and responsibilities as employers. The Equal Pay Act of 1963, Title VII of
the Civil Rights Act of 1964 and the Americans with Disabilities Act of 1990, need that
employers adhere to fair employment practices in recruiting, hiring, training and retaining
employees.
Workplace Structure

It also provides guidance for employers on recordkeeping measures, requiring that businesses
maintain employees’ pay records for two years in some instances related to wages and up to
three years for pay information when a joint bargaining agreement is in force.

Collective Activity

The NLRA protects the rights of employees to act collectively — not to join collectively —
to voice their concerns about wages, benefits and working conditions.

Integrity

Some labour laws preserve structural integrity; they are useful for developing business
principles and workplace ethics. For example, whistle-blower laws contained in the
Occupational Safety and Health Act of 1970 and the Environmental Protection Act protect
the identity of employees and small-business owners who feel the company is fetching in
activities that violate public policy, laws, social or ethical responsibilities.