This article on 14 Rights of Employees in India (Private Sector) was written by an intern at Legal Upanishad.
In this piece, we will discuss different laws that prevail the legal rights of employees in India. We observe that every employee in the private sector suffers from the exploitation of their employer. They get exploited by employers at every stage of their employment by giving them a minimum wage as compared to their work, terminating them without any reason, not providing them with proper medical facilities, and so on.
In India, labour laws and reforms have been a controversial topic on which no one wants to talk about their rights. The majority of the population of India is not aware of labour laws, especially the daily wage labourers and even sometimes the employees working in huge establishments.
Labour laws were enacted by the legislature to protect workers’ rights from employer exploitation. Here, we will discuss the sources of labour laws, the types of workers for whom these laws are made, what are the legal rights of employees in India for the private sector, and who resolves the disputes between employer and employee.
Sources of Labour Laws
There are many employment laws which exist in India for the protection of labour. But the question arises what are the sources of labour laws. The Indian constitution is the source of Labour Laws, the Centre as well as the State have the right to enact legislation to protect the interest of the employee. It helps in creating more job opportunities.
There are several laws enacted on the basis of type of industries, nature of work, number of workmen, location, remuneration, etc; different laws were enacted such as Industrial Dispute Act, (1947), Minimum Wages Act, Factories Act, (1948) etc. have been enacted. These laws are enacted with the objective to safeguard the employee from the employer’s unnecessary exploitation.
Legal Rights of Employees in India for the Private Sector
There are several laws which legislate for the protection and welfare of employee rights against employers. As we discussed the Indian constitution is the source which governs the parliament to legislate several Labour laws which help in safeguarding the rights of employees in India for the private sector, these laws give an opportunity to employees put a question mark on the policies of factories and industries which are responsible for hurting the employees.
Rights of Employees in India for the Private Sector are governed by various acts. These are as:
1- Factories Act (1948):
Parliament enacted the Factories Act in 1948 for the protection of daily wage workers against the exploitation of employers. This act was enacted in the context of protecting workers from the hazardous environment of factories. Employers hired workers in the factories without providing any basic facilities for the workers. Its object is to safeguard the interests of workers by regulating the working conditions in factories; enacting special provisions related to health, safety, welfare, and annual leave; and enacting special provisions related to young people who are over the age of 14; women; old people; etc.
In this act, they specifically mention the working hours in the factory. A maximum of 48 hours a week is allowed for adults to work in a factory, and there should be a weekly holiday.
Health-related provisions also stated in this act that there should be a clean and adequate environment in the factory. Every worker must have a proper sanitisation system, drainage system, adequate lighting, ventilation temperature, and so on.
2- Minimum wages Act (1948):
If an employer pays less than the fixed minimum wage, it is a violation of Article 23 of the Indian Constitution. If a worker is forced to work for less than the minimum wage, the employer may face legal consequences.
This act applies to various types of employment as well as different classes of work within the same type of work. It is applicable to all age groups. The minimum wage varies from state to state. When determining the minimum wage, the centre and state governments take into account a variety of factors. These factors include location; type of work; working hours; cost of living, and so on.
3- Payment of Wages Act (1936):
According to this act, it ensures that every employee will get their payment on time. This act fixes the obligation on authorities regarding the payment of wages and fixes the pay period, time and method of payment of wages. According to this act, every employer is liable to pay all wages to every worker that he/she employs for his work.
The Payment of Wages Act stipulates that an employee has to be paid his remuneration by the 7th of every month. If this doesn’t happen, the employee whose salary is more than 18000 can approach the labour commissioner or file a civil suit and take legal action against the employer.
4- Equal Remuneration Act (1976):
This act states that every employee has to be paid equally without any discrimination between men and women when there are some qualifications for the same person. If an employer is not treated fairly, it violates Article 39(b) of the Indian Constitution, which states that every individual, whether male or female, has an equal right to an adequate means of livelihood. This act was enacted to eliminate discrimination on the basis of race, caste, gender, etc. The aim of this act is to improve the number of women employees in the employment sector and to create awareness regarding their rights and legal duties.
5- Provident Fund Act (1952):
The Employment Provident Act was enacted in 1952 and, hence, the act was renamed the Employees Provident Fund and Miscellaneous Provisions Act, 1952. This act is established for the welfare of the employees. It governs provident funds and retirement pensions, and in this scheme, both the employer and the employee contribute a portion of their total salary. In this employer, 12% deduction of basic salary + dearness allowance, and the employer will deduct 12% plus 1%. The mandatory deduction limit is 15,000, which can be exceeded if both the employer and the employee agree. It is given as security to employees when they retire for their future.
6- Employees State Insurance Act (1948):
It was the first legislation on social security for workers that was enacted by the parliament. This act’s main objective is to provide certain health-related security, which is caused because of the health-related issue. Occupational disease and death cause loss of wages, so to counter this loss, the government legislated this act.
In this, several insurances are done by the employer for the protection of employees from various diseases; medical insurance, for example. Medical insurance is provided by the employer for both the employee and their family, and another one is accidental insurance, which only the employee covers. It applies only when an individual’s salary is more than 21,000. In this insurance policy, employees contribute 0.75% of their wages and employers contribute 3.25% of wages.
7- Payment of Bonus Act (1965):
The payment of a bonus is a statutory obligation. It is compulsory for all employers to pay their employees. The act is applicable to the whole of India for all the establishments which have twenty or more people employed on any given day during the year. It is not applicable to the establishments that fall under section 32, and it is not applicable to those employed on a contract basis.
Its main objective is to provide a redressal mechanism to employees and to put legal responsibility on the employers of every establishment towards their employees. The lower limit of a bonus is 8.33% of wages. It may be more than this percentage, which depends on the profit of the establishment, but it is not followed, which is a wrong practice.
8- Gratuity Act (1972):
Under this act, gratuity is paid by the employer to the employee for their contribution to the establishment as a token of appreciation. It is paid as a monetary award if the employee rendered five years of continuous service in any factory or in any company. The employee has given no contribution to the gratuity fund. it is a lump sum amount given by the employer. it is paid as 15 days of salary according to every year of working.
9- Professional Tax Act (1987):
This act empowers the nodal agency to collect professional tax dues from the professionals in the state. Under Article 276 of the constitution empowers the levy of profession tax limit is 2500 p.a. this act is applicable only to 15-16 states.
10- Labour Welfare Fund Act (1981):
This act was legislated with the objective to provide all basic facilities to labourers to improve their working conditions, provide social security and raise their standard of living. This act is enacted by states for the betterment of the labour class.
11- Shop and Establishment Act:
This act was enacted to improve the management of working conditions and employment in shops, commercial establishments, hotels, theatres, and other public places of amusement. This act helps in catering to the needs of the unorganised sector, which often suffers from the exploitation of employers. The State legislature has the authority to enact legislation on it. Each state has its own rules.
12- Industrial Dispute Act (1947):
This act governs the relationship between employer and employee. This act came into force to protect workers against the exploitation of employers. Differences always exist between the employer and employee, which causes conflicts among them. So, to remove these conflicts, the government passed this act with the objective of maintaining peace and harmony in the industries.
13- Maternity Benefit Act (1961):
this was the first act which is enforced to protect the employment of women at the time of maternity. This act was amended in 2017 and after the amendment brought so many changes in this act. The minimum maternity leave is 26 weeks and it is paid leave. Pregnant women can’t be terminated from their employment office on the grounds of their pregnancy.
14- Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act (2013):
This law was passed in 2013 in order to protect the rights of women in the workplace. It not only covers women’s constitutional rights but also human rights. This act provides protection for women against sexual harassment. Through the amendment, it was added to the IPC. Both civil and criminal remedies are available under such laws. The landmark judgement on sexual harassment was Vishaka and Others v. the State of Rajasthan.
There are so many legal rights of employees in India for the private sector that exist to safeguard private employees against employers. These are as follows:
- It is necessary to obtain a joining letter in writing because if in future conflicts arise, an employee can easily prevail on their rights against the employer.
- Several laws were enacted by the parliament, but we observe that these laws are not strictly followed.
- We need to increase awareness regarding these laws, about their legal rights and duties.
- Working hours should be flexible.
In COVID-19, many employers terminate their employees without giving any reason. Employees’ rights are always exploited by employers. It is mandatory for all workers to have knowledge of their rights as employees so they can exploit their interests. Several laws are passed by the parliament to protect workers as well as workmen from the exploitation of employers. The Indian constitution is the source of labour laws and reforms. Its provisions aim to eliminate gender discrimination and provide equal opportunities for men and women. Four new labour codes established by the government are the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020.
- Laws relating to private employees in India available at: https://labour.gov.in/ (Last visited on 19-07-22)
- The constitution of India, art 39, 256, and art 23 (last visited on 19-07-22)