Employee Provident Funds and Miscellaneous Provisions Act (1952): Applicability and Features

According to Section 2(f) of the Employee Provident Funds and Miscellaneous Provisions Act (1952) (hereinafter referred to as the EPF Act), Any individual who is (i)employed by or through a contractor in or in relation to the work of the establishment is considered to be an employee; or (ii)engaged as an apprentice but not under the terms of the establishment’s standing order or the 1961 Apprentices Act.

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Work from Home and Maternity Benefit: Is there a need for reform?

By Nevin Clinton

Maternity is a hugely important period in a woman’s life and hence, priority in the said period must be on providing the best care for mother and child. Everything else including work must take a back seat. Therefore, to recognize and respect this period of maternity and to ensure that every working woman’s rights are safeguarded, the Maternity Benefit Act, 1961 came into force.

Key provisions of the Act

The act entitles every working woman to leave with full pay and benefits for up to 26 weeks. This applies to all establishments where there are 10 or more employees. The condition is that the woman must have worked for at least 80 days in the preceding 12 months. While availing these maternity benefits, the woman’s service cannot be terminated by the employer because of the pregnancy (there can be termination due to poor conduct and the like). 

Now, the Maternity Benefit Act has been amended from time to time to incorporate provisions in accordance with the changing times. One such key amendment was made in 2017 which brought in some important changes such as extending the maternity leave period from 12 to 26 weeks. There are also other provisions that were brought in for an increased period of leave in cases of miscarrige or termination of pregnancy.

Among these changes, one other important inclusion was that of provisions for ‘work from home’.

The emergence of work from home

Working from home has been a relatively new concept or idea that emerged thanks to the advent of computerisation of a plethora of work done in jobs. Despite the fact that the same could get monotonous, working from home has emerged as a viable option for people looking for light work. With the arrival of the COVID-19 pandemic, the concept came into the mainstream with nearly every establishment going for it. 

Work from home and maternity benefit

In the context of maternity benefits, work from home was a novel concept in India and there was on official recognition of the same. However, the 2017 amendment in what was a welcome change, brought in the option of employers providing for mothers to work from home for an extended period after delivery, ‘if the nature of work allows so’. 

Is there room for reform?

Now, the option or the very concept of work from home for mothers is pioneering, yes. Mothers in the past did not have such a possibility and even their maternity leave period was far lesser. Therefore, the changes in recent times have been extremely promising and there is no denying that.

But, there is still some scope for reform, especially with regard to the work from home provisions. This is because the complete discretion to make the option available to the women concerned lies with the employer. There is no say for the women. The employer can very well not provide the option stating that the nature of work does ot allow so (even if it in fact allows so). 

Therefore, employers must be made aware of the existence of the ‘work from home’ provisions and advised to make it available wherever possible. Legislation could be a solution to ensure that the option is not denied, but the problem in such a situation would lie in ascertaining an objective way to determine when the nature of work is in such a way for the option to be exercised. 

Classification of various jobs in every establishment as to whether ‘work from home’ would be possible would be a good solution as well, if made mandatory. This can help in the discretion of making use of the option shifting to the employees to an extent, albeit not fully (since the employers will have a say in the said classification of jobs, if done).


The Maternity Benefit Act in India does not have a lot of controversial or contentious provisions. In fact, the Act has been recognized as a progressive one by other countries. Recent amendments have also been encouraging. Therefore, with a few crucial amendments from time to time, India can go a long way in making sure that its maternity benefit legislation is near-perfect. 


Gratuity under the Social Security Code, 2020 and its implications 

Priyasha Sen Gupta, Flywork.io TeamFlywork.io. 


The term ‘Labour’ falls underneath the Concurrent List of the Indian Constitution. The Code on Social Security,  2020 arose from the recommendations of the 2nd National Commission on labor, which stated in its report that the existing labor laws must be amalgamated based on the subject matter. The Code came into effect in  December 2019, while the Parliamentary Standing Committee submitted its report on July 31, 2020, and subsequently proposed a new draft law, the Code on Social Security 2020, which aims to review and integrate the Social Security Law in order to extend social security to all employees and workers, be it organized, unorganized sectors or any other sectors. Another major objective of the Code is to promote technology to ensure compliance and enforcement of its regulations are easily achieved. 
Currently, unorganized workers are not covered by the Employee Provident Fund and Employees' State Insurance.  According to the Social Security Code, 2020, the Central and State Government will issue the special schemes to ensure that the gig workers and others in the non-organized sectors have tangible social security and benefits in the form of pensions, benefits for accidents at work, funeral allowances, etc. 

Amalgamation and Improvement of Various Laws regarding Gratuity

One of the nine laws that the Code subsumes is the Payment of Gratuity Act, which is a major retirement benefit for employees in India and applies to all organizations with more than ten employees (including unorganized workers) (i.e., MNC, schools, and other companies) because employees sacrifice the prime moments of their lives for the development, prosperity, and betterment of their employers, an employer pays his employee gratuity as a  graciousness or gift. Gratuity is a statutory obligation of the employer to promptly tip their employees when they are due. Previously, gratuity was applicable only to employees who had worked in the company for five consecutive years, based on their 15-day salary for a full year. In the event of death, disability, etc., it can deviate from the five-year rule. 
The mandatory minimum five-year gratuity was abolished in the Bill of the Social Security Code, but different threshold structures were introduced for various categories of employees. The prerequisite for this is that the regular and permanent employees must have worked for at least five years to be eligible. Although no such restriction applies to employees with fixed-term contracts, the employer pays gratuity on a pro-rata basis i.e., it is linked to their tenure of the employment. If an employer fails to pay any amount of gratuity to which an employee is entitled,  he shall be sentenced to imprisonment for a term which may extend to one year or with a fine which may extend to Rupees fifty thousand or with both. 

Current Scenario

This move is in sync with the changing dynamics of the Indian labor force. Since the duration of service has generally been reduced, most workers are now employed on a contractual basis. Further, it additionally allays the concern raised by trade unions, that certain employers retrenched employees before the completion of 5 years,  solely to avoid making gratuity payment. 
Under the existing Payment of Gratuity Act, wages include the basic salary and dearness allowance and exclude all other allowance. However, under the Social Security Code, a new concept of deemed wages has been introduced, which means that if an employee receives more than 50% of the total remuneration in the form of allowances and other amounts not included within the definition of wages, then the excess amount would be considered as wages for the purposes of contributions towards Employee Provident Fund. The prospect of social security would, as an immediate consequence, increase the financial burden on employers and also reduce workers' cash. However, this could be mitigated if the Central Government stipulates a lower contribution rate for employees within the framework of the provisions of the Social Security Code. 
Gratuity is exempt from taxation, as long as every full year of service does not exceed 15 days salary, calculated based on the last salary received (up to Rs.2 million). It should be noted that employers can pay additional gratuity to employees, which is known as ex-gratia and is a voluntary contribution. Ex-gratia is subject to tax.


Overall, the enactment of the Code on Social Security, 2020 is a welcome step by the Labour Ministry, which has made it easier to understand the scope and the ambit of the social security laws by consolidating the preexisting laws. The Code also defined various terms such as gig workers, unorganized workers which were not previously defined. This will help increase employment opportunities by engaging workers on a temporary basis and also make organizations responsible for the social security of these segments of workers, which will help combat exploitation while improving their overall compensation.

Let the qualified curated professionals at Flywork.io assist you to resolve any legal and allied issues. For more details visit us at Flywork.io.

Employment Policy – Need, benefits, and essentials

Nevin Clinton, Flywork.io TeamFlywork.io.

An employment policy is a key aspect of any business or company and also one of the most vital ones. It helps increase the understanding between the employer and the employee and establishes the nature of the relationship between the two. There can be various facets to an employment policy which can be included all in the same document or there can be separate ones. Examples include a disciplinary policy, grievance redressal policy, absence management, non-disclosure of confidential information, data protection, equal opportunities, and much more. These policies help in informing the expected appropriate behavior in the workplaces thereby making clear what is expected and what is not. 

Need for a well-drafted employment policy and its benefits

If an employment policy is drafted effectively, coupled with systematic procedures for complaints and a lack of discrimination, it can pay rich dividends in ensuring employee satisfaction. Such a policy helps in increasing confidence in the employees and also helps in ensuring that the employees don’t have any room to behave inappropriately or exploit the employer by any means. On the other hand, if there is no proper employment policy in place, there could be confusion and a lack of clarity especially when there are complaints to be filed. This is exactly why it is of paramount importance to frame an employment policy robustly.

Further, it is important to keep changing an employment policy with time as newer challenges, requirements and legal standards come up. For example, in today’s digital world, it becomes essential to frame a data protection and social media policy. Such aspects were unknown back in the day and it is necessary to evolve with time.

Now, having dealt with the need for an employment policy, concerning the benefits, they are there for the world to see. Any policy that is framed well and is fair is beneficial because it gives rise to clarity. With employment policy also having various facets such as disciplinary policies, absence management, opportunities and so much more, it becomes hugely beneficial and one of the key aspects of the very identity of a company.

Essentials of an employment policy

An employment policy can be as detailed or as concise as it can get, but the fact of the matter is that it must contain certain ‘essentials'. First and foremost in that regard is the code of conduct or a disciplinary policy. A complete procedure concerning the expected standard of conduct and the action that would be taken for not adhering to the same must be given. This can include policies on sexual harassment at the workplace, exploitation, and so on. Guidelines on the usage of alcohol, tobacco, and drugs inside the premises can also be included here or as a separate policy as well. Secondly, there must be a policy that lays down the hierarchy and the modes of communication. Guidelines on the usage of technological devices on the job and the like can be elaborated here. In that regard, a policy on privacy especially concerning data has become all the more important. 

Next up, a policy on non-discrimination or equality must be provided. This can lead to increased confidence in the employees and can also dissuade them from engaging in discriminatory conduct. Moving on, yet another crucial policy is working time and absence management. Provisions on maternity and paternity leave can be given here. A financial policy dealing with pay, bonuses, and so on is also essential. Grievance redressal is another key policy that helps in laying down how and through whom redressal must be done. Yet another key policy is that of health and safety. Ensuring the same through a sound policy will go a long way in employee satisfaction.

Depending upon the nature of the company, there could be several other policies that could be introduced. If all of these are drafted soundly, they are bound to be of help to both employees and employers.

Let the qualified curated professionals at Flywork.io assist you to resolve any legal and allied issues. For more details visit us at Flywork.io.


Labour codes – What could this mean for employers and employees?

Written by Adil Zawahir, Flywork.io Team, Flywork.io .

 A sea change is expected to occur in the labour policies and compensation structure of all the businesses, be it small or big. Here is an overview of the impact of the Labour Codes on employers and employees. For any assistance in coping with these drastic changes, visit us on Flywork.io.

The Parliament has recently passed four new labour codes. The Ministry of Labour and Employment has finalised rules under these four labour codes paving the way for making reforms a reality by notifying these for implementation soon. Under the new plan, 29 central laws will be subsumed into four broad codes on wages; industrial relations; occupational safety, health and working conditions (OSH) and social security.

The changes in labour laws are to affect workers of all strata of society. The organized sector would face changes in salary structure and retirement benefits, whereas the unorganized sector would see minimum wages implemented, universal social security and health benefits.

In 2019, the Central Government introduced four bills on labour codes to consolidate 29 central laws. While the Wages Code was passed in 2019, the other three bills were referred to a Standing Committee on Labour. As per the recommendations of the Committee, the government replaced these bills with new ones in September 2020, and these were passed in the same month.

Even though the draft Rules for the Wages Code had been circulated in 2019 itself, the Central Government had taken a conscious call of not implementing the law on a standalone basis. It wanted to implement all the codes at one go for uniformity.

Changes introduced in the new codes

  • The code allows for 12-hour shifts and 4-day workweeks, provided the number of hours in a week not exceed 48 hours. If such 12-hour shifts are adopted in a 4 day workweek, it must be with the mutual consent of both the employee and the employer, and must mandatorily include 3 days of paid leave in the week. Rajiv Kapoor, a member of the CII National Committee on Industrial Relations, is of the opinion that a 4-day workweek provides flexibility to organizations to plan according to the market demands and customer needs. At the same time, due caution should be exercised and safety guidelines should be complied with after due diligence in the specific area of work.
  • The codes include a provision that caps allowances at 50%. This has been brought in to ensure that companies do not blow-up allowances to evade statutory burdens. As a result, companies will need to retweak their salary structures. Employees earning low salaries will not be heavily impacted as the take-home salary is not going to change by much. However, for employees earning a higher income, the income tax impact and providence fund deductions will be seen more clearly.
  • In the process of restructuring, net salaries may be reduced to balance it with an increase in retirement benefits such as gratuity and other tenure related benefits.
  • Universal Social Security will be introduced for the first time in India. Workers in the unorganized sector, gig workers and platform workers will now be brought into the social security lens. Employers and employees will be asked to contribute towards such a scheme as opposed to the government paying for it.
  • Employees State Insurance Corporation (ESIC) health insurance scheme plans to initially cover one million gig workers. Platforms and aggregators such as Amazon, Flipkart, Ola etc. will contribute 1% of their revenue towards the Social Security Fund and this fund will take care of the health and other needs of the gig workers and their families.
  • Statutory National Minimum Wage. The present minimum wage regulation is statutory but not binding by law. The new code will be statutory as well as mandatory which will make employers accountable for any breaches, and simultaneously improve the income of workers across India.
  • India's cost advantage as far as labour is concerned will come down substantially. The new law ensures all workers in India receive minimum wages, as against 60% of the workforce do at present.
  • With the gender pay gap as high as 80% in some of the Indian states, ensuring pay parity for women has been a constant urge by women’s rights advocates. The recent wage code clearly has created the right grounds for ensuring gender parity across sectors by emphasising equal opportunity and wages for all genders. This in turn could go a long way in attracting more women to join the organised workforce in India.

Concerns regarding the new codes

The notion of stretching daily working hours up to twelve hours is deeply concerning. These rules would supersede thirteen existing central labour law rules, as well as international standards set by the ILO and ratified by India. Several states including Uttar Pradesh and Madhya Pradesh have already introduced laws to enhance working hours to twelve in what they claim was a move to recover the losses incurred during the pandemic-induced lockdown. The state governments argued that such measures were necessary to boost output amid a limited workforce. However, considering the high rate of unemployment in India, this is questionable and points towards a desire to ensure cheap labour.

The central government’s plan to implement the new labour codes in India by April 1st is pushed forward due to a delay by state governments in framing their own sets of rules. Even after the draft rules are made public by the states, they will have to wait for public comments over a period of 30-45 days before finalising the codes.

Let the highly skilled and curated professionals in Flywork.io assist you to resolve any issues and concerns related to Labour or any other law.

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Selective Empowerment

Feminists, as often misconstrued, do not want women to be given a higher pedestal than men. They advocate for equal rights for both the sexes. The recent amendment to the Factories Act 1948 would give them a reason to rejoice. Maharashtra, the third largest state in India, recently brought an amendment to the Factories Act by way of which women can work night shifts from 7 pm to 6 am. Section 66(b) of the Factories Act which prohibited women from working between the hours of 7 pm and 6 am was amended. The other states which have brought about similar amendments to enable women to work in night shifts are Haryana, Rajasthan, Punjab, Andhra Pradesh and Madhya Pradesh, making Maharashtra the sixth one.


The amendment has been welcomed by many industrialists and has been claimed as a much required change.[1]Former policy makers and lawyers have also lauded the amendment. Maharashtra’s Industries Minister Subhash Desai is of the opinion that it will create more employment opportunities for women.[2] However, there have been negative reactions as well. Congress has opposed the amendment and taken the stand that due to the prevailing conditions of unprecedented sexual harassment against women, they should be refrained from working in night shifts.[3] On the argument that women are already working in night shifts in BPO and other IT industries, the Congress’ spokesperson has differentiated between a BPO and the factories. While the women working in BPO’s are  better off financially and most of the companies employing them have  both pick up and drop facilities, the factories that come under Factories Act 1948 mostly involve ground work and the women working here often rely on public transport. Speaking on similar lines, a former Labour Commissioner considered this a -” bold move which might backfire”.[4]

However the majority claim has been to approve of this change and the only contention is with regard to women’s safety.



Chief Minister Devendra Fadnavis has put the onus of ensuring safety of women on the employers.[5] They would be responsible for the safety of the women workers both inside the factory and to ensure that they reach home safely to their doorstep. According to a report reflecting the crime rates in India issued by the National Crime Records Bureau, Maharashtra is one of the least safe states for women.[6] In another report specifically addressing the problem of rape, Maharashtra stands second in reporting the highest instances of rape.[7] Although these reports are a year or two old and have no connection with women working in night shifts, these statistics somehow support the doubt expressed by those who have opposed the amendment.

The factories have the responsibility of ensuring the safety of the women working in night shifts but on a practical note, how many times have policies been enforced in India?  The other major drawback is the health repercussions. Studies have shown that women working in night shifts suffer from breast cancer and obesity. A study was conducted which revealed that women working in night shifts have a 30% higher chance of having breast cancer. In addition to this, her fertility and reproductive capabilities are seriously affected. Her Social and personal life can get chaotic too. Most of the women working in India are solely responsible for managing their household and children. Working in night shifts disrupts their work-life balance .However, a survey by the National Commission of Women has found that working in nigh shifts has been beneficial for women in terms of monetary compensation and most women agreed to sacrifice their social life in order to get more benefits.[8]

Another difficulty that the women might have to face is that of childcare facilities. Often only a few industries can afford such facilities and most of them cannot provide adequate facilities. This may pose a problem especially for women who have little children and live in nuclear families. While the situation is better off in cities, rural areas and lower middle class women suffer the most. With the amendment, the Government and the employers must take care of these additional factors also.

 Despite these problems faced by women, there are numerous advantages also. Factories would be more inclined towards hiring women as now they can work for longer hours. Improving gender diversity can be another advantage. One of the views taken in support of the amendment was that women were already working in night shifts in IT sector and hence this change is just a step forward in the same direction.

 There have been mixed responses to the amendment. However, the amendment has undoubtedly been a positive change and will act as a precedent for other states to follow. While Gujarat HC has scrapped this particular provision,[9] the Kerala HC only extended the 7 pm deadline to 10 pm but has prohibited women from working for the entire night.[10]



Apart from enabling women to work in night shifts, there were other significant changes that were introduced. Earlier the industries using electricity and 10 or more workers or not using electricity but employing 20 or more workers fell under the jurisdiction of the Act. After the amendment, it has been changed to 20 and 40 respectively. The other significant change is the reduction in the number of hours from 240 to 90, to be eligible for paid leave. The number of extra permissible working hours has also been increased. In a nut shell, all the amendments have been pro-labour.


A woman should have the complete liberty to decide whether she wants to work in a night shift or not. Excluding women in selected areas of work, apart from being discriminatory prima facie, also raises the question – whether the state is concerned only about the safety of a particular class of women working in the industries which fall under the purview of Factories Act. The fact that only 6 states have amended the Act to explicitly allow women to work in night shifts speaks volumes about our country’s parochial mindset .However, it is pertinent at this juncture to keep in mind the various problems that women might face due to working in night shifts. What remains to be seen is how these provision are executed and to what an extent can the employers guarantee the safety of women. If they are successful, it will surely help open new avenues and encourage other states to follow suit while in the bigger picture, assure citizens that Indian politicians can keep to their promises.

[1] S. Mahamulkar, An equal music:Maharashtra nod for women on night shifts, The Times of India(21/05/2015), available at  http://timesofindia.indiatimes.com/india/An-equal-music-Maharashtra-nod-for-women-on-night-shifts/articleshow/47364451.cms

[2]  S. Nandgaonkar, Now women can work night shifts in Maharashtra, The Hindu(02/12/2015) available at http://mediatoday.co.in/stories_discription.php?id=390657

[3] Factory night shifts not for women, Congress says, The Times of India(08/08/2014) available at http://timesofindia.indiatimes.com/india/Factory-night-shifts-not-for-women-Congress-says/articleshow/39836613.cms

[4] Mixed response to Govt’s move to allow women in nigh shifts, OneIndia,  http://www.oneindia.com/india/mixed-response-to-govt-move-to-allow-women-in-night-shifts-1753750.html

[5] M.Phadke, Maharashtra cabinet gives node to night shifts for women workers, The Indian Express(21/05/2015), available at


[6]Y.Yadav, Which Indian state has highest crime rate:NCRB Crime Chart Reveals, Indian Express(19/08/2015), available at   http://www.newindianexpress.com/nation/Which-Indian-State-Has-Highest-Crime-Rate-NCRB-Crime-Chart-Reveals/2015/08/19/article2981590.ece

[7] 33,307 Rape Cases registered in India in 2013:MP tops List, Indian Express(02/07/2014) available at  http://www.newindianexpress.com/nation/33707-Rape-Cases-Registered-in-India-in-2013-MP-Tops-List/2014/07/02/article2311178.ece

[8] Night Shift for Women:Growth and opportunities. Research study by ASSOCHAM http://ncw.nic.in/pdfreports/night%20shift%20for%20women.pdf

[9] Gujarat HC chunks law against night shift for women employees, The Times of India(14/12/2013) available at http://timesofindia.indiatimes.com/india/Gujarat-HC-junks-law-against-night-shift-for-women-employees/articleshow/27318873.cms

[10] No night shifts for women at work beyond 10 PM:Kerala HC, LiveLaw, http://www.livelaw.in/no-night-shifts-for-women-at-work-beyond-10pm-kerala-hc/

Photo Courtesy: http://www.moorecommgroup.com/blog/entry/we-can-do-it-five-women-focused-campaigns-that-did-it-right

Ageism: Discrimination on the basis of age


Age discrimination or “Ageism” is the discrimination of a group of people because of their age. The main victims of ageism are the people belonging to the age group of fifty years or more.  Employees from this age group often do face age discrimination, but this concept has not received attention in India yet. This blog post attempts to detail the problem of age discrimination in India, which has come to the forefront off-late.

A landmark case in the U.S. was in EEOC v. Wyoming[1], where the Supreme Court upheld the constitutionality of the Age Discrimination in Employment Act as it applies to state and local governments. The Court rules that state and local governments cannot discriminate against employees and job applicants on the basis of their age. Recently, in the case of Schmitzer v. Bundesministerinfür Inneres (European Court of Justice decision in 11 November 2015), a pay scheme for Austrian civil servants which was amended because of age discrimination, was still age discriminatory.



Age discrimination is likely to affect employees, especially those belonging to the older age group, if the workforce faces an oversupply of young people. This has a considerable possibility in a country like India where the percentage of youth work force is nearly 60 percent of the total work force. Such discrimination results in many people losing their jobs due to their age alone. This could result from either from being pushed out of a profession with headhunters or recruiters preferring younger people over more senior counterparts, being barred from applying for a post or being replaced in one’s job by a younger candidate. Age-discrimination is common in India. For example, most institutions for higher studies prescribe a maximum age limit for applicants. Previously, a person could not take the Common Law Admission Test for studying LLB unless one was below 20 years of age, however this rule has been done away with.

There are no codified laws in India however, that tackle age discrimination, either at the local or national level[2]. Since there is no codified law on age discrimination in India, there is no designated statutory body which deals with matters pertaining to age discrimination. The awareness of the need to prevent age-based discrimination is very low as well.

The Constitution of India guarantees certain fundamental rights to the citizens of India, including protection to individuals from discrimination only on the grounds of religion, race, caste, sex or place of birth under Article 15 of the Constitution of India. However, age is not included. In practice, age discrimination is actually prohibited at various levels in matters of job recruitment or retirement [3].

Under the penal laws of India, no criminal sanctions are prescribed in relation to age discrimination and thus, only civil law actions can be instituted, and even then, only in cases where discrimination on the basis of age is highly unjustified. Civil remedies may include reinstatement with compensation where a person’s employment is terminated. An example of this would be seeking corrections of an award under Section 6(6) of the Industrial Disputes Act, 1947.  According to the nature of the claim made and the category of the employee, such cases can be filed in civil courts, service tribunals or labour courts[4]. Mostly claims made in India related to age discrimination are limited to judicial precedents (Air India v. Nergesh Meerza and Others (AIR 1981 SC 1829), State of Uttar Pradesh v. Dayanand Chakrawarty (AIR 2013 SC 3066). Judicial precedents are case laws that establish a principle which can be used in subsequent cases.

Under the retrenchment laws in India, termination of employment can only be done according to a specific Act which applies to the area where the dispute arose[5].

Retirement Age

There is also the problem of retirement age. In India,the retirement age for State government employees differ. For example, in the State of Kerala, the retirement age for government employees is 55 years while in the State of Punjab it is 60 years. The age of retirement for Central government employees is currently 60 years[6] Therefore, a government employee in Punjab would have the benefit of more years of service than one in Kerala. It is for this reason that one state may attract more applicants since their years of service would be more. This indicates inequality in terms of the number of years of service of governmental service and the migration of a number of government employment candidates from one state to another. It is clear that states with a higher retirement age provide an advantage for potential applicants.Indian laws do not prescribe any retirement age for private organisations. Thus, private organisations are free to decide the retirement age for their employees, which usually is 58 to 60 years.

In the case of Air India v. Nergesh Meerza and Others[7], the issue of different retirement age of male and female crew members of Air India came up for consideration. The Honourable Supreme Court of India struck down the provision which provided that the extension of service of an air hostess beyond 35, if found medically fit, would be at the discretion of the Managing Director. While striking the latter condition, the Court held that the real intention of the makers of this regulation had not been carried out because the Managing Director had been given uncontrolled, unguided and absolute discretion to extend or not to extend the period of retirement after an air hostess attained the age of 35 years. The Court held that the regulation gave wide powers to the Managing Director which could result in discrimination. However, although the Court considered the fact that Air India had fixed the retirement age of air hostesses different from the male crew members taking into account the nature of work, prevailing conditions of service, the need to safeguard health of females, and other relevant factors, the Court negated the grievance that service conditions providing lower age of retirement to air hostesses is unfavourable or discriminatory.

In the more recent case of State of Uttar Pradesh v. Dayanand Chakrawarty[8], the Court referred to the judgment of Prem Chand Somchand Shah v. Union of India[9], in which it was held that “if employees appointed from different sources, after their appointment were to be treated alike for the purpose of superannuation under Regulation 31, and subsequently solely on the basis of source of recruitment no discrimination can be made and differential treatment would not be permissible in the matter of condition of service, including age of superannuation, in absence of an intelligible differentia distinguishing them from each other”.



However, it is important to remember that India still has such a large number of unemployed people and that it cannot afford to allow its senior citizens to keep working until they voluntarily decide to call it a day. Furthermore, it is difficult to ascertain if one’s age is the cause of discrimination at work, as it could be a problem of incompetence or experience. When there are reasonable grounds for discrimination on the basis of age, such as nature of job, location of job, etc, discrimination would be justified. Yet, a situation where, if an employee’s termination is in accordance with law or contract, and they are duly paid their severance pay and termination benefits, they can challenge the termination but not only on the basis of age discrimination, if it seems unfair to people being discriminated against[10].

Thus, a law based on age discrimination in India could be the answer to the problem of ageism.  By making it unlawful for an employer to refuse to hire because of such individual’s age; or classify or group the employees in any way which would affect his status as an employee, because of such individual’s age; or reduce an individual’s wage simply on the grounds of age, an end to age discrimination could possibly be in sight.

  1. Photo Courtesy: 
  2. http://www.slideshare.net/EricLi2/ageism-powerpoint-presentation


[1] 460 U.S. 226 (1983)

[2] Age Discrimination, India, available at <http://www.agediscrimination.info/international/Pages/India.aspx>

[3] Business and Human Rights Resource Centre, available at <http://business-humanrights.org/en/age-discrimination-new-phenomenon-emerging-at-the-workplace-india>

[4] Age Discrimination, India, available at <http://www.agediscrimination.info/international/Pages/India.aspx>

[5] Age discrimination: New phenomenon emerging at the workplace, available at <http://economictimes.indiatimes.com/articleshow/9341329.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst>

[6] Available at<http://www.govtempdiary.com/category/retirement-age/>

[7] AIR 1981 SC 1829

[8] AIR 2013 SC 3066

[9] (1991) 2 SCC 48

[10] Age Discrimination, India, available at <http://www.agediscrimination.info/international/Pages/India.aspx>


Labour Laws in India: Brief Idea

A 4th year student of W.B.N.U.J.S, Kolkata

Given the large human resource availability within the country, the government has set up a comprehensive regulation system in order to prevent its exploitation. These laws essentially govern terms of employment and conditions of work of laborers. Therefore, if you are a business startup, company or an industry employing a certain number of employees as laid down by each law, you would be required to provide certain benefits or adhere to the guidelines prescribed by the following Acts which are enumerated below:

            Industrial Disputes Act, 1947– This Act aids in determining whether or not one’s company would be deemed as an industry and if the workers would qualify as ‘employees’ for the purpose of benefits such as collective bargaining, protecting rights of both employer and employees during strikes and lockouts, and determining modes of dispute settlement between both contracting parties. For instance, Section 18 of the Act envisages settlement arrived in the course of conciliation proceeding before the authority, wherein such settlements not only bind the member of the signatory union but also non-members as well as all the present and future employees of the management orthe settlementis not arrivedat in the course of conciliation proceedings but signed independently by the parties to the settlement binds only such members who are signatory or party to the settlement. Further Section 19 of the Act prescribes the period of operation which includes such a settlement and envisage the continuation of the validity of such a settlement unless the same is not replaced by another set of settlement, while Section 29 prescribes the penalty for the breach of such a settlement.Workers have the right to strike, even without notice unless it involves a public utility service; employers have the right to declare lockout, subject to the same conditions as a strike. The parties may sort out their differences either bilaterally, or through a Conciliation Officer who can facilitate but not compel a settlement, which is legally binding on the parties, even when a strike or a lockout is in progress. But if these methods do not resolve a dispute, the government may refer the dispute to compulsory adjudication and ban the strike or lockout. However in recent times the Higher Courts have deprecated the tendency to go on strike quite frequently. Furthermore, the Supreme Court of India has also held that government employees have no fundamental right to go on strike.


            Payment of Wages Act, 1936– This Act applies to all factories, industrial establishments, tramway services, motor transport services and such other establishments. Wherein wages means all remuneration expressed in terms of monetary value and includes that which is paid through award, settlement, overtime wages, wages for holidays or that paid during termination. This would however exclude bonus, payment to schemes such as PF or ESI, Gratuity, House Accommodation, Travelling allowance, etc as per Section 2(vi) of theAct. It is pertinent to note that if the number of employees is less than 1000 in any organization, then wages shall be paid before the seventh day of the following month, if employees are more than 1000 then before the tenth day of the following month. In addition, the maximum deduction can be fifty percent of monthly wages; however a maximum of 75 percent is permissible if deduction is partly made for payment to a cooperative society. With respect to fines, it cannot exceed over three percent in the same wage period and should be recovered within ninety days from the date it was imposed. The Act requires the maintenance of certain registers such as that for fines (Form II), deductions (Form III), advance (Form IX), wages paid (Form IV and V), muster roll cum register of wages (Form VI) and annual returns such as for transport services.


            Workmen’s Compensation Act, 1923 –This Act is specific to provide for protection in case of accident or injury caused  to employees during or arising out of the course of their employment. The benefits accrue to every employee irrespective of their category or capacity or form of hire, thereby including contract laborers as well. The compensation depends upon the form of injury caused that is total, partial or an occupational disease. The amount of compensation payable has been laid down under Section 4 of the Act wherein in case of death the amount is either 40 % of the wages multiplied by the relevant factor or Rs 20,000, whichever is more, total disablement out of injury is 50% of the wages multiplied by the relevant factor or Rs 24,000 whichever is more. This relevant factor is as per the schedule provided within the Act specifying the period of work to be considered for the above calculation. In cases of partial disablement, reference must be made to Part II of Schedule I which provides the percentage of compensation which would have been payable in case of permanent total disablement but as a percentage of the loss of earning capacity caused by the injury. In case such injury is not mentioned then the percentage of compensation should be proportionate to the loss of earning capacity. When an injury does occur it must be reported as per Rule 11 Form EE ,within seven days of the injury to the Commissioner (this however is not necessary if the Employees State Insurance Act, 1948 is applicable)


            Employees State Insurance Act, 1948 – This Act has been incorporated as a form of social security insurance which is applicable to factories employing ten or more persons irrespective of whether power is used in the process of manufacturing or not. In addition it also includes theatres, motor transport undertakings and newspaper establishments employing twenty or more persons and private medical and educational institutions employing twenty or more persons in certain states. To be included under this Act the wage limit must be within Rs 15,000 per month. The contribution is made by the employer on behalf of the employee on or before the 21st day of the following month. This Act, similar to the Workmen’s Compensation Act provides benefits in case of injury, accident, maternity, sickness, etc.



            Employees Provident Fund Act – Every factory or establishment employing twenty or more persons from the date of its setup is covered under this Act including theatres that employ five or more persons. The Act essentially requires the employer to place a certain contribution towards a common fund wherein contribution is from both the employer and employee. The benefits that accrue ranges from retirement, medical care, housing, family obligations, education, financing insurance policy, etc. An employer must keep in mind Forms 5A, 9, 11 and 2 that provide for registration and nomination in case of a withdrawal to be made by an employee. While employees mustbe  provided for Forms 19, 1 10 C, 13, 31, 20, 10 D, 5 (IF), 8 which would facilitate withdrawal, change of nominees or other formalities to register for this fund.


            Factories Act, 1948 –  In cases where a premises employees ten or more persons with the aid of power or twenty or more workers without the aid of power on any day preceding twelve months wherein a manufacturing process is being carried on, with the exclusion of mines as per the Mines Act, 1952 would fall under the purview of this Act. The employer has to undertake the responsibility  to keep the factory clean at all times (Section 11), arrange for disposal of wastes and effluents (Section 12), maintain a reasonable temperature for comfort of employees (Section 13), control dust and fumes as per permissible limits (section 14), artificial humidification should be at a prescribed standard level (Section 15), overcrowding should be avoided (Section 16), adequate lighting, drinking, water, latrines, urinals and spittoons should be provided (Section 17 to 19) and proper ventilation for air and light  to be maintained within the factory. He must also undertake certain safety measures for employees such as: ensuring all machinery are fenced or kept in a manner that would not endanger a workers life, hoists and lifts tests periodically for quality maintenance, floors, stairs and means of access should be of a sound construction, all safety appliances for eyes against  dust, gas and fumes provided, additional safety measures for hazardous substances, adequate firefighting equipment and a safety officer should be appointed if number of workers in the  factory are 1000 or more.  Further a certain standard of working hours should be maintained wherein it may not exceed 48 hours in a week with a maximum of 9 hours in a day and Sundays being a compulsory holiday. A minimum of half an hour of rest should be provided after 5 hours of work. He must also be provided with weekly holidays and notice of period of work must be provided along with other requirements as laid down within Sections 51 to 61. Reference may be made to the rules under this act for specific guidelines in cases of annual leave, notice, overtime and employment of young individuals which however prohibits employment of a person below 14 years of age.


            Maternity Benefit Act, 1961 – This is applicable to every establishment being a factory, mine or plantation in which ten or more persons are employed on any day of the preceding twelve months, wherein every pregnant woman is eligible to a leave of 80 days before the expected date of delivery, however if her pay is below 15,000 she may be offered a similar benefit under the ESI Act. An important facet being  that she is provided pay for the period of leave and an additional leave of one month is provided in case of illness and includes  six weeks for miscarriage and two weeks leave in case of a tubectomy operation.


            Gratuity Act, 1972- This Act is a social security measure provided by establishments with twenty or more persons employed to avail of a retirement benefit if he has served at least five years or provided continuous service of 4 years and 240 days. It is payable at a rate of fifteen days wages for every year completed and in case of seasonal establishments at the rate of seven days wages for each season. However, the benefit is provided to an employee whose salary is below Rs 15,000, but if there exists even a single employee who meets this salary threshold, then the employer is bound to provide for gratuity to the stated employee irrespective of the other employees drawing a higher salary.


            Payment of Bonus Act, 1965– ThisAct extends benefits to any factory employing ten or more persons wherein any processing is carried out with the aid of power and also other establishments employing twenty or more persons, thereby allowing the employee who draws wages uptoRs 10,000 to be eligible for a bonus with minimum 30 days worked performed by the employee during the accounting period (Section 8).



            Apprenticeship Act, 1961 – This Act applies to all industries as notified by the central government that places a statutory obligation on the employer to recognize certain minimum rights of an apprentice. In order to be qualified as an apprentice, a candidate must be not less than fourteen years of age and has to satisfy the laid down standard of education and physical fitness. Further he or she must be under such employer for a period of six months to four years and who works 42 to 48 hours a week but not between 10 pm to 6 am unless approved by what the Act deems as the ‘apprenticeship advisor’. The employer on the other hand must provide casual leave of 12 days, medical leave of 15 days and extraordinary leave of 10 days in a year and provide a minimum rate of stipend as per the rules of this Act.

Labor Law Reforms- Is flexibility the only resort left?

 By Ayushi Singhal,

3rd Year, WBNUJS, Kolkata



After the recent clean sweep victory of the right wing party in the elections of the largest democracy in the world, the talk for reforms in the Labour Laws of India (which are more than 250 in number) has begun again. Reforms like flexibility in these laws have been demanded by many liberalists like Mr. Kaushik Basu time and again.

Since the subject of labour is included in the concurrent list, the states can change their own laws. Some states like Gujarat have already made amendments in their laws by allowing industries in the Special Economic Zones to lay off workers without permission. These amendments have been lauded by various economists[i] and after Mr. Modi’s debut on the national political scene; there is a hope that he will apply the same for the whole of India. He envisages this as a necessary step in bringing up the contribution of the manufacturing sector (which is right now only 15%) by attracting foreign investment.[ii]



The Goldman Sachs Report has also stated that more flexible laws like that in Gujarat, as opposed to the pro labor laws in West Bengal are beneficial for economic growth.[iii] However, one needs to cogitate upon the fact that- is flexibility the only option left? For this we need to analyze the problem which we seek to rectify.

Here, I will focus on the one related to the Industrial Disputes Act (“IDA”), 1947. This Act, which was legislated a few months before our country’s independence, guides the hiring and firing policy of the industries. An amendment which was made in the Act in the 1980’s asks an industry employing more than 100 workers to get permission from the state government before firing any of these workers. The industry also needs to take permissions before winding up even a sick unit. Moreover, it is required that the workers be given a 21 day notice before alteration in work, wages and other terms and conditions of work. This permission is seldom given and the process to attain the same is lengthy and circuitous, which has had several adverse consequences.


Arguments For Flexibility

What might happen is that a company might just be ready to give labourers higher wages for a particular period of time, but since the firm cannot remove workers all of a sudden, it will have to spread those wages for a longer period of time, which is only counterproductive. Moreover, some industries which have a volatile demand have not been exploited well in the fear of this legal regime.

It has also been alleged that this very policy has held back the growth of India’s manufacturing sector since this permission is seldom given,[iv] making the dismissal even in the extreme circumstances very difficult. To avoid this, the employers become extra wary while hiring which ultimately leads to the dwindling of potential jobs.

They cannot increase the workforce even during the time of a boom, since they cannot be removed when the market falls. These have added the burden of extra costs (both direct and indirect) which further decrease competitiveness. The long lines for the dates of cases and their disposal along with the unchecked corruption make the adherence to these guidelines much more difficult.

Consequentially, to avoid coming under the umbrella of industries that ought to follow these rules, firms generally limit the number of their formal employees below 100, leading to the increased hiring of contract labour. These laborers are not only more often than not paid less, but also have no job security. New labour saving technologies have been devised which replace human labour. There has also been a tendency to resort to grease the palms of officials in order to get rid of the consequences of retrenchment.[v]

This has led people, including economists and lawyers to believe that the pro-worker legislation is harming workers more than it is helping them.[vi] A civil servant believes to such an extent that there is a causal relationship between these laws and the “low number of intermediate-sized firms”.[vii] A study by World Bank has in fact rated India – 48 out of the highest 100 in terms of rigidity, whereby China scoring a 30 and Singapore scoring equivalent to 0.[viii]



Having understood that this requires a change, what is needed is a policy which achieves the dual objectives of development of the manufacturing sector along with the welfare of workers. As mentioned earlier, flexibility in these laws has been one of the obvious methods suggested to get rid of this impasse. Others include simplification of these laws, introduction of self-certification akin to the states of Gujarat, Maharashtra and Rajasthan and the reforms in the dispute settlement mechanism.[ix] I will restrict my criticism to the demand for flexibility, since other reforms are beneficial ‘directly’ (as argued by many, flexibility is ‘indirectly’ beneficial to the employees) both to the labourers and the industries.

Flexibility will naturally come in the form of removing the need for seeking permissions for the removal of workers or winding up the industries. Now even if we accept the argument that there is an established causal relationship between the prosperity in developed countries (like Norway) and the flexible labour reforms; we do not have similar social security schemes like an unemployment insurance program etc., which may decrease the effects of bringing flexibility in these policies. In the absence of such measures, bringing flexibility in these laws can pose a huge threat to the workers who are dependent on the industries for their livelihood.

We are living in a myth whereby we conceive everyone to be ready for the developmental changes, which however is not the case for one and all.[x] If we envisage building labour laws in the same mould as these countries, which take bold steps of removing workers from sick units, we should not forget that the ideas like celebrating ‘May day’ are the brain child of these nations only.

Since the problem arises due to the lengthy and time consuming mode of taking permission and because of the few cases who ultimately receive such permissions, changing the regulatory mechanism can be an alternative consideration. This implies that the means rather than the end should be changed. For instance, there are numerous adjudicating authorities under the IDA like conciliation officers, conciliation boards, courts of inquiry, labour courts, industrial tribunals and the national industrial tribunal. This increases the complexity of the process. This complex procedure makes the survival of these companies a difficult task.



The construction of a mechanism which ensures quick disposal of permission related processes will be helpful to the employers in adapting to the market changes and will also not harm workers. However even here, the authority should make sure that the permissions are given after proper assessment of all the factors involved. We need to realize that this efficiency, which we might bring by vouching for flexibility, may not necessarily transform into prosperity for people at the lowest rung of the corporate chain. Having said this, we will have to make the workers adept to adjusting to changes in the economic environment.[xi]

Nevertheless, whatever reforms we cogitate to bring in, they should not instill fear in the minds of workers of being laid off any time. This can be ensured by making workers aware of the reasons for the change we decide to bring about in the laws. Until all this is achieved, reforming the implementation of these laws is a far better option than changing these laws wholly.

[i] http://siteresources.worldbank.org/INTDECSHRSMA/Resources/india.pdf

 [ii] http://news.valleyindiatimes.com/2014/06/a5.html


 [iv] http://news.bbc.co.uk/2/hi/south_asia/4103554.stm

 [v] http://siteresources.worldbank.org/INTDECSHRSMA/Resources/india.pdf

 [vi] http://pragati.nationalinterest.in/2013/11/labour-market-reforms-in-india/

 [vii] http://pragati.nationalinterest.in/2013/11/labour-market-reforms-in-india/ “A recent study by International Finance Corporation compared the sizes of the typical Indian, Mexican, and US firms at start-up and at the end of 35 years and found that their size declined by a fourth in India whereas it doubled in Mexico and rose 10 times in the US.”

[viii] http://pragati.nationalinterest.in/2013/11/labour-market-reforms-in-india

[ix][ix] http://articles.economictimes.indiatimes.com/2014-03-13/news/48189392_1_labour-stringent-laws-archaic-laws

[x] http://www.bim.edu/index/doc/labour-reforms.pdf

 [xi] http://pragati.nationalinterest.in/2013/11/labour-market-reforms-in-india/