At a time when labour laws - the tripartite relationship between employee, employer, and union - are a crucial element of growing economies, understanding the nuances of personal labour laws makes a huge difference to employees’ life. These Labour Laws ensure fairness, thereby improving work culture and boosting productivity significantly.
Personal Finance Influencer and labour law advisor Mandeep Gill says, “As a labour law advisor, it is my responsibility to educate people about the importance of understanding labour laws in India. The rights and privileges of employees are protected by various labour laws in India. Sensitizing people about these laws is crucial as it helps them understand their rights and how to exercise them.”
Here’re five essential Labour Laws Mandeep suggests that every employee and employer needs to understand:
1. The Employees Provident Fund and Miscellaneous Provisions Act:
- Any employer with or above twenty employees needs to set up a provident fund to benefit employees. Under this Act, both the employer and the employee need to submit 12% of the employee’s basic salary and dearness allowance.
- Every employee covered under this Act is also required to contribute 8.33% of their basic salary or a maximum of Rs 15,000 per month to the pension scheme.
- These benefits act as social security for employees in case of retirement, death, disability, or in any other scenario. It is crucial to know that the employee can only remove the amount post two months of unemployment from the job.
2. The Employees State Insurance (ESI) Act:
- Next in line is another social security act that favours employees or their dependents when in need of medical support for maternity, sickness, disablement, cash, or others.
- Any organization with or above ten employees who are involved in the manufacture or sale of goods or services is required to be registered with the Employees State Insurance Corporation (ESIC).
- If the employees are not involved in the manufacture of sales or services, then the organization or a factory is required to follow the rules when employee strength crosses at least 20.
- The employer’s contribution is 3.25% of the employee's wages, and the employee & contribution is 0.75% of their wages.
- This act is crucial, and every worker or employee should comply with the rules for their benefit.
3. The Payment of Wages Act:
- If your employer is not paying your salary on time or deducting it without any unreasonable causes, then it is very important to understand this act as it regulates the payment of wages to employees.
- The Act simply states that any employer can deduct its employee’s salary in case of leave, damage, recovery of loan, or any deductions to government schemes.
- It also states that any employer must pay the salary within a maximum of a month and the employees can take legal action if the act is not complied with by the employer.
4. The Industrial Disputes Act:
- If nothing works in your favour, be it the employee or the employer, then this law will help provide investigation as well as the settlement of the disputes.
- The first step is to reach the conciliation officer for the settlement of the dispute. If the dispute is still not settled, then both parties are required to approach the Industrial Tribunal or a National Tribunal. This Tribunal is appointed by the government and has the required powers.
- The Act declares various rules to be followed before laying off an employee or before declaring a strike in a factory.
5. The Maternity Benefit Act:
- As the name suggests, this act aims to provide maternity benefits to the female workforce.
- Any organization that employs ten or more employees is required to provide maternity benefits to its female employees. However, certain criteria need to be met for the act to be effective, like a female must work for at least 80 days in the last 12 months preceding the date of her expected delivery.
- Under this act, the female employee is entitled to receive equal pay during her absence also. Women can take 26 weeks of maternity leave either before or after the delivery.
- It is denied to remove a female employee from her job during her maternity leaves on any grounds.
Mandeep Gill argues that many employers are taking undue advantage of the loopholes in the system, and if the employees can be trained, or made cognizant of these laws, then it can bring a revolution in the whole system.
Mandeep wants to be known as someone who is always there to help salaried/waged employees in any way possible. He believes that it is important to contribute if you want to bring a change in society, and that is what Mandeep Gill is working towards.