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- The big-ticket issues that labour law strives to address are –
- Working conditions
- Employment terms
- Minimum wages
- Equality of wages
- Hours
- Health and safety
- Dismissal
- Child labour
- The basic feature of labour law in almost every country is that the rights and obligations of the worker and the employer are mediated through a contract of employment between the two.
- Many contract terms and conditions are covered by legislation or common law.
- The most fundamental employment terms include compensation, holiday and illness rights, notice in the event of dismissal etc.
- The contract is subject to various law provisions. An employer may not legally offer a contract that pays the worker less than a minimum wage. An employee may not agree to a contract that allows an employer to dismiss them for illegal reasons.
- In the U.S. for example, the majority of state laws allow for employment to be “at will”, meaning the employer can terminate an employee from a position for any reason, so long as the reason is not explicitly prohibited
- Many jurisdictions define the minimum amount that a worker can be paid per hour. The minimum wage is set usually higher than the lowest wage as determined by the forces of supply and demand in a free market and therefore acts as a price floor.
- Each country sets its own minimum wage laws and regulations, and while a majority of industrialised countries has a minimum wage, many developing countries do not.
- Minimum wages are regulated and stipulated in some countries that lack explicit laws. In Sweden minimum wages are negotiated between the labour market parties (unions and employer organizations) through collective agreements that also cover non-union workers and non-organised employers.
- “Living wage” – The living wage is higher than the minimum wage and is designed that a full-time worker would be able to support herself and a small family at that wage.
- Convention no. 158 of the International Labour Organization states that, an employee “can’t be fired without any legitimate motive“; and “before offering him the possibility to defend himself“
- These are administrative law principles.
- Discrimination – racial, gender based
- Health and safety – mandatory safety measures specified by law for safety on premises, specified standards for working conditions, specified mandatory contributions towards health insurance,
- The maximum number of hours worked per day or other time interval are set by law in many countries. Such laws also control whether workers who work longer hours must be paid additional compensation.
- Before the Industrial Revolution, the workday varied between 11 and 14 hours. With the growth of industrialism and the introduction of machinery, longer hours became far more common, reaching as high as 16 hours per day.
- The eight-hour movementled to the first law on the length of a working day, passed in 1833 in England. It limited miners to 12 hours and children to 8 hours.
- Trade unions are organized groups of workers who engage in collective bargaining with employers. Some countries require unions and/or employers to follow particular procedures in pursuit of their goals. For example, some countries require that unions poll the membership to approve a strike.
- Laws may govern the circumstances and procedures under which unions are formed.
- Strike action is the worker tactic most associated with industrial disputes. In most countries, strikes are legal under a circumscribed set of conditions.
- Workplace statutes in many countries require that employers consult their workers on various issues. Industrial democracy extends the concept to require worker approval of specific workplace changes.
- In certain jurisdictions, workers have the right to be represented on their companies’ boards of directors. For instance, Germany requires that half of the board of directors are appointed by the company trade union. This is another manner in which the workers’ rights are protected – by sharing decision making powers with them directly.
- The labour movement has long been concerned that economic globalisation would weaken worker bargaining power, as their employers could hire workers abroad to avoid domestic labour standards.
- The International Labour Organization and the World Trade Organization have been a primary focus among international bodies for regulating labour markets. Conflicts arise when people work in more than one country.
- ILO’s primary role has been to coordinate international labour law by issuing Conventions. ILO members can voluntarily adopt and ratify the Conventions.
- India
- Over fifty national and many more state-level laws govern work in India. These are one of the critiques of the framework as set out in the Reading.
- In 2008, the World Bank criticized the complexity, lack of modernization and flexibility in Indian regulations.
- The World Bank report says that “India’s labor regulations are among the most restrictive and complex in the world – have constrained the growth of the formal manufacturing sector where these laws have their widest application. Better designed labor regulations can attract more labor- intensive investment and create jobs for India’s unemployed millions and those trapped in poor quality jobs. Given the country’s momentum of growth, the window of opportunity must not be lost for improving the job prospects for the 80 million new entrants who are expected to join the work force over the next decade.”
- Where do India’s problems lie?
- Domestic workers
- Unorganized sectors
- High unemployment rates – makes the workmen desperate
- No social security framework in India
- Women workers
- This was the social perspective of looking at labour laws. How workmen as a class are placed in the society and their interests need to be protected.
- What is the other perspective from which labour laws can be looked at?
- Economics
- There are views that argue that Indian labour laws need a complete overhaul. The extant laws form a crisscrossing network of chaotic, strangulating, overlapping and often-contradictory laws.
- The single most important labour law is arguably the Industrial Disputes Act (IDA), 1947.
- This was enacted a few months before India’s independence and guides the hiring and firing rules of the industrial sector and is a good example of a well-meaning policy that is founded on antiquated economics and a handsome misunderstanding of the way markets function.
- The IDA makes it very hard for firms to fire workers.
- In fact an amendment made to the IDA in the mid-1980s requires that any firm employing more than 100 workers needs to get permission from the state government before retrenching workers (and in practice that permission is seldom given).
- This law has probably done more to hold back the growth of India’s manufacturing sector than any other policy.
- Why is that a problem from an economic perspective?
- Some economists argue that the existing laws prevent free-contracting
- Higher wage – short notice period; low wage – job security; volatile markets; hesitance in hiring in the first place – adding to unemployment
- However, there is also a contrary view that says that a well-rounded framework of labour laws contribute to an efficient market
- We have a Ministry of Labour & Employment
- It is one of the oldest and important Ministries of the Government of India.
- We hope that the economy will continue to grow and certainly it appears that an overhauling of labour laws have to be a part of it.
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