The legal framework for labor and employment issues in India arises out of the following sources:
a) Provisions in the Indian Constitution - Articles 39,41,42 & 43 have special relevance in the field of industrial legislation and adjudication. These articles lay down the directive principles of labour legislation including living wages, equal pay for equal work, just and humane conditions of work etc.
Labour is a subject in the Concurrent List where both the Central & State Governments are allowed to enact legislation subject to certain matters and industries being under the authority of the Centre.
b) Statutory Legislation enacted by the union and state governments and as interpreted in various court decisions.
A sample of statutes relating to employment are:
In addition to these, there are social security and wage related legislation as well as legislation related to specific industries.
Each state in the country has its own set of rules which qualify the national legislation, and service conditions compliance obligations differ in each state.
c) Common Law - the system of legal principles which has evolved through court decisions and is also known as Case Laws. The law governing contracts of employment is a matter of common law with several statutory interventions.
d) International Conventions adopted by the International Labor Organization and ratified by the Indian Government which basically impact welfare, social security and wage legislation in the country.
e) Custom, precedent and practice also affect the employment contract in India and the judiciary is known to look upon the employee(s) favorably in such cases.