SOURCES OF LAW

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:

• The Factories Act 1948 which aims at securing to workers, health, safety, welfare and proper working hours, leave and other benefits and protecting the worker from exploitation.
• The Shops and Establishments Act: in each state regulates conditions of work in Shops and Commercial Establishments
• The Trade Unions Act 1926 which provides for the registration of trade unions and confers on registered trade unions certain rights and privileges
• The Industrial Disputes Act 1947 whose objective is to bring about industrial peace and lays down the procedure and institutions for resolution of industrial disputes
• The Workman's Compensation Act 1923 which provides for payment of Compensation by certain employers to their employees for injuries or death caused to them in the course of their employment
• The Industrial Employment (Standing Orders) Act, 1946 which aims at bringing about uniformity in terms and conditions of employment and minimizing industrial conflict
• Contract Labor (Regulation and Abolition) Act, 1970 which aims at regulating the service conditions of labor hired on a contract basis and minimizing use of such labor in jobs which are permanent in nature

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.