Article: Key labour reforms during monsoon session of Parliament


Key labour reforms during monsoon session of Parliament

The Parliaments monsoon session witnessed some crucial labour reforms with the starkest legislation being the Maternity Benefit (Amendment) Bill, 2016. This feature looks at some of the highlights of the session:
 Key labour reforms during monsoon session of Parliament

Recently concluded Monsoon Session of Parliament was one of the most productive sessions as it cleared 114 Bills and only one was withdrawn during the month-long assembly that started on July 18 and ended on August 12. Significant impact will be seen on Indian workforce. Besides passing the landmark Constitutional (122nd Amendment) (Goods and Services Tax) Bill, that simplified taxation procedure by incorporating most  indirect taxes under a single taxation regime; several other significant legislations were voted including -The Maternity Benefit Bill that increased the existing maternity leave from existing 12 weeks to 26 weeks; The Employees’ Compensation Bill, which rationalized the penalties and strengthened the rights of the workers under the Act, and The Factories Bill that enhanced the limit of overtime hours for workers. A few of the major legislations are:

The Maternity Benefit (Amendment) Bill, 2016 

Many women working in the private sector fear loss of employment after attaining motherhood as many firms don’t allow extended leave to mothers other than permissible period of 12 weeks. But now the latest amendment has brought cheer to many women as eligible maternity leave with full pay has been increased from 12 to 26 weeks. It is applicable in all establishments, including both public and private sector. 

As per the new amendment, now maternity benefit can be availed before 8 weeks from the expected date of delivery. The Bill introduces new provision where every establishment needs to inform woman about maternity benefits at the time of her appointment.  Another important provision stated in the bill is option to work from home. Organizations may allow young mothers to work from home if the nature of job so assigned permits them to work from home. The duration of work of home is to be mutually decided by the employer and the woman.

The new Maternity Benefits (Amendment) Bill, 2016 allows 12 weeks leave to adopting mothers who want to legally adopt a child below three months of age and to commissioning mothers. The 12 week leave period will be counted from the date when child is handed over to adoptive or commissioning mother. Another reason of joy that bill provides is the mandatory facility of Crèche to be provided by establishment with 50 or more employees in the nearby vicinity. 

However, the new extended period of 26 weeks will not be available to woman who has two or more children. Their maternity benefit will continue to be 12 weeks, which cannot be availed before six weeks from the expected delivery of delivery.

“This amendment is a landmark piece of legislation framed in furtherance with Article 15(3) of the Fundamental Rights and Article 42 of the Directive Principles of State Policy. The proposed amendment will provide an impetus to the industry and promote employment retention of women employees in the organized sector.  It protects the employment of women during the time of her maternity and entitles her of a full paid absence from work - to take care for her child. The bill may also enable working mothers to exercise work-from-home option. However, this enabling provision will not be mandatory. Nevertheless this bill is a salutary step in promotion of actual equality in the citizenry and securing humane conditions in workplace for millions of working women in India,” elucidates Mr Purushottam Sharma Tripathi, Advocate-on-Record, Supreme Court. 

But some feel this pro-women step of increasing paid maternity leave is passed very late; considering there is ever increasing pressure on women to maintain work-life balance. Remote and flexible working options provide window to women fulfill their duties and progress in their careers simultaneously. Today, several new startups are opting for remote workforce understanding work-life challenges of employees, especially women. Flexible working hours work as boon for mothers who can raise their children without compromising on their employment sphere. 

 “It is a positive step towards creating the support system for the women talent, but the bill should have been passed 20 years ago. This is too little, too late. Remote and flex work options are the future of work and that is what companies should be incorporating,” avers Ms Sairee Chahal, Founder & CEO,, online career destination for women.  

However, this move will help boost women participation in workforce as it will provide much needed support to working mothers.

The Employee's Compensation (Amendment) Bill, 2016 

The Bill provides amendment to the Employee’s Compensation Act, 1923, which provides payment of compensation to employees and their dependents in the case of injury by industrial accidents, including occupational diseases. The bill raises the dispute amount of compensation to ten thousand rupees for appeal in High Courts, which may be further increased through notification.  Also, in case of violation of Act, bill increases penalty to fifty thousand; later it may be raised to one lakh rupees. 

“This amendment aims at benefiting the entire organized workforce in India. The Bill introduces a provision which requires an employer to inform the employee of his right to compensation under the Act in writing (in English, Hindi or the relevant official language) at the time of employing him. Further, the bill penalizes an employer if he fails to inform his employee of his right to compensation.  Such penalty may be between fifty thousand to one lakh rupees. While the act provides that any dispute related to an employee’s compensation will be heard by a Commissioner (with powers of a civil court).  Appeals from the Commissioner’s order, related to a substantial question of law, will lie before the High Court. The Section 30 of the Act stipulates that appeals can be made against orders related to compensation, distribution of compensation, award of penalty or interest, etc. only if the amount in dispute is at least three hundred rupees, the proposed amendment raises this amount to ten thousand rupees and permits the central government to raise this amount by issuing appropriate notification. It is one of the many initiatives undertaken by the Central Government to usher in labour reforms so as to facilitate ease of doing business in India given that the Government has aggressively promoted its ‘Make in India’ campaign across the world. The amendment is in furtherance with the Constitution goal of Economic Justice as stated in Articles 39(a), 42 and 43 of the Directive Principles of State Policy enshrined in the Constitution of India,” adds Purushottam Sharma Tripathi, Advocate-on-Record, Supreme Court. 

This is one of the key labour legislations passed aimed at reducing number of litigation cases arising over compensation to workers. 

The Factories (Amendment) Bill, 2016

The Factories (Amendment) Bill, 2016 enhances the limit of overtime work hours for workers. Amendments are made to two sections of the Factories Act, 1948 which permit the number of overtime hours.  The existing 50 hours per quarter are raised to 100 hours under (Section 64) and existing 75 hours per quarter are raised to 125 hours under (Section 65).

Another facet of the factories bill is that in case of excessive work load and in the matter of public interest Central and State Government can increase overtime hours from 115-hour limit to 125 hours. The bill also provides power to Centre and State Government to make rules regarding double employment, conditions related to exemptions to certain workers etc. Along with this, bill allows State Government to make rules to define individuals holding management or confidential posts and immune certain types of adult workers from fixed working hours, periods of rest, etc. It also extends this rule making power to Centre.

“The need for increasing the total number of hours of work on overtime in a quarter is based on the demand from industries and is aimed to facilitate production in India. It is another landmark amendment to promote labour reforms so as to enable ease of doing business. The increase in working hour becomes necessary given the present era of globalization, privatization and liberalization and in our economy wherein government employees as well private sector employees put- in over 10 hours of work on daily basis.  One important feature of the law would be to enable workers to ‘work more and earn more’. Overtime is only an opportunity. The proposed amendment is not in conflict with the International norms. The Government’s commitment to promoting the manufacturing sector is evidenced from this piece of legislation,” avers Purushottam Sharma Tripathi, Advocate-on-Record, Supreme Court. 

With this amendment , the central government is also empowered along with the state governments to make exempting rules and orders in respect of total number of hours of work on overtime in a quarter. This would ensure uniformity in its application by various state governments and union territories. The amendments in the bill are in consonance with the International Labour Organisation’s prescribed limit of 144 hours of overtime.

The Model Shops and Establishments (Regulation of Employment and Conditions of Service) Bill, 2016

Another suggestive piece of legislation that has been finalized keeping in mind the spirit of co-operative federalism is- The Model Shops and Establishments (Regulation of Employment and Conditions of Service) Bill, 2016. This is a model bill for which state governments will have full prerogative to modify the provisions in the Model Act as per their convenience. Currently, shops and establishments are governed by different legislations in each state. 

The main provisions of the model bill inter-alia, include - freedom to operate 365 days in a year and gives free hand to determine their opening and closing time. Women would be permitted to work during the night shift, if the provision of shelter, rest room, ladies toilet, adequate protection of their dignity and transportation etc. exits.  Also, the model law provides workers’ rights and welfare provisions where provisions for common Latrines and urinals, Crèche facility, Canteen will be provided by a group of employers. In addition, it provides paid holidays for the workers which will be 18 days earned leaves, 8 days causal leaves, weekly holiday and 5 festival leaves in addition to National holidays.

The model law also provides for exemption of highly skilled workers (for example workers employed in I.T., Bio-Tech and R&D) from, daily working hours of 9 hours and weekly working hours of 48 hours subject to maximum 125 over-time hours in a quarter. It will enable establishments to provide better services to their clients, especially who cater to international customers in the IT sector.

“Allowing employment of women in night shifts will enhance the gender diversity at work places and will also do away with the ‘protective discrimination’ faced by women, who were exempted from working in the night shift. The establishments will have to ensure safety and better working conditions for female employees by providing facilities such as late-night drops and crèches. This bill is aimed at promoting real equality as opposed to formal equality which in turn shall promote financial growth of our nation.  Due to enhanced working hours, more job opportunities would be created. The provision of operating 24X7 is expected to boost up the retail market across the country and will give customer flexibility and convenience to shop any time. This is expected to generate competitive and challenging spirit amongst the States and create an environment which is conducive for large scale employment generation at every level,” adds Purushottam Sharma Tripathi, Advocate-on-Record, Supreme Court. 

Labour laws are beneficial pieces of legislation that are meant to ensure better terms and conditions of employment to workers. There is no doubt that we need forward looking labour reforms in our country that will provide more facilities and benefits to workers; safeguarding their rights.  Hope these new reforms help achieving higher economic growth tempered with social justice in the present day era of globalization.


*Source: PRS India

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Topics: Diversity, Other employee benefits, Benefits & Rewards, Compensation & Benefits, #IndustrialRelations

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