Labour laws have always been a compliance maze for employers. The Indian Constitution places employment and labour matters in the concurrent list. Which means, both the Centre and the States have rule-making power over the subject matter.
Many labour legislations date back to the independence era and have slowly evolved over the years. Business and work culture adapted and adopted to the changing times, particularly after liberalization in the nineties, when globalization became the norm, and work cultures from across the globe permeated the Indian employment landscape.
While a notable stratum of the Indian urban population kept getting added to the globalized local framework for white collared engagements, a significant portion of India’s population, particularly in the rural areas, and those working in factories, as well as blue-collar workers, continued to co-exist, creating catch-222 situation – the laws did not provide for both such extremes. The law provided for ‘workmen’, for instance, but while conceptually “workmen” was a category, as well as those who were not “workmen”, the laws did not catch up fast enough to address both.
The inconsistencies in the applicability of laws and overlapping provisions across multiple laws caused anxiety to employers and triggered worries about compliance and liabilities. Multi-national companies that were perhaps used to specific and clearer compliance requirements in their home jurisdiction and employer-friendly provisions for...
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