The document summarizes recent amendments made to key Indian labor laws between 2010 and 2014, including the Workmen Compensation Act, Employee State Insurance Act, Payment of Gratuity Act, Industrial Disputes Act, Factories Act, and Contract Labour Act. The amendments were made in an effort to increase India's competitiveness by providing more flexibility to employers. However, critics argue the changes weaken worker protections and that labor market flexibility alone will not solve issues of stagnating manufacturing output and employment. The document concludes that while some changes aim to streamline regulations for businesses, others seem to reduce security for workers.

1. Critical Review of
the Recent
Amendments in
Indian Labor
Legislations
Submitted By:
Apurva Mittal
20141009

2. Introduction
Indian labour law is closely connected to the Indian independence movement, and the
campaigns of passive resistance leading up to independence. While India was under colonial
rule by the British Raj, labour rights, trade unions, and freedom of association were all
suppressed. Workers who sought better conditions, and trade unions who campaigned
through strike action were frequently, and violently suppressed. After independence was won
in 1947, the Constitution of India of 1950 embedded a series of fundamental labour rights in
the constitution, particularly the right to join and take action in a trade union, the principle of
equality at work, and the aspiration of creating a living wage with decent working conditions.
Sweeping changes in labour laws are taking place in India. A day after meeting trade union
leaders, Prime Minister Narendra Modi has said changes in labour laws will be carried out
through consensus and in consultation with the unions. The current government is
championing the cause of labour.
There is a thin line dividing the interest of industry and industrialists, government and nation,
and labour and labour organisations. Often one talk about saving the industry but ends up
protecting industrialists, adding there is a need to recognise this thin line in letter and spirit
and adopt a balanced approach to the deal with the issues and change the environment.
Amendments
 Workmen Compensation Act, 1923
Workmen's compensation Act has been amended on 9th January 2010. It was effective from
18.1.2010
Given below are the synopses of the changes.
(1) THE WORKMEN'S COMPENSATION (AMENDMENT) ACT, 2009 is now renamed
as THE EMPLOYEE'S COMPENSATION (AMENDMENT) ACT, 2009 and wherever
"workman" or "workmen" is mentioned in the entire Act the same needs to be read as
"Employee"
(2) The compensation payable on death from the injury, is (i) minimum of Rs.80000 is
increased to Rs.120000 or (ii) 50% of the monthly wages of deceased multiplied by the
relevant factor.
(3) The compensation payable on Permanent Total Disablement from the injury, is (i)
minimum of Rs.90000 is increased to Rs.140000 or (ii) 60% of the monthly wages of
deceased multiplied by the relevant factor.
(4) Definition of wages remains unaltered.

3. (5) For the purpose of claims settlement actual monthly wages have to be calculated without
ceiling of Rs.4000/- which will lead to multifold increase in claim outgo. The maximum
amount of claim compensation payable was Rs. 4.56 lakh in the case of death and Rs. 5.48
lakh in the case of permanent total disablement. *(Refer to table and calculation below).
With the ceiling of Rs.4000/- being removed, the claims outgo will increase.
(6) Definition of workmen replaced by "Definition of Employee"- also now includes CLERICAL
employees.
* Maximum claim outgo in case of death when ceiling of Rs.4000 was there is calculated as
below:
50% of 4000* 228.54 (if age of employee was 16 years from table below) = Rs.4.56 lakhs
the award, order or settlement as if it were a decree passed by it.
 Employee State Insurance Act, 1948
Ammended on May, 2010. It was effective from 1.5.2010
Now, therefore, in exercise of powers conferred by section 95 of the Employees' State
Insurance Act, 1948, the Central Government, after consultation with Employees' State
Insurance
Corporation, hereby makes the following rules further to amend the Employees' State
Insurance
(Central) Rules, 1950, namely:-
1. These Rules may be called the Employees' State Insurance (Central) Amendment Rules,
2010.
2. These shall come into force from the l " day of May, 2010.
3. In the Employees' State Insurance (Central) Rules, 1950, in Rule 50, for the words "Ten
Thousand", wherever they occur, the words "Fifteen thousand" shall be substituted.
 The Payment of Gratuity Act, 1972
Ammended on May, 2010. Implemented on 24 .5.2010
An Act further to amend the Payment of Gratuity Act, 1972. BE it enacted by Parliament in
the Sixty-first Year of the Republic of India as follows:-

4. 1. (1) This Act may be called the Payment of Gratuity (Amendment) Act, 2010. Short title
and commencement.
(2) It shall come into force on such date as the Central Government may, by notification in
the Official Gazette, appoint.
2. In section 4 of the Payment of Gratuity Act, 1972, in sub-section (3), for the words “Three
lakhs and Fifty thousand rupees”, the words “Ten lakh rupees” shall be substituted.
 The Industrial Disputes (Rajasthan Amendment) Act, 2014
An Act further to amend the Industrial Disputes Act, 1947 in its application to the State of
Rajasthan. Be it enacted by the Rajasthan State Legislature in the Sixty-seventh Year of the
Republic of India, as follows:-
1. Short title, extent and commencement.- (1) This Act may be called The Industrial
Disputes (Rajasthan Amendment) Act, 2014.
(2) It shall extend to the whole of the State of Rajasthan.
(3) It shall come into force at once.
2. Amendment of Section 2, Central Act No. 14 of 1947.- In the Industrial Disputes
Act, 1947 (Central Act No. 14 of 1947), in its application to the State of
Rajasthan, hereinafter referred to as the principal Act, in section 2.-
(a) the existing sub-clause (iii) of clause (g) shall be deleted; and
(b) in clause (s), the existing expression “by an employer or by a contractor in relation to the
execution of his contract with such employer” shall be deleted.
3. Amendment of Section 2-A, Central Act No. 14 of 1947.- In Section 2-A of the
principal Act after the existing sub-section (3), the following new sub-section
shall be added, namely:-
“(4) Notwithstanding anything in sub-sections (1), (2) and (3), no such dispute or difference
between that workman and his employer connected with, or arising out of, such discharge,
dismissal, retrenchment or termination shall be deemed to be an industrial dispute if such

5. dispute is not raised in conciliation proceeding within a period of three years from the date of
such discharge, dismissal, retrenchment or termination:
Provided that an authority, as may be specified by the State Government, may consider to
extend the said period of three years when the applicant workman satisfies the authority that
he had sufficient cause for not raising the dispute within the period of three years.”
4. Amendment of Chapter II-B, Central Act No. 14 of 1947.- Chapter II-B of the
principal Act, as inserted by the Rajasthan Act No, 34 of 1958, shall be
renumbered as:
CHAPTER II-C”
5. Amendment of Section 9-C, Central Act No. 14 of 1947.- Section 9-C of the
principal Act, as inserted by the Rajasthan Act No, 34 of 1958, shall be
renumbered as “9-CC”.
6. Amendment of Section 9-D, Central Act No. 14 of 1947.- In Section 9-D of the
principal Act, as inserted by the Rajasthan Act No. 34 of 1958, the existing
expression “fifteen per cent” shall be substituted by the expression “thirty per
cent”,
7. Amendment of Section 25-K, Central Act No. 14 of 1947.- For the existing
section 25K of the principal Act, the following shell be substituted, namely:-
“25-K. Application of Chapter VB.- (1) The provisions of this Chapter shall apply to an
industrial establishment (not being an establishment of a seasonal character or in which work
is performed only intermittently) in which not less than. three hundred workmen were
employed on an average per working day for the preceding twelve months.
(2) Without prejudice to the provisions of sub-section (1), the State Government may, if
satisfied that maintenance of industrial peace or prevention of victimization of workmen so
requires, by notification in the Official Gazette apply the provisions of this Chapter to an
industrial establishment, (not being an establishment of a seasonal character or in which work
is performed only intermittently) in which such number of workmen which may be less than
three hundred but not less than one hundred, ‘as may be specified in the notification, were
employed on an average per working day for the preceding twelve months.
(3) If a question arises whether an industrial establishment is of a seasonal character or
whether work is performed therein only intermittently, the decision of the appropriate
Government thereon shall be final.”

6. 8. Amendment of section 25-N, Central Act No. 14 of 1947.-ln section 25-N of the
principal Act.-
(a) in clause (a) of sub-section (1), the existing expression “or the workman has been paid in
lieu of such notice, wages for the period of the notice” shall be deleted; and
(b) in sub-section (9), after the existing expression “six months” and before the existing’
punctuation mark “.”, appearing at the end, the expression “and an amount equivalent to his
three months average pay” shall be inserted.
9. Amendment of Section 25-O, Central Act No. 14 of 1947.- In sub-section (8) of
section 25-O of the principal Act, after the existing expression “six months” and
before the existing punctuation work “.”, appearing at the end, the expression “and
an amount equivalent to his three months average pay” shall be inserted.
10. Amendment of Fifth Schedule, Central Act No. 14 of 1947.- After the existing
paragraph 5 of Part-II to the Fifth Schedule of the principal Act, the following
shall be added, namely:-
 The Factories (Rajasthan Amendment) Act, 2014
An Act further to amend the Factories Act, 1948 in its application to the State of Rajasthan.
Be it enacted by the Rajasthan State Legislature in the Sixty-seventh of the Republic of India,
as follows:-
1. Short title, extent and commencement.-
A. This Act may be called The Factories (Rajasthan Amendment) Act, 2014
B. It shall extend to the whole of the State of Rajasthan.
C. It shall come into force on and from the date of its publication in the
Official Gazette.
2. Amendment of Section 2, Central Act No. 63 of 1948. – In section 2 of the
Factories Act, 1948 (Central Act No. 63 of 1948), in its application to the State of
Rajasthan, hereinafter referred to as the principal Act.
(i) in sub-clause (i) of Clause (m) , for the existing word “ten”, the word “twenty” shall be
substituted; and

7. (ii) in sub-clause (ii) of clause (m), for the existing word “twenty”, the word “forty” shall be
substituted.
3. Amendment of Section 85, Central Act No.63 of 1948. – In Clause (i) of sub-
section (1) of section 85 of the principal Act, for the existing words “ten” and
“twenty”, the words “twenty” and “forty” shall be substituted respectively.
4. Amendment of Section 105, Central Act No. 63 of 1948, – For the existing sub-
section (1) of Section 105 of the principal Act, the following shall be substituted.
 CL (RA) (Rajasthan Amendment) Act, 2014
An Act to amend the Contract Labour (Regulation and Abolition) Act, 1970, in its
application to the State of Rajasthan.
Be it enacted by the Rajasthan State Legislature in the Sixty Seventh Year of the Republic of
India, as follows:
1. Short title, extent and commencement.-
A. This Act may be called The Contract Labour (Regulation and Abolition)
(Rajasthan Amendment) Act, 2014.
B. It shall extend to the whole of the State of Rajasthan.
C. It shall come into force at once.
2. Amendment of Section 1, Central Act No. 37 of 1970- For the existing sub-
section (4) of section 1 of the Contract Labour (Regulation and Abolition) Act,
1970 (Central Act No. 37 of 1970), in its application to the State of Rajasthan, the
following shall be substituted namely:-
 The Employees’ Provident Funds (Fifth Amendment) Scheme 2014
In exercise of the powers conferred by Section 5, read with sub-section (1) of Section 7 of the
Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952) and in

8. supersession of Ministry of Labour and Employment’s G.S.R 321(E), dated the 6th
May, 2014
except as respect things done or omitted to be done before such supersession, the Central
Government hereby makes the following Scheme, further to amend the Employee’ Provident
Funds Scheme, 1952, namely:-
(1) This Scheme may be called The Employees’ Provident Funds (Fifth Amendment)
Scheme, 2014.
(2) It shall come into force from 1st
April 2011.
In the Employees’ Provident Funds Scheme, 1952, in sub-paragraph (6) of paragraph 60 the
following proviso shall be inserted, namely:-
“Provided that if the settlement of claim in respect of inoperative account is delayed for more
than thirty days from the date of receipt of the application for settlement of claim, interest
shall be credited to the account in accordance with sub-paragraph (2) for delay period
excluding the period of thirty days”.
 The Employees’ Provident Funds (Fifth Amendment) Scheme 2014
G.S.R. 891(E). – In exercise of the powers conferred by Section 5, read with sub-section (1)
of Section 7 of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (19
of 1952) and in supersession of Ministry of Labour and Employment’s G.S.R 321(E), dated
the 6th
May, 2014 except as respect things done or omitted to be done before such
supersession, the Central Government hereby makes the following Scheme, further to amend
the Employee’ Provident Funds Scheme, 1952, namely:-
(1) This Scheme may be called The Employees’ Provident Funds (Fifth Amendment)
Scheme, 2014.
(2) It shall come into force from 1st
April 2011.
In the Employees’ Provident Funds Scheme, 1952, in sub-paragraph (6) of paragraph 60 the
following proviso shall be inserted, namely:-
“Provided that if the settlement of claim in respect of inoperative account is delayed for more
than thirty days from the date of receipt of the application for settlement of claim, interest
shall be credited to the account in accordance with sub-paragraph (2) for delay period
excluding the period of thirty days”.

9. Rationale behind amending the labour laws
 International Competitiveness: There is a view that the labour laws at present are
hampering India’s competitiveness in the world market. India essentially being a
labour abundant country has comparative advantage in labour intensive
manufacturing commodities (which could give a thrust to employment growth).
However, this advantage is not fully exploited, it is said, due to the rigid labour laws.
 Employment Trend in the 2000s: There is genuine concern about India’s capacity for
job creation in the manufacturing sector. In the 10-year period between 1999-2000
and 2009-10, the net increase in the number of workers in the manufacturing sector
was only 5.9 million
 External market: the external market is sought to be achieved through cost cutting – in
turn made possible by diluting employment protection law. But cheapening of
domestic products in the international market can also be brought about by
depreciation of the real effective exchange rate.
 Labour market flexibility is hardly the silver bullet for removing output and
employment stagnation in the manufacturing sector. From the foregoing discussion it
follows that amendments to labour laws in Rajasthan and elsewhere are not based on
sound economic logic.
Conclusion
While most of these rectifications seem to be targeting the security of workers, some are
required to make the law hassle-free for the industrialists. “India has long been criticized for
its strict labour laws and burdensome business regulatory environment,” says the World
Bank. Being the country with the largest population of under-utilized labour forces in the
world, the stringent rules make it difficult for employers and industrialists to expand their
businesses in a labour intensive fashion, while the industries keep growing in a capital
intensive manner.
The reformed code has to be quite sufficient to strengthen Indian business standards, to end
up strengthening the state of labour in the country.