Doing Business in India For Dummies®

Labor and Allied Laws

India has an elaborate system of labor laws. Some are federal laws, which are applied by the central government, and the others are enforced by the state governments. The labor union movement has substantially declined, and strikes are far less common. The important labor laws you should study include the following:

✓	Factories Act, 1948: This law addresses the security and welfare of workers by requiring safe working conditions in factories.
✓	Industrial Disputes Act, 1947: This law governs industrial relations, including retrenchment, closure, and layoffs. Prior government permission is required to lay off workers or close down businesses employing 100 or more workers. Getting such permission is no simple matter, but that could be changing soon because the Indian Parliament is considering raising the ceiling on the number of employees that necessitates the need for government approval before layoffs. The Parliament is also looking at putting in place strong deterrents against strikes and lockouts.
✓	Laws relating to provident funds, gratuities, workmen’s compensation, employee state insurance (for medical relief), and apprentices.

After you’ve made certain that you’re obeying all the relevant laws with your Indian employees and colleagues, consider all the ways you can keep those teams together and keep them motivated. I include a great deal of that information in Chapter 7.

Unions and labor disputes are a fact of life in India. Indian workers have the right ...