Diversity and Inclusion: How do Indian Labour Laws fare ?

Inclusion and diversity are among the two most trending hashtags on LinkedIn. Corporate India has also embarked on a mission to be more inclusive and diverse in its hiring and policies. In this editorial, I look at the areas where our laws work, and those which can do with improvement.

In the first place, it necessary to define ‘inclusion’ and ‘diversity’. In many conversations, the scope is restricted to gender. It is indeed critical for our country to work on allowing our biggest latent resource to thrive, our women. This topic is covered brilliantly by my friend Anirudha Dutta in his book Half a Billion Rising. We need more women on boards, we need more women in leadership positions, we need more women in workplaces, we need these women to be paid equally and last but not least, we need more women on panels and webinars that discuss women’s inclusion.

I would also however like to extend the scope to encourage the inclusion of disabled people, people with mental health issues, people who do not conform to male or female genders and people of alternate sexualities. It is hard to see the law extending positive discrimination to the rest of these categories. However there is no reason corporates cannot work at equal opportunity employment and making their workplace more friendly and inclusive.

GENDER DIVERSITY

I would first like to lay out the various areas covered by our laws that relate particularly to working women.

• Maternity Benefits
• Prevention of Sexual Harassment
• Physical Safety and Security
• Working conditions
• Domestic Workers

Maternity benefits

What works:

India does very well on this count. In 2017, the period of paid maternity leave was extended to 26 weeks from 12, for women with fewer than two surviving children. The ILO standard is 12 weeks and most countries provide 14 weeks.

The law prohibits discrimination against and protects employment of women during the period of maternity. The law also requires employers with 50 or more employees to provide crèche facilities close to the workplace.

As a country that lacks social security, this protection is definitely above par.

What could be better:

•   Not hiring due to potential maternity: Paid Maternity leave has the unfortunate consequence of discouraging employers from hiring women. It is impossible for the law to police intent. However, the law can criminalise this form of discrimination and insist on active communication from employers to discourage managers from engaging in this practice
  
  
•     Adopted Children: This is a fairly absurd provision. Employees are allowed 12 weeks leave if they adopt a child less than 3 months old. As an adoptive parent, I can confirm that is practically impossible to adopt a child that is less than 3 months of age in India. Why this provision has not been contested and changed, I do not know. In my opinion, this limit should be extended to children of up to 3 years at a minimum.
  
  
•       Post-maternity attrition: @40-45% in total. The biggest reason for this is a mismatch of post-maternity career expectations between women and their employers. This is a colossal loss of trained capability. This is probably not a subject that can be addressed by law but corporates can and must put programs in place to reduce this number.

Prevention of sexual harassment

What works:

• The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, (POSH Act) is a landmark legislation.
• The definition of harassment is clear and all encompassing.
• The actions required under the act provide for communication and redressal of issues.
• The repercussions of non-compliance for an employer are also strong.
• This law has actively discouraged such acts and forced corporates to act rather than sweep issues under a carpet like earlier.

What could be better:

Not much really.  Sexual harassment, by nature is not an act that takes place in front of witnesses. I have been on committee hearings and it is extremely difficult to ascertain facts or collate evidence. Rare are cases that are clear and incontestable. As such, most legal disputes become a case of one person’s word against the other and is down to the judge.

The issue of women using this as a weapon is also brought up. While that is also a problem, it cannot be used as an argument against the law existing. The onus of proof is already on the woman and the problem is real and widespread.  The unintended consequences will have to be tolerated.

On this issue, I believe the law does as much as it can, the rest is up to employers to relentlessly communicate their lack of tolerance on this issue to their employees.

Physical Safety and Security

What works:

There is a general prohibition on women working at night, usually after 7pm.  In the last few decades, the rise of the outsourcing industry has changed this dynamic. Both corporates and women organisations have requested the flexibility for women to be able to work at night.

Most states allow this exemption on application and with guidelines. The guidelines are fairly strict and put a lot of onus on the employer to ensure the safety of women workers in night shifts. This includes the provision of transport to their homes. There have been incidents and each of them has resulted in a few more loopholes being tightened.

It is fair to say that this process works as it should. The general safety of women outside the place of work is still a matter of concern.

Working conditions

What works:

There are a few special provisions for separate working conditions for women

•        Prohibition of pay and recruitment discrimination between genders
•        Prohibition on women working at night
•        Provision of crèches or day-care facilities
•        Separate restrooms and canteens in certain workplaces
•        Separate toilets and washrooms
•        Prohibition on the engagement of women in certain hazardous occupation

Most of these are basic hygiene factors of course.

What could be better:

•      Pay inequities still persist although declining. The law seems to lack intent and teeth.
•     Encouraging and incentivising STEM education for girl children to address any perceived technical gaps
•    Given the disproportionate allocation of home and care duties on our working women, corporates could provide support and concierge services that make the lives of working women a little easier.

 

Domestic Workers

What works:

•       Not much
•   Andhra Pradesh, Bihar, Jharkhand, Karnataka, Kerala, Odisha, and Rajasthan have introduced minimum wages for domestic workers.

What could be better:

•    The law does very little for the estimated 4-5 million domestic women workers in our country.
•   Minimum Wages – only 7 states have minimum wages in place. Enforcement of this is non-existent.
•     The Domestic Workers Welfare and Social Security Act drafted in 2010 by the National Commission for Women has not been passed yet.
•     The Unorganised Workers Social Security Act 2008 was meant to develop schemes for welfare measures for this sector. However it does not receive all the funds allocated and even those lie unused. There was no welfare measure visible during the lockdown migrant issue.
•     Violence and sexual harassment of domestic workers is a real issue. While these are criminalised, in law, there aren’t adequate efforts to ensure that victims can receive legal advice and help.
•    While domestic workers do come under the ambit of laws such as the Unorganized Workers’ Social Security Act, 2008, and the Sexual Harassment of Women at Workplace Act, 2013, they have gaps and cannot address all their issues.

In conclusion, this huge workforce is critical to enabling gender diversity in corporate India. Many a woman’s career has been built on the reliability of their domestic help. It is a great pity that they suffer a woeful lack of protection themselves. 

 

OTHER DIVERSITY

I mentioned the inclusion of disabled people, people with mental health issues, people who do not conform to male or female genders and people of alternate sexualities. These categories have become an important part of the corporate diversity conversation. There are many employers who solicit people from all walks of the wood and make them feel welcome.

In terms of the law, The Rights of Persons with Disabilities Act 2016 provides for reservation for people with disabilities. It also incentivises employers to hire disabled people. Implementation has been poor though. Most states have not notified their rules and the act has not taken full effect.

The Transgender Persons (Protection of Rights) Act, 2019 (Act) is also a move in the positive direction. The normalisation of this category as a part of the workforce is overdue. This is just the first step in a long journey in making transgenders welcome.

It is hard to see the law extending positive discrimination to the rest of these categories. However there is no reason corporates cannot go ahead and beyond. They have to work at equal opportunity employment and making their workplace more friendly and inclusive.

One area of diversity that I haven’t discussed here is caste, ethnic and religious diversity. There has been a fair amount of affirmative action on these fronts, but largely from a political angle. There is also a recent trend of states passing laws which force employers to hire percentages of locals against new positions. The nature of these changes could be the subject of a few books, and is too complex to include here.

CONCLUSION

It is indeed heartening to see the desire of the more forward organisations to set the trends and go well beyond what is prescribed by the law in terms of diversity and inclusion. This is a trend that can only spread and move in the right direction.

This good feeling is however tempered by the limited reach of these organisations. According to the Economic Survey (2018-19), 93% of the total workforce of 450 million in India is from the unorganized sector. This means that if every single workplace adopts best-in-class policies, you still impact a negligible percentage of the workforce.

Finally, our track record on this issue is not very healthy either. We are among the ten lowest countries in the world in terms of women’s involvement in the workforce, and continuing to masculinise according to the World Bank. The LFPR (Labour Force Participation Rate) for women was 20.52% in 2019, down from 30% in 1990. Less than one in four women is available for work.

There is hence a critical need for our laws to encourage if not insist on a more inclusive and diverse workforce. It is also critical that the laws be more inclusive in terms of actually covering a larger percentage of the country’s workforce.

 

comply4hr is a full service labour law compliance provider. 

connect@comply4hr.com - get in touch for enquiries or to discuss labour laws

Work From Home - Do the Laws Need to Change?

Working from home is the new normal

Covid-19 has resulted in transformational changes to the workplace worldwide. Employees are encouraged to work from home, huge offices are largely empty operating with a minimum necessary workforce and many industries have let portions of their workforce go. While real estate and facility management businesses are struggling to stay relevant, organisations are struggling with health and safety issues as well as internet issues in home offices. 

It is also clear now that this situation is going to last a lot longer than earlier assumed. Employers have realised that the expected drop in productivity has not materialised. Employees are enjoying the time saved on the commute and being more diligent. There is a loss in terms of collaborative ability but organisations are evolving quickly to adopt different technologies on this front. 

In light of this, do labour laws in India need to change to incorporate and facilitate this unforeseen and rapid change? To answer this, we will look at the major areas where employment conditions are covered by the law and see whether anything needs to change.

 

Definition of an establishment or factory or workplace - Yes ✅

As of now, the definitions are quite specific to places which carry on a trade or a business. This could be construed to exclude homes. This could get tricky in the case of any incidents at home. How would you distinguish between incidents which occurred in the process of work and household incidents? Would the Employee Compensation Act need to be amended to take work from home into account? This opens a can of worms and needs resolution. 

Opening and Closing Hours - No ❌

As these pertain to the workplace and not the employee, there is no need for change here.

Working Hours - Maybe ❓

All states have defined the maximum number of hours of work, hours of overtime, interval periods and spread-over (start of work to end of work including intervals). Typically, these are handled through attendance systems/registers which clock your hours. In the transition to work from home, organisations will be challenged in terms of monitoring these. In environments where overtime is paid, this issue becomes even important. In the case of disputes, there is no longer any physical evidence on either side. While this is complicated, I do not see how a change in the law will make this any easier. This requires a technological solution on part of the employer. 

Holidays and Leave – No ❌

While employers should resist the temptation to ask employees to work on off-days just because the office is in the next room, yet again, this is an operational issue which cannot be ameliorated by the law. 

Payment Wages – No ❌

Nothing in the employee-employer relationship with relation to wages changes on account of work from home.

Notices and Abstracts – No ❌

Most acts require that employees are able to access its provisions by requiring employers to put up an abstract on the notice board. Similarly, various notices are required informing the employees of minimum wages, holidays, service conditions and authorities whom they can approach. Employers need to find alternate ways of providing this information to employees.

Contract Labour - No ❌

As contract labour are employees of a contractor, and the act governs the contractor-employer relationship, there is nothing that needs to change here. The vast majority of contract labour in India,  work on the site in any case, and there will be few cases of work from home here.

- While this list covers areas that already exist under the law, a few new areas of concern arise that may need addressing.

Health and Safety 

Health and Safety for employees while working at home is a subject not covered at all by the labour laws. As mentioned in the first point, action needs to be taken to ensure that homes are included in the definition of workplaces. This will automatically ensure that any health and safety provisions that have to be followed in law will also have to be followed in the home workplace.

Further, group insurance policies which cover normal workplace incidents may not cover work from home issues. Similarly, the Employee Compensation Act which covers for injuries arising "out of and in the course of employment" would also need to be amended to account for home being the workplace. 

Flexible Working Hours 

Requests for these are bound to arise in work from home situations. The law does not specifically provide for this and split work hour periods with large intervals could technically contravene spread-over laws. The law needs to provide for this and avoid ambiguities. 

Work from home Infrastructure and Expenses 

This is a big grey area. Are employees required to use their personal internet connections and furniture for work purposes? What of employees with space constraints which make work from home impossible? As of now, employers are not obligated to look at these issues. 

Employee Childcare 

With children also having to stay at home during lockdowns, employees are having to balance work and life at a much more intense level. Employers need to be sensitive to this and the law needs to facilitate this. It could be possible to include extended protection to working mothers  with children of a young age. 

In summary, the law at this moment falls short on dealing with many work from home situations. With the government already busy with the new labour codes, I do not expect any of this to become a priority soon. At the moment, the balance of arguments rests against the employee.

I would love to hear from you on your experiences and insights into the above subject. Do comment on this blog or connect with me on ananth @ comply4hr.com.

Comply4hr.com - taking the labour out of labour law

Is Labour Law in India really restrictive?

It is a standard refrain of Indian employers that labour laws hamper them from functioning with ease. This perception gains credibility because the laws originate from an aged British legacy system, and they do not change in keeping with the business landscape.

Is this really the case? Is labour law in India restrictive to business functioning? Let us try to look at this subject analytically and see if we can reach some conclusions.

In order to make some sense of this issue, I have listed the main areas which employers complain about, provided my brief opinion on the issue and then assigned it a ‘Severity Rating’ on the following scale.

1 - Not a real issue;

2 - Minor Issue, does not affect functioning for most employers;

3 - Valid Issue – affects functioning somewhat for many employers;

4 - Major Issue – makes functioning cumbersome for most employers;

5 - Burning Issue – Why hasn’t it been fixed?

1. Ability to hire and fire freely: 

If you employ more than 100 people (300 with the new labour code), you require the government’s permission to let people go. This is technically true but this applies only to ‘workmen’. There are issues around the definition of a workman in different laws, political interference and bureaucracy which add complexity to the process. Yet, if you are reading this and employed, the likelihood is that you can be fired without a problem. Countries where employers can ‘hire and fire’ have unemployment benefits in place which is not the case here. Further, there are no significant cases where permission is refused. This is at best a minor issue.

[Severity Rating: 2/5] 

2. Lack of Freedom to use Contract Labour/Outsource: 

You are generally free to outsource except for a few jobs which are notified by the government as core activities. This list is not really restrictive. You do have to maintain records and comply with minimum wage regulations but that is true for all employees. The complaint is primarily from employers who wish to disguise permanent jobs as temporary. This is not a real issue.

[Severity Rating: 1/5] 

3. Multiple Trade Unions: 

The law allows for multiple trade unions to be formed. This makes it hard for employers to reach agreements quickly. Newer industries and organisations with employee oriented HR policies are not affected by this issue. The number of trade unions has gone down from 40,000+ at the start of the century to less than 13,000 in 2014 as per last published figures. The influence of trade unionism in India is reducing. It does continue to prevail in the industrial belts. This is a major issue causing workers, employers and workplaces to suffer. The new labour codes offer very little mitigation by prescribing thresholds for recognition of a negotiating union.

[Severity Rating: 4/5] 

4. Cost of Minimum Wages:

In the scale of gross minimum wages, India is ranked 107th among 122 countries by the ILO. These minimum wages are in any case applicable only in the formal employment sector. Thus this affects a maximum of 20% of India’s actual employment. The objection to this comes from the regular revisions which make it hard to predict costs at the lowest end of the pyramid. As auditors, we all too often see employers in this sector trying to game the system. In my opinion, this protection for employees is very important and is only a minor issue from an employer’s perspective.

[Severity Rating: 2/5] 

5. Harassment by the Inspectorate:

This used to be a big problem a decade or so ago when enforcement authorities had the freedom to harass you. Employer’s also had lax attitudes towards compliance. Nowadays, inspectors are no longer willing to turn a blind eye towards non-compliance. Employers are also much more inclined to aim for maximum compliance. The government has introduced automated procedures which schedule inspections randomly and prevent the authorities from being able to selectively target employers. This is, therefore, a problem for those who are trying to be non-compliant. Ethical issues are still a concern here as well. 

[Severity Rating: 1/5] 

6. Registrations and Licensing:

As India’s struggle to climb up the ‘Ease of doing business’ rankings shows, obtaining all the registrations and licenses required to start a business or an office is a thankless task. Labour laws are not spared from this mire. Again, things have improved thanks to technology, with application processes and statuses made available through portals but in most cases, you still need to visit the relevant office to obtain the certificate. To be fair, the documentary requirements for the registrations are not too stringent but given the physical difficulty in obtaining a licence and the unpredictability of the process with regard to time and results, this has to be a valid issue.

[Severity Rating: 3/5]

7. State differences in laws:

“Under the Constitution of India, Labour is a subject in the Concurrent List where both the Central & State Governments are competent to enact legislation subject to certain matters being reserved for the Centre” The result of this? While most Acts (spirit of the law) are Central, most Rules (letter of the law) are different for each state. The primary act governing the running of all shops and establishments is also different for each state. This makes having consistent pan-India policies for working hours, overtime and leave impossible. This is a fairly severe and definitely a problem for organisations with establishments across the country.

[Severity Rating: 4/5]

8. Administrative burden:

The number of forms and returns that need to be provided, and their frequency, can often be an irritant to employers. However, in this day and age of automation, this should hardly be a challenge. There are also complaints about the volume and relevance of the data required. It must be realised that the data provided in these returns are critical for labour and employment statistics. If you have managed to become GST compliant, nothing here should provide a challenge. Yet again, for those employers who aim to be compliant, this is not a problem. It is only when the data and the reality doesn’t match, that this becomes an issue.

[Severity Rating: 1/5]

In summary, if we look at the severity ratings above, the total severity score is 18/40 or 45% with an average score of 2.25/5. Further, there are no issues that can be classed as burning issues, and just 2 classed as major issues. The numbers have been provided just to add a layer of analysis, issues like these cannot be boiled down to statistics.

CONCLUSION

While there are a couple of areas that need real and urgent changes, it is hard to conclude that Indian labour law is really restrictive. Employers enjoy substantial freedom albeit regulated. Employees enjoy protection of minimum wages, service conditions and retirement benefits but not full security in their jobs. A few tweaks to the high-severity issues are needed though.

I personally believe that the labour law environment in the country offers more than a fair balance between the needs of both employers and employees. 

I would love to hear from you on your experiences and insights into the above subject. Do connect on this blog or connect with me on ananth @ comply4hr.com.



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