India’s growth story remains incomplete as it is not matched by record employment growth. The employment rate was sluggish during the period 2000 to 2009, although the Indian economy grew at an average rate of 8 percent. Despite the large number of labour laws in India, it protects only 7 to 8% of the employed organized sector workers at the cost of 93 per cent or unorganized sector workers. Labour is a subject in the Concurrent List of the Seventh Schedule, so both the Center and the States are allowed to legislate on labour related issues.
At present, there are 44 labour laws under the purview of the central government and over 100 under the state government, which address a number of labour issues.
Labour laws adapted to the economic and social changes in the modern world of work play three important roles, the redistribution of legal power, wealth and more importantly bargaining power in an economy. Establish a legal system that facilitates productive individual and collective employment relationships and hence a productive economy. Provide a clear and constant reminder and guarantee of fundamental rights and principles at work that have gained wide social acceptance. In a performance audit, the Comptroller and Auditor General of India (CAG) noted that the effectiveness of the decision-making process was weak due to various factors.
There has been an increase in the use of contract labour due to labor compliance and economic reasons. The labour laws cover only the organized sector which accounts for only 7% of the workforce and the remaining 93% of the total workforce is informal which has been left uncovered.
All employees whose salary does not exceed a specified monthly amount notified by the Central or State Government shall be entitled to an annual bonus which shall be at least 8.33% of their salary or Rs.100 whichever is higher. An employee can receive a maximum bonus of 20% of his annual salary.
It is essential to prohibit sex discrimination in matters relating to pay and recruitment of employees for the same work or work of a similar nature.