Awareness of labour laws at shop-floor level in SMEs

Awareness of labour laws at shop-floor level in SMEs

INTRODUCTIONSMEs have important role to play in the growth of Indian economy.

SME units would be able to focus on business and avoid labour problems only when there is good understanding of the existing labour laws among the workers as well as the employers.

The ever-changing scenario of the social, economic and political environment, make the legal framework complex and very dynamic.

INTRODUCTION TO ORGANIZATIONSARB BEARINGS LTD.With a tremendous focus on manufacturing quality bearings and restrains on cost, ARB Bearings Ltd. is among India's prominent engineering companies.

SHAKTI MINERALS AND CHEMICALSShakti was started in 1982 with a trading house of minerals in Delhi. This was followed by a period of sustained expansion, diversification and growth.

CHIRAG MARKETINGIt is one of the well-known manufacturer and supplier of a huge array of Outdoor and Indoor Advertising, Promotional Items and Exhibition Material.

SR CREATIONSIt was founded in 2000 in Rohtak, when manufacturing of polypropylene woven circular sacks just started in India. Its a manufacturer and exporter of much kind of yarns and threads and fancy laces. They export their finished products mainly to USA and Canada.

OBJECTIVESGauging the level of awareness of the labour laws among the workers of SMEs.

To study the benefits extracted by the workers from the existing legal framework governing labour, employment and social security. The project also aims at finding out the level of satisfaction of the workers on the basis of benefits provided by the employers.

RESEARCH METHODOLGYPRIMARY DATA: Close-ended questionnaire No. of Questions: 15

SECONDARY DATA: Official websites of the organizations

SAMPLE SPACE: 100 workers/labours of 4 SMEs

QUESTION-WISE ANALYSIS

1. Are you a Contractual, Temporary or Permanent worker?

COMPANYCONTRACTUALTEMPORARYPERMANENTARB Bearings3037SR Creations0020Chirag Marketing3012Shakti Minerals6019

ANALYSISSurvey shows that there were majorly two classes of workers- contractual and permanent.

Main reason of having contract labours was meeting the rise in demand.

There might be a possibility that some temporary workers were told that they were permanent but were actually not legally documented(temporary).

2. How many hours do you work in a day?COMPANY8 hrs.More than 8 hrs.ARB Bearings1327SR Creations020Chirag Mktg.150Shakti Minerals619

ANALYSIS66% of workers said they work for more than 8 hours in a day.

According to the Factories Act,1948 (Section 51); a worker cannot be employed for more than 48 hours in a week and the total period of work inclusive of rest interval cannot be more than 10.5 hours.

It can adversely hamper their productivity due to the imbalance between personal and working life.

3. Do you get proper overtime benefits?

COMPANY YESNO ARB Bearings328

SR Creations 119

Chirag Mktg.015

Shakti Minerals178

ANALYSIS60% of the workers said they were paid overtime benefits.

According to the Factories Act,1948 (Section 51); if a worker works beyond 9 hours a day or 48 hours a week, overtime wages being paid should be double the rate of wages. However, there might be a possibility for that the companies are not paying according to this law and the workers are unaware of this.

Also, the Act states that the total working hours including overtime should not exceed 60 in a week and total overtime hours in a quarter should not exceed 50. We cannot comment how many workers are aware of this law, and they are satisfied just because they are being paid more for the overtime.

4. Does your employer pay bonuses regularly? COMPANY YESNO ARB Bearings1129

SR Creations 713Chirag Mktg.105Shakti Minerals178

ANALYSIS45% of the workers said they were paid bonuses regularly.

There might be a possibility that rest 55% were not satisfied with the amount of bonuses being paid or were unaware about the provisions of the Payment of Bonus Act, 1956.

The Payment of Bonus Act, 1965 states that Every employee receiving salary or wages up to Rs. 10,000 p.m. and engaged in any kind of work whether skilled, unskilled, managerial, supervisory etc. is entitled to bonus for every accounting year who has worked for not less than 30 days in that year.

5. Did you get proper training regarding safety precautions to be followed while performing the job?COMPANY YESNO ARB Bearings319

SR Creations 182Chirag Mktg.015Shakti Minerals250

ANALYSIS81% of the workers were aware about whom to contact in case of any grievance.

This shows that grievance handling is given due importance by the employers in recent times.

Rest 19% of the workers might be new to the organizations and were not clear about the redressal process.

6. Do you know whom to contact in case of any problem or grievances?COMPANY YESNO ARB Bearings3010

SR Creations 119Chirag Mktg.150Shakti Minerals250

ANALYSIS74% of the workers said they were given the training regarding safety precautions.

This shows that safety of the workers is duly taken care of and considered important for the organizations productivity.

The Factories Act, 1948 (Section21-41); lay down the rules for the purpose of securing the safety of workers. For example, section 22 states about the work on or near machinery in motion.

7. Do you get proper medical leave and benefits?COMPANY YESNO ARB Bearings355

SR Creations 200Chirag Mktg.150Shakti Minerals232

ANALYSIS93% of the sample said they are getting adequate medical leaves and benefits by their employers.

According to Employees state Insurance Act, 1948, insured persons and their families are entitled to medical and cash benefits. The employees registered under the scheme are entitled to medical treatment for themselves and their dependents, and maternity benefits in case of women employees.

Today, most of the SMEs have tie ups with dispensaries and hospitals to provide cash less service to their employees.

8. Do you get proper maternity leave and benefits?

COMPANY YESNO ARB BearingsN/AN/A

SR Creations N/AN/A

Chirag Mktg.N/AN/A

Shakti MineralsN/AN/A

ANALYSISData from all organizations indicate that the maternity policies/benefits are not applicable in any of them. This is because neither of the organizations had female workers at the shop floor level.

The organizations need to maintain an optimum level of gender diversity among workers in order to set up a healthy work environment.

9. Do you get proper compensation and treatment in case of a mishap?

COMPANY YESNO ARB Bearings364

SR Creations 416Chirag Mktg.015Shakti Minerals250

ANALYSIS65% of the workers under study responded that proper compensation in case of any casualty occurring at the workplace is provided to the workers while some of the workers under 35% said that the compensation was not in proportion with the level of injury happened and others said it was totally in incongruity with the extent of the mishap happened.

Workmens Compensation Act, 1923 was enacted to help workmen face the hardships resulting from accidents.

10. Is there a trade union in your organization? COMPANYYESNOARB Bearings400SR Creations137Chirag Mktg.015Shakti Minerals250

ANALYSIS78% of the workers said they had Trade Union in their respective organizations.

According to The Trade Unions Act, 1926; registration of a trade union is not compulsory but is desirable.

One of the four SMEs did not have any Trade union but there was a single representative for the workers.

11. Have there been any strikes/lockouts in your factory?

COMPANYYESNOARB Bearings391SR Creations812Chirag Mktg.015Shakti Minerals1411

ANALYSISAccording to 61% workers, there had been strikes/lockouts in the factory.

Strike Work stoppage initiated by employees. Lockout- work stoppage initiated by an employer

In SR Creations, workers were unaware of what constitutes a strike and hence, the discrepancy in their responses.

In Shakti Minerals, all the new employees answered in negation implying that there has been no strikes/lockouts in the past 7-8 years and hence a positive development.

12. Were the strikes resolved in full consent to workers and management?

COMPANYYESNON/AARB Bearings8311SR Creations8012Chirag Mktg.0015Shakti Minerals12211

31

ANALYSISAccording to 46% workers, strikes were resolved in full consent to workers.

The rest 54% were not satisfied with the way the issues were resolved esp. in ARB Bearings Ltd.

However, in Shakti Minerals, almost all the employees were satisfied with the results thereby, preventing them to occur in the future.

Section 22 of Industrial Dispute Act, 1947 lays down conditions and provisions to be followed before carrying out a strike/lockout.

13. Do you get proper and healthy food in canteen?

COMPANYYESNOARB Bearings346SR Creations317Chirag Mktg.015Shakti Minerals025

ANALYSIS63% of workers say that they do not get proper healthy food. One of the SMEs under study encountered a strike for this very reason. This figure also includes company where there is no provision of canteen.

As per Factory Act 1948, provision of canteen or a lunchroom with drinking facility should be made for workers.

Adequate and healthy food supply ensures that workers focus on their work and gives them a feeling that employer takes care of them.

14. Does your factory involve you in other activities(sports, festivals etc)?COMPANYYESNOARB Bearings400SR Creations164Chirag Mktg.015Shakti Minerals250

ANALYSIS81% of total respondents said that their companies involve them in other fun activities. Fun at work has become an established and accepted contributor to job satisfaction, along with task performance and organizational behavior.

Workers at most of the places were given an opportunity to engage in various cultural activities

15. Are you satisfied with your pay?COMPANYYESNOARB Bearings1129SR Creations713Chirag Mktg.105Shakti Minerals178

ANALYSIS55% of the workers said they were not satisfied with their salaries.

Employer should take care that wages should be comparable with industries of the similar work, as maximum strikes happen due to the wages.

RECOMMENDATIONS

Proper induction of the workers should be done. Regularly organize Awareness Sessions about the policies that exist in the company.

Contributions by Trade Unions.

Inculcating the culture to follow Labour laws and policies.

The organizations need to maintain an optimum level of gender diversity

CONCLUSIONFollowing conclusions can be drawn on the basis of our study:

Some policies exist, but workers are unaware.Certain important policies dont exist.Workers ignorance is managements advantage.The level of awareness of laborers on the shop floor, regarding various labor laws and policies pertaining to their benefits, is medium.

ANYQUESTIONS