The Author, Ishita is a 3rd year law student at Sharda University (School of Law), Greater Noida. She is currently interning with LatestLaws.com.
In India there are various labour laws which businesses need to follow, but the main difference which lies in making this industry the most thriving industry is the ethics which come with it. And sadly, there is no such law which guarantees or directs these businesses when it comes to ethics.
WHAT IS BUSINESS ETHICS
Business ethics can be defined as a structure of rules which overlooks the conduct of the organizations, their behaviour under the legal purview. Business ethics is a very broad term as there is no one type of business present in this world, there are sole propertiorship, company which may be owned or managed by one or a group of people. But the major form of doing business in the modern world is by the way of forming corporations.
Business ethics as a term is a very broad field of study and in the history is has been studied from various angles such as of- philosophy, scientifically, legally etc. amongst these views the legal field the biggest role in influencing business ethics. Law helps the business potray a positive image in the society which increases its brand value and people start trusting the brand or the company and at the end consumers and customers are made.
The term or the concept of business ethics was talked about by Aristotle and Max Weber in their studies, the debate around the conduct of business has always been there since trading and bartering was introduced in the human society as it mainly concerns around basic human rights, and how powerful organizations have exploited their consumers and labours. Business ethica as a field of study saw the light of the day in the 1970s and soon after governments around the world began legislating laws and legal policies to manages this exploitation caused by the businesses which as we know now is termed as ‘ business ethics’.
When we talk about business ethics as a broad term we also undertake suitable working environment which is required by the labourers and workers. Many times we have seen businesses only care for the profit they are making and neglect the working conditions of their workers, such as the issues of equal pay, working conditions, working hours, job related entitlements, exploitation at work place etc. this is where the laws come into picture. Our governments have enacted various labour related legislations and welfare schemes which save the innocent workers from big corporate houses.
WHAT IS LABOUR WELFARE
The Industrial Labour Organization (ILO) defines labour welfare as- “ it may be understood understood and including such services facilities and amenities which may be established in vicinity of undertaking to perform their work in healthy and congenial environment and to avail of facilities which improve their health and bring high morale.”
We are aware that the labour force/ workforce work for the development and welfare of business organization, so the labour welfare comes as the duty of the business organization for its employees. Welfare can mean anything that is made or done for the comfort of employees and is generally provided over and above the wages paid. These things help the employees/ labour to have faith in the business they are working for and to be associated with it for a longer duration of time. It is also termed as ‘employee satisfaction’.
CASE- ARKAL GOVIND RAJRAO V/S CIBA GEIGY OF INDIA LTD. (1985) 3 SCC 371
In this case the apex court explained the scope of the definition of ‘workman’ under section 2(s) of the Industrial Disputes Act, 1947 and held that the appellant was a workman under the said section, the court further stated that the additional duties cannot change the nature and the character of the employee, and the basic duties have to be taken into account first and the additional tasks/duties will have no bearing on the nature/ character of the duties of a person.
CASE- RANDHIR SINGH V/S UNION OF INDIA AIR 1982 SC 879
In this case the Apex court undertook Article, 14, 16, 39 (d) along with the preamble and it was held that the notion of equal pay for equal work can be derived from these articles. Certain directions were also given to fix the salary of the drivers of Delhi Police Force at par with the other drivers of Delhi Administration.
EVOLUTION OF BUSINESS ETHICS AND LABOUR WELFARE IN INDIA.
In India the onset of business ethics and labour welfare came in the later stages of the global development, it was the Britishers who brought the first machines to India and since then on the industrial revolution took place with the establishment of big industries in the prime cities of that time. People from poverty-stricken villages and small cities started to migrate to big cities in search of work and better life. During the initial stages of industrial revolution there was no such regard of labour welfare, the main goal of the industries were to fulfil the demands put on by the British government. The relationship between the employer and the employee was only to the extent of salary/money in exchange of labour services. As unemployment and lack of skill development was at unprecedented high, people of that time were not even aware of the concept of welfare, labour rights, ethics, fair practice, working hours, occupational hazards etc. and so as a result exploitation of the workers was at peak.
LAW AND LABOUR WELFARE IN ACCORDANCE WITH BUSINESS ETHICS
When the first factories act was passed in the year 1981, it was only applicable to the factories which were employing not less than 100 workers using power. In the modern times this act is applicable to the factories employing 20 or more workers without the use of power and factories employing 10 or more workers with the use of power.
Indian Factories Act of 1910- in the year 1907 the government of India appointed a committee to review the industrial labour conditions and the Indian Factories act of 1910 was introduced for seasonal factories, this act stated the working hours for male workers to be 12 hours/day, today the timings are revised to be 8 hours/day.
Indian Factories Amendment Act 1922- This act was applicable to the factories which were employing not less than 20 people, whereas children and women were not allowed to work between 7 pm- 5:30 am, children below the age of 12&14 were not allowed to work more than 6 hours a day.
There were various other cumulative efforts for the welfare of the workers which was implemented by many organizations such as The Printers Union, Kolkata (1905) & the Bombay Postal Union (1907) which introduced mutual nigh school schemes, educational scholarships, insurance schemes, allowances, the amalgamated society of railway servants of India and Burma also rolled out some welfare schemes for the workers.
The current Factories act was passed in the year 1948 in the basis of recommendations by the Rege Committee, The National Commission of Labour was also introduced in 1960-1969, which dealt with labour related issues and worked for welfare of the labours
WOMEN AND LABOUR WELFARE
According to the census of 1981, it was found that women constitute around 19% of the total workforce which is 45 million and out of the said figure 2 million women were employed in the organized sector, and they were not protected by any labour law. The scope of labour welfare is very broad and the legislations are made with the thought to dignify the work of the labours, give them status, protection from business mal practices, health hazard related to their jobs. It was also found in a research that majority of the working women are employed in the cotton textile, fashion industry, coffee, tea, rice plantations, household and small scale industries. With the increase in the rate of technological advancement the percentage of employment of women has increased in technology and electronics industries.
BUSINESS ETHICS AND LAW
Governments across the world use rules and regulations to control the business practices so that they don’t exploit the workers and the consumers for the sake of making profits. We all are aware that the government works for the welfare of the people while businesses work for the purposes of profit making only, and here ethics come into picture and it plays a huge role. The rapid industrialization and globalization left very limited scope for businesses to see its ethical situations and the insensitivity to the communities especially in the areas where they operated accelerated the governments to take immediate actions by making relevant rules and regulations.
Criminal liability in the Indian legal system revolves around the legal maxims which are- actus non facit reum, nisi mens sit rea. They mean that in order to make one liable for the act it must be shown that the act was done against the law and with guilty mind.
Sections which talk about criminal liability of corporations in India are 45, 63, 70(5), 203 of the Indian Companies Act makes the officials of the company liable for the acts, the three major statutes in India are section 141 of the Negotiable Instruments Act, 1862, Section 276-B of the Income Tax Act and Section 7 of the essential Commodities Act.
Case- Bata Shoe Co. Ltd V/S D.N Ganguly, 1961 AIR 1158, SCR (3) 308
In case the workers of Bata went on a strike, after the settlement in the court, the company claimed that since the dispute has been settled in the court their strike was illegal and irrelevant, the company conducted an inquiry and disbanded the workers who had gone on strike. Due to the ongoing dispute and termination of the workers a conciliation proceeding was preferred by both the parties but during the proceeding no conciliation officer was present.
Question before the court was that whether the settlement was done under the Industrial Dispute Act, 1947 sec 12,18. The court held that the settlement adhered to the provisions of the act and it was binding over both the parties.
CONSTITUTION AND LABOUR WELFARE RIGHTS
The Indian Constitution provides various articles for the safeguard of the labour rights, these are in the form of Directive Principles of State Policy (DPSPs) and the fundamental rights.
Part IV of the Constitution covers the Directive Principles of State Policy, which are Art. 38,39,39A, 41, 42, 43, 43A and 47, but they are not enforceable in the court. The part III of the constitution comprises of fundamental rights under Art. 14, 19, 21, 23, 24.
Further, I will discuss how these articles will be applicable for the welfare of the labours.
Article 14- Directs the State that as per the law every person is equal before the law and it is uniformly applicable to everyone.
Article 19 (1) (c)- according to this article the citizens have the right to form unions and associations.
Article 21- Protects life and personal liberty.
Article 23- This article prohibits forced labour.
Article 24- According to this article child labour is prohibited (under 14 years).
Article 39 (a)- This article directs the state that it is its duty to secure adequate means of livelihood for its citizens.
Article 39 (A)- This article provides that it the state shall secure equal opportunities for justice to its citizen and that these opportunities are not denied by any external reason whatsoever mainly economic.
Article 41- The state shall secure the right to work and education for its citizens, within the economic capacity.
Article 42- Provides for the state to make adequate provisions for humane working conditions, maternity relief.
Article 43- This article orders the State to fix decent working conditions, living wages and socio-cultural opportunities for all workers by the way of an organization or legislations.
Article 43A- It provides for the participation of workers in Management of Industries through legislation.
Articles 39, 39A, 41,42, 43,43A can be collectively termed as ‘Magna Carta’ for the working class.
CONCLUSION
In corporate/ business world the criminal activities or the injustices to the labours is not just related to one aspect, it is spread to plethora of other matters as well. With the ever-increasing scope of industries as it is the main source of employment for the modern world, we need strong legislations not only on the national level but also on the international level which makes the businesses to carryout their practices in a ethical manner. When we talk about business and labour welfare we are not only talking about employment, occupational hazards we are also talking about rights and self-respect of the labourers associated with it. And the only way to stop the injustices is by following the precedents set by the cases decided and the taking in the examples of various legislations.
