The Gendered Impact of India's Labour Laws

Author: Sneha, Symbiosis Law School, NOIDA

Abstract

Indian Labor Laws have gone through significant changes in the recent years, they were formulated to ensure that worker’s rights are protected while addressing the employer’s obligations. India strives to become the third largest economy by 2030 for that she needs to realize her complete potential which she’ll be able to achieve if the female work force also contributes equally in its economy. A majority percentage of women are employed in the informal sector and the remaining in the formal. Though, India has witnessed a significant increase in the female working population in the formal sector which has been achieved through the contribution of legislative reforms and various schemes, still only 32.8% (as per 2021 data) women contribute in the working sector, this figure is lower than that of our neighbor countries like Pakistan and Afghanistan (Before the Taliban regime). Despite an increase in female participation in the formal sector, driven by legislative reforms and various government schemes, barriers persist. This essay focuses on the aspects that affect women participation in the formal work sector and through this article our aim is to study the factors responsible for less portrayal of women in the formal labor market, to summarize the reason how labor laws impact women’s participation in the formal work sector, and to study what can be done to achieve gender parity and promote women participation in the formal working sector.

Keywords

Equal Rights, Labor Laws, Workforce Gender Gap.

Introduction

“To awaken the people, it is the woman who must be awakened, once she is on the move, the family moves, the village moves, the nation moves.”

- Jawaharlal Nehru

(Former prime minister of India)

The shifts and diverse trajectories of the Indian labor market have grabbed the interests of many scholars. India is a country full of potential and has witnessed a stride in its economic development in recent years. It also became the fifth largest economy surpassing the United Kingdom and is believed to grow at a faster rate than China (second largest economy) according to the IMF (International Monetary Fund). However, a persistent challenge still hinders the growth of the economy which is the lack of utilization of women work force in the Indian labor market. There are many factors which govern the participation of women in the workforce inclusive of socio- economic factors, paradoxes and other cultural, political factors and crucially the Indian labor laws. While the Indian economy can be said to be the largest growing economy because of several factors, its contours reflect a striking disparity of workforce. As per a report the Female Labor Force Participation in the year 2021 was 32.8% in India, i.e.1/3rd women are an inclusive part of the working population in India.

Indian labor laws were enacted to protect the worker rights but through the time these rights only started creating barriers for women’s pave to the formal sector. It happened because many of these laws were formulated decades ago and do not address the present problems faced and the four new labor codes passed by the Indian parliament in 2019-20 sessions are still not enacted.

Barriers to Women’s Representation in the Formal Workforce

Despite the labor laws there are several other factors that are responsible for the lower representation of women in the formal workforce sector. We need to know about these factors first because they also shape the laws formulated as they address some specific challenges faced by women. For example, safety concerns which results in lower representation of women led to the Sexual Harassment of Women at Workplace Act, 2013, fostering secure workplaces.

The factors are inclusive but not limited to Socio-Cultural Norms and Gender Roles, Limited Access to Education and Skill Development, Workplace Discrimination, Safety Concerns, Lack of Support Systems and so on. Starting with the socio- cultural norms, the gendered roles are divide between men and women without any saying, it has been observed from time immemorial that men are the providers while women are the nurturers, this traditional responsibility has harnessed women to seek full time- employment and then expectations like child birth after marriage restricts the women participation in the formal workforce. Many instances have been reported when employers perceive recently married women as likely to take maternity leave soon, and reject them despite qualifications. In another case women are denied promotions on the basis that due to family responsibility they might not be able to give much time to the organization as required. If a recently married woman is hired she is hired on shorter-term contracts or probation to avoid long-term obligations, for e.g. providing maternity leave under the Maternity Benefit Act, 1961. In some reported cases of 2018, employers of many IT companies preferred to hire unmarried women for project incentive roles.

Limited access to education and skill development also affects the women's representation in the formal sector. High dropout rates among girls can be one of the reasons as many families prefer investing more on education of their male child believing that once a girl gets married what role will the education play in the sphere of her life. Workplace discrimination which is deep rooted in our system also plays a major role because though women are doing the same work as their male counterparts, still they receive lesser salaries than them; it is generally referred to as pay disparity. Other factors include biases during hiring, in the name of safety preventing them from night shifts and so on. Inadequate safety measures and lack of safe commuting options because many women migrate for employment also plays a major role as to why women don’t seek employment in certain sectors. Insufficient availability of childcare facilities, eldercare options, and family-friendly policies force many women to opt out of the workforce. Seeing these concerns, labor laws were evolved in such a way that it tackles the issues faced by women in the workplace. However, these well intentioned laws often inadvertently created barriers to women’s participation in the formal workforce.

Impact of Labor Laws on Women’s Participation in the Formal Workforce

Labor laws are a body of rules, which governs the working people and their conglomerate; it is also inclusive of trade unions and employee unions which are imposed by government agencies. In brief labor laws set forward the employee’s rights and the obligations to be fulfilled by the employers. Indian labor laws play an important aspect in shaping the participation and opportunities generated for women in the formal workforce. Though these legislative frameworks are enacted to promote gender parity or gender equality sometimes they hinder the chances of women representation in the workforce.

The data on employment and unemployment, commenced by the Ministry of Statistics & Programme Implementation since 2017-18, which is collected through a periodic survey known as ‘Periodic Labor Force Survey’ states that the female worker population (which is 15 years and above) in 2022-23 was 37% and as per their data of 2021-22, 33.6% women wanted to continue their studies and 44.5% stated child birth, family and other personal commitments as their reason for not engaging in the formal sector. As per another data though the education attainment has increased and fertility rates have decreased still the participation of women is declining. As per a report of the World Bank, “Indian women’s participation in the formal economy is among the lowest in the world—only parts of the Arab world fare worse.”

Women participation can be much seen in the informal sector (agricultural, domestic settlements etc) but it’s lower in the formal sector as in the former part employers don’t have to shoulder the burden of “insecure, unsafe and unhealthy work conditions.” As society is moving forward to more technological advancements and employment opportunities are more developed in the tertiary sector it becomes crucial to form a safety net through regulations to ensure women participation in the formal sector. Laws should be built around safe migration and it is equally important to address issues regarding access to water, sanitation, safe transportation, streets, healthcare, education, and care facilities. Addressing these factors can play a crucial role in enabling more women to participate in the labor market.

Referring to the pre- existing labor laws, for gender equality to promote women participation in the formal labor market, legislature introduced laws like: Maternity Benefits Act, 1961, Equal Remuneration Act, 1976, Minimum Wages Act, 1948, Factories Act, 1948, Prohibition of Sexual Harassment of Women at Workplace Act, 2013 along with many government schemes like Janani Suraksha Yojana and so on. The Maternity Benefit Act of 1961 stipulates a 26-week period of paid maternity leave for women employed in the formal sector. The POSH act, address the pervasive issue of sexual harassment in the formal workplace sector and was created in compliance of the Vishaka guidelines which were formulated in the landmark case of Vishaka v/s State of Rajasthan. Complaints filed are to be handled within 3 months with inquiries to be addressed within 90 days. It also establishes internal complaint committees to handle the matter of such complaints. Compensation paid to the victims is inclusive of various factors like mental wellbeing and financial losses. Similarly Factories Act, 1948, addresses the key issue of safety concern and refrains women from working in the hazardous or dangerous condition and establishes fundamental rights of women working in the factories which are inclusive of “ separate toilets and washrooms with doors. If a factory has more than 30 women workers the employer must provide a crèche for the workers children. Women cannot be made to lift more than the prescribed weight; women can’t work for more than 48 hours and also restrict night shifts.” Equal Remuneration Act mandates equal pay for equal work regardless of gender. It was a well-intended legislation to promote gender parity. But despite these labor laws, why does the labor market face the shortcoming of gender disparity in the formal sector?

The answer is sometimes these laws only create hindrance for women participation in the formal sector. For instance, the maternity benefit act has increased reluctance among the employers to hire female workers because they want to escape the extra perceived cost of providing paid leaves. The equal remuneration act owing to poor implementation and lack of awareness among workers still faces consequences of wage- disparities. The Factories act confines the employment opportunities in certain sectors like manufacturing and logistics. Inclusive of other factors like lack of childcare and support and gender biases in the workplace during project allotment and promotions also results in the lack of women participation in the formal work sector.

Reforms Needed in the Labor Laws

There were some significant reforms in the labor laws in recent years making this legislative framework more amenable, creating more business opportunities and addressing worker’s rights which have also gone through significant evolution. The major reforms focus on consolidating existing laws into four labor codes and adapting to modern work requirements. The significant feature about these codes is that it addresses issues and is designed to support women’s participation in the workforce, enhance their safety, and promote gender equality. These reforms aim to create an inclusive environment for women in the formal sector while addressing their unique challenges.

These codes are namely, the Code on Wages 2019; the Industrial Relations Code, 2020; The Code on Social Security, 2020 and The Occupational Safety, Health and Working Conditions Code, 2020. Under these reforms women are now allowed to work in certain sectors in which earlier they were restricted for instance, manufacturing and the employer has the obligation to ensure safety measures, including transportation and workplace security. It has resulted in the diverse roles of gender and women are now working in the traditionally set patriarchy dominated sectors. The code on social security 2020, mentions maternity benefit providing 26 weeks paid leave and establishes flexible working hours of mothers, this legislation was reformative in the sense because it provides flexible working hours for new mothers and promotes the mothers to again join the workforce declining dropout rates from offices. The codes on wages 2019 establishes gender neutral wages, promoting gender parity, financial equity and independence; it also encourages recruitment based on merit rather than gender biasness. Women can now work under hazardous conditions and it breaks the traditional stigma that women are not suited for so-called tough jobs. These codes also address women working in the informal sector and offer protection and benefits like maternity leave and health insurance to women in flexible, non-traditional work roles. This encourages women to participate and explore gig economies. Many schemes or yojanas like Production Linked Incentives scheme, 2020, Mahatma Gandhi National fellowship and programs like Skill India that push for female entrepreneurship aim to address these gaps etc, were also implemented in recent years to promote women participation in the formal work sector. Steps should be taken to incentivize the employers through fostering public- private partnerships by providing the companies financial support for funding maternity leaves, tax deduction, subsidies and schemes for the companies will promote employers to employ more women and to retain them in the workforce. Through training programs like Skill India and other training programs we can provide women training in certain sectors like health, technology, entrepreneurship etc, so that women are upskilled. More government policies and stronger legislative frameworks to keep an eye on the companies to check gender parity is maintained and equal wages are allotted for equal work, the government can even award or recognize such companies which are properly following the legislative framework. Initiatives should be taken by the corporate to encourage women to join the workforce even after the career breaks and we as society can aid in promoting gender equality by providing the much-needed societal support and recognizing such awareness campaigns which are implemented to highlight success stories of some prominent women to encourage the female population to join the workforce.

Conclusion

The Indian labor laws are a critical intersection of societal norms, legislations and economic outlook of the population that shapes the women participation in the formal work sector, though education level among women has increased and fertility rates have decreased, still we noticed a lower trend of women engaging in the formal workplace due to several factors. Though legislatures have formulated some well-intended laws to ensure safety, equality and inclusivity of women, yet there are several persistent challenges that hinder the progress of women. These gaps should be addressed and approached with a sensitized technique that addresses gender disparity and the recent cultural shift. Women empowerment in the formal work force will not only promote gender equality but will also address the socio-economic growth of the nation. India by 2030 is to become the 3rd largest economy in the world and to achieve that aim , India needs to unlock its true potential which can be achieved by providing women equal opportunities and this is also required to achieve a progressive society.