Extending Protection of Labour Laws to the White Collar Employees in India

The article critically examines the legal invisibilization of corporate and white-collar employees within India’s labour law framework. The piece argues for a uniform, inclusive definition of ‘employee’ across labour welfare legislations. It advocates for statutory caps on working hours, timely overtime payments, and recognition of stress-induced injuries as compensable harms.

Introduction

The recent instance of industry leaders such as Narayana Murthy and SN Subrahmanyan calling for a 90-hour work week has brought to the fore the lack of protections available to the white-collar employees under the Indian labour law. The World Health Organization (WHO) and the International Labour Organization (ILO) have previously estimated that approximately 398,000 deaths from heart attacks can be directly attributed to the burden of long working hours underscoring the severe and often overlooked health consequences of excessive work schedules.

Employment at Multi-National Corporations (“MNCs”) and Big Tech has further exacerbated the woes of the employees, whereby employees have to work for not less than 14 hours a day for 5 days a week sans requisite compensation. The post-pandemic period has blurred the working time and availability of employees for the job, as managers expects the employees to be available 24/7. These corporations have been able to escape the accountability of labour legislations because of technicalities with regards to the coverage of these establishments under the relevant laws.

This article identifies the loopholes used by the employers to deny the benefits of the labour laws to white collar employees. It suggests making the protection of such laws more inclusive so that technical grounds are not taken by the employers to defeat the objective of these social welfare legislations.

The Inadequacies of the Current Legal Framework

MNCs, Big Tech Offices and other commercial establishments inter-alia are regulated by the Shops and Establishment Acts of specific states as the case maybe where the place of business is situated. As an illustration, it is essential to  analyse the provisions of The Delhi Shops and Establishment Act (‘Act’), to highlight the loopholes of the current framework.

Section 15 of the Act provides that the opening and closing hours of commercial establishment shall be between 8 a.m. and 6 p.m. This fails to account for situations where the work can be done and allocated online as is the case for white collar employees.  A study conducted by the global job platform indeed revealed that 88% of employees in India receive work-related communications outside their standard working hours, with 85% encountering this issue even during public holidays or while on sick leave. Furthermore, 79% worry that failing to respond after hours may negatively impact their career progression, potentially leading to missed promotions or harm to their professional reputation.

The normal working hours provided under the Act is daily 9 hours and total of 48 hours in week. The Act does not bar overtime work, however such excess overtime hours cannot exceed 54 hours in total in a week and not beyond 150 hours in the entire year. Therefore, it can be computed that in a given day the work of an employee can only be exceed by 1 hour. However, the reality elicits a different picture altogether, where the employees are mandated to serve a 12-hour shift or risk losing employment.

It has often been reported that MNCs and other corporates try to circumvent the law by playing upon the technicalities that Labour Legislation are not applicable to the corporate white-collar sector. IT companies have consistently maintained that their workforce comprises highly skilled and well-remunerated professionals, and have thus implied that such employees fall outside the ambit of traditional labour legislations, particularly the Industrial Disputes Act. Corporates often employs workforce by glorifying their status as manager, executive, and supervisor etc so that they don’t have to face the rigours of laws, but no such difference in the manner of work. Furthermore, the predicament of the workforce gets further compounded due to the exemption granted by the certain states. For instance, Karnataka and Telangana have granted certain exemptions to IT companies from complying with certain provisions of their respective S&E legislation pertaining to opening and closing hours, and overtime work limit etc. This allows the IT corporate to shift their labour-intensive operations to places that grants them regulatory amnesty and continued unchecked workforce exploitation for private gains. Moreover particularly the inapplicability of Maharashtra Shops and Establishment Act, 2017 (“Maharashtra Act”), as it is widely assumed that The Maharashtra Act restricts its application only to workers..

Adoption of multifarious S&E legislation whether to boost economy or to protect workers, has allowed the rights of the workers to go for a toss. However, looking at the S&E legislations primarily through legal prism, on a closer analysis, it is clear that corporate or big tech offices are aptly covered under the expression ‘establishments.’ The Act defines establishment as inclusive of any premises wherein any trade, business or profession or any work in connection with, or incidental or ancillary thereto is carried on. The word ‘any’ denotes the wide amplitude of the provision and thus places like corporate offices where heavy business transactions take place will fall within the confines of the Act. Furthermore, judicial precedents have recognized that Software Engineers or people employed in skilled and technical capacity are covered under the expression ‘worker.’ Thus, the technicalities of law should not provide licence to the employer to obviate from their responsibilities under the legislation to which they are otherwise bound.

The new labour codes particularly Occupational Safety, Health and Working Conditions Code, 2020, falls short of addressing the ambiguity of the previous legislation. The code defines both the ‘employee’ and ‘worker,’ however when it comes to regulate the working hours of establishment, the code only covers ‘worker.’ Thus, it is imperative that the legislation regulating the working conditions must be broadened in its ambit and to use one single expression ‘employees’ wide enough to include workers, otherwise it will be easy for the corporations to design their employment contracts in such a manner so as to escape the rigours of the law and allow the exploitation of the employees.

Ending the Blue/White Collar Divide

The Indian labour laws are particularly centered around to protect the interest of blue-collar workers employed mainly in manual or manufacturing tasks, leaving others susceptible to workplace exploitation, such as demanding work schedules and abrupt termination. Labour Legislation for instance Employee’s Compensation Act 1923 (“Compensation Act”) provides for compensation on account of “injury caused due to accident arising out of and in course of employment” only to the employees who are primarily employed manual or manufacturing work which is evident by looking at the categories of employees covered under Schedule II of the Compensation Act.

There have been multiple calls by the Unions to recognize white-collar corporate sectors employees within the ambit of the Compensation Act. However, it is only after the death of Ernst & Young employee that the plight of these employees gained widespread attention. As a result, authorities started taking extra efforts to scrutinize the practices of the establishment.

It is an undeniable fact that people employed in Tech or MNCs also suffer physical and mental injuries considering the nature of their jobs. For instance, it was reported that IT employees are highly susceptible to severe health issues such as diabetes and hypertension due to the constant physical and mental stress of their work. Prima facie these health issues do not appear to be similar in nature to the injuries or diseases outlined under the Compensation Act. As most of the disease are result of intake of substances peculiar to the nature of employment, however diseases or health issues arising due to work stress or stress arising out of long hours of work needs to be included within the Compensation Act. Given that persistent work stress can directly impact the autonomic nervous system and neuroendocrine function.

More importantly the 2010 amendment to the Compensation Act substituting the word ‘workmen’ with ‘employees’ and removing the numerical threshold of employees to be part of the workplace had a specific purpose of covering all employees and make it gender neutral. Thus, it is neither equitable nor justifiable that injury resulting out of mental stress, psychological strain, mental disorders, or related conditions have been interpreted to be within the coverage of ‘personal injury’ under the Compensation Act, only for one set of workers i.e., workers who employed for manual or manufacturing purpose, and do not provide for compensation to personnel employed for doing skilled or technical work.

The Code on Social Security, 2020 while defining ‘employee’ in a broad manner, however restricts its application in terms of compensation to only those employees covered under the Schedule of the said Code. The new labour codes while appearing progressive on paper, however fail to account for the lacuna which was present in the Compensation Act.

Insights from the Global Best Practices

Furthermore, major economies across Europe have abolished the distinction between white-collar and blue-collar workers. This distinction originated in the early industrial era, when the distinction between ‘manual’ and ‘intellectual’ labour was highly favoured. However, through collective bargaining and unionisation, this distinction started getting effaced gradually. The German Federal Constitutional Court ruled that the differentiation between blue-collar and white-collar workers in Germany is both “discriminatory” and in violation of the Constitution. Similarly, in 1993, the Belgian Court of Arbitration stated that the distinction between blue- and white-collar workers was hardly as ‘objective and reasonable.’

Austria has also removed the distinction between the white-collar employees and blue-collar employees owning to technological change leading to skill-development of manual blue-collar workers. Additionally, the United States also extended the benefits of social security legislation to employees without creating a distinction between white and blue collar employees, as the definition of employees includes anyone who is employed so as to affect the commerce of the employer. Karnataka High Court also underscored that owning to transition of industry from being limited to factory to now includes modern-day technology companies, the distinction between the blue-collar and white-collar has been blurred so as to embrace white-collar within the protective shield of labour law legislations

Conclusion

The article exposits a gap between how companies in India’s growing corporate world treat their employees and what the law intends to protect. The push for longer workweeks, supposedly to make the country more competitive, completely ignores the harm it does to people. The current laws, like the Delhi Shops and Establishment Act, 1954, and the Employees’ Compensation Act, 1923, fail to properly protect office workers from being exploited. Companies are finding loopholes to avoid rules about working hours and overtime, and the way “employee” is defined in compensation laws leaves many people unprotected.

The way companies, especially big tech and MNCs, use legal technicalities to avoid labour laws shows that changes are urgently needed. The new labour codes, while trying to modernize things, still have problems because they separate “workmen” and “employee,” letting companies exploit this difference. It essential to recognize that mental stress and problems caused by long hours are “personal injuries” under the Employees’ Compensation Act.

It is therefore necessary that a common definition of ‘employees’ must be incorporated across labour welfare legislation. There must be a statutory limitation to the number of hours an employee can work overtime. Employees shall not be allowed to work overtime before prior permission from the employer. Further, registers and records of overtime done by employees must duly be filed with the labour commissioner on periodic basis. Additionally, employers need to pay employees for overtime work right after the completion of the task, or when they’ve worked the maximum overtime allowed, whichever is earlier. These measures are crucial to rectify the existing imbalances and ensure that labour laws effectively protect the rights and well-being of all employees.

Devang Kala is a 4th year student at National University of Juridical Sciences, Kolkata.

Ed. Note: This piece is edited by Hamza Khan and Published by Abhishek Sanjay from LAOT blog.