29 August, 2015

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Applicability of Labour Laws on E-commerce

Applicability of Labour Laws on E-commerce Industry

By CA Ankit Gulgulia (Jain)
ankitgulgulia@gmail.com

Most labour laws in India have been framed for those working in manufacturing, mining and plantation. The new e-commerce sector, which has picked speed only over the last decade, does not have any specific regulation.

Some laws, such as Workmen's Compensation Act, 1923; Industrial Dispute Act, 1947; The Contract Labour (Regulation and Abolition) Act, 1979; The Shops and Establishment Act, 1953, arguably apply. But the e-commerce companies self-fashioning as service providers leads to some dispute over the applicability of the laws. 

According to Section 2(gg)(j) of The Industrial Disputes Act, 1947, 'industry' is defined as: "any systematic activity carried on by co-operation between an employer and his workmen (whether such workmen are employed by such employer directly or through any agency, including a contractor) for the production, supply or distribution of goods or services with a view to satisfy human wants or wishes. So say for example, even if the delivery staff is not on the roll of the E-com Company the same would qualify as workmen under the above definition.

This law also provides the conditions which allow the workers to go on strike. Workmen's Compensation Act has provisions for financial protection of labourers. Perhaps this may be legal explanation to Last month's strike struck at country's leading E-com player, with about 400 delivery personnel stopping work and demanding facilities such toilets and regulation of working hours, among other things.

In such a scenario, E-commerce companies would have to comply with regulations on wages, including overtime, leave, working hours, working conditions and amenities and medical benefits as stipulated under the Labour Laws. 


On Similar Tracks, Rajasthan has recently moved an amendment to bring e-commerce companies under Rajasthan Shops and Commercial Establishments Act 1958.This will make it mandatory for e-commerce companies to follow rules governing working hours, wages for overtime, weekly holidays and annual earned leave.

Other State governments may soon follow in similar in light of increasing work force in e-commerce sector and high end requirement to regulate the labour laws on the Industry 

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