IMPACT OF LABOUR LAWS ON EMPLOYEE PRODUCTIVITY IN RAILWAYS

This paper aimed to empirically explore the influence of labour law compliance on employee productivity in India based on a sample of 200 employees in manufacturing, IT/ITES, banking and retail industries in Hyderabad. The results give strong evidence that compliance with labour law - based on the dimensions of awareness, wage and compensation, working hours and leave, and occupational safety and health - is positively and significantly related to employee productivity.   The regression equation, which explains 62.7% of the productivity change, confirms that labour laws are not a regulatory millstone, but they are actually a functional part of the process of ensuring that human capital can be used to its best advantage. Compliance infrastructure investments in organizations are, in a way, investments in the motivational and health basis of the productive capacity of workforce. The fact that safety and health compliance is, by far, the most significant predictor of productivity is an important message to the Indian industry: in the age of increased competition, the urge to compromise safety in the workplace must be overcome, both on moral and legal counts, but on the economic level as well. Employees who are safe and healthy, fairly remunerated and legally guarded are proven to be more productive employees.   With India in the process of enforcing the consolidated Labour Codes, and aiming to establish itself as a manufacturing and services powerhouse in the world, it will be of paramount importance that the reforms in the regulatory framework in question will be, in fact, translated into the actual changes in the employment conditions. This research paper adds empirical data to that policy debate and maps out a research agenda to further explore the productivity-enhancing potential of strong labour governance.

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