Flex and thrive

Better productivity is a goal for any economy. India’s current statutorily prescribed working hours are insufficient for many entities; therefore, the ground reality is that these regulations are often violated in practice. One middle-path solution could be that, in cases where productivity-linked incentives are paid, there may be an increase in work timings at the option of both employee and employer. This would incentivise employees to work longer hours and attract those inclined to work and remain productive. It may also create positive competition within organisations. There is a need to modernise the outdated concept of overtime for certain entities, making it compatible with new-age benefits.

The age-old 9-to-5 schedule is outdated for many establishments. As a middle path, permutations combinations could be incorporated into India’s work laws, granting greater flexibility to employers and employees. Rather than imposing fixed or rigid working hours, employers who offer lucrative, genuine productivity-linked allowances could be permitted to extend work hours statutorily. This approach could apply to establishments and employees engaged in intellectually demanding work or receiving high-reward salary packages and incentives, but not to workers in factories, construction, or other sectors involving strenuous manual labour.

Additionally, the existing concept of overtime in antiquated laws needs a review for various establishments and higher-category employees, linking it to productivity. The practically prescribed 48 hours of weekly work under the Shops and Establishments Act is often impractical for many entities. Moreover, requiring employees to work beyond the prescribed limits entails paying overtime at twice the regular wage, which is only permissible up to a prescribed limit—generally about 60 hours a week. Such payments make it expensive for employers, particularly when time is spent mechanically rather than on constructive productivity. Many entities already make payments under headings such as productivity-linked incentives or bonuses. Thus, provisions allowing for extended hours, where excess payments are made subject to productivity, could be statutorily considered instead of continuing with the outdated concept of overtime. Of course, there should be bare minimum prescriptions regarding payments, along with provisions for consensus between employers and employees. As mentioned, this flexibility need not apply to work involving arduous tasks.

Productivity-linked incentive is awarded by measuring an individual or group’s performance against certain goals. It is a variable component of pay and serves as a reward based on performance. Such incentives aim to significantly improve efficiency and effectiveness, enhance output, and motivate employees by rewarding individual and/or team performance. They act as a catalyst to boost overall productivity. As per current Indian laws, even prescribed overtime has rigid limitations. People who want to work hard do so regardless. However, statutory timings, being rigid and constrained, need to be addressed. Often, this rigidity is contrary to the interests of employees with higher aspirations.

Moreover, the new-age work culture and job descriptions, especially in fields like IT and AI that require more intellectual engagement and less physical strain, demand suitable updates to laws. Similarly, where salary packages are lucrative for higher-level positions, legislation could allow flexibility, subject to mutual agreement between employers and employees, within pragmatic and broader restraints. An amendment to this effect in respective Shops and Establishments Acts, or the introduction of a uniform law for metropolitan cities, could significantly address efficiency challenges.

A modern economy requires progressive laws that balance work-life harmony with economic and global competitiveness. Striking this balance is essential for businesses to achieve optimal growth while ensuring employee well-being. Over the decades, both private entities and government departments have increasingly relied on outsourcing and contract labour, even for core activities, due to the non-performance and limited working hours of permanent employees.

What needs urgent attention is the disparity in productivity. On one hand, contract labourers, casual workers, and daily wage earners work far beyond legally stipulated hours. On the other, permanent employees in government, public sector undertakings, private-sector multinationals, and large corporations enjoy high salaries, generous perks, and comparatively fewer working hours—sometimes even less than the 48 or 49 hours prescribed under the Shops and Establishments Act.

Age-old laws, based on employee tiers, nature of duties, and pay packages, need harmonious modifications to align with current dynamics.

The writer is a practising Advocate in Supreme Court and High Court of Delhi. Views expressed are personal