Debt bondage Employment contracts
Section 5 declares all agreements, customs, etc. under which a person or persons are required to work as bonded labourers to be void, effectively extinguishing all debts owed in the framework of a system of debt bondage.
Section 5. Agreement, custom, etc., to be void.
On the commencement of this Act, any custom or tradition or any contract, agreement or other instrument (whether entered into or executed before or after the commencement of this Act), by virtue of which any person, or any member of the family or dependant of such person, is required to do any work or render any service as a bonded labourer, shall be void and inoperative.
Law / India / Bonded Labour System (Abolition) Act, 1976
The Bonded Labour System (Abolition) Act, 1976 provides for the abolition of the bonded labour system, with a view to preventing the exploitation of vulnerable sections of society.
This Act prohibits, criminalises and extinguishes any system of debt bondage, whether by agreement, custom or contract. The Act aims to achieve the following: (i) every bonded labourer is discharged from any obligation to provide such labour; (ii) the obligation to repay any bonded debt is extinguished; (iii) the property of bonded labourers shall be free of mortgage, charge, lien or other encumbrances and shall be restored to his possession; (iv) a bonded labourer shall not be evicted from a homestead or other residential premise he was occupying as part of the consideration for the bonded labour; and (v) no creditor may accept payment against an extinguished debt.
Indian courts have given a very broad, expansive interpretation to the definition of bonded labour. For example, where a person has provided labour or services to another and received a remuneration below the minimum wage, the Courts have ruled that the labour or service falls clearly within the scope of the prohibition of forced labour under the constitution.