Chapter I

Labor Law Legislations in

India
After reading this chapter you will be conversant with:
 Industrialization and Industrial Peace
 Industrial Jurisprudence
 Role of International Labor Organisation
 Labor Policy in India
Labour Law

The National Movement and the evolution of independent India after

Independence have a close connection with the labor movement in India. The
leaders like Gandhiji, Tilak, Nehru, and Subhash Chandra Bose were prominent
champions of cause for trade unionism among the workers to achieve their rights.
It was their efforts, which culminated in creating awareness and mobilizing the
working class in India towards the goals of collective bargaining, workers
participation in management and identification of welfare and social security
measures for workers both in organized and unorganized sectors of industry.
INDUSTRIALIZATION AND INDUSTRIAL PEACE
Rapid industrialization process through out the world during early twentieth
century had its effects on India too. Consequently, there was rapid increase in
industries, employers, and wage earners in varying circumstances. However, the
common feature observed was the increase in concentration of production at one
particular place around which the working population, consisting mostly migrant
workers has increased. Thus, with the rise in number of industries, the evils of
industrialization also increased multifold specially leading to –
 Improper and inadequate wages that fulfill the barest necessities of the
workers and their families.
 Insecure employment, placing the workers at the mercy of the employer.
 Insanitary and over crowded work environment.
 Unscheduled long hours of work, devoid of intervals of rest or recreation.
 Inhuman treatment, devoid of any regard for the safety or welfare of the
workers.
 Employment related injuries that were neglected and never compensated by
the employers as the injuries were regarded as normal risks incidental to
employment in a factory.
 Inadequate wages forcing the other family members wife and children to
work. The same was taken advantage by the employers by exploiting their
need in the form of unequal wages and working conditions, which affected
their physical and mental health.
All these hardships encountered by the workers and their families, were realized
by the workers themselves. Added to this was the lack of adjustment and
harmonious relationship on behalf of the employer and the emergence of the
industrial revolution, triggered labor problems in industries. There was deeper
awakening towards the relation ship between the worker and employer, workers
rights, and maintenance of harmonious relationship between the employer and
employee leading to the present form of industrial jurisprudence.
Industrial peace and harmony was identified as the key factor for the economic
growth of the nation as well as for the individual by both the working class and the
employers. This led to a quest for more co-operation between employer and
employee was envisaged for a healthy industrial relations.
Industry was identified as a conglomerate of various groups, and the relation
between these diverging groups has become the subject matter of the industrial law
as establishment of good industrial relationship is essential for better production.
In other words, it is the backbone for the economic activity of a State. The
economic progress of a nation directly depends upon the industrial peace and thus
maintenance and establishment of industrial peace is no more a matter of concern
of employer and the employee alone. It is the concern of whole society. It becomes
essential for the State to intervene and prevent the workers from being exploited in
their larger interests. Thus, the concept of social justice in the form of legal
regulations of industrial relations by State has emerged, and, these regulations
were based upon the socio-economic objectives of the State. State in return sought
to achieve these objectives in its national labor policy.

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 Labor Law Legislations in India

INDUSTRIAL JURISPRUDENCE
Beginning of the twentieth century witnessed the evolution of this new branch of
jurisprudence in India. With the emergence of industrial jurisprudence, the
traditional views on laissez faire and master and servant relationship had begun
undergoing changes. Therefore, the emphasis was more on developing amicable
and harmonious relationship between the employers and employees. The standard
form of contract replaced the individual contracts. The standard forms of contract
were incorporated in the form of statutory contract through legislations and
judicial interpretations.
The master and servant concept too under went transformation and there emerged
a new relationship as of co-sharers in partnership which created job security for
employees. Further, the employees’ right to participate in collective bargaining and
related management issues have been recognized by legislations too.
This way, the new jurisprudence aimed at eliminating the differences between the
haves and have-nots. The employers also realized the strength of the employees and
the loss caused in production due to repeated strikes, and lockouts by the employees.
Thus, through out the World there was mass awakening among the working class
and in consequence of which certain basic legal principles evolved. They are:
 The right to form associations and trade unions;
 The right to collective bargaining for better conditions of work;
 Shift from laissez faire to welfare state. With social security and social
welfare measures;
 Formation of Tripartite consultation groups comprising of representatives of
workers, employers and the Government;
 State intervention for the benefit of the working class;
 Setting minimum standards by State governments in terms of wages, benefits,
and provision of welfare measures in order to protect the employees from
being exploited by the employer;
 The right to have safety measures, and the right to get compensated for the
injuries arising out of industrial work related injuries; and
 The right to participate in management issues and the right to get educated.
The application of these basic principles tried to bring in certain reforms and
assured the working class with more secured wages, and social welfare measures
in the Labor policies drafted for them.
ROLE OF INTERNATIONAL LABOR ORGANIZATION
The adoption of labor laws and regulations is an excellent means of implementing
ILO standards, promoting the ILO Declaration and the Fundamental Principles and
Rights at Work, and putting the concept of Decent Work into practice. Under the
ILO Constitution, the ILO office is committed to assisting member States to assess
and, where necessary, frame or revise their labor laws.
The activities of the Office in the field of labor law are closely related to the
general standard-setting and standard-monitoring competence of the ILO. First, the
elaboration of standards requires that the Office undertakes thorough research on
the national law and practice of member States, which provide the basis for
proposals to the International Labor Conference as to the shape and content of an
international instrument - to be eventually adopted in the form of a Convention, a
recommendation or both. Secondly, the implementation of ILO standards must be
based inter alia on national laws and regulations, whose elaboration may require
ILO technical assistance if requested. Furthermore, ILO assistance in the field of
labor legislation may be requested by member States irrespective of whether they
have ratified ILO Conventions, and/or in respect of fields which have not yet been
addressed by ILO standards.

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Labour Law

The ILO Declaration on Fundamental Principles and Rights at Work recognizes

the obligation to assist its member States in response to the established needs they
express by offering technical cooperation and advisory services to promote the
ratification and implementation of the ILO fundamental Conventions. This of
course, includes assistance in the development of national laws and regulations to
allow ratification of these Conventions or implementation of the corresponding
principles.
The changing economic and technological patterns of the last decade as well as the
globalization of the economy have led to an increase in international trade between
countries with different levels of social and labor protection. Therefore, it is now
increasingly accepted that a regulatory framework is essential if globalization is to
be both socially and economically sustainable in the long term. Such a framework
must include, as a minimum, all the rights and principles laid out in the ILO
fundamental Conventions.
ILO Intervention in the Field of Labor Law
The ILO Office is frequently called upon to provide advice on the basis of
international and comparative labor law in order to help cast light on the debate at
the national level.
Member States request ILO advice in the field of labor law with a view to
responding to various needs such as:
 to develop national law so that it can fully implement ratified ILO standards;
 to assess and, where necessary, reorganize the framework regulating the labor
market with a view to adapting it to meet the country’s current needs and
challenges;
 to take into account emerging types of employment relationships so that they
can be covered by a suitable regulatory framework;
Further, assistance in the form of policy guidance is provided by the ILO Office
such as:
 Expertise for assessing the labor law framework in a given country, or, as the
case may be, sub-region;
 Advice on the revision of labor law;
 The drafting of laws or regulations;
 Technical comments on draft labor legislation, including comments in the
light of ILO standards (includes proposals for alternative wording);
 Assessment of the existing law enforcement machinery and procedures,
including recommendations for improvements;
 Technical information on a wide variety of labor law subjects;
 Participation in national discussion fora on the assessment and revision of
labor law1.
LABOR POLICY IN INDIA
The labor policy in India after independence aimed at self-reliance of the workers
and the Governments. Therefore, the present approach in all labor related policies
is to constitute Tripartism, the three party approach consisting of trade unions,
employers, and the Government. This approach would enable the representatives
to come together and discuss the issues related to the labor dispute and come to a
consensus and advise the disputing groups by giving recommendations. Tripartism
is an approach, which emphasized on the identity of interests between labor and
capital, as they are the partners in the maintenance of the production and the
building of the national economy. Therefore, the Annual Labor Conferences and
the permanent labor committees constituted under this principle served the

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 Labor Law Legislations in India

function of chief instrument of Tripartism and advocated workers participation in

management, workers’ education, works committees, and minimum wage
legislations.
The aim of new labor policy of India is to protect the interests of the workers
community at large and the principle obligation is on the employers to secure all
these welfare measures along with giving workers their due share in the gains of
economic development, that is for example in the form of bonus.
The report of the National Commission on Labor 2 made various recommendations
to be incorporated in the labor related policy of India, few of the main
recommendations are:
 Recognition of the State as the custodian of the interests of the community as
the catalyst of change and welfare programmes.
 Recognition of the right of the workers to peaceful direct action if justice is
denied to them.
 Encouragement to mutual settlement, collective bargaining and voluntary
arbitration.
 Intervention of the State in favour of the weaker party to ensure fair treatment
to all concerned.
 Primacy to maintenance of industrial peace.
 Evolving partnership between the employer and employees in a constructive
endeavor to promote satisfaction of the economic need of the community in
the best possible manner.
 Ensuring fair wage standards and provisions of social security.
 Co-operation for augmenting ‘production’ and increasing ‘productivity’.
 Adequate enforcement of legislation.
 Enhancing the status of the worker in industry.
 Tripartite consultations.
Principles of Labor Policy in India
The principles on which the Labor legislations in India have its base are social
justice, social equity, international homogeny, and national economy. However, the
most prominent among these are Social Justice and Social Security.
SOCIAL JUSTICE
Principles of Social justice aims at achieving equitable distribution of profits and
other benefits of industry between industry owner and the workers. Secondly, it
intends to protect the workers against exploitation and other harmful effects to
their health, safety and morality.
Labor welfare in India has a direct connection with the constitutional objective of
promotion of welfare of the people, and for provision of just and humane
conditions of work while securing to all workers full employment with leisure and
social and cultural opportunities.
The Indian Constitution enshrines the concept of Social Justice as one of the
objectives of the State. The Article 38 of the Constitution provides that the State
shall strive to promote the welfare of the people by securing and protecting as
effectively as it may bring in social order. Article 39 ordains that it shall be the
duty of the State to apply certain principles of social justice in making laws.
Social justice is justice according to the social interest. Application of social justice
is subordinate to fundamental rights, and is subservient to the statutory Industrial
law. It does not mean doing everything for the welfare of the labor to the utter
disregard of the employer. The balance of social justice leans on neither side. The
labor policy of a country should, in the national interest, prevail over the rival
economic policies in cases of conflicts3.

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Labour Law

Social justice is designed to undo the injustice done due to inequality either by
reason of birth or opportunity to make it possible that wealth should be distributed
as equitably as possible. The concept of social justice has become the integral part
of the industrial law, as it is founded on the basic idea of socio-economic equality
and its aim is to assist the removal of socio-economic justice to all its citizens.
The concept of social justice is not narrow or limited to a particular branch of
legislation or adjudication although it is more prominent and conspicuous in
industrial legislation and adjudication. Its sweep is comprehensive and is founded
on the basic ideal of social-economic equality and it aims at assisting the removal
of socio-economic disparities and inequalities of birth and status and endeavors to
resolve the competing claims especially between the employers and workers by
finding a just, fair and equitable solution to their human relations problem so that
peace, harmony and co-operation of the highest order prevails amongst them
which may further the growth and progress of nations4.
SOCIAL SECURITY
The mutual conflict between the employer and the employees over the question of
adequacy of their respective shares in social produce constitutes the crux of the
labor problem, of which collective bargaining and industrial conflict are the two
most important aspects. Social security is the security that the State furnishes
against the risks, which an individual of small means cannot, today, stand up to by
himself even in private combination with his fellows.5
The quest for social security and freedom from want and distress has been the
consistent urge of man through the ages. Social security envisages that the
members of the community shall be protected by collective action against social
risks causing undue hardship and deprivation to individuals whose private
resources can seldom be adequate to meet them. It covers through an appropriate
organization, certain risks to which a person is exposed.6
Social security measures are significant from two viewpoints: First they constitute
an important step towards the goal of a welfare State, second they enable workers
to become more efficient and thus reduce wastages arising from industrial
disputes. Lack of social security impedes production and prevents formation of a
stable labor force. Therefore, social security measures are not a burden but a wise
investment, which yields good dividends.
The role of International Labor Organization in framing certain standards of Social
insurance has been significant. The Social Security (Minimum Standards)
Convention adopted in 1952 embodies universally accepted basic principles and
common standards of social security. The application of these principles has
guarded developments of this field throughout the world7.
Labor Legislations in India
There were very few labor laws, existing before India’s independence; the first to
attract legislative control was plantation industry in Assam, where the workers of
the plantations were subjected to several hardships like they were not allowed to
leave the plantation site. From the year 1863 onwards, a number of Acts were
passed to regulate the recruitment, safety, and working conditions of the plantation
workers. This was followed by Factories Act in 1881, Mines Act in 1901, Trade
Union Act, 1926, Trade Disputes Act, 1929, Workmen’s Compensation Act, 1923,
Industrial Employment (Standing Order) Act, 1946, Mica Mines Labor Welfare
Fund Act, 1946, Payment of Wages Act, 1936 etc.
In the words of V.V. Giri “Workers are the dominant partners in the industrial
undertakings and without their co-operation and good work, discipline, integrity
and character, the industry will not be able to produce effective results or profit.
However, efficient the machine touch in any industry may be, if the human
element refuses to co-operate, the industry will fail to run. Therefore, the profit of

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 Labor Law Legislations in India

the industry must be shared between the employers, workers, and the community.
The workers are having a dominant share, being the producers of wealth. The
Government and the factory owners must fully understand the labor psychology
and a change in their outlook and attitude is desired to secure the industrial peace.
Nothing should be done under threat or coercion but on a clear understanding that
whatever is good and is due to the labor must be given. The industry owners
should treat the workers as co-partners.” 8 Thus, the present Labor policy in India
has evolved in response to specific needs of changing situations and circumstances
to suit the requirements of planned economic development and social justice with
two-fold objectives, viz., maintaining industrial peace and promoting the welfare
of labor. The following are few such legislations, which the subsequent chapters
would cover in detail, they are:
 The Trade Unions Act 1926: The Trade Unions Act, 1926 provides for
registration of trade unions and thus the right to form associations related to
trade is protected.
 Minimum Wages Act, 1948: The wages of the workers in the un-organised
sector of employment are fixed under the Act, by both Central and State
governments.
 Payment of Wages Act, 1986: It was enacted to regulate the payment of
wages to certain classes of persons employed in industry with the object to
provide a speedy and effective remedy to the employees arising out of illegal
deductions or unjustified delay made in paying the wages to them.
 Payment of Bonus Act, 1965: It provides for payment of bonus to employees
as defined under the Act.
 The Contract Labor (Regulation and Abolition) Act, 1970: It has been
enacted to regulate the employment of contract labor in certain
establishments.
 The Child Labor (Prohibition and Regulation) Act, 1986: Prohibits
employment of children in certain hazardous occupations and processes and
regulates their employment conditions in some other areas.
 Bonded Labor System (Abolition) Act, 1976: Envisages release of all bonded
laborers, liquidation of their debts and their rehabilitation.
 Workmen’s Compensation Act, 1923: Provides for payment of compensation
to workmen and their dependents in case of injury and accident including
certain occupational disease arising out of and in the course of employment
which result in disablement or death.
 The Maternity Benefit Act, 1961: Regulates employment of women in certain
establishments for a certain period before and after childbirth and provides
for maternity and other benefits.
 The Payment of Gratuity Act, 1972 is made applicable to employees working
in various factories, mines, oil fields, plantations, ports, railways, motor
transport undertakings, companies, shops and other establishments in
recognition of their services.
 The Employees’ State Insurance Act: Provides for medical care in the form of
benefits in cash or kind to meet the contingency of sickness, maternity and
employment injury and pension for dependents in the event of the death of a
worker because of employment injury.
 Employees’ Provident Fund and Miscellaneous Provisions Act, 1952:
Retirement benefits in the form of provident fund, family pension and
deposit-linked insurance are available to employees under the Employees’
Provident Fund and Miscellaneous Provisions Act, 1952.

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Labour Law

 The Construction Workers (Regulation of Employment and Conditions of

Services) Act 1996 is another major step taken by the government to
ameliorate the working conditions of construction workers.
 The Inter-State Migrant Workmen (Regulation of Employment and
Conditions of Service) Act 1979 was enacted for protection of surplus labor
who migrate to other regions for earning their livelihood.
Summary
 With the awakening of democratic ideology during the independence struggle
the labor force working in various industries also got awakened resulting in
Industrial revolution. With the concept of industrial revolution catching up,
there was total industrial unrest and the need was felt for employer and
employee co-operation and industrial peace. Both the employer and
employee have realized that they could mutually gain in all respects only by
adopting peaceful means.
 Industrial jurisprudence was developed after the industrial revolution wherein
the old master and servant relationship had to give way to the newer
relationship of co-sharers in partnership. The dimensions include forming
associations, trade unions, worker participation in management, collective
bargaining, social security, labor welfare, right to claim compensation.
 Role of International Labor Organisation in framing various labor policies in
India becomes essential due to the impact of globalization of the economy.
 Labor policy in India is based on principles of social justice, social security
and welfare state.

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 Labor Law Legislations in India

References

9
1
www.ilo.org
2
1969, pp.29,30
3
G.L.Kothari, Labor Law and Practice in India, p.15.
4
Mahesh Chandar, Industrial Jurisprudence (1976), p. 47.
5
V.V. Giri, Labor Problems in Indian Industry, p. 247
6
Ibid.
7
Report of the National Commission on Labor, (1969), p. 162.
8
V.V. Giri, Industrial Relations p.27