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Labour Laws of India and Pakistan: History and Evolution

The British ruled over the Indian Subcontinent, including present-day India and Pakistan, for nearly 200 years (1757-1947) after the arrival of the monopolistic East India Company, which exploited the region's resources for its own profit. The Company manufactured goods at low prices, such as textiles and spices, and sold them in Europe and the UK at inflated prices. With the establishment of the textile industry in England during the industrial revolution, the British Crown took control of the Indian Subcontinent and imposed stricter legislation to close the market for Indian competitors.

After the First World War, labour unrest increased, leading to repeated strikes. This prompted the recognition of labour-management relations for the first time, as previously the common law principle of conspiracy applied to labour unions. In 1926, the Indian Trade Union Act was passed, followed by the Trade Disputes Act of 1929 after three years.

The Trade Union Act allowed workers to associate and be represented by unions, while the Trade Disputes Act provided for the prevention and settlement of disputes between employers and employees, which could be referred to a court of inquiry or board of conciliation. Several other legislations related to labour welfare were introduced during this period, including the Factories Act of 1934, Payment of Wages Act of 1936, Mines Act of 1923, Workmen Compensation Act of 1923, and Dock Labor Act of 1934.

In the wake of the Second World War, the Essential Services Maintenance Ordinance of 1941 was promulgated. The Industrial Disputes Act of 1947, the last labour legislation before the partition of the Indian Subcontinent and subsequent independence of India and Pakistan, provided for permanent administrative machinery for the settlement of disputes through specific procedures. The Act also allowed for the constitution of work committees and referral of disputes to one-man industrial tribunals constituted for that particular dispute.

Constitutional Provisions
The idea of providing constitutional safeguards to labours by incorporating provisions for them was adopted by both nations. This was in the form of Fundamental Rights being conferred upon and Directive Principles being laid down for the welfare of labourers in the country.

The Constitution of Pakistan under its Part II - Fundamental Rights and Principles of Policy contains certain labour rights like:
  • Article 11 - prohibition of all forms of slavery, forced labour and child labour
  • Article 17 - freedom to form associations and unions
  • Article 25 - right to equality before law and prohibition of discrimination on the grounds of sex alone
  • Article 37(e) - securing just and humane conditions of work, ensuring that children and women are not employed in vocations unsuited to their age or sex, and for maternity benefits for women in employment.

The Constitution of India under its Part III - Fundamental Rights contains certain provisions which are as follows:
  • Article 14, 15, 16 - provides for right to equality, protection against discrimination and equal opportunity in employment or appointment to any office under the state.
  • Article 19(1)(c) - right to form associations or unions
  • Article 23 - prohibition of traffic in human beings and forced labour
  • Article 24 - no child below the age of fourteen years shall be employed to work in any factory or mine or engaged in any other hazardous employment.
  • Additionally, Articles 38, 39, 42, 43 and 43-A forming part of Directive Principles of State Policy also provide for directions for the state to act in welfare of labourers.

Post-independence, Pakistan inherited laws like Trade Union Act of 1926, Industrial Employment (Standing Orders) Act of 1946, Industrial Dispute Act of 1926 and Factories Act of 1934. Since, these laws were progressive, they helped in further policymaking. The Trade Union (Amendment) Ordinance of 1960 brought in the principle of compulsory recognition of trade unions by the employers. Also, it abolished the unfair labour practices carried out by both employers and employees.

During the regime of Ayub Khan, The Industrial Dispute Act of 1926 was replaced by Industrial Dispute Ordinance of 1959 which brought drastic change in the existing system. The Ordinance broadened the definition of public utility and includesd various entreprises and also banned strikes. The idea of compulsory adjudication made the aggrieved juggled themselves from one court to the other in the search of justice.

Following this, during the time of military dictator General Yahya Khan, the labour legislation were once again revamped with two key intentions: (1) the trade union movements should be restricted to plant/factory (2) it should not get involved with party politics. Since the time of independence, five labour policies were announced in the year 1955, 1959, 1969, 1972 and 2002 which mainly focused on the growth of trade unionism, protection of workers' rights, settlement of industrial disputes and redressal of worker grievances.

In the year 2010, subjects of labour and employment were devolved to Provinces under the 18th Amendment to the Constitution of Pakistan, as a result of which the Federal labour laws made applicable on Provinces under Article 270AA(6) of the Constitution of Pakistan until replaced, amended or repealed by Provinces.In 2010, a labour policy was introduced with an aim to reduce the number of labour laws but was a failure. In light of current economic crisis prevailing in the nation, it is high time and all provinces and territories in Pakistan should coordinate with one another to ensure that labour legislation is as uniform as possible across Pakistan.

After independence, the government began to take a more active role in regulating labour practices. The Industrial Disputes Act of 1947 provided for the resolution of industrial disputes and the settlement of grievances through negotiation and conciliation. The Factories Act of 1948 provided for better working conditions, safety measures, and welfare facilities for factory workers. The Employees' State Insurance Act of 1948 enabled workers to obtain insurance in the event of illness, maternity, accident or death.

In subsequent years, more labour laws were enacted to protect the interests of workers, including the Minimum Wages Act of 1948, The Employees' Provident Fund and Miscellaneous Provisions Act of 1952. The Trade Unions Act of 1956 was also passed to regulate trade unions and their activities.

The labour laws of independent India have been highly influenced by the leaders of the freedom struggle, the members of the constituent assembly and also international treaties and conventions. However, when the government adopted the policies of Liberalization, Privatization & Globalization in the year 1991, a new set of challenges were surfaced in the labour market as the existing legal regime was inclined to the protection of labour and was not conducive for competition.

In the year 2002, the Second National Commission on Labour proposed to consolidated all central labour legislations into 4 groups and it led to the introduction of 4 codes consolidating 29 central laws in 2019-20 namely:
  1. Code on Wages
  2. Industrial Relations Code
  3. Code of Social Security
  4. Occupational Safety, Health, and Working Conditions Code

In conclusion, while India and Pakistan have made efforts to establish comprehensive labour laws, there are differences in their approach and implementation. Both countries need to continuously strive for improvements in enforcement, awareness, and compliance to ensure that their labour laws contribute to creating fair and inclusive work environments for their workforce. One key difference between India and Pakistan is the level of flexibility in their labour laws.

India has seen recent reforms aimed at liberalizing its labour laws and promoting ease of doing business, while Pakistan has opted for a more regulated approach with stringent labour laws to protect workers' rights. The need for robust labour laws that protect the rights and welfare of workers is crucial in promoting decent work and sustainable development in both India and Pakistan.

  • Comparison of Labour Laws: Select Countries, INDIA EXIM BANK (2013),
  • Labour and Employment Law: A Profile on Pakistan, Iftikhar Ahmad, WAGEINDICATOR (2010),
  • Saad Saud Almutairi, Comparison of Labour Laws in Different Countries, 7 Journal of Critical Reviews 908, 908-916 (2020).

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