Labour laws are also known as employment laws. They are the body of laws,
administrative rulings, and precedents that address the legal rights and
restrictions of working people and their organizations. Labour laws attempt to
regulate the relationships between an employer or group of employers and their
employees. This branch of law has the broadest application, as it affects more
men and women than any other branch of law.
As a result of its vast implications
and dynamic facets, it is also considered the most fascinating area to study.
These laws generally address issues like health and safety at the workplace,
collective bargaining, unfair labour practices, certification of unions,
labour-management relations, general holidays, annual leave, working hours,
unfair terminations, minimum wage, layoff procedures, and so on.
In India, the
Central Government has promulgated around 44 labour-related statutes, 29 of
which have been consolidated into four new labour codes. This article summarizes
some of the labour laws in India, as well as the four labour codes.
Concept and origin of labour laws in India
In society, institutions develop to abhor the gaps that changes leave behind.
The Industrial Revolution, a historical phenomenon, completely transformed
society from rural and agricultural to industrial and consumerist. The changes
brought by the industrial revolution had left some gaps, and it became the
responsibility of society to fill those gaps. To fill those gaps, society turned
to certain social devices, which are known as labour laws.
Labour laws are the
result of the industrial revolution, and they were formed to address the
problems caused during the industrial revolution. They are different from
ordinary legislation in that they are meant to address unique issues brought on
by particular situations. As a result, their orientation, philosophy, and
concepts are specific rather than general.
Industrial society resulted in the over-exploitation of the working classes by
employers who took advantage of the individual worker's dispensability and
sought the highest profit from their investment. Due to the capitalist axiom
that 'risk and right' go hand in hand, they had the authority to 'hire and
fire." At that point in time, the law also included ideas such as 'Master and
servant', etc., and the common law principle was in effect. The terms
of contract was typically verbal and were mostly used in cases of breach. This
resulted in the prosecution and imprisonment of the workers.
Over time, the scope and purpose of labour laws have evolved. Earlier, labour
laws were enacted to protect the interests of employers. It was governed by the
laissez-faire doctrine, which means a policy of minimal government intervention
in the economic affairs of individuals and society.
On the other hand, contemporary labour law safeguards employees from the
exploitation of the employer. The progressiveness of social philosophy, or the
doctrine that forms the foundations for a welfare state, has made laissez-faire
doctrines obsolete. Theories like "Hire and fire' as well as those of 'supply
and demand', which were treated under the notion of laissez-faire, are no longer
valid.
The approach to labour law and the sphere of industrial relations has changed
dramatically since the Philadelphia Charter, which proclaimed "labour is not a
commodity" and that "Poverty anywhere is a danger for prosperity everywhere." W.
Friedmann and other scholars trying to analyze legal development in this field
identify social duty on the part of government.
Evolution of labour legislation in India
The laws relating to labour in India go back 125 years with the enactment of
the Apprentice Act, 1850. This Act allowed orphaned children to seek employment
when they reach 18 years of age. This led to the enactment of several Acts
relating to labour dealing with various aspects pertaining to industrial
employment.
Labour laws not only set the standard of labour in industrial establishments but
are also concerned with issues such as trade unions, payment of wages, dispute
resolution mechanisms, and others. They also include within their scope the
social security provisions for workers, with the Indian Constitution being
considered the fundamental basis for all the labour laws. According to the
Constitution, labour as a subject fall under the concurrent list and thus allows
both central and state governments to enact labour laws. State
legislatures may, however, not enact laws contrary to central legislation.
Further, the Factories Act of 1881 and the Bombay Trade Disputes (and
Conciliation) Act of 1934 were also enacted following the Apprentice Act of
1850. These Acts were further amended during the Second World War.
The Bombay Industrial Disputes Act, 1938, was replaced by the Bombay
Industrial Relations Act, 1946. In the same year, the Industrial Employment
(Standing Orders) Act, 1946, was enacted by the central government. Further, the
Industrial Disputes Act, 1947, was subsequently amended, superseding the Trade
Disputes Act, 1947, which later became the primary tool for government
intervention in labour disputes. After independence, many laws relating to
labour, employment, and social security were enacted. These laws are discussed
in brief in the latter part of this article.
Principles of Labour Laws in India
The fundamentals of labour law establish that in a civilized society, workers have rights and responsibilities. The current labour laws of the country, as a form of social security for all citizens, provide progressive benefits like health insurance, an old-age pension, maternity benefits, gratuity payments, and others. Some of the principles of labour laws are as follows:
- Principle of Social Justice: The basis of this principle is that all social groups must be treated equally, notwithstanding their circumstances, so that they are considered on equal terms. It seeks to eliminate social inequality because it is clear that certain groups face some form of socio-economic disadvantage in terms of employment or labour. The core purpose of this principle is to facilitate equal access for everyone, regardless of social status, to available employment opportunities.
- Principle of Social Equity: In general, the principle of social equity means the creation of fair standards for everyone through statutory obligations. The fundamental idea of this principle involves the preservation of labour-friendly laws for collective social equity, as circumstances do not remain the same and change from time to time. Thus, laws should be updated regularly. Based on this principle, the government intervenes to make changes in the laws to reflect the evolving situation.
- Principle of Social Security: Social security includes the overall security of the person and their family, place of employment, etc. The social security system meets basic needs and unexpected life events as a way of ensuring that people continue to have an adequate standard of living. It envisages collective action against social risks, which are at the heart of labour laws.
- Principle of the National Economy: This principle states that while enacting labour laws, the overall economic situation of the country must be taken into account because the economic condition of the nation has a significant impact on labour laws in any country.
Factors Influencing Labour Laws in India
There are various factors that have influenced the development of labour laws. These factors are as follows:
- Early Industrial Society of Exploitation: The labour laws in India have a long and complicated history. The roots of labour laws initially emerged as a response to the overindulgences of early industrialization following the industrial revolution. Early industrialisation was accompanied by very long working days and the hiring of young children in very unhygienic conditions, as well as low wages being paid to the workers. Legal protection was also limited for the workers. Such abuses could not have gone on forever without public protests and the call for change.
- Development of Trade Unionism: The trade union movement, which emerged from the industrial revolution, was another factor that contributed to the rapid development of labour laws. They helped to protect the interests of the working class, and as a result of this, laws were enacted on wages, working conditions, women's rights, social security, and other issues. However, laws on industrial disputes, their prevention and resolution, as well as trade union privileges and rights, became inevitable due to its expansion.
Emergence of socialist and other revolutionary ideas
Through his analysis of capitalism, Karl Marx demonstrated that the economic system
based on capital is innately a form of exploitation against labour. Therefore, he supported
the abolition of the capitalist system.
The slogan "The workers of the world unite; you have
nothing to lose but your chains" sent shivers down conservative and capitalist circles by
bringing forth ameliorative as well as protective labour laws that worked very safely. Soon
they realised that an application of labour laws could serve as a measure to prevent the
propagation of revolutionary ideals. The trend towards progressive labour laws was
bolstered by the first and second internationals, as well as socialist and communist parties
established in numerous countries.
- Establishment of the International Labour Organization (ILO)
The establishment of the International Labour Organisation (ILO) in 1919 drastically transformed the way in which labour laws evolved across the globe. It can be read through the acceptance of the principle 'labour is not a commodity', and the slogan that 'poverty anywhere is a threat to prosperity everywhere'. Moreover, the ILO has always identified the need for better laws governing labour conditions by investigating workers' living conditions.
It has proposed new labour laws, undergone a lot of discussion, and reviewed and adopted conventions and recommendations. In an attempt to unify labour standards as far as the conditions prevailing across the globe and the uneven development of the global economy allow, the ILO has done that singular service in the field of labour legislation.
- Factors that affect labour laws in India
All the above-mentioned factors played a significant role in formulating labour laws. India has unique characteristics that have formed its labour laws.
They are as follows:
- Impact of colonial rule
The first of the early labour laws in India were enacted under pressure from Lancashire and Birmingham manufacturers. They considered the labour, which worked in factories and mills across India, to be very cheap when compared with that of their British counterparts. These laws no doubt helped Indian labour, but they were more concerned with safeguarding the interests of British capitalists. The British Civil Servants carried the democratic and pragmatic traditions of the British. The Workmen's Compensation Act, 1923; the Indian Trade Unions Act, 1926; the Payment of Wages Act, 1936; and other Acts followed the British model.
- The adoption of the Indian Constitution and the struggle for national emancipation
Indian labour laws were shaped through the adoption of the Indian Constitution as well as the struggle for national emancipation. With the backing of freedom fighters and nationalist leaders, industrial workers worked tirelessly to ensure that protective labour laws were passed. The Indian Trade Unions Act, 1926, the Royal Commission on Labor, and other statutes were framed in pursuance of their fight for freedom. The Preamble, Fundamental Rights and Directive Principles of State Policy in the Indian Constitution are all expressions of promises given by the leaders during the national movement about how a better and more sustainable social order should be established once independence is achieved.
- Constitutional provisions relating to labour laws in India
The Constitution of India is the supreme law of the land, and all laws are based on it. To this effect, the Constitution guarantees its citizens a 'Socialistic Pattern of Society' and carries on to assert that there would be the creation or formation of the welfare state. The Indian labour laws have been greatly shaped by the interpretation of the Preamble, Fundamental Rights, Directive Principles of State Policy, and judicial wisdom.
- Seventh Schedule of the Indian Constitution
The Seventh Schedule of the Constitution outlines the distribution of legislative powers between central and state legislatures on different matters. List III (Concurrent List) covers most of the labour-related issues. These include topics such as maternity benefits, liability of employers, workmen's compensation, invalidity, and old age pensions; social security and social insurance; employment and unemployment; labour unions; industrial and labour disputes; and provident funds. Parliament has legislated labour laws in most of these fields since the majority of issues related to labour are found on the Concurrent List.
Directive Principles of State Policy in India
The constitution emphasises the significance of socio-economic justice as a
fundamental right. The framers of the Constitution thought that in a developing
country like India, without economic democracy, political democracy would be
meaningless, and hence they incorporated certain Articles in the Constitution to
improve the socio-economic conditions of the common man. These Articles are
known as the Directive Principles of State Policy (DPSP), which are provided
under Part IV of the Constitution.
The main purpose of these principles is to ensure the socio-economic objectives
that the government must pursue to strengthen and advance the social and
economic democracy of the country. When it comes to the law relating to labour,
Articles 38, 39, 41, 42, and 43 are very important as they serve as the 'Magna
Carta' of industrial law.
These articles impose an obligation on the central and
state governments to ensure social order and living wages as per the economic
and political circumstances of the nation. It is also important to note that
while DPSPs are not legally enforceable by the courts, they are still considered
a fundamental part of the Constitution. They serve as the guiding principles for
the government while framing policies and enacting laws that promote the welfare
of the people.
Article 38 of the Indian Constitution
The concept of social justice has been provided under Article 38 of the
Constitution, which states that "the state shall strive to promote the welfare
of the people by securing and protecting, as effectively as it can, social order
where justice, social, economic, and political, shall inform all institutions of
national life."
This principle reaffirms what has been stated in the Preamble to
the Constitution, i.e., that the function of the Republic is to ensure social,
economic, and political justice. Further, Article 39 mandates the state to
incorporate specific principles relating to social justice in its legislative
process. Justice Gajendragadkar, in the case of
State of Mysore v. Workers of
Gold Mines, 1958, stated that "the idea of social and economic justice is a
living idea of revolutionary import that upholds the rule of law and gives the
welfare state ideal meaning and significance."
Article 39 of the Indian Constitution
According to the Supreme Court's interpretation of Article 39(a), the right to
livelihood has been incorporated under Article 21 of the Constitution. In Olga
Tellis v. Bombay Municipal Corporation (1986), the Supreme Court stated, "If the
state has an obligation to secure to its citizens an adequate means of
livelihood and the right to work, it would be sheer pedantry to exclude the
right to livelihood from the content of the right to life."
Articles 39(b) and (c) are important constitutional provisions as they have an
impact on the entire economic system of India. Socialism seeks to distribute the
community's material resources in a way that promotes the welfare of all.
According to Article 39(b), socialism requires distributive justice.
Article 39(d) provides for 'equal pay for equal work. Under this Article, the
parliament has enacted the Equal Remuneration Act, 1976. The Act prohibits
discrimination based on gender and requires that both men and women be paid
equally for performing the same or similar work. The Supreme Court, in many of
its decisions, has drawn the general principle of equal pay for equal work from
the combined reading of Articles 14, 16, and 39(d).
The Supreme Court in
Randhir Singh v. Union of India (1982), has identified that
even though the idea of 'equal pay for equal work' is not a fundamental right,
it is unquestionably a constitutional objective that can be upheld through
constitutional remedies under Article 32 of the Constitution.
Articles 42 and 43 of the Indian Constitution
Article 42 mandates the state to make provisions relating to just and humane
conditions of work and maternity relief. Article 43, on the other hand, provides
for a living wage for the workers. These Articles signify a groundbreaking
concept, asserting that specific benefits are inherently owed to employees as a
matter of right.
In many cases, the Supreme Court has emphasized that the
Constitution expresses strong
concerns with respect to the welfare of workers under Articles 42 and 43. It has
given a broad interpretation to Article 21, including the right to live with
human dignity, by combining it with several Directive principles, including
Article 42.
Fundamental Rights (Part III of the Indian Constitution)
Part III of the Constitution provides for fundamental rights. The freedoms and
rights that are mentioned in Part III are intended to be protected against the
arbitrary actions of the state.
Article 14 of the Indian Constitution
Article 14 states that "the State shall not deny to any person within the
territory of India equality before the law or equal protection of the laws."
There are two aspects of equality under Article 14, i.e., equality before the
law and equal protection of the law. Equality before the law is a negative
concept, and it strictly prohibits discrimination. Whereas the concept of equal
protection of laws is a positive one, it states that to achieve equality among
all, the state has to provide special treatment to people under certain
circumstances.
Article 16 of the Indian Constitution
Article 16 provides for equality of opportunity in matters of public employment.
It states that no citizen shall be discriminated against on the grounds of
religion, race, caste, sex, descent, place of birth, residence or any of them.
The state, under this Article, is also empowered to make special provisions for
the underprivileged classes.
Article 19 of the Indian Constitution
Article 19 provides the bundle of rights; it protects 'the right to free speech
and expression, the right to peaceful assembly without arms, the right to
assemble in unions or associations, the right to practice any profession, and
the right to engage in any occupation, trade, or business."
Article 21 of the Indian Constitution
Article 21 protects the right to life and personal liberty of every person. The
interpretation of the term 'life' by the Supreme Court has evolved significantly
to include in its ambit various rights that contribute to the personal liberty
of the individual. Further, the term personal liberty has been construed broadly
to include a wide range of rights. These rights must adhere to a proper legal
process that is fair, just, and reasonable. Thus, this broad interpretation
reflects the developing notion of human rights, elaborating on significant parts
of human life within the borders determined by constitutional protection.
Articles 23 and 24 of the Indian Constitution
Article 23 prohibits trafficking in human beings and forced labour. It states
that trafficking in human beings, and beggar and other similar forms of forced
labour is prohibited, and any contravention of this provision is punishable by
law. The Supreme Court has interpreted the term life under Article 21 to include
livelihood, and it has held in several cases that any employment below minimum
wage levels is illegal as it amounts to slavery. Further, the employment of
children below the age of 14 in any factory, mine, or other hazardous occupation
is prohibited under Article 24.
Preamble of the Indian Constitution
The preamble to the constitution is another significant source of authority for
the legislature to consider while enacting labour laws. It promises 'Social,
economic, and political justice; liberty of thought expression, belief, faith,
and worship, equality of status and opportunity'. The elaboration of the
principles provided under the preamble is found in Part IV of the Constitution,
i.e., Directive Principles of State Policy.
This part of the constitution states
that the state is responsible for ensuring and safeguarding a social order that
is characterized by justice, social equality, and political stability. These
principles are intended to permeate all facets of national institutions working
towards the promotion of the welfare of the people.
The promotion of the welfare of the people is addressed by some of these
directives, such as minimizing inequalities, directing the policy of the state
towards securing the satisfaction of certain minimum needs, the right to work,
an education, public assistance in some circumstances, just and humane working
conditions, maternity leave, a living wage, the participation of workers in the
management of industry, providing free and mandatory education for children, and
enhancing public health.
History of Labour Laws in India
Prior to India's independence, during the British colonial era, the labor laws
in India were established. These laws were established by British government
with a motive to safeguard the rights of the nation's employers and
industrialists.
In 1883, the Factories Act was established by the British Parliament with the
goal of increasing the cost of Indian labor for the advantage of British textile
magnates. This Act created guidelines for ending child labor, mandating 8-hour
work per day, paying overtime, and forbidding women from working at night. These
provisions helped the labor market, but their true aim was to placate special
interests.
Following World War I, India witnessed the international labor reform
negotiations and the enactment of the Trade Union Act of 1923 and the Industrial
Disputes Act of 1929. These were designed to regulate the interactions between
workers and employers. They included provisions defending workers' rights to
form unions in order to engage in collective bargaining and to take part in
demonstrations through strikes and lockouts.
The British government established the Royal Commission on Labour in 1929,
during the global economic crisis, the independence movement, and rising
unemployment. The Indian labor movement was so strongly opposed to the panel
that it decided to boycott it.
On the other hand, the report which was issued that enabled the passage of
several labor laws between 1932 and 1937. Among them, the two significant pieces
of laws were passed during this period were the Trade Disputes (Amendment) Act
of 1938 and the Payment of Wages Act, 1936.
The Indian Labour Conference and the International Labour Conference also had a
significant impact on labor laws. Additionally, court decisions regarding bonded
labor, minimum wages, contract labor, and child labor have impacted labor laws,
as have proposals from national commissions and committees like the First
National Commission on Labour (1969) and the Second National Commission on
Labour (2002).
Code on Wages
The Code's objective is to ensure the proficient and orderly implementation of various wage-related legislations by combining and simplifying them. It combines the following actions:
- Payment of Wages Act, 1936
- Minimum Wages Act, 1948
- Payment of Bonus Act, 1965
- Equal Remuneration Act, 1976
In compliance with the updated Code, a few changes are being made. Section 6 gives the federal and state governments the authority to set minimum salaries for all employees covered by the Code. This is not the same as the 1948 Minimum Pay Act, which established a minimum pay schedule. In addition, Section 9 of the Code mandates that the central government compute floor wages while accounting for working circumstances. Minimum salaries under the federal government's minimum rates cannot be imposed by state or local governments.
Code on Industrial Relations
Layoffs, strikes, relaxations, and lockouts are all covered by the industrial relations legislation. Later laws like the Industrial Disputes Act of 1947, the Trade Unions Act of 1926, and the Industrial Employment (Standing Orders) Act of 1946 are also incorporated.
The exceptions listed in Section 2(j) have been removed, and Section 2(p)'s industry definition has been updated. The term "industrial dispute" has been expanded under Section 2(k) to encompass worker release, discharge, removal, or termination.
Code on Social Security
The Social Security Code reinstated certain statutes and provided benefits to employees. These actions consist of the following:
- Employees Compensation Act, 1923
- Employees Provident Fund Act, 1952
- Employees State Insurance Act, 1948
- Employees Exchange (Compulsory Notification Of Vacancies) Act, 1959
- Maternity Benefit Act, 1961
- Payment of Gratuity Act, 1972
- Cine Workers Welfare Fund Act, 1981
- Unorganized Workers Social Security Act, 2008
Final Takeaways
An essential foundation for regulating the intricate interactions between
unions, companies, and employees is labor law. Labor law protects workers'
rights and upholds fair working practices by addressing important issues such as
workplace security, labor-management relations, and employment requirements. The
contrast between individuals and collective labor law emphasizes how
all-encompassing these laws are, including both individual worker rights and
more extensive union activity.
Labor rules have historically changed dramatically between states. The Manu
norms of Asia and the European medieval guilds are the origins of labor
regulations. An important turning point was the industrial revolution of the
eighteenth century, which made legislation necessary to combat worker
exploitation and advance social fairness. Throughout the 20th century, labor
laws continued to be developed and gained widespread recognition as an essential
part of the contemporary industrial society.
The first labor regulations were created in India during the British colonial
era to protect the interests of manufacturers and employers. Significant changes
were implemented throughout time, such as the Factories Act of 1883 and other
laws that were passed after World War I. Modern labor laws were largely shaped
by the Indian labor movement and powerful organizations like the International
Labour Conference and the Indian Labour Conference. The contemporary legal
environment has also been greatly influenced by national commissions and
judicial rulings.
Modernizing and streamlining labor laws is the goal of recent initiatives in
India, including the Code on Wages, Code on Industrial Relations, and Code on
Social Security. These regulations guarantee that workers obtain fair
compensation, stable jobs, and necessary social security benefits.
They also incorporate new requirements and combine current laws.
In general, fair labor practices, the protection of worker rights, and the
development of positive workplace relationships are all supported by labor
legislation. As the political, social, and economic environments change, it
keeps developing to make sure that everyone's rights and obligations at work are
respected.
Conclusion
Labour law was developed as a result of workers' struggles for their justly
deserved rights and lives throughout the world. They engaged in disputes to
defend themselves and improve their living conditions. The field of labour law
is dynamic and has a unique place in the legal profession. It has specific
components aimed towards employees.
In some ways, India's labour laws resemble those of advanced industrial
societies. Many laws govern social security, workplace health and safety, and
other issues, such as minimum employment standards. However, only a small
portion of India's workforce is formally.
covered by the nation's labour laws, and even among that group, the actual
application of the law is very limited. The consolidation of multiple labour
laws is a significant step towards making compliance easier. Because of the
rationalisation of definitions and the expansion of coverage to include the
unorganised sector, the benefits of the law will be available to a larger
workforce.
Even though it took decades, the change should pave the way for more significant
ones in the years ahead, improving India's ease of doing business, creating
jobs, and influencing the country's future industrial relations.
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