· Hello everyone!

Today, we will explore the fascinating journey of labor law in India and how
it has evolved over time to protect the rights of workers.

· MUGHAL ERA The history of labour not only seen in colonial period but could also be traced
back before colonial India.

· The information obtained from European traders, missionaries, and travellers allows us to
identify the main types of labour that were practiced in India throughout the latter half of
the 16th and beginning of the 17th centuries.

· Money wages were prevalent in towns for skilled and unskilled labour and domestic service
due to the widespread scale of money-use1.

· Thus, it may be said that cash wages were generally the norm in imperial and aristocratic
structures as well as Indian towns and markets in the seventeenth century.

· Imperial households and nobles employed domestic servants, cavalrymen, and clerks on
monthly pay.

· Peasant labour was semi-commodified, while artisans like weavers, ironsmiths, carpenters,
and oil-pressers worked at home and sold their products at fairs or markets.

· They were both self-employed and employers.

· The domestic service sector in Mughal India was vast, with both aristocracy and middle-class
groups employing numerous servants.

· Brief- Indian labour law and industrial relations have evolved over six main periods. The
earliest regulation aimed to secure labour supply and control, including English law's
Masters and Servants provisions. Between the 1880s and the 1930s, factory-type
regulations provided basic protection. This legislation reflected an accommodation between
British industry's interests and Indian social reformers' efforts to improve working conditions
in Indian factories.

· The second period (1937-47) was more creative, beginning with the emergence of
"Provincial Autonomy" in the 1930s, the Indian Congress Party's focus on workers' rights,
and the extension of workplace regulation.

· The third period began with critical post-Independence legislation in the late 1940s and
early 1950s. Some argue that significant progress in labour legislation occurred in the
immediate post-World War I period, with the influence of International Labour Organisation
conventions and the Royal Commission on Labor in the 1920s.
· PRE 1923- During early industrialization, colonial authorities focused on penal provisions to
secure labor supply and discipline for emerging industries, neglecting work organization.

· Early British regulation focused on government service workers and forced labor, with the
Workmen's Breach of Contract Act 1859 imposing fines and specific performance orders.

· Labour organization was influenced by family, land, and cultural regulations, with complex
relationships between Masters and Servants laws, penal provisions, and employment
contracts rooted in earlier customs.

· From the 1880s, the colonial government implemented legislative interventions on

· The period of industrial and political transformation was influenced by a strong nationalist
movement, rapid trade union development, and Communist influence in the labour
movement following the 1917 Bolshevik revolution.

· The International Labour Organization, established simultaneously, began to significantly

· The legislation during this period continued pre-war factory-style regulation, addressing
work hours, rest periods, female and child protections, health and safety, and responding to
International Labour Organization conventions ratified by the colonial Indian government.

· 1923-1947 The Trade Unions Act 1926 and the Trade Disputes Act 1929, enacted during this
period, marked the emergence of a modern approach to industrial relations regulation,
formally underpinning India's collective labour law system.

· The Trade Unions Act 1926 allowed trade unions to register, granted legal status, and
provided protections against civil and criminal liability in industrial disputes. However, it was
limited and did not support a collective bargaining system. The Trade Disputes Act 1929
limited strike rights and required conciliation or court referrals, but their outcomes were not
binding. Both legislation were criticized by trade unions.

· During the world economic depression, the All India Trade Union Congress played a
significant role in agitating for Indian independence. Mass dismissals and strikes increased
during 1928 and 1929. The British government established the Royal Commission on Labour
in India, but the Indian labour movement boycotted it due to the British Imperialist
government's repressive legislation and lack of legitimacy.
· In 1931, the Royal Commission's Report influenced Indian labour law through new
legislation between 1933 and 1939. Most of these laws were protective regulations for
factories and mines, focusing on wages, hours of work, and compensation. However, the
Payment of Wages Act 1936 allowed employers to deduct wages of absent employees
without reasonable cause, and the Trade Disputes (Amendment) Act 1938 allowed
provincial governments to appoint conciliation officers.

· The 1935 Government of India Act increased provincial autonomy, leading to popular
expectation of more labor or union-friendly policies, resulting in concentrated periods of
extensive strike action.

· Before the 1935 Act, provincial governments had experimented with labour law,
contributing to improved working conditions. However, the Trade Disputes (Conciliation) Act
1934 by Bombay was introduced to address collective labor relations and prevent
communist influence among the labour movement. The Act appointed a Labour Officer to
represent workers' interests in cotton mills, but its main goal was to prevent a decline in
Bombay-based textile industries and a major strike earlier that year.

· After the 1935 Government of India Act, provincial governments in India introduced more
adventurous legislation, such as the Industrial Disputes Act 1938. This introduced legal
obligations for employers to recognize trade unions. However, these measures were largely
limited and did not receive general approval from the Indian trade union movement. The All
India Trade Union Congress criticized the 1938 Bombay Bill as reactionary and harmful to
workers' interests. Consequently, expectations from the popular election of provincial
governments remained unfulfilled.

· 1947-1991- During World War II, industrial unrest and strike action led to the creation of
legislation to secure labor cooperation. The Bombay Industrial Disputes Act, passed in 1941,
granted the Bombay government the power to refer disputes to arbitration by an Industrial
Court. This restrictive legislation was continued after the war in the Bombay Industrial
Relations Act 1946. Other relevant legislation included the Essential Services Act 1941 and
the Defence of India Rules, which laid down restrictions against strikes and other industrial
actions, including employer action. These provisions were continued after the war as part of
the Industrial Disputes Act 1947 and remain a core part of industrial disputes and bargaining
legislation.

· The Trade Disputes Act 1929, its successor, and earlier provisions like the Bombay Act of
1934 were designed to enable government agencies to investigate industrial disputes and
settle them. However, these legislations were primarily focused on labor control rather than
settlement issues. Indian governments controlled the adjudication of disputes, industries,
 and unions, excluding various types of workers. The Industrial Disputes Act 1947 limited
workers' freedom of industrial action and restricted their options. Collective bargaining
developed without state support and mainly evolved in formal sectors of the economy,
largely confined to public and large corporations.

· Most scholars have noted that the path taken in the evolution of labour law in India in the
post-1945 period basically followed the pattern established earlier in the restrictive policies
of the colonial government and in particular the legislation of the war years.54 Only in a few
states were there exceptions made to the overall discretionary power of government to
refer or not to refer disputes for adjudication, and in only a few states did laws emerge
which created some sort of obligation upon employers to recognize trade unions.

· One such provision was the Bombay Industrial Relations Act 1946 which, building upon the
earlier (and much criticized) attempts in the Bombay Industrial Disputes Act 1938,
distinguished several types of union, and extended to some of those unions the right to
represent workers in particular industries and areas. This is a common theme in Indian
labour law, with obvious implications for the legitimacy of the labour law system as a whole.

· In the immediate post-war period it was agreed that the Indian central government would
be primarily responsible for labour legislation, and the promotion of labour's interests,
reflecting a five-year plan of development "dealing with all phases of the worker's life, of
housing, welfare, work, better working conditions, and fair wages.

· When it came to the regulation of collective labour relations in particular, the restrictive
policies of government control which had characterized the colonial and immediate post-
war period continued to hold sway.

· The laws regulating trade unions and industrial disputes remained largely fixed on the model
set by the legislation introduced over the period from 1926 to 1947,61 and this in turn had
certain implications for the Indian industrial relations system.

· While trade union organization was legally sanctioned, collective bargaining (at least
nominally) "recognized,"62 and strikes and lockouts to a degree legalized and regulated, the
level of state intervention in the actual industrial relations process, and the emphasis given
to the maintenance of "industrial peace"63 effectively circumscribed the possibility that
collective bargaining might develop as the primary form of industrial relations in India:64 in
effect "[c]ollective bargaining was held to be incompatible with economic planning.

· "65 Overall, the law on bargaining has changed little since these formative days, although in
an important amendment to the Trade Union Act in 2001 it was provided that trade unions
were required to have at least 100 members or to represent at least 10% of the workforce in
 order to secure registration under the Act, thereby making the formation and legalization of
unions far more onerous than had previously been the case.66 As noted earlier, some states
did move to provide unions with a right to recognition, and some

· subsequent legislation made the refusal to bargain on the part of an employer an "unfair
labour practice," more or less making the duty to bargain legally obligatory.

· Whilst on the face of it this provision might seem to have amounted to a major
breakthrough in collective bargaining law in India, it does not appear to be regarded as
particularly important by Indian labour law scholars,69 perhaps principally because it has
had little impact in practice.

· On the other hand, Indian labour law continued to develop in a second dimension; that is, in
respect of the relations between the employer and the individual worker.

· The first concerns the continued regulation for protective labour standards which took place
at both central and state levels.73 We have already noted the continuation of this pattern in
the post-World War II period, and, as Sundar has pointed out,74 the ongoing regulation for
minimum wages, equal pay, social security and insurance, maternity benefits, health and
safety, leave and holidays, housing, and so on, occupied much of the regulatory space which
was taken up in the contents of collective agreements in industrialized Western countries.

· However, pursuant to amendments to the Industrial Disputes Act in 1953, 1976, and 1982,
the central government began gradually to introduce important new regulations pertaining
to retrenchments, lay-offs, and plant and industry closures.

· was introduced by the central government in 1970 which strictly limited and regulated the
use of contract and agency labour.82 Further, the Industrial Disputes (Amendment) Act of
1982, in addition to declaring certain collective behaviours by both employers and unions to
be "unfair labour practices," declared certain hiring practices, such as the continuing
employment of workers on casual or temporary contracts with "the object of depriving
them of the status and privileges of permanent workmen," also to be unfair.83 Overall, then,
the post-Independence period was, at least at the level of the individual worker in the
regulated sector, clearly a period of important consolidation in employment protection.

· post-war evolution in Indian labour law, Indian governments were concerned principally
with the construction and maintenance of a "floor of rights" for certain classes of labour,
and at the same time restricting the industrial, if not the political, development of collective
labour influence.

· 1991- present- The Indian labour law system is perceived as overly restrictive, with over 150
 separate laws governing the labor market and workforce. This has led to agitation for
governments to reduce regulations, particularly those affecting flexible arrangements and
minimum wage payments. However, the labour movement generally resists this reform.
There are doubts about the accuracy of the connection between Indian labour law and the
perceived "inflexibility" of the labour market. The paper aims to investigate whether labour
law in India has undergone modification in response to liberalization and what form that
change might have taken.

· The Indian government's response to the late 1980s economic crisis led to the adoption of a
readjustment package by the World Bank and the International Monetary Fund, which
required steps to liberalize the economy. The "New Industrial Policy" aimed to reduce the
number of industry sectors under state control, abolish government approval for new
investment, and wind back the public sector. Unprofitable state industries were to be closed
down, and a more flexible licensing system for new businesses was introduced. Workers
were to be disciplined by the market rather than state control. Subsequent governments
have continued to support these policies, but the extent of their success remains unclear.
The main reason for caution is linked to the political and legal strategies adopted in the slow
liberalization process, which have been pursued through a "less direct" and more piecemeal
approach.

· The slow liberalization process in India has led to caution in labour reform policies, which
are typically pursued through a less direct, piecemeal approach. This is due to political and
labor alliances across different parties, which can block major reforms. Despite membership
decline, the political influence of the union movement remains critical.

· India's labour law liberalization has been a gradual process, with significant movements
occurring at the state government level. This is due to competition between states for
investment, which has led to legal changes on a state by state basis, avoiding the need for a
national reform. State governments often provide assurances to investors that certain
inconvenient labour standards will not be enforced, which helps to attract investment. State
reforms may also act as models for changes in other states or provide leadership for reform
at the central government level. However, many bolder reform proposals have failed to pass
into law, such as changes to minimum wage laws and flexible "hire and fire" laws in Special
Economic Zones.

· The liberalization process in Indian labour laws has led to the relaxation of laws against night
employment, greater ease in shift working, and greater freedom for contract labour. The use
of contract labour and subcontracting of non-core activities increased substantially during
the 1990s, though this increase was more pronounced in some states. Despite the general
laxity of enforcement in labour law, laws on retrenchment continue to be comparatively
 strictly implemented. Other minor changes include the minimization of workplace
inspections and technical changes to workplace administration and record keeping. While
India's job security laws remain fairly stable for regular contracts, the system is now more
flexible in relation to temporary and fixed-term contracts. However, the liberalization
process has produced modest outcomes at best. An OECD study examined eight sets of
regulatory variables across 21 Indian states, finding that the largest number of reforms
related to contract labour, but only in about half of the subject areas pertaining to this form
of employment. Areas of regulation showing little change across the 21 states included
collective lay-offs, working hours regulation, union recognition, and reductions in
inspections.

· END