A

Assignment on

“Codification of Labour Laws”

Submitted towards the partial fulfillment of grading for 4th year BBA-LLB (Hons.)

Labour Law Assignment

Topic: Codification of Labour Laws

Submitted To: Submitted by:,

Dr. Vir Vikram Bahadur Singh Sir, Priya Sharma
Assistant Professor, ILS19119
ICFAI Law School, BBA-LLB(Hons.)
ICFAI University, Jaipur 2019 – 2024
4th year

1
Introduction:
The Labour are considered as the power of nation as the material prosperity of a
country depends on the progress of its agriculture, industry and trade. A long
back ago Labour was a vital part of nation and were raising their demands to
being provided with better conditions like the right to organize. Simultaneously
employers also raising demand to restrict the powers of workers and to keep
Labour costs low due to which Labour Laws were enacted. Now at this time
there was a very wide and voluminous array of Labour laws, also a number of
conventional Labour law texts and commentaries which are descriptive of the
Labour laws and institutions.1 But a search of English language sources on India
Labour law reveals little by way of what might be regarded as a unified
historical account of its evolution covering both central and provincial sources,
and its relation to its political, social, and economic contexts. 2 And, strangely
for a country whose Constitution guarantees certain Labour rights and whose
laws include upwards of 150 separate pieces of Labour legislation arising from
central and state government authorities, there is no specialist Labour law
journal3 promoting scholarly engagement in the field, notwithstanding the law’s
obvious relevance in political and industrial terms.4 The Indian system of
Labour laws is very extensive and dauntingly complex. In particular in this
paper, we intend to examine the evolution of Indian Labour law with the
important time periods through which the law has progressed since the earliest
19th century.

Evolution of Labour Laws5:

For the purposes of present discussion we propose to examine the evolution of
Labour law in India, and the regulatory policy associated with it, across six
main periods.6

a) Pre-1920s
In the early period of industrialization and the gradual shift of Labour from
rural areas to cities, there was little attention paid to the organization of work

1
Leading Labour law texts include: Kothari & Kothari (1987); Malik (2011); Mishra (2011).
2
Saini (1995a)
3
The Labour Law Journal of India
4
According to at least one authority “Labor relations in India is defined by law”: DeSousa (1999).
5
See generally Vaid (1965), Chapters 3 and 5, and in particular, Mishra (1992), pp. 13–18
6
The evolution of Indian Labour policy is presented by Sundar (2005).

2
 by the colonial authorities beyond various penal provisions aimed at securing
Labour supply and discipline for emerging industries. 7 In this early
legislation, the Workmen’s Breach of Contract Act 1859 was of pronounced
importance, imposing not merely fines for breaches of employment
contracts, but also allowing for orders of specific performance of the service
contract.8 These provisions were long standing and extensively used in
Labour discipline.9 It is important to note further that at the same time
Labour organization was also substantially a matter of family, land, and
cultural regulation,10 and the relationship of the Masters and Servants laws
and other penal provisions, and the idea of the “contract” of employment,
with the traditional patterns of regulation grounded in these earlier customs
and forms, were complex to say the least. 11 However, from the 1880s
onwards there was a succession of legislative interventions by the colonial
government.12 Much of this legislation was the result of various government-
initiated enquiries.13 However, the legislation made only very slight inroads
into working practices in these industries, and was of limited impact insofar
as it applied only selectively.14

b) Post-World War I and the 1920s:

There was some disagreement and several factors had combined to alter the
industrial and political landscape, including the emergence of a strong
nationalist movement, the rapid development of trade unions (most
importantly the formation of the All India Trade Union Congress in 1920),
and the emergence of Communist influence in the Labour movement
7
Anderson (2004), supra note 10, pp. 424–5
8
Ibid., pp. 431–3.
9
The Act was not repealed until 1925, along with corresponding provisions of the Penal Code 1860: see
Anderson (2004), supra note 10, p. 448.
10
For a detailed study of one Indian region see Scoville et al. (1991).
11
Anderson (1993), supra note 10; Harriss-White (2003).
12
These include the Factories Acts of 1881, 1891, and 1911: DeSousa
13
See Das (1930).
14
The Factories Act of 1881

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 following the successful Bolshevik revolution in Russia in 1917.15 At the
same time, the newly created International Labour Organization began to
have an influence on Labour policy in India.16 Typical protective legislation
of the period includes the Factories Act 1922, the Mines Act 1922, and the
Workmen’s Compensation Act 1923, much of it responding to the
ratification of various relevant International Labour Organization
conventions by the colonial Indian government.17 However, even if this body
of legislation is correctly characterized as “unimportant,”18 two further
enactments in this riod point to what has been described as the emergence of
a more modern approach to the regulation of industrial relations: the Trade
Unions Act 1926 and the Trade Disputes Act 1929 19 which formally
continues to underpin the collective Labour law system of present day India.
The Trade Unions Act 1926 provided for the registration of trade unions
gave unions a legal status, and extended some protections against civil and
criminal liability in the course of industrial disputes. The Act was limited in
certain respects (for example unregistered unions were excluded from the
Act’s protections), and the legislation provided no support for a collective
bargaining system as such, insofar as there was no obligation upon
employers to bargain with unions in the course of an industrial dispute, nor
was there any legal obligation to bargain in good faith, which were strongly
criticized by the trade union movement, including the All India Trade Union
Congress.20

c) The 1930s:
In the context of world economic depression and the associated rise in
15
Ajad, supra note 14, pp. 33–8; Candland, supra note 11, pp. 18–19; Bhattacharya (2007).
16
See in particular Menon, supra note 12, p. 555.
17
Amjad, supra note 14, pp. 33–47; DeSousa, supra note 6, pp. 79–81. The Workmen’s Compensation Act was
renamed the Employee’s Compensation Act in 2010
18
See supra note 12, and associated text
19
Amjad, supra note 14, Chapter 4.
20
Ibid., pp. 36–9.

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 employment, there was also in this period continued agitation for Indian
independence in which the All India Trade Union Congress was playing a
major role.21 Mass dismissals were accompanied by a renewed wave of
strikes, especially as the economic depression took hold through 1928 and
1929. Against this background, the British government established the Royal
Commission on Labour in India on 4 July 1929. In 1931, still a period of
continued job cuts, wage reductions, and ongoing industrial unrest and strike
action. But during the 1930s, two major factors began to put some further
shape on Indian Labour law. First, many of the outcomes of the Report of the
Royal Commission made their way into a string of new Labour legislation
between 1933 and 1939. Menon estimates that of 24 pieces of Labour
legislation introduced by central and provincial governments between 1932
and 1937, arose from the Royal Commission’s recommendations. 22 Virtually
this new law was in the nature of protective factory and mines regulation to
do with wages, hours of work, and compensation of one sort or another,
similar to earlier periods.
Second, and potentially more important, were the developments which
followed from the Government of India Act 1935. The heightened profile
given to provincial autonomy23 made possible under these new constitutional
arrangements gave rise to popular expectation that more “Labour”- or
“union”-friendly policies would emerge at the provincial government level, 24
and this in turn gave rise to further concentrated periods of extensive strike
action.25 However, more adventurous legislation followed after the election
of ore popular provincial governments in the wake of the Government of

21
Ibid., pp. 36–40. The British colonial government favoured the less nationalistic Indian Federation of Labour:
see Sen (1994).
22
Mnon, supra note 12, p. 557
23
Te oyal Commission on Labour had “recommended that legislative authority should remain with the
central Government, though the states could also be given jurisdiction provided that no legislation was
undertaken by the states without the previous concurrence of the central government and that such legislation
did not impair or infringe the central Government’s legislation”
24
Amjad, supra note 14, pp. 49–50.
25
Ibd.

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 India Act 1935. The introduction of the Industrial Disputes Act 1938 by the
Bombay provincial government, for example, among other things made
some move towards the imposition of a legal obligation on the part of
employers to recognize trade unions.26 Again, it is necessary to note,
however, that these were largely limited measures which were not greeted
with general approval by the Indian trade union movement. The All India
Trade Union Congress described the 1938 Bombay Bill as “uncalled for,
reactionary, prejudicial and harmful to the interest of the workers and
‘calculated to create slave unions’.”27

d) World War II and the Pre-Independence Period:

Regulation in the World War II period appears against the background of
considerable industrial unrest and strike action against the conditions and
effects of the war itself. These circumstances brought into being several
pieces of legislation (at central and state level) designed to secure Labour co-
operation in support of the war effort. This legislation included passage in
941 of s. 49A of the Bombay Industrial Disputes Act, granting power tohe
Bombay government to refer industrial disputes to compulsory arbitration by
an Industrial Court, and banning all strikes and lockouts prior to arbitration.
Other relevant legislation included the Central Government’s Essential
Services Act 1941, and the Defence of India Rules (Rule 81-A, introduced in
1942, and Rule 56-A, introduced in 1943). Each of these sets of provisions 28
laid down severe restrictions against strikes, and other forms of industrial
action, in the urse of industrial disputes, including industrial action on the art
of employers in some cases. General and political strikes were also
targeted.29 To greater or leser extent, the Trade Disputes Act 1929, its

26
Amjad, supra note 14, pp. 50–52
27
Ibid., p. 52
28
Forbrief accounts see ibid., pp. 54–7.
29
See Johri (2002), paras. 626–52.

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 successor the Trade Disputes Act 1947, and earlier provisions such as the
Bombay Act of 194, were essentially designed to enable government
agencies to investigate industrial disputes over relevant terms and conditions
of employment, and to settle them in appropriate cases. 30 But generally the
terms of this legislation were historically directed more towards the control
of Labour than towards the settlement issue. While strikes and lockouts were
strictly controlled, Indian governments, at both central and state levels,
exercised strong controls over the circumstances in which disputes might be
referred to adjudication, the industries to which the legislation applied, and
which unions might be permitted to notify such disputes. 31 The overall
impact of this was, then, one of limitation and exclusion. 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.32 At the same time, however, there was a
continued strengthening of the protective egulation applying to an individual
worker’s rights during this period. Examples is the Industrial Employment
(Standing Orders) Act 196, he Factories Act 1948 and the Minimum Wage
Act 1948. Much of this body of regulation, as we have noted also in the case
of the Industrial Disputes Act 1947, was limited in its application because it
was applied only selectively to certain kinds of business establishment. This
is a common theme in Indian Labour law, with obvious implications for the
legitimacy of the Labour law system as a whole.33

e) Pst-Independence, 1948 Onwards:

In the immediate post-war period it was agreed that the Indian central

30
Se the discussion in Section 3 of this paper, around notes 203–217
31
Amjad, supra note 14, pp. 58–61.
32
See, for example, Sundar, supra note 15, p. 920; Gopalakrishnan & Tortell, supra note 52, p. 537.
33
Sankaran, supra note 14.

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 Government would be primarily responsible for Labour legislation, and the
promotion of Labour 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.” 34 Many of these social values
were articulated in the Constitution of India 1950, particularly its
commitment to economic, political, and social justice in the Preamble, and
its general egalitarian conception of national development.35 Consistent with
this Socio/political outlook, the Factories Act 1948, the Minimum Wages
Act 1948, the Dock Workers (Regulation of Employment) Act 1948, the
Employees’ State Insurance Act 1948 and the Plantations Labour Act 1951
enacted which sought to regulate conditions of work are introduced to
provide welfare measures for India’s high-employment industries in tea and
rubber plantations, and the Employees’ Provident Fund and Miscellaneous
Provisions Act 1952. As various authorities have noted, the major influence
on the formation of post-independence Labour and economic policy was the
priority given to government-directed “nation-building” in which the need
for trade union co-operation in securing industrial peace and Labour support
for industrialization and economic development was paramount.36
Consequently, 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 1947,37 and this in turn had certain implications for
the Indian industrial relations system. While trade union organization was
legally sanctioned, collective bargaining “recognized,”38 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

34
35
Se Bhattacharya, supra note 26, pp. 117–18; and Chibber (2005), p. 40.
36
Thakur (2008), p. 8; Sundar, supra note 15, pp. 920–21
37
See Sundar, supra note 15, p. 922.
38
At last to the extent that a “settlement” arrived at through a direct bargaining process was recognized pursant
to a 1956 amendment to the Industrial Disputes Act 1947

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 maintenance of “industrial peace”39 effectively circumscribed the possibility
that collective bargaining might develop as the primary form of industrial
relations in India:40 in effect “collective bargaining was held to be
incompatible with economic planning.”41 Overall, the law on bargaining has
little changed in 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. 42 In 1982,
the Indian central government amended the Industrial Disputes Act of 1947,
introducing the concept of “unfair Labour practice” into national Labour
law.43 This legislation outlawed various practices by employers, unions, and
workers designed to disrupt the legitimate processes of dispute settlement
under the Act.
In the mid-1990s, the proportion of Indian workers covered by collective
bargaining agreements was estimated to be lower than 5%. 44 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.
Here we can identify two main categories of intervention. The first concerns
the continued regulation for protective Labour standards which took place at
both central and state levels.45 The second area of development concerns
employment security. Originally the termination of, or dismissal from,
employment was not an appropriate subject of an individual “industrial
dispute” pursuant to the Industrial Disputes Act 197, and there was thus little
limitation on the employer’s right to fire an employee as it saw fit, 46 other
than are requirement that appropriate notice be given.47 However, pursuant to

39
Thakur, supra note 59, p. 35; Visweswaraiah (1990), p. 3. See generally Bhattacharya, supra note 26, pp. 118–
40
Johri, supra note 46, paras. 574–8; Sankaran, supra note 14, pp. 238–9.
41
Sundar, supra note 15, p. 921.
42
Trade Unions (Amendment) Act 2001 (Act 31 of 2001)
43
Industrial Disputes (Amendment) Act 1982.
44
International Labour Organization (2000).
45
See generally Menon, supra note 12.
46
Amjad, supra note 14, pp. 98–9
47
Notice was required under the Industrial Employment (Standing Orders) Act 1946

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 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.
Other legislation introduced in the 1970s and into the 1980s consolidated
this evolving protective framework of laws for employees engaged in the
regulated (formal)48 sectors of the economy. Aside from further
strengthening the law on dismissal, major legislation was introduced by the
central government in 1970 which strictly limited and regulated the use of
contract and agency Labour.49 Further, the Industrial Disputes (Amendment)
Act of 1982, in addition to declaring certain collective behaviors 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. 50 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. Not only the Central government, but also several of
the state governments, played an important role in this development.51

The Struggle for Liberalization: Post-199052:

Whatever might be said with accuracy about the protective qualities of the
Indian Labour law system, it is certainly the case that there is a widespread
perception that the Indian Labour market has placed severe restrictions on
the capacity of the Indian economy to develop, particularly in the context of
economic globalization.53 As noted earlier, India has well in excess of 150

48
See supra note 53 and infra note 187 and associated discussion.
49
The Contract Labour (Regulation and Abolition) Act 1970.
50
The Industrial Relations Act 1947, Fifth Schedule.
51
See Johri, supra note 46, aras. 197–8; in relation to unfair practices.
52
See generally Ratnam, supra note 70
53
See generally Sankaran, supra note 14, pp. 241–4

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 separate laws54 governing the Labour market and the workforce, many of
which overlap, deviate from central principles, or are perceived to be simply
out of date.55 his perception of “overregulation”56 has given ise to agitation
from many sources57 for the various Indian governments to roll back their
regulation of Labour and workplaces, particularly those laws which impact
upon the capacity of enterprises to hire and fire more easily, and to engage
Labour on more flexible arrangements,58 and those requiring the payment of
minimum wages.59 At the same time, this pressure for reform has been
strongly resisted by the Labour movement generally.60 Certainly there are
legitimate doubts raised in the literature on the accuracy of the supposed
connection between Indian Labour law and the perceived “inflexibility” of
the Indian Labour market. The immediate catalyst for action in Labour
market reform in India is grounded in the state of economic crisis which
confronted the country in the late 1980s. It is important to note that the
government ws obliged to accept a readjustment package proposed by the
World Bank and the International Monetary Fund which required certain
steps to be taken to liberalize the economy.61 A shift to a less regulated
Labour market, particularly in relation to the tight controls exercised (at least
in the organized sector) over dismissals and redundancies and the use of
contract Labour, was inevitably part of this policy. 62Consequent neoliberal
reform measures, according to on account, save included policies to “weaken
union power, outlaw strikes, individualize Labour relations, privatize public
enterprises, dilute Labour laws, freedom to hire and fire and close
undertakings, removal of prohibition of contract Labour , freedom to

54
Estimates vary; compare Sundar supra note 55, p. 5; Leelavathi (2005)
55
Sundar, supra note 55, p. 5.
56
Ahsan et al., supra note 88, p. 248; Papola & Pais, supra note 89, p. 196
57
See Sankaran, supra note 14, p. 242.
58
Ahsan et al., supra note 88, pp. 264–73.
59
For details on the kind of reforms under consideration over the past two decades see Leelavathi, supra note89.
60
Sankaran, supra note 14, p. 242; Johri, supra note 46, paras. 64–6
61
Candland, supra note 11, pp. 99–100; Jenkins, supra note 87.
62
Jenkins, supra note 87; Papola & Pais, supra note 89.

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 introduce technical changes, repeal of legal provisions relating to bonus and
so on.”63 But nevertheless, there is considerable caution, if not to say
scepticism, over how much progress has been made in following these
policies through.64 The main reason for caution seems to be linked with both
the political and legal strategies being adopted in the slow liberalization
process. Although there have been some Labour policy initiatives at the
central government level,65 including, for example, various proposals and
Bills for the protection of workers in the unorganized sector, 66 the most
important and ongoing movements towards liberalization in Labour law have
taken place at the state government level. In general terms, the liberalization
process in the Labour laws of the Indian states has included the relaxation of
laws against the employment of women at night, greater ease in shift
working, and greater freedom for the use of contract Labour 67. According to
one source, the use of contract Labour, and the subcontracting of non-core
activities to other firms, increased substantially during the 1990s, though this
increase was more pronounced in some states than others. 68 On the other
hand, despite the general laxity of enforcement in Labour law, the laws on
retrenchment continue to be comparatively strictly implemented.69 Other
minor changes include matters such as the minimization of workplace
inspections and technical changes to the administration of workplaces and
keeping of records required under various pieces of factory legislation and so
on.70 Standard fixed-term contracts are allowed for white-collar workers as

63
Sundar, supra note 15.
64
See, for example, the observations by Ahsan et al., supra note 88, pp. 247–50.
65
The central government introduced the concept of Special Economic Zones as part of its Export-Import Policy
1997–2002.
66
Prasad, supra note 92, pp. 49–50.
67
For example, as of January 2005, the State of Maharashtra had extended more than 500 exemptions undr its
Shops and Commercial Establishments Act, which facilitated greater flexibility in software, information
technology, and Biotechnology businesses in relation to working days and hours, and the employment of
women at night: see Sundar (2009)..
68
Ahsan et al., supra note 88, p. 261.
69
Ibid.
70
Sundar, supra note 15, p. 931; Prasad, supra note 92, pp. 50–2.

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 well as, in principle, for regular workers.” 71 However, despite these shifts in
Labour law at the state level, it remains the case that the liberalization
process has produced modest outcomes at best. An Organization for
Economic Cooperation and Development (OECD) study reported by
Dougherty examined eight sets of regulatory variables (totalling 50 separate
subject areas) for potential reform lightening the regulatory burden upon
businesses across 21 Indian states
Recently in 2018 as there were over 100 state and 40 central laws regulating
various aspects of Labour such as resolution of industrial disputes, working
conditions, social security and wages72 which make the existing legislation to
be complex, with archaic provisions and inconsistent definitions73. The
Second National Commission on Labour (2002) (NCL) to improve ease of
compliance and ensure uniformity in Labour laws, recommended the
consolidation of central Labour laws into broader groups such as (i)
industrial relations, (ii) wages, (iii) social security, (iv) safety, and (v)
welfare an working conditions (Labour Codes, 2020).

Object of the Labour Codes 2020:

The Second National Commission of Labour had submitted its report in 2002
which said that there was multiplicity of Labour Laws in India and therefore,
recommended that at the Central level multiple Labour Laws should be codified
in 4 or Labour Codes. While discussions were held on it, however, no serious
initiative was taken in this direction during the time period from 2004 to 2014.
Labour Reforms also remained untouched during the economic reforms carried
out in 1991. The brainstorming on Labour Codes were fast tracked when the
GST, as One Nation One Tax, was made applicable in the country with

71
Dougherty (2009)
72
List of Central Labour Laws under Ministry of Labour and Employment
73
Report of the Natioal Commission on Labour, Ministry of Labour and Employment,
002, http://www.prsindia.org/uploads/media/1237548159/NLCII-report.pdf.  

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consensus and with the strong will of the Hon’ble Prime Minister Modi Ji to
take tough decisions for “Sabka Sath Sabka Vikas aur Sabka Vishwas”. By
taking forward this progressive thinking, the reforms in Labour Laws were also
speeded up. Extensive discussions were held before initiation of Labour
Reforms by Ministry of Labour and Employment. Initially, as a part of
Government's pre-legislative consultative policy, the Ministry uploaded all the
draft Labour Codes on its website for stakeholders and public consultation.
During 2015 to 2019, the Ministry organized 9 tripartite discussions in which all
the Central Trade Unions, Employers’ Associations and representatives of State
Governments were invited to give their opinions/suggestions on Labour
reforms. All the four Bills were also examined by the Parliamentary Standing
Committee which gave its recommendation to the Government.

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