Unit 3
Unit 3
Unit 3
Objectives
After going through this unit, you will be able to:
• explain the role of government in enacting a series of labour laws
• to discuss the fundamental rights and directive principles relating to industrial
jurisprudence
• highlight the role of ILO in promoting social justice and its impact on
industrial relations in India
Structure
3.1 Introduction
3.2 Constitutional Framework
3.3 Industrial Relations Statutes
3.4 Social Justice
3.5 Role of Law
3.6 Summary
3.7 Self-Assessment Questions
3.8 Check Your Progress
3.9 Further Readings
3.1 INTRODUCTION
The sweeping character of the transition from a simple agricultural set-up to a
complex urban industrial society has resulted in the emergence of labour problems
in our country. Since the work men had no bargaining capacity with the employers
regarding the terms and conditions of their employment, they worked on nominal
wages for long hours and under unhealthy conditions. The Government of India,
therefore, enacted a series of legislations to protect the working class from
exploitation and to bring about improvement in their working and living
conditions. The progress of labour legislation, after independence has been quite
remarkable. Spate of legislations like the Industrial Disputes Act, 1947, the
Minimum Wages Act, 1948, the Employees’ State Insurance Act, 1948, and the
Factories Act,1948,were enacted. The goals set in our country by the Constitution
have a bearing on industrial legislation and adjudication.
The Constitution of India has guaranteed some Fundamental Rights to the citizens
and has also laid down certain Directive Principles of State Policy for the
achievement of a social order based on justice, liberty, equality and fraternity.
The Constitution amply provides for the upliftment of labour by guaranteeing
certain fundamental rights to all. Article 14 lays down that the State shall not
deny to any person equality be fore the law or the equal protection of laws. There
shall be equality of opportunity to all citizens in matters relating to employment
or appointment to any office under the State. People have the right to form
associations or unions. Traffic in human beings and forced labour and the
employment of children in factories or mines or other hazardous work is
prohibited. The Directive Principles, though not enforceable by any court, are
nevertheless fundamental in the governance of the country, and it shall be the
duty of the State to apply those principles in making laws from time to time.
Labour is in the Concurrent List on which both the Centre as well as the States
have the power to make laws. Article254 has been enacted to clarify the position.
Normally, as laid down in clause(I), in case of any repugnancy between the Union
and the State legislation, the legislation of the Union shall prevail. To this, there
is one exception embodied under clause(II)of Article 254, where, a law enacted
by the State with respect to the matter enumerated in the Concurrent List, reserved
for the consideration of the President, has received his assent, such law shall
prevail in the State, and provisions of that law repugnant to the provision of an
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earlier law made by the Parliament or any existing law with respect to that matter Constitutional and Legal
Framework of Industrial
have priority over the Central legislation. Relations
Articles 39, 41, 42 and 43 have a special relevance in the field of industrial
legislation and adjudication. In fact, they are the substratum of industrial
jurisprudence.
Article 41 lays down that the State shall, within the limits of its economic capacity
and development, make effective provision for securing the right to work, to
education and to public assistance in cases of unemployment, oldage, sickness
and disablement, and in other cases of undeserved want.
Article 42 enjoins the State government to make provision for securing just and
humane conditions of work and for maternity relief.
Article 43-A makes it obligatory on the State to take steps by suitable legislation
or otherwise to secure the participation of workers in the management of
undertakings and industrial establishments. Though the Directive Principles are
not justiciable, they are the sheet-anchor of the legislation by the Centre and the
States in the field of welfare of the working class. Also, it is observed by the
National Commission on Labour in its report,” in accepting the Directive
Principles the country is committed morally and ethically to see that the
governance of the country is carried on with a view to implementing these
Directive Principles in course of time”(ChapterVI,p.48).
A brief discussion regarding the extent to which these provisions had been adopted
and enforced in our country will be in order:
The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 and
the Maternity Benefit Act,1961 are also social security measures to help fulfil
the objectives of Directive Principles of our Constitution. The Provident Fund
Scheme aimed at providing substantial security and timely monetary assistance
to industrial employees and their families. This scheme has provided protection
to employees and their dependants in case of old age, disablement, early death of
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Conceptual Framework of the bread-winner and in some other contingencies. A scheme of Family Pension-
Industrial Relations
cum-Life Assurance was introduced with a view to providing long-term recurring
financial benefit to the families in the event of the member’s premature death
while in service. The Employees’ Provident Fund Organisation is in charge of
three important schemes, viz., the Employees’ Provident Funds Scheme, the
Employees’ Family Pension Scheme, and the Employees’ Deposit Linked
Insurance Scheme.
The Maternity Benefit Scheme is primarily designed to provide full wages and
security of employment. They enable a female employee to get maternity leave
with full wages at least for six weeks before and six weeks after confinement.
The object of the Payment of Gratuity Act, 1972, is to provide a scheme for the
payment of gratuity to employees employed in factories, mines, oil fields,
plantations, ports, railways, shops and establishments. All employees who have
rendered a minimum of 5 years’ continuous service in the above mentioned
establishments are entitled to gratuity at the time of superannuation, retirement,
resignation, death or if they leave their job due to accident, disease or disablement.
Under the Act, employers are required to pay gratuity at the rate of 15 days’
wages for every completed year of service subject to a maximum of rupees ten
lakhs.
Besides social security benefits, efforts have also been made to provide ample
opportunities for employment and for workers’ education. The Apprenticeship
Act, 1961, was enacted to supplement the programme of institutional training by
on-the-job training and to regulate the training arrangement in industry. Under
this Act, it is a statutory obligation on all employers in the notified industries to
engage apprentices as per the ratio prescribed for the designated trades.
Employment exchanges play an important role for the job-seekers. The
Employment Exchanges (Compulsory Notification of Vacancies) Act, 1969, has
made it obligatory on the part of the employers to notify vacancies occurring in
their establishments to the prescribed employment exchanges before they are
filled. A voluntary workers’ education scheme was launched in our country in
1958 to educate the workers in trade union philosophy and methods, their rights
and duties, and so on. This scheme is administered through a tripartite semi-
autonomous body known as the Central Board for Workers’ Education.
Substantial steps have been taken to fulfil the object of Article 42 of the
Constitution. The Factories Act, 1948, provides for health, safety, welfare,
employment of young persons and women, hours of work for adults and children,
holidays and leave with wages. Labour welfare funds have been set-up to provide
welfare facilities to the workers employed in different mines such as coal, mica,
iron ore and limestone. The Contract Labour (Regulation and Abolition) Act of
1970, a piece of social legislation, provides for the abolition of contract labour
wherever possible and to regulate the conditions of contract labour in
establishments or employments where the abolition of contract labour system is
not considered feasible for the time being. The Act provides for licensing of
contractors and registration of establishments by the employer employing contract
labour.
Article 43 of the Constitution provides for a living wage. To provide social justice
to the unorganised labour and to prevent exploitation, the Minimum Wages Act,
1948, was enacted. It provides for the fixation of minimum rates of wages by the
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Central or State governments within a specified period for workers employed in Constitutional and Legal
Framework of Industrial
certain scheduled employments. These rates vary from state to state, area to area Relations
and from employment to employment. The minimum wage in any event must be
paid irrespective of the capacity of the industry to pay. Living wage is the higher
level of wage and naturally, it would include all amenities which a citizen living
in a modern civilised society is entitled to. Fair wage is something above the
minimum wage which may roughly be said to approximate to the need- based
minimum wage. It is a mean between the living wage and the minimum wage.
In Punjab National Bank Ltd. vs. Industrial Tribunal (1957-I LLJ. 455), it was
observed by the Supreme Court that social justice does not mean that reason and
fairness must always yield to the convenience of a party in an adjudication
proceeding.
It was held by the Supreme Court in the case of Rashtriya Mills Mazdoor Sangh
vs. Appollo Mills Ltd. (1960-II LLJ. 263), that social justice is not based on
contractual relations and is not to be enforced on the principles of contract of
service. It is something outside these principles, and is invoked to do justice
without a contract to back it.
The aims and objectives of ILO are set out in the preamble to its Constitution
and in the Declaration of Philadelphia (1944) which was formally annexed to
the Constitution in 1946. The Preamble affirms that universal and lasting peace
can be established only if it is based upon social justice. It draws attention to the
existence of conditions of labour involving injustice, hardship and privation of a
large number of people. Also, it declares that improvement of these conditions is
urgently required through such means as the regulation of hours of work;
prevention of unemployment; provision of an adequate living wage; protection
of workers against sickness, disease, and injury arising out of employment;
protection of children, young persons and women; protection of the interests of
migrant workers; recognition of the principle of freedom of association; and
organisation of vocational and technical education. Further, the Preamble states
that the failure of any nation to adopt human conditions of labour is an obstacle
in the way of other nations desiring to improve labour conditions in their own
countries.
The three main functions of the ILO are: (i) to establish international labour
standards: (ii) to collect and disseminate information on labour and industrial
conditions; and (iii) to provide technical assistance for carrying out programmes
of social and economic development. From the very beginning, the ILO has
been confronted with the tremendous task of promoting social justice by
improving the working and living conditions of labour in all parts of the world.
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Conceptual Framework of The ILO consists of three principal organs, namely, the International Labour
Industrial Relations
Conference, the Governing Body, and the International Labour Office. The work
of the Conference and the Governing Body is supplemented by that of Regional
Conferences, Regional Advisory Committees, and Industrial Committees. The
meetings of the General Conference, held normally every year, are attended by
four delegates from each member state, of whom two are government delegates
and one each representing respectively the employers and the work people of the
state.
The International Labour Conference is the supreme organ of the ILO and acts
as the legislative wing of the Organisation. The General Conference elect the
Governing Body, adopt the Organisation’s biennial programme and budget, adopt
international labour standards in the form of Conventions and Recommendations
and provide a forum for discussion of social and labour issues. The Governing
Body is the executive wing of the Organisation. It appoints the Director-General,
draws up the agenda of each session of the Conference and examines the
implementation of member countries of its Conventions and Recommendations.
The International Labour Office, whose headquarters are located at Geneva,
provides the secretariat for all conferences and other meetings and is responsible
for the day-to-day implementation of the administrative and other decisions of
the Conference, and the Governing Body. The Director-General is the chief
executive of the International Labour Office. An important aspect of its work
relates to the provision of assistance to member states. It also serves as a clearing
house of information on all labour matters.
In order to achieve its objective, the ILO has relied on its standard-setting function.
The international labour standards take the form of Conventions and
Recommendations. The general assembly of the ILO, which comprises
representatives of all the member countries, the trade unions and the employers’
organisations, have vowed to protect, promote, and realise the fundamental rights
of labour. These are known as the International Labour Standards (ILS). These
standards deal with the rights of human beings at work. There are certain basic
rights that workers all over the world are entitled to. These rights are an outcome
of the workers’ struggles over the ages. It is found that there are certain common
labour standards that apply to workers all over the world. These basic rights are
applicable to all the member countries of the ILO, irrespective of their levels of
economic development.
The labour standards of ILO can be classified into five categories. These are: (i)
freedom of association; (ii) effective recognition of the right to organise and
participate in collective bargaining; (iii) elimination of all forms of forced and
compulsory labour; (iv) effective elimination of child labour; and (v) elimination
of discrimination in respect of employment.
India has been one of the founder-members of the ILO and has been taking active
part in its deliberations. The ILO has influenced India and India has influenced
the ILO. The ILO has adopted 184 Conventions and 191 Recommendations till
December 2001. Out of 184 Conventions, India has ratified 36 Conventions.
Conventions ratified by India have been incorporated in the existing legislation.
Conventions not ratified by India have indirectly guided and shaped the Indian
labour legislation in far-reaching manner. The ILO standards have a decisive
impact on the factory, mines, social security and wage legislation in India. The
Conventions concerning basic human rights have considerable influence on Indian
law and practice. The Conventions have formed the sheet-anchor of Indian labour
legislation, especially after 1946, when the Indian National Government assumed
office at the Centre.
The ILO has greatly influenced the trade union movement and industrial relations
in our country. The AITUC owes its immediate origin to it. It is instrumental in
improving the lot of the working class in our country. India’s commitment to the
ILO is reflected in its adherence to the institution of tripartism as a novel method
for resolving labour-management conflicts. ILO and India have common aims,
common goals and common destiny, as both of them are committed to world
peace, freedom, and social justice. Both are striving for the socio-economic
betterment of the long suffering, and under-privileged people. In essence, there
is a close resemblance between the ILO Philadelphia Charter of 1944 and the
Fundamental Rights and the Directive Principles of State Policy under the Indian
Constitution. All these basic documents enshrine the principles of freedom,
individual dignity and social justice.
In India, while there has been a large degree of agreement on the need for reform,
areas for reform and nature of the reforms required in those areas, major
disagreement exists as to the part that the law should play in any scheme of
reforms. One view has been that any such reforms should not include any new
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Conceptual Framework of legislation. But majority view has always envisaged the introduction of some
Industrial Relations
new legislation and any legislative reform by definition involves the law.
There are basically two schools of thought concerning the role of the law in
industrial relations. On the one hand, there are those who believe that the law
should fulfil an abstentionist role; that is the substantive matters of industrial
relations should be regulated by the parties themselves free from legal constraint
or obligation. On the other hand, there is the view that the law should be a main
instrument of directing and controlling the system. If the system is acknowledged
to be in need of reform, then the law should be the instrument of that reform.
This view implies an extensive system of regulatory legislation directing the
parties in their activities and forcing changes wherever necessary.
The distinction between these two views does not lie in the presence or absence
of the law. All systems of industrial relations have a legal framework if they
operate within a legal system. The legal framework may take the form of
recognizing the development of certain institutions and remove any impediments
to their existence. The role of law in an industrial relations system may be
perceived by the extent to which it attempts to regulate relationships, the extent
to which it is obligatory rather than optional, and the attitudes of the parties to
the legal system.
3.6 SUMMARY
• It is gratifying to note that apart from the fundamental rights, our Constitution
embodies within itself, in Part IV, Directive Principles of State Policy.
• The functions and duties of the States as contained in the Directive Principles
have given rise to concept of social justice.
• The old idea of laissez faire has given place to a new idea of welfare state.
• The philosophy of social, economic, and political justice has been given a
place of pride in our Constitution, as well as in the aims and objectives of
ILO.
• The development and growth of industrial law presents a close analogy to
the development and growth of constitutional law.
• A series of labour enactments covering labour welfare and social security
were enacted for protecting and promoting the overall welfare of different
categories of working class.
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