Evolution of Labour Laws and Trade

Unionism in India

The History of Labour Laws in India dates back to Pre-Independence British Era as these
Labour and Industrial Laws were enacted by British Administration to protect interests of British
Employers and Industrialists.

The industrial development took place in the middle of the nineteenth century. After
industrial development, the first organization that came into being was that of the industrialists. The
owners of the industries formed an organization.

The industrialists organized themselves in order to protect and safeguard their interests; but
there was no organization for the protection of interests of the labour class. With further
industrialization, the exploitation of labour increased and a need for separate labour organization
was felt.

Stage I- Prior to the World War I

Though the origin of labour movements was traced to the 1860s, first labour agitation in the
history of India occurred in Bombay, 1875. It was organised under the leadership of S.S Bengalee. It
concentrated on the plight of workers, especially women and children.

• This led to the appointment of the first Factory commission, 1875. Consequently, the first
factories act was passed in 1881.

However, the efforts of Mr. Bengali did not bear much fruit and there was no substantial
improvement in the lot of Indian labour.

Narayan-Meghji Lokhande:
The Government of India promulgated the first Factory Act in 1881. In 1881, Mr Narayan-
Meghji Lokhande made renewed efforts for reform in the conditions of Indian labor. Mr Lokhande a
workman summoned a summit conference of workers engaged in mills in Bombay Presidency. In this
conference, the essential demands of labour were considered and a number of resolutions were
passed.

The major demand of this conference was that the workers should be granted a weekly holiday and
given half-an-hour rest every day. Besides, it was also insisted that workers suffering from
accidental injuries should be adequately compensated. The efforts of this conference bore some
healthy fruits. Some industrialists accepted some of the above demands.

As a consequence of success achieved by the conference, Mr Lokhande felt encouraged and he

established a trade union in Mumbai.

• He christened this organization Bombay Mill Hands Association 1890.

• He also helped in the publication of a labour magazine- “Deenbandhu”.
 Thus, Mr Lokhande stood by the working class and did a great deal to improve their lot. But after
the death of Mr Lokhande, the momentum of the, work being done by him was lost. Afterwards
railway employees organized themselves into a union.

After the Partition of Bengal 1905 and till 1909, a number of strikes on various issues were
organized. In 1908, an eminent national leader Shri Lokmanya Tilak was imprisoned for six years.

As a protest against this injustice a very big strike was organized. In this period, a number of trade
unions came into being. Like:-

• In 1897, the Amalgama Society of Railway Servants of India was established and registered
under the Companies Act.
• Printers’ Union Calcutta (1907),
• Postal Union (1907),
• Kamgar Hitwardhak Sabha (1909) and
• Social Service League (1910).

However, these organisations could not make the real start in the Labour Movement till World War
I.

Stage II: Between the Two World Wars:

The modern history of labor movement in India dates from the First World War. The World War I
(1914-19), the Russian Revolution (1917), Swaraj Movement and the establishment of
International Labour Organisation gave a new life to the labour movement and by the year 1920,
the trade union emerged on the Indian scene in almost all the sectors to safeguard the interests of
the working class.

• National leaders devoted particular attention to working classes. As a result of the efforts
made by Lokmanya Tilak, Annie Besant, and Gandhi, the working classes began to get
organized.
• Mahatma Gandhi along with Anasuya Sarabhai and Shankerlal Banker founded the
Ahmadabad textile labour association in 1918. He applied the theory of non-violence in
industrial relations.
1. This first union was started in Madras by the initiative of Mr. B.P. Wadia who established the
Madras Labour Union in 1918.
• Many other national leaders devoted particular attention to working classes. As a result of
the efforts made by Lokmanya Tilak, Annie Besant, and Gandhi, the working classes began to
get organized.

Establishment of International Labour Organization (ILO) by the 1919 Peace Conference that
followed World War I. Its original constitution, which formed part of the Treaty of Versailles,
established it on 11 April 1919 as an autonomous organization associated with the League of
Nations.

• A branch of International Labor Organization was established In India and a regular

conference of I.L.O. was started in India.
All India Trade Union Congress (A.I.T.U.C), the oldest trade union federation in India was set up in
1920.

• It was founded by Lala Lajpat Rai, Joseph Baptista, N.M Joshi and Diwan Chaman Lall.
• Lajpat Rai was elected the first president of AITUC.

With the establishment of this trade union, the labor movement in India received tremendous fillip.
A special step toward progress was made, when the then Government passed the Trade Union Act
of 1923 and Industrial Disputes Act, 1929.

With the passage of Trade Union Act, the trade unions were greatly benefited as they were
conferred a legal and corporate status on registered trade unions and granted them certain
immunities in regard to trade disputes. The act makes provision for two matters.

1. The conditions governing the registration.

2. The right and privilege accorded to registered unions.
3. The Act also allowed the funds of the registered unions to be spent for the conduct of trade
disputes and for the provision of benefits to its members.

The organization of trade unions underwent a great change in 1926. When the leadership of trade
unions went over to communists. The communists made radical changes in the policies and
organization of trade unions and as a consequence of this the trade unions divided themselves into
two.

Royal Commission on Labour in 1929

During World War I, in 1917, John Henry Whitley chaired a committee which produced a report on
the ‘Relations of Employers and Employees’ identifying good industrial relations as a vital need for
industrial relations.

• Amidst the world economic depression, associated rise in unemployment and continued
agitation for Independence, the British government established the Royal Commission on
Labour in 1929.
• The commission received resistance and large scale boycott from the Indian labour
movement. Nevertheless, the Commission handed down its report and the outcome of
these reports made way for a series of labour legislations from 1932 to 1937.
• Some of the key legislations passed included Payment of Wages Act, 1936 which
empowered employers to deduct wages of employees absent from work without reasonable
cause.
• Trade Disputes (Amendment) Act 1938, which authorized government to appoint
conciliation officers to settle disputes.

The workers owing allegiance to old leadership had a peaceful and constructive outlook,
whereas those owing allegiance to communists had radical outlook. Owing to difference of outlook,
the two trade unions were always at loggerheads. The mutual strife between unions was
advantageous to the employers.

The mutual strife among trade unions kept on increasing. In 1929, Indian National Trade Union
Congress held its 10th session in Nagpur. This session was presided over by an eminent social
reformer Pandit Jawaharlal Nehru. Subsequent to this session, some trade unions severed their
connection with the parent body.
 The unions, which separated themselves from AITUC, formed their own all India body under
the name All India Trade Union Federation. The struggle between trade unions did not limit itself up
to here only. As a result of the mutual strife in 1931, a new All India Trade Union under the label All
India Red Trade Union Congress came into being.

At length in 1934, this mutual strife ended. In this year, a grand session of Indian Trade Union
Congress took place. This session was presided over by Pandit Harinath Shastri. In this session, an
agreement was reached between All India Red Trade Union Congress and Trade Union Congress.

Efforts of Shri V.V. Giri:

According to this agreement. All India Red Trade Union Congress was abolished.
Subsequently in 1938, Trade Union Federation was also merged in All India National Trade Union
Congress. The credit for this agreement is due to the efforts made by the former President of India,
Shri V.V. Giri. Thus, once again in 1940, a united body of trade unions was established. However, this
mutual amity among unions proved to be short-lived and the Second World War brought to surface
once again mutual dissensions and dis-agreements.

Stage III: During and After the World War II

The Second World War lowered standard of living for the workers further and this led to the
strengthening of the movement. The question of war effort created a rift between the Communists
and the Congress. This, coupled with other issues, led to further split in the movement.

• As a result of this rift, “Indian Trade Union Labour Federation” came into existence led by
M.N. Roy.

However, the movement as a whole got stronger due to the compounding issues. This included
mass entrenchment post-war and the massive price rise that accompanied it.

Legislations like Industrial Employment Act, 1946 and Bombay Industrial Relations Act, 1946
contributed to strengthening the trade union movement. In general, the movements got more vocal
and involved in the national movement.

The two parallel labour unions continued to function. The dissensions and conflicts among
communists and Congressmen persisted and ultimately due to the efforts of Gulzarilal Nanda and
Sardar Patel, Indian National Trade Union Congress was established 1947.

As the Indian National Trade Union Congress has the largest membership in the country it
was declared the representative union of Indian labour. Subsequently, Communists also set up an all
India trade union. This trade union was labelled as Hind Mazdoor Sabha. This trade union of
Communists though did not escape the scourge of rifts and dissensions it split up into two groups in
1949. As a result of this split, a new trade union came into being and this was named United Trade
Union Congress. Professor K.T. Shah headed this trade union.

Bhartiya Mazdoor Sangh: In 1955, Jan Sangh also established a labor organization. The trade union
under the aegis of Rashtriya Swayamsevak Sangh (RSS) was known as “Bhartiya Mazdoor Sangh”. Its
headquarters was in Bhopal.
Among them INTUC and HMS were affiliated to the "Industrial Confederation of the Trade Union"
(ICFTU) which is one of the international labour organizations. AITUC was affiliated to the World
Federation of Trade Unions.

Stage IV- After Independence

Independence and partition of the country smashed the hope of the workers for getting
higher wages and better working conditions from the national Government. With a view to retaining
the amenities which they have earned earlier, a series of strikes swept the country.

The number of strikes and man days lost were the highest ever recorded in the country.
Various political parties formed and kept control over various trade unions. In 1948, Praja Socialist
party started another trade union known as Hind Mazdoor Panchayat. Indian Federation of Labour
and Hind Mazdoor Panchayat were amalgamated and formed Hind Mazdoor Sabha (H.M.S) in 1948.

Planned economic development and emphasis on Trade union

The Planning Commission drafted its first five year plan, setting therein necessary targets of

production - industrial as well as agricultural - to be achieved during the next five years. For having
industrial advancement industrial Policy Resolution in 1948, was also prepared.

As the economic progress is bound up with the Industrial peace so for the successful implementation
of the plans, particularly in the economy organised for planned production and distribution and
aiming at the realisation of social justice and the welfare of the masses, the co-operation from Trade
Unions was considered absolutely essential at different stages of the execution of the plans.

Accordingly, it was realised that the question of maintenance of smooth industrial relations was not
a matter between employers and employees alone. But it was a vital concern of the community.
Therefore their relationship has to be of a partnership in this constructive endeavour. this was the
reason why it was provided in the first five year plan that the dignity of labour must be recognised

so that the workers who on account of hardships of illiteracy and ignorance and lack of opportunities
have not been able to play as effective a role in the working of industry as they should, could
understand and carry out their responsibility and could take an increasing share in the industry.

Accordingly the workers "right of association, organisation and collective bargaining was
accepted" and it was laid down in this plan that they (Trade unions) should be welcomed and helped
to function as part and parcel of the industrial system.

Code of Discipline of Industries of 1962

It was adopted under the then Union Labour minister V. V. Giri. He was also the fourth president of
India from 24 August 1969 to 24 August 1974.

Principles of the Code of Discipline:

1. There should be no strike or lockout without proper notice.

 2. No unilateral action should be taken in connection with any industrial matter.
3. There should be no resource to go slow tactics.
4. No deliberate damage should be caused to a plant or property.
5. Acts of violence, intimidation, coercion or instigation should not be resorted to.
6. The existing machinery for settlement of disputes should be utilized.
7. Awards and agreements should be speedily implemented.
8. Any action which disturbs cordial industrial relation should be avoided.

First National Commission on Labour

First National Commission on Labour in 1966- was set up on 24 December 1966 under the
Chairmanship of Justice P.B. Gajendragadkar. The Commission submitted its report in August, 1969
after detailed examination of all aspects of labour problems, both in the organised and unorganised
sectors. The first National Commission on Labour recommended that works committee be set up in
any unit which has a recognised union.

Stage V: Present

Second National Commission on Labour

Second National Commission on Labour was set up on 15 October 1999 under the chairmanship of
Ravindra Verma which submitted its report to the then Prime Minister Atal Bihari Vajpayee on 29
June 2002.

Need for Second National Commission on Labour

• During the period of three decades since setting up of the First National Commission on
Labour, there has been an increase in number of labour force etc. because of the pace of
industrialisation and urbanisation.
• After the implementation of new economic policy in 1991, changes have taken place in the
economic environment of the country which have in turn brought about radical changes in
the domestic industrial climate and labour market.
• Changes have occurred at the work places, changes in the industry and character of
employment, changes in hours of work and overall change in the scenario of industrial
relations. These changes have resulted in certain uncertainties in the labour market
requiring a new look to the labour laws.

Recommendation of Second National Commission of Labour:

It recommended that the existing Labour Laws should be broadly grouped into four or five Labour
Codes on functional basis by simplifying, amalgamating and rationalizing the relevant provisions of
the existing about 44 Central Labour Laws.

Accordingly, the Ministry has taken steps for drafting four Labour Codes:

1. Labour Code on wages

Code on wages will subsume legislations like The Minimum Wages Act, the Payment of Wages Act,
the Payment of Bonus Act, the Equal Remuneration Act. It aims to provide a national floor for
minimum wage. It also has provisions to consider regional variations like geography, economy etc.

2. Labour Code on Occupational Safety, Health and Working Conditions

Code on Industrial safety and welfare will replace legislations like the Factories Act, the Mines Act
and the Dock Workers (Safety, Health and Welfare) Act. This will put in place a uniform regime
across the nation to ensure industrial safety.

3. Labour Code on Industrial Relations

The Labour Code on Industrial Relations will combine the Trade Unions Act, 1926, the Industrial
Employment (Standing Orders) Act, 1946, and the Industrial Disputes Act, 1947. The focus here is to
set the stage for the way labour unions can protect labour interests. It also seeks to abolish
deadlocks and promote worker welfare while promoting investment.

4. Labour Code on social security

Code on social security will merge important legislations like Employees’ Provident Fund and
Miscellaneous Provisions Act, Employees’ State Insurance Corporation Act, Maternity Benefits Act,
Building and Other Construction Workers Act and the Employees’ Compensation Act

Note: The Labour Code on Wages was approved by Parliament in August while the Labour Code on
Occupational Safety, Health and Working Conditions have been referred to the standing committee
on labour.

Problems faced by the labour movement post Independence

• Uneven growth: They are concentrated in the metropolises, largely catering to organised
sector. Rural Agricultural labour and small scale labour are grossly underrepresented.
• Low membership: Trade union membership is growing, but the vast majority of India’s
labour is not part of any trade unions. This reduces their collective bargaining power.
• Weak financial position: Membership fees are set too low (25 paise) by the Trade Union Act,
1926. They are particularly disadvantaged against corporate lobbying groups that are flush
with cash.
• Political leadership: Careerist politicians and vested political agenda mean that worker
interests are sidelined. Since the leadership may not be from the labour force, they are held
captive to party politics. This lead to further exploitation.
• The multiplicity of unions: Bargaining power is diluted and it is easy for employers to divert
the attention of the labour.
• Inter-union rivalry: There are conflicts of interest and party politics between the unions.
• The problem of recognition: Employers are under no obligation to give them recognition.
This means that docile unions get recognition and genuine ones may be sidelined.
• Diverse nature of labour: Most unions don’t have properly differentiated organisational
structure to cater to different classes of labour. Eg: Differences between agricultural, formal
and informal labour.
 • Lack of public support: Especially post 1991, trade unionism is looked down as an
impediment to growth and development. This has led to a general ebbing of the movement
across the country.

Major Labour Unions and their Political Affiliation

1. All India Trade Union Congress – Communist Party of India.
2. Indian National Trade Union Congress – Indian National Congress.
3. Bhartiya Mazdoor Sangh – Bharatiya Janata Party.
4. Centre for Indian Trade Unions – CPI(M).
5. Hind Mazdoor Sabha – Samajwadi Party.
6. Self Employed Women’s Association – Unaffiliated.
7. United Trade Union Congress - Revolutionary Socialist Party.