HRMG 3041

EMPLOYMENT LAWS
 SYLLABUS
U • Labour Legislation: Principles of Labour Legislation, Role of ILO and Indian
NI Constitution
T-
1
U
NI • The Factories Act, 1948.
T-
2
U • The Industrial Disputes Act, 1947,
NI • The Industrial Employment (Standing Orders) Act, 1946.
T-
3
U • The Payment of Bonus Act, 1965,
NI • The Minimum Wages Act, 1948
T-
4
U • The Employees State Insurance Act, 1948, •The Employees Compensation
NI
T-
Act, 1923, •The Payment of Gratuity Act, 1976
5
 Books
• Text Books:

1- Singh B.D (2014), Labour Laws for Managers, New Delhi: Excel Books.
2- Padhi, P.K., "Labor and Industrial Laws", Prentice Hall of India, New Delhi, 2018

• References:

1- Singh B.D., "Labor Laws for Managers", Excel Books, New Delhi, 2014
2. Malik P. L., "Industrial and Labor Laws", Eastern Book Company, 2013
3. Mishra S.N., "Labor and Industrial Laws", Central Law Publication, 2012
 UNIT-I

Learning Objectives
Labour Legislation: Concept
Origin of Labour Legislation
Nature, Objectives/ Need and Significance
Principles of Labour Legislation, Scope and Classification
New Codes of Employment Laws
Role of ILO - Aims – Objectives, Recommendations and Conventions
Impact of Indian Constitution on Employment Laws
Social Security and Social Dialogue in Employment Laws
 INTRODUCTION
• We are living in a dynamic, ever-changing world.

• This world has always been regulated by some laws and rules, and as the needs of
society grow due to technological, economic and social changes, it calls for an
immediate action for the formation of new laws.
• Industrial Revolution is an epoch-making event, which completely changes the
lifestyles of society from agricultural and pastoral to industrial and materialistic one.
• The labour legislations are the products of Industrial Revolution and they have come
into being to take care of the aberrations created by it

• A plethora of labour laws were introduced for the betterment of the livelihood of the
workmen.
• Labour legislation regards individuals as workers, whereas the general legislation regards him
a citizen.
• The principles governing labour legislations are more influenced by the postulates of social
justice than general justice.

• Workers are the weaker class of industrial society and have suffered long at the hands of
employers. Therefore, these sets of legislations go out of way in protecting workers and
securing justice to them.

• The influences of ‘discriminative justice and distributive justice’ can be clearly seen over
them. All the labour legislations are heavily skewed towards labour and they are specifically
designed like that.

• Labour legislation seeks to deal with problems arising out of occupational status of the
individual. Consequently, such problems as hours of work, wages, working conditions, trade
unions, industrial disputes etc. come to be the main, subject matter of labour legislations.
 Labour Legislation- Concept

• The term ‘Labour Legislation’ used to cover all the laws which have been enacted to deal
with employment and non-employment, wages, working conditions, industrial relations,
social security and welfare of persons employed in any industries.

• Thus ‘Labour Legislation’ refers to all the laws of the government to provide social and
economic security to the workers. These acts are aimed at reduction of production losses
due to industrial disputes and to ensure timely payment of wages and other minimum
amities to workers.

• As labour legislations are to regulate the conditions of labour, in the industrial milieu, it is
required to be adjusted as per the changing requirements of industry.
• As per the Indian Constitution, the Central as well as State Governments are empowered to
enact suitable legislations to regulate and protect the interests of employees, as well as to
create and increase employment opportunities.

• With the objective to consolidate and reform labour laws and to facilitate the ease of doing
business in India, the Government of India has enacted four labour codes which subsume
approximately 29 labour laws.

• The four new labour codes are the Code on Wages 2019, the Code on Social Security 2020,
the Occupational Safety, Health and Working Conditions Code 2020 and the Industrial
Relations Code 2020.

Labour is a concurrent subject in the Constitution of India implying that both the
Union and the state governments are competent to legislate on labour matters and
administer the same. The bulk of important legislative acts have been enacted by
the Parliament.
 Objectives of The Labour Legislations
Labour legislation in India has sought to achieve the following objectives:

Establishment of all kinds of justice for the working people – social, economic, and political.

The availability of equal opportunities to all workers, irrespective of caste, creed, religion and beliefs for
their overall personality development.

Protection of weaker sections of workers who are not financially well off to protect themselves.
 Maintenance of Industrial Peace.

Creation of conditions for economic growth.

Protection and improvement of living standards of the labourers.

Protection of workers from all sorts of exploitation – mentally or physically and creating a better working
environment.
 The legislations can be categorized as follows:

a. Labour laws enacted by the Central Government, where the Central Government
has the sole responsibility for enforcement.

b. Labour laws enacted by Central Government and enforced both by Central and
State Governments.

c. Labour laws enacted by Central Government and enforced by the State

Governments.

d. Labour laws enacted and enforced by the various State Governments which apply
to respective States.
 Grant rights to workmen to unite and form their unions so that they could bargain collectively with
their owners for the betterment of their livelihood.

Keep checks on the government about their active participation in the working areas for social well-
being.

Ensures human rights and human dignity.

Make state interfere as protector of social well being than to remain an onlooker.

Proper regulation of employee-employer relationship is a condition precedent for planned, progressive

and purposeful development of any society. The objectives of labour legislation is a developing concept
and require ceaseless efforts to achieve them on continuous basis.
In its landmark judgement in Hindustan Antibiotics v. The Workmen (A.I.R. 1967, S.C. 948; (1967) 1, Lab.L.J.114)
the Supreme Court of India made a significant observation. The object of the Industrial law, said the Court, was
to bring in improvements in the service conditions of industrial labour by providing them the normal amenities
of life which would lead to industrial peace. This would accelerate the productive activities of the nation,
bringing prosperity to all and further improving the conditions of labour
 Classification of Labour Legislations

On the basis of specific objectives which it has sought to achieve, the

labour legislations can be classified into following categories-

(1) Regulative
(2) Protective
(3) Wage-Related
(4) Social Security
(5) Welfare both inside and outside the workplace
The Regulative Labour Legislations

The main objective of the regulative legislations is to regulate the relations between
employees and employers and to provide for methods and manners of settling industrial
disputes. Such laws also regulate the relationship between the workers and their trade
unions, the rights and obligations of the organisations of employers and workers as well
as their mutual relationships.

• The Trade Unions Act, 1926

• The Industrial Disputes Act,1947
• Industrial Relations Legislations enacted by states of Maharashtra, MP, Gujarat,UP
etc.
• Industrial Employment (Standing Orders) Act, 1946
The Protective Labour Legislations

Under this category come those legislations whose primary purpose is to protect labour
standards and improve the working conditions. Laws laying down the minimum labour
standards in the areas of hours of work, supply, employment of children and women etc. in
the factories, mines, plantations, transport, shops and other establishments are included in
this category.
Some of these are the following :

• Factories Act,1948
• The Mines Act,1952
• The Plantations Labour Act,1951
• The Motor Transport Workers Act,1961
• The Shops and Establishments Acts
• Beedi and Cigar Workers Act 1966
Wage-Related Labour Legislations
Legislations laying down the methods and manner of wage payment as well as the minimum wages
come under this category:

• The Payment of Wages Act,1936

• The Minimum Wages Act, 1948
• The Payment of Bonus Act, 1965
• The Equal Remuneration Act, 1976

Social Security Labour Legislations

They cover those legislations which intend to provide to the workmen social security benefits under
certain contingencies of life and work.

• The Workmen's Compensation Act, 1923

• The Employees' State Insurance Act, 1948
• The Coal Mines Provident Fund Act, 1948.
• The Employees PF and Miscellaneous Provisions Act, 1952
• The Maternity Benefit Act, 1961
Welfare Labour Legislations

Legislations coming under this category aim at promoting the general welfare of the workers and
improve their living conditions. Though, in a sense all labor-laws can be said to be promoting the
welfare of the workers and improving their living conditions and though many of the protective
labour laws also contain chapters on labour welfare, the laws coming under this category have the
specific aim of providing for the improvements in living conditions of workers. They also carry the
term "Welfare" in their titles.

• Limestone and Dolomite Mines Labour Welfare Fund Act, 1972.

• The Mica Mines Welfare Fund Act, 1946
• The Iron Ore Mines, Manganese Ore Mines and Chrome Ore Mines Labour
• Welfare Fund Act, 1976
• The Cine Workers Welfare Fund Act, 1981.
• In addition, some state governments have also enacted legislations for welfare
• funds.
• Beedi Workers Welfare Fund Act, 1976
 Principles of labour legislation

There are various principles of labour legislation-

• Principle of Social Justice – It ensures social equality for people and ensures that
opportunities aren’t denied to them on the basis of religion, caste or any other prejudicial
grounds. No matter whichever place they come from they must be provided with equal
opportunities to work. Their social status should not be considered a ground for anything
and they should be treated in a well-mannered way. The profits earned by a company must
be distributed on fair grounds between the workers and the owner.

• Social Equity – It mentions that the maintenance of labour is based on social equity of
labour. As the time and circumstances keep changing it demands new laws and rules to suit
workers’ needs accordingly. This intervention of the government in bringing new Acts and
amendments according to the situation prevailing is based upon social equity. ‘Equity’
means to be fair and impartial. Social equity means to form equal working standards for
the people with the help of provisions and obligations to do so. Laws should be flexible
enough to meet the demands of the industrial society.
• International Uniformity – International Labour Organisation (ILO) plays an
important role by creating agreements with different countries and providing its
recommendations on general conditions of employment, wages, hours of work, the
health of the labourers and women etc.

• National Economy – While forming any labour law it is crucial to assess the general
economic condition of the country under consideration because the national
economy directly affects labour legislation. National Economy provides the
standards to be set for the labour legislations.

• Social Security – It mentions that the state must protect every citizen who
contributes their efforts towards the promotion of the country and for the welfare
of the state. This would make the workers more hard-working and efficient and
increase our industrial power and potential. Social security envisages collective
action against social risks which constitute the crux of the labour legislation.
 Concept and Origin of labour laws
• In society, institutions develop to abhor the gap that changes leave behind. The Industrial
Revolution, a historical phenomenon, completely transformed society from rural and agricultural
to industrial and consumerist. The changes brought about by the industrial revolution left some
gaps, and it became society’s responsibility to fill those gaps. To fill the gaps, society turned to
certain social devices known as labour laws. Labour laws are the result of the industrial
revolution, and they were created to address the problems that they caused. They differ 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 proverb that ‘risk and right’ go hand in hand, they had the
authority to ‘hire and fire.’ The law at the time also included ideas like ‘master and servant,’
among others. The common law principle was in effect. The terms of the contract were typically
verbal and were mostly used in cases of breach, which resulted in prosecution and imprisonment
of the workers.
• The purpose and scope of labour laws have evolved over time. Early labour laws were enacted to
protect employers’ interests. It was governed by the laissez-faire doctrine, which entails a policy
of minimal government intervention in the economic affairs of individuals and society. On the
other hand, contemporary labour law aims to safeguard employees from employer exploitation.
The foundation of the welfare state doctrine is the concept of progressive social philosophy,
which has rendered the previous doctrine of laissez-faire outdated. The ‘hire and fire’ and ‘supply
and demand’ theories, which enjoyed unrestricted application under the previous laissez-faire
philosophy, are no longer valid.

• The approach to labour law and industrial relations has changed significantly since the
Philadelphia Charter, which stated that ‘labour is not a commodity’ and that ‘poverty anywhere is
a danger to prosperity everywhere.’ W. Friedmann and others who have attempted to analyse the
essential characteristics of legal development in this branch of law consider “social duty on the
part of the employer” to be the main bedrock upon which this law is built.
 Evolution of labour legislation in India

• The history of labour law in India dates back more than 125 years. Beginning with the Apprentice Act of
1850, which allowed orphaned children to find work when they reached the age of 18, several labour
laws covering all aspects of industrial employment have been enacted. Labour laws govern not only the
working conditions of industrial establishments but also industrial relations, wage payment, trade union
registration, certification of standing orders, and so on. They also provide social security measures for
workers. The Indian Constitution serves as the foundation for all Indian laws. According to the
Constitution, labour is a matter under the Concurrent List, meaning that both the Central and State
governments may pass labour laws, subject to the restriction that the State legislature may not pass
laws that conflict with Central law.

• The Apprentice Act of 1850 was followed by the Factories Act, 1881, and the Bombay Trade Disputes
(and Conciliation) Act, 1934, was the first State law. During World War II, both of these, as well as the
Bombay Industrial Disputes Act, 1938 were amended. In its place, the Bombay Industrial Relations Act,
1946, was enacted. The Central government passed the Industrial Employment (Standing Orders) Act,
1946 around this time. The Industrial Disputes Act, 1947, which was later amended, took the place of
the Trade Disputes Act, 1947. This law is the primary tool for governmental intervention in labour
disputes. Following independence, many laws governing labour employment and social security were
enacted, which are discussed in the latter part of this article.
 Factors influencing labour laws in India

The following are the factors influencing labour laws:

• Early industrial society of exploitation
The excesses of early industrialization after the industrial revolution were where labour laws
first emerged. Early industrialization in the capitalist nations of the world was marked by
long workdays, the hiring of young children in very unhygienic conditions, the payment of
low wages, and other excesses. The workers’ access to legal protection was limited. Such
excesses could not have continued indefinitely without public outrage and the demand for
reforms.
• Development of trade unionism
Another factor that accelerated the expansion of labour laws was the trade union
movement, which emerged from the industrial revolution. They pushed for the protection
of working-class interests, and as a result, laws were passed that dealt with wages, working
conditions, women’s rights, social security, and other issues. However, as a result of their
expansion, laws addressing industrial disputes, their prevention and resolution, and trade
union privileges and rights also had to be passed.
• Emergence of socialist and other revolutionary ideas

Karl Marx showed through his analysis of capitalism that the capitalist economic system is inherently
exploitative of labour. He, therefore, promoted the overthrow of the capitalist system. The slogan ‘The
workers of the world unite, you have nothing to lose but your chains’ sent tremors through conservative
and capitalist circles, causing ameliorative and protective labour laws to emerge as safe alternatives.
They quickly realized that labour laws could be used as a check on the spread of revolutionary ideas.
The first and second internationals, as well as the creation of socialist and communist parties in
numerous nations, strengthened the trend toward progressive labour laws.

• Establishment of the International Labour Organisation (ILO)

The establishment of the International Labour Organization in 1919 had a significant impact on how
labour laws developed throughout the world. Acceptance of the principle that ‘labour is not a
commodity’ and the slogan that ‘poverty anywhere is a threat to prosperity everywhere’ have
influenced the development of labour laws in all countries. The ILO has consistently established the
need for improved labour laws through its ongoing investigation of workers’ living conditions. It has
proposed new labour laws, gone through extensive deliberations and reviews, and adopted conventions
and recommendations. By attempting to establish uniform labour standards insofar as the world’s
diverse conditions and uneven economic development permit, the ILO has performed a singular service
in the field of labour legislation
 International
Labour Organisation
Abbreviation: ILO
Formation: 11 April
1919; 104 years ago
Type: United
Nations specialized agency
Legal status: Active
Headquarters: Geneva,
Switzerland
Director-general: Gilbert
Houngbo
Award(s) : Nobel
https://www.ilo.org/global/about-the-ilo/lang--en/index.htm

Peace Prize (1969)

• The ILO has 187 state members. 186 of the 193 member states of the United Nations plus the
Cook Islands are members of the ILO. The UN member states which are not members of the
ILO are Andorra, Bhutan, Liechtenstein, Micronesia, Monaco, Nauru, and North Korea.

• The ILO constitution permits any member of the UN to become a member of the ILO. To gain
membership, a nation must inform the director-general that it accepts all the obligations of the
ILO constitution.

• The only tripartite U.N. agency, since 1919 the ILO brings together governments, employers
and workers representatives of 187 member States, to set labour standards, develop policies
and devise programmes promoting decent work for all women and men.

• The ILO formulates international labour standards in the form of Conventions and
Recommendations setting minimum standards of basic labour rights : freedom of association,
the right to organize, collective bargaining, abolition of forced labour, equality of
opportunity and treatment and other standards regulating conditions across the entire
spectrum of work related issues.
 Objectives of the ILO

• To promote and realize standards and fundamental principles and rights

at work.

• To create opportunities for women and men to obtain decent and

productive work in conditions of freedom, equity, security and human
dignity.

• To enhance the coverage and effectiveness of social protection for all.

• To strengthen tripartism and social dialogue.

Note: The basis of the ILO is the tripartite principle, i.e. the negotiations within the organization are held between
the representatives of governments, trade unions, and member-states’ employers.
 International Labour Standards

• The ILO sets international labour standards with conventions, which are ratified by member
states. These are non-binding.

• Conventions are drawn up with input from governments, workers’ and employers’ groups at
the ILO and are adopted by the International Labour Conference.

• In ratifying an ILO convention, a member state accepts it as a legally binding instrument. Many
countries use conventions as a tool to bring national laws in line with international standards.

Decent Work Agenda

As part of its mission, the ILO aims to achieve decent work for all by promoting social
dialogue, social protection and employment creation, as well as respect for international
labour standards.
The ILO provides technical support to more than 100 countries to help achieve these aims,
with the support of development partners.
 Core Conventions of the ILO
• The eight fundamental conventions form an integral part of the United Nations Human
Rights Framework, and their ratification is an important sign of member States’
commitment to human rights.
• Overall, 135 member States have ratified all eight fundamental conventions.
Unfortunately, 48 member states (out of 183 member States), including member states
with the highest populations, have yet to complete ratification of all eight conventions.

The eight-core conventions of the ILO are:

1. Forced Labour Convention (No. 29)
2. Abolition of Forced Labour Convention (No.105)
3. Equal Remuneration Convention (No.100)
4. Discrimination (Employment Occupation) Convention (No.111)
5. Minimum Age Convention (No.138)
6. Worst forms of Child Labour Convention (No.182)
7. Freedom of Association and Protection of Right to Organised Convention (No.87)
8. Right to Organise and Collective Bargaining Convention (No.98)
 ILO Declaration on Fundamental Principles and Rights at
Work

• It was adopted in 1998, the Declaration commits member states to respect and promote
eight fundamental principles and rights in four categories, whether or not they have ratified
the relevant conventions. They are:

• Freedom of Association and The Right to collective bargaining (Conventions 87 and 98)

• Elimination of forced or compulsory labour (Conventions No. 29 and No. 105)

• Abolition of child labour (Conventions No. 138 and No. 182)

• Elimination of discrimination in respect of employment and occupation (Conventions No.

100 and No. 111)
 India and ILO

• India is a founding member of the ILO and it has been a permanent member of the ILO
Governing Body since 1922.

• In India, the first ILO Office was started in 1928. The decades of productive partnership between
the ILO and its constituents has mutual trust and respect as underlying principles and is
grounded in building sustained institutional capacities and strengthening capacities of partners.

• India has ratified six out of the eight-core/fundamental ILO conventions. These conventions are:
• Forced Labour Convention (No. 29)
• Abolition of Forced Labour Convention (No.105)
• Equal Remuneration Convention (No.100)
• Discrimination (Employment Occupation) Convention (No.111)
• Minimum Age Convention (No.138)
• Worst forms of Child Labour Convention (No.182)
• India has not ratified the two core/fundamental conventions, namely Freedom of
Association and Protection of the Right to Organise Convention, 1948 (No. 87) and Right
to Organise and Collective Bargaining Convention, 1949 (No. 98).

• The main reason for non-ratification of ILO conventions No.87 & 98 is due to certain
restrictions imposed on the government servants.

• The ratification of these conventions would involve granting of certain rights that are
prohibited under the statutory rules, for the government employees, namely, the right to
strike, to openly criticize government policies, to freely accept a financial contribution, to
freely join foreign organizations etc.