Labour Legislations and Different Acts made for Labours in India

Read this article to learn about the nature of labour legislations and different acts made for labours!

The colonial government had a covert pro-employer bias. After Independence, the government tried to rectify the imbalance by passing a series of protective legislations.

The Industrial Disputes Act (ID Act) of 1947 attempted to protect workers by curbing some of the rights of the employers such as the right to terminate employment, shut down establishments arbitrarily, and so on.

Some provisions from the new draft Labour Code - LIGANET

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It also recognised trade unions as an essential feature of industrial relations. In addition, a number of legislations covering minimum wages, bonus, disciplinary procedures, recruitment policies, and so on, which grant security to the workers, were passed in order to ensure that the workers, who were weaker compared to the collective strength of the employers, could get security and justice.

At the same time, government intervention, especially through the labour department, increased considerably. On viewing industrial relations in the historical context, we find that labour laws change along with the strength of the labour movement. If the labour movement is strong, there is an attempt by the state to subvert its strength or clip its wings.

Thus, the ID Act, which forms the core of industrial relations in India, was based on the Defence of India Rules, framed by the British during WWII. At that time, the colonial state was interested in ensuring smooth flow of production to meet the war effort. This could be done only if labour was made to believe that means of grievance redressal existed. At the same time, care had to be taken to ensure that workers did not go on strike as that would disrupt production.

Industrial Disputes Act (1947):

The Industrial Disputes Act is important because it is the first piece of legislation that affected labour soon after India became independent. Perhaps it was the view of the new government that since India would have to reconstruct its economy, and labour would be a vital element, labour rights should be given, though they should be curbed when it came to unrest. The management was given greater leeway possibly because the new state thought that it would help in building a new India.


The ID Act provides for various methods of conciliation. For example, any dispute between labour and management may be referred to the labour officer who will try to conciliate between the two parties. If this fails, a failure report will be filed by the officer, and labour will have two options. Firstly, an arbitrator who is acceptable to both sides can be appointed but the decisions will be binding on both sides; in case the workers think that this is a risk, they can take the matter for adjudication to the labour court.

If the decision of the labour court is unfavourable, the issue can be moved to the High Court and finally to the Supreme Court. Any form of strike is thus avoided during this period of grievance redressal. The legal process is long and, for the workers, expensive, unless the person is backed by the trade union which agrees to cover the cost.

The ID Act allows any trade union or an individual worker to raise a dispute before a conciliating officer with the result that any minority union, with little or no following, can intervene in a labour dispute. This practice and the issue of recognition of a trade union encourage multi-unionism in industries. The managements can manipulate unions and create inter-union rivalries through these methods.

One of the positive aspects of this Act is that it prevents any factory employing 100 or more workers from shutting down even if it is running at a loss. The management has to get clearance from the respective state government and its labour department before any case for winding up can be made. This clause is important because the Act tries to ensure that the workers get their dues before the factory closes.


A legal strike is extremely difficult under the Act. The trade union concerned has to prove that all methods of redressal have failed. After this, a strike ballot must be taken and a strike notice would be given one month prior to the strike. In case the strike is legal (which is almost impossible), the workers will get their wages during the strike period.

If it is illegal, as is the case with most strikes, workers will forfeit their wages. A legal lockout initiated by the employers/ management is a rarity too. However, if an illegal lockout takes place (most lockouts are illegal), the management will have to pay a fine for each day of the lockout. According to the ID Act, this fine is Rs 50 per day. Hence, we can see the abject difference in the consequences of the workers’ fighting for their cause and the employers’ actions.

Other Acts:

There were other acts too, such as the Factories Act, 1948 which broadly reflected the ideology of the ID Act. The 1948 Act had several positive aspects such as reducing the working day to eight hours with half an hour lunch break, provisions for proper lighting and ventilation, canteen facilities, creche, toilet and drinking water facilities.

The problem however lies in the definition of a factory. The Act defines a factory as a manufacturing unit having more than nine workers in case it uses power, or nineteen workers in case it does not; in other words, small-scale industries employing nine workers or less do not come under the purview of the Factories Act.

It should also be noted that other acts relating to labour welfare are all applicable to factories that come under the purview of the Factories Act. These include acts relating to insurance (covering the Employees’ State Insurance Corporation, or ESI), provident fund, pension and gratuity, etc.

Hence, a large section of the industrial workforce that is engaged in the small factories is deprived of these benefits. One may point out that in 2009, according to official figures, there were thirty million workers engaged in small-scale industries, while, ironically, the entire formal sector employs twenty-seven million workers.

The Trade Union Act of 1926, which registers trade unions and also ensures that no legal action can be taken against them, has remained unchanged since its promulgation. It allows seven workers to come together to form a union.

However, the Act only provides guidelines for registration of trade unions; it does not provide for recognition as this is left to the employer’s discretion. Hence even a union representing a fraction of the total workers can get recognised as the representative union by management and it can participate in negotiations relating to the entire workers in that unit.

This usually happens when the majority union disagrees with the management’s directions or if it initiates a strike to put forth workers’ demands, and then the management promptly derecognises the union and may recognise a union representing a small section of workers which is more likely propped up by it.

Another interesting aspect of the TU Act is that it does not distinguish between trade unions and associations of other sectors. Hence, even an association of employers can be registered as a trade union, and the Employers’ Federation of India is, in fact, registered under this Act.

We have noted earlier that after Independence the government passed legislations to protect labour. It can be argued with equal emphasis that the state’s policies were aimed at blunting the workers’ initiatives in organising themselves against the might of capital as the state, through its bureaucracy, projected itself as the protector of the workers.

This has made workers and their trade unions increasingly dependent on the government rather than on their own abilities for sorting out problems with their employers. In order to perpetuate this dependence, the state has selectively passed laws which, while granting protection to the workers, have undermined the trade unions.

It can be seen that, in general, the state’s intervention in regulating industrial relations has created several problems for the workers and their trade unions. Besides the problems discussed above, the elaborate legal structure and the emphasis on the bureaucracy have placed workers in a vulnerable position.

It has increased their dependence on outside leaders as workers find the complicated legal process difficult to tackle on their own. Moreover, ordinary workers, being unable to deal with the bureaucracy of the labour department, have to find leaders with the correct political contacts to do so.

The legal process for redressal of grievances is lengthy, complicated and expensive and instead of providing a framework for justice it has encouraged militancy among the workers. Workers often resort to violence or wildcat strikes to achieve their objectives.

The rise of militant leaders like Datta Samant can be attributed to this. E. A. Ramaswamy’s study of Mumbai’s working class shows this growing impatience of the workers with the legal process. Samant (Ramaswamy 1987: 20) said, ‘When the workers get something good from the lower courts the employer goes to the Supreme Court and straight away 10-15 years are lost. The workers cannot wait that long to get things changed.’

An examination of the industrial relations scene will clearly indicate that despite its projected pro-labour attitude, whenever there has been any major confrontation between labour and management, the state has intervened on behalf of the latter. Ramaswamy’s 1986 study of two industrial disputes in Tamil Nadu in the 1970s, one in the textile industry and the other in the automobile industry, provides a graphic account of the state s manipulation in favouring the employers.

Another significant example is the strike of textile workers in Mumbai in 1982-83 led by Datta Samant which lasted for eighteen months. For the first fifteen months, in what is regarded as the longest industry-wide strike in the country, the textile industry in the city was at a standstill. The workers put forth demands which included regularisation of casual workers, increase in wages, and so on but the most important demand was that of de-recognition of the RMMS. However, despite the display of unity by the workers and their determination to fight, the strike petered out.

The government extended support to the employers, and the RMMS did all it could to break the strike (Bakshi 1987; Wersch 1992). During this period, the Chief Minister of the state, Babasaheb Bhosale, was replaced by Vasantdada Patil, who was once the president of RMMS. This was done with the intention that the new Chief Minister would be more competent in breaking the strike as he had once been a leader of textile workers.

Such instances reveal that the state has rarely taken a pro-working- class stands in cases of major labour-management conflicts. In most cases, the state has used its authority to break the workers’ movement. Hence, the legal provisions regarding recognition and their effect in fragmenting trade unions may not necessarily be an act of omission.

The state fears that if the trade union movement is truly autonomous it may emerge not only as the opponent of capital but of the state (more specifically, the party in power) as well. The formation of the INTUC by the Congress as an opposition to the AITUC was a clear indication of this fear.

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