Evolution Of Indian Labour Legislations

Introduction:
The Indian Labour Legislations owe its existence to the British Raj. Most of the labour
legislations were enacted prior to India’s independence. The post independence enactment of
important legislations in the areas of employee security and welfare derive their origin partly
from the vision of independent India’s leaders and partly from the provisions in the Indian
Constitution and international conventions like the International Labour Organization (ILO). The
labour legislations were also enacted keeping in mind the international standards on Human
Rights and United Nations Protocols.

Historical Perspectives On Indian Labour Legislations.

Initial periods of imperialism were based on exploitation of the worker class. With the
emergence of ILO at an international level and with the inhumane treatment meted out to
workmen being replaced with an outlook of dignity of labour, the whole scenario of labour
legislations began in pre independence India.
After independence legislations related to worker welfare like Provident Fund Act, Employee
State Insurance Act, Payment of Bonus Act and Payment of Gratuity Act were enacted with the
intention of providing security and retirement benefits to workmen. Over a period of time several
amendments have been made to the existing labour legislations as per the needs of the industry.
The case in point is the latest amendment to the Factory Act whereby women worker is allowed
to work between 7pm and 6am. Such amendments have been done after industry associations
like NASSCOM and ASSOCHAM recommendations to the labour ministry. Now BPO and IT
sector which employs a large women workforce during its nightshifts benefits tremendously
from this amendment to the Factory Act.

Following Table Timelines The Evolution Of HR Thoughts In India:

Period

Developments

Emphasis On “People”

Outcomes
1700 To 1900’s
Slavery due to imperialism
Exploitation of labour
Bonded labour

1
Master – slave relationship
1900 To 1920’s
Workmen status defined by acts
Employer – employee relationship established. Wages paid
Legal recognition of workmen. End of slavery.
1920’s To 1947
Trade union’s were organizing workers
Trade unions being recognised by workers and factory managers
Collective bargaining. Workers movements.
1947 To 1960’s
Independent India believed in a socialist society.
Worker welfare by labour officers. Laws like EPF, ESIC, minimum wages, and bonus act.
Beginning of labour welfare administration and personnel function
1970’s To 1980’s
Trade unions – mgt conflicts – COD, MOU, etc.
Productivity bargaining. Workers participation in management
Empowerment of workers – upliftment of workers status and role.
1990’s To 2000
Globalization, international markets, new economy.
Developing “people” as a key resource
HRD replaces personnel management
2001 Onwards\
Advent of the “Knowledge Era”. Growth of service sector.
Rightsizing of organizations to compete globally.
Managing “human assets” with a long term strategic focus on “development and retention”
“People management” need replaces HRD with HRM. Hr is aligned to business goals. HRM to
SHRM
Abbreviation used:
HRD – Human Resources Development

2
HRM – Human Resources Management
SHRM – Strategic Human Resources Management
HCM – Human Capital Management
Labour Welfare / Industrial Relations
Relationship between the employer and the employee representatives i.e.: Unions, for
establishing working relationships and for regulating the working conditions
Personnel Management
The most effective use of people to achieve organizational and individual goals. It believes more
in control mechanisms than employee empowerment
HRD - Empower people by developing them for their current and future roles
HRM – Leveraging the systems approach to the HR function. Integrating HR functions with
other organizational functions
SHRM – Align the HR goals to the organizational goals
HCM – Human Capital Management
From the above figure we see that today HCM encompasses Labour Welfare along with its role
of providing a strategic intent to Human Resources.

Role Of India’s Constitutional Framework On Indian Labour Laws.

The relevance of the dignity of human labour and the need for protecting and safeguarding the
interest of labour as human beings has been enshrined in Chapter-III (Articles 16, 19, 23 & 24)
and Chapter IV (Articles 39, 41, 42, 43, 43A & 54) of the Constitution of India keeping in line
with Fundamental Rights and Directive Principles of State Policy.
Under the Constitution of India, Labour is a subject in the concurrent list where both the Central
and State Governments are competent to enact legislations. This categorization is listed as
follows:

(A) Labour Laws Enacted By The Central Government, Where The Central

Government Has The Sole Responsibility For Enforcement

1. The Employees’ State Insurance Act, 1948
2. The Employees’ Provident Fund and Miscellaneous Provisions Act, 1952
3. The Dock Workers (Safety, Health and Welfare) Act, 1986
4. The Mines Act, 1952

3
5. The Iron Ore Mines, Manganese Ore Mines and Chrome Ore Mines Labour Welfare (Cess)
Act, 1976
6. The Iron Ore Mines, Manganese Ore Mines and Chrome Ore Mines Labor Welfare Fund Act,
1976
7. The Mica Mines Labour Welfare Fund Act, 1946
8. The Beedi Workers Welfare Cess Act, 1976
9. The Limestone and Dolomite Mines Labour Welfare Fund Act, 1972
10. The Cine Workers Welfare (Cess) Act, 1981
11. The Beedi Workers Welfare Fund Act, 1976
12. The Cine Workers Welfare Fund Act, 1981

(B) Labour Laws Enacted By Central Government And Enforced Both By Central And State
Governments
13. The Child Labour (Prohibition and Regulation) Act, 1986.
14. The Building and Other Constructions Workers’ (Regulation of Employment and Conditions
of Service) Act, 1996.
15. The Contract Labour (Regulation and Abolition) Act, 1970.
16. The Equal Remuneration Act, 1976.
17. The Industrial Disputes Act, 1947.
18 The Industrial Employment (Standing Orders) Act, 1946.
19. The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service)
Act, 1979.
20. The Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by Certain
Establishments) Act, 1988
21. The Maternity Benefit Act, 1961
22. The Minimum Wages Act, 1948
23. The Payment of Bonus Act, 1965
24. The Payment of Gratuity Act, 1972
25. The Payment of Wages Act, 1936
26. The Cine Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981
27. The Building and Other Construction Workers Cess Act, 1996

4
28. The Apprentices Act, 1961

(C) Labour Laws Enacted By Central Government And Enforced By The State Governments
29. The Employers’ Liability Act, 1938
30. The Factories Act, 1948
31. The Motor Transport Workers Act, 1961
32. The Personal Injuries (Compensation Insurance) Act, 1963
33. The Personal Injuries (Emergency Provisions) Act, 1962
34. The Plantation Labour Act, 1951
35. The Sales Promotion Employees (Conditions of Service) Act, 1976
36. The Trade Unions Act, 1926
37. The Weekly Holidays Act, 1942
38. The Working Journalists and Other Newspapers Employees
(Conditions of Service) and Miscellaneous Provisions Act, 1955
39. The Workmen’s Compensation Act, 1923
40. The Employment Exchange (Compulsory Notification of Vacancies) Act, 1959
41. The Children (Pledging of Labour) Act 1938
42. The Bonded Labour System (Abolition) Act, 1976
43. The Beedi and Cigar Workers (Conditions of Employment) Act, 1966

(D) There Are Also Labour Laws Enacted And Enforced By The Various State Governments
Which Apply To Respective States.

Impact Of International Labour Organization (ILO) On Indian Labour Laws

India is a founder member of the International Labour Organization, which came into existence
in 1919. At present the ILO has 175 Members. A unique feature of the ILO is its tripartite
character. The membership of the ILO ensures the growth of tripartite system in the Member
countries. At every level in the Organization, Governments are associated with the two other
social partners, namely the workers and employers. All the three groups are represented on
almost all the deliberative organs of the ILO and share responsibility in conducting its work. The
three organs of the ILO are:
International Labour Conferences: - General Assembly of the ILO – Meets every year in the
month of June.

5
Governing Body: - Executive Council of the ILO. Meets three times in a year in the months of
March, June and November.
International Labour Office: - A permanent secretariat.
The work of the Conference and the Governing Body is supplemented by Regional Conferences,
Regional Advisory Committees, Industrial and Analogous Committees, Committee of Experts,
Panels of Consultants, Special Conference and meetings, etc.

International Labour Conference

Except for the interruption caused by the Second World War, the international Labour
Conference has continued, since its first session in 1919 to meet at least once a year. The
Conference, assisted by the Governing Body, adopts biennial programme and budget, adopts
International Labour Standards in the form of Conventions and Recommendations and provides a
forum for discussing social economic and labour related issues. India has regularly and actively
participated in the Conference through its tripartite delegations.

Governing Body
The Governing Body of the ILO is the executive wing of the Organization. It is also tripartite in
character. Since 1922 Indian has been holding a non-elective seat on the Governing Body as one
of the 10 countries of chief industrial importance. Indian employers and workers’ representatives
have been elected as Members of the Governing Body from time to time.
The Governing Body of ILO functions through its various Committees. India is a member of all
six committees of the Governing Body viz. (i) Programme, Planning & Administrative; (ii)
Freedom of Association; (iii) Legal Issues and International Labour Standards; (iv) Employment
& Social Policy; (v) Technical Cooperation and (vi) Sectoral and Technical Meetings and
Related issues.

The International Labour Office

The International Labour Office, Geneva provides the Secretariat for all Conferences and other
meetings and is responsible for the day-to-day implementation of decisions taken by the
Conference, Governing Body etc. Indians have held positions of importance in the International
Labour Office

International Labour Standards - ILO Conventions: -

The principal means of action in the ILO is the setting up the International Labour Standards in
the form of Conventions and Recommendations. Conventions are international treaties and are
instruments, which create legally binding obligations on the countries that ratify them.
Recommendations are non-binding and set out guidelines orienting national policies and actions.
The approach of India with regard to International Labour Standards has always been positive.
The ILO instruments have provided guidelines and useful framework for the evolution of

6
legislative and administrative measures for the protection and advancement of the interest of
labour. To that extent the influence of ILO Conventions as a standard for reference for labour
legislation and practices in India, rather than as a legally binding norm, has been significant.
Ratification of a Convention imposes legally binding obligations on the country concerned and,
therefore, India has been careful in ratifying Conventions. It has always been the practice in
India that we ratify a Convention when we are fully satisfied that our laws and practices are in
conformity with the relevant ILO Convention. It is now considered that a better course of action
is to proceed with progressive implementation of the standards, leave the formal ratification for
consideration at a later stage when it becomes practicable. We have so far ratified 39
Conventions of the ILO, which is much better than the position obtaining in many other
countries. Even where for special reasons, India may not be in a position to ratify a Convention,
India has generally voted in favour of the Conventions reserving its position as far as its future
ratification is concerned.
Core Conventions of the ILO: - The eight Core Conventions of the ILO (also called
fundamental/human rights 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)

(The Above Four Have Been Ratified By India).

Freedom of Association and Protection of Right to Organised Convention (No.87)
Right to Organise and Collective Bargaining Convention (No.98)
Minimum Age Convention (No.138)
Worst forms of Child Labour Convention (No.182)

(These Four Are Yet To Be Ratified By India)

Consequent to the World Summit for Social Development in 1995, the above-mentioned
Conventions (Sl.No. 1 to 7) were categorised as the Fundamental Human Rights Conventions or
Core Conventions by the ILO. Later on, Convention No.182 (Sl.No.8) was added to the list.
As per the Declaration on Fundamental Principles and Rights at Work and its Follow-up, each
Member State of the ILO is expected to give effect to the principles contained in the Core
Conventions of the ILO, irrespective of whether or not the Core Conventions have been ratified
by them.
Under the reporting procedure of the ILO, detailed reports are due from the member States that
have ratified the priority Conventions and the Core Conventions every two years. Under the

7
Follow-up to the ILO Declaration on Fundamental Principles and Rights at Work, a report is to
be made by each Member State every year on those Core Conventions that it has not yet ratified.
Source: Ministry of Labour – GOI.

Role Of The National Commission On Labour

Labour legislations have also been shaped and influenced by the recommendations of the various
National Committees and Commissions such as First National Commission on Labour (1969)
under the Chairmanship of Justice Gajendragadkar, National Commission on Rural Labour
(1991), Second National Commission on Labour (2002) under the Chairmanship of Shri
Ravindra Varma etc. and judicial pronouncements on labour related matters specifically
pertaining to minimum wages, bonded labour, child labour, contract labour etc.
The First National Commission on Labour was constituted on 24.12.1966 which submitted its
report in August, 1969 after detailed examination of all aspects of labour problems, both in the
organised and unorganised sector. The need for setting up of the Second National Commission
on Labour was felt due to vast changes occurring in the economy during the last three decades
especially in the nineties due to globalization, liberalization and privatization.
The Second National Commission on Labour was given two point terms of reference:
i) To suggest rationalization of existing laws relating to labour in the organised sector; and
ii) To suggest an umbrella legislation for ensuring a minimum level of protection to the workers
in the unorganised sectors;
The Commission submitted its Report to the Government on 29.06.2002. The Commission has
comprehensively covered various aspects of labour and given recommendations relating to
review of laws, social security, women & child labour, wages, skill development, labour
administration, unorganized sector etc.
The recommendations of Second National Commission on Labour inter-alia, included – (i)
introduction of umbrella legislation for workers in the unorganized sector and agricultural
labour, (ii) emphasis on up-gradation and development of skill of workforce by
training/retraining of workers, (iii) encouragement of small scale industries, agri-business and
rural sector for higher employment generation, (iv) bringing attitudinal change and change in the
mindset and work culture where the employer and the worker work as partners with emphasis on
participative management, (v) consolidation of social security legislations and establishment of
social security system, (vi) abolition of child labour , etc.
The Ministry of Labour had held consultations and interactions with the workers representatives,
employers’ organizations, experts, professionals etc. The recommendations of the Commission
were discussed in the 38th Session of Indian Labour Conference held on 28-29 September 2002,
a National Seminar on Unorganized Sector Workers held on 7-8 November 2002, Tripartite
Committee meeting held on 18-19 February 2003, and Consultative Committee Meetings of
Ministry of Labour held on 07.02.2003 and 30.4.2003. The recommendations had again been

8
discussed in the 39th Session of Indian Labour Conference held on 16-18 October, 2003. While
carrying out the amendments in labour laws, the recommendations of Second National
Commission on Labour are also taken into consideration.
Source: The Planning Commission of India

Indian Labour Laws – Review By ASSOCHAM

Even after 17 years of globalization, India has yet to dismantle Inspector Raj for SSI sector
where the numbers of inspectors have rather increased from 20 to about 40 by end of 2008,
according to The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
Incidentally, liberalized and Reformed `Red Books’ now provide for 50% curtailment in
numbers of inspectors for other sector but SSIs which generate large employment, contribute
substantially to exports cover 38% and manufacturing is highly regulated by inspectors and
cause maximum harassment to them, ASSOCHAM analysis further unveils. The Chamber cited
an example of food processing industry which used to be regulated by 100 inspectors 17 years
ago, their numbers have reduced to 46. The unified Food Law which is composition of 9 laws,
enacted in 2007 is primarily responsible for hugely reducing the number of inspectors for food
processing industry for which the credit should go to the Ministry of Food Processing and its
Minister, Subodh Kant Sahay.
The Factory Act of 1948 would provide for taking mandatory licensing even if an entrepreneur
wanted to commence manufacturing at tiny scale, today there is no such condition and this
happened mainly because of transition process of liberalization remained industry-friendly,
pointed out the ASSOCHAM. Another case for example is again food processing industry in
which before enactment of Unified Food Law, the industry would be subjected to multiple
inspectors such as Weighing Inspector and Inspectors for ISI, Corporation, Health, Hygiene and
even Medical etc. Today, these sectors are examined by not more than 2 inspectors. On the
contrary, the SSI sector which would brave as many as 20 inspectors over 17 years ago is now
subjected to inspectors monitoring whose number have gone beyond 40, says the ASSOCHAM
analysis. 17 years ago is now subjected to many other inspections which include one separate
inspector to monitor their register of employees, accounts, balance sheet and on taxation fronts
particularly the service tax inspector. Likewise, many more areas were added in which the SSI
sector is subjected to tedious inspections.
However, the SSI sector continues to remain under the tight grip of inspector raj which was
supposed to be come out with advancement of liberalization. This did not happen because most
of states govern the SSI sector and governments never took especial initiatives for reducing the
number of inspectors. The analysis is based on feedback coming to Chamber Secretariat directly
from its members, be it manufacturing, food processing and SSIs. Even obtaining of licence is no
longer required to commence industrial operations in any sector other than those enlisted in the
sensitive list which include defence, strategic alliances and to some extent telecom, civil aviation
and insurance. This change has taken place as government brought about various notifications
and amendments in some sense to prototype laws. The SSI sector which would go through
inspections from excise, customs, banks, insurance, PF, PPF and record inspectors, 16 years ago

9
is now subjected to many other inspections which include one separate inspector to monitor their
register of employees, accounts, balance sheet and on taxation fronts particularly the service tax
inspector. Besides, the Factory Act 1948, Minimum Wages Act 1948, Payment of Bonus Act
1965, Employment Exchange Compulsory Notification of Vacancies Act 1959, Air (Prevention
& Control of Pollution) Act 1981 jointly provide empowerment to government departments and
various state governments to still regulate the SSI sector.

Labour in India

Working conditions and salaries in India are different from the ones in western countries. The
official work week in India runs from Monday to Saturday, from 10am to 6pm each day. In
reality, overtime is the norm and most local companies do not compensate their workers for it

The Indian work culture is immensely diverse. There are major differences depending on
whether you work for small, local companies, for big Indian corporations or for international
companies. Business practices also vary between regions.

Work practices in India

The importance of hierarchies in Indian culture can also be witnessed in the daily work
environment. People of different management levels are treated differently. The behaviour of
superiors towards other employees seems very rude from a Western point of view. This is normal
in India. . Even though that might make you feel uncomfortable at first, you need to adapt to this
as otherwise employees of lower hierarchy levels will try to take advantage of your kindness.

10
They might treat you extra nice but then expect favours in return, such as help in getting a job in
the West.

Communication within Indian companies is something many expatriates have trouble getting
used to. Unlike rather relaxed business dinners, formality plays an important role in Indian work
environment and instructions are direct (to the point of seeming bossy). It is also highly unlikely
that you will address you co-workers with their first names.

Salaries in India

Average salaries in India are only a fraction of Western salaries. However, they are rising at rates
between 12 and 14 percent each year. Expatriates usually earn significantly higher salaries than
Indians, though this depends on whether they work for Indian or international companies.

Indian salaries are stated in lakhs, increments of hundreds of thousands. This is confusing at first,
but is ultimately much easier to handle than millions of Rupees.

If you are appointed to India by your company from overseas your salary will usually be at a
Western level. You will also be provided with the full list of benefits available to employees in
Europe or the USA, and your salary will be three times that of your local counterpart.

In addition to salary and standard benefits, international companies often provide special
expatriate allowances, such as housing allowance, three to five weeks paid vacation, a round trip
air ticket per year, full healthcare coverage etc.

If you work for an Indian company, the situation changes dramatically. Your salary will be
significantly lower. Even though you still earn more than your Indian colleagues, you will never
reach Western levels.

Most importantly, Indian companies usually do not offer the fancy expat benefits provided by
international companies. However, fringe benefits are an important part of every Indians pay
check and can account to up to 50% of the actual salary. Since fringe benefits are taxed at a
lower rate than regular income (Fringe Benefit Tax, FBT) they are commonly used to reduce the
required tax payments. Typical benefits include paid vacation, sick leave, health insurance and
maternity leave. Depending on your job and qualification the amount of healthcare benefits
varies greatly but will usually be around Rs10,000 a month.

Vacation in India

There are 15 to 20 paid public holidays, depending on where you work in India. Indian
employees will additionally get a minimum of 12 days paid vacation. Expatriates are usually
entitled to 18 to 30 days of paid vacation a year. Make sure that these regulations about extra
vacation days are explicitly stated in your employment contract.

11
Wages:

The Minimum Wages Act 1948 is an Act of Parliament concerning Indian labour law that sets
the minimum wages that must be paid to skilled and unskilled labours. The Indian Constitution
has defined a 'living wage' that is the level of income for a worker which will ensure a basic
standard of living including good health, dignity, comfort, education and provide for any
contingency. However, to keep in mind an industry's capacity to pay the constitution has defined
a 'fair wage' Fair wage is that level of wage that not just maintains a level of employment, but
seeks to increase it keeping in perspective the industry’s capacity to pay. To achieve this in its
first session during November 1948, the Central Advisory Council appointed a Tripartite
Committee of Fair Wage. This committee came up with the concept of Minimum Wages. A
minimum wage is such a wage that it not only guarantees bare subsistence and preserves
efficiency but also provides for education, medical requirements and some level of comfort India
introduced the Minimum Wages Act in 1948 giving both the Central government and State
government jurisdiction in fixing wages. The act is legally non-binding, but statutory. Payment
of wages below the minimum wage rate amounts to forced labour. Wage Boards are set up to
review the industry’s capacity to pay and fix minimum wages such that they at least cover a
family of four’s requirements of calories, shelter, clothing, education, medical assistance, and
entertainment. Under the law, wage rates in scheduled employments differ across states, sectors,
skills, regions and occupations owing to difference in costs of living, regional industries' capacity
to pay, consumption patterns, etc. Hence, there is no single uniform minimum wage rate across
the country and the structure has become overly complex. The highest minimum wage rate as
updated in 2012 is Rs. 322/day in Andaman and Nicobar to Rs. 38/day in Tripura.

2015: From July 1, 2015 the National Floor Level of Minimum Wage was raised to Rs 160 per
day.

2015: On September 1, 2015 labourers in unorgainsed sector extended their support to one-day
nationwide general strike called by central trade unions (CTUs). Later than Shri Bandaru
Dattatreya, the Minister of State(IC) for Labour and Employment, elaborated on the initiatives
and continuing efforts of the Government to address the issues and concerns of the Trade Unions
for the welfare of workers. If the norms are implemented then the minimum wage would be not
less than Rs 273 per day which is currently Rs 160 per day.

Health and safety

The Workmen's Compensation Act 1923 requires that compensation is paid if workers are
injured in the course of employment for injuries, or benefits to dependants. The rates are low.

 Factories Act 1948, consolidated existing factory safety laws

12
  The Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013 that seeks to protect and provides a mechanism for women to
report incidents of sexual harassment at their place of wor
Indian labour law

Indian labour law refer to laws regulating labour in India. Traditionally Indian governments at
federal and state level have sought to ensure a high degree of protection for workers, but in
practice, legislative rights only cover a minority of workers. India is a federal form of
government and because labour is a subject in the concurrent list of the Indian Constitution,
labour matters are in the jurisdiction of both central and state governments. Both central and state
governments have enacted laws on labour relations and employment issues.

History

Indian labour law is closely connected to the Indian independence movement, and the campaigns
of passive resistance leading up to independence. While India was under colonial rule by the
British Raj, labour rights, trade unions, and freedom of association were all suppressed. Workers
who sought better conditions, and trade unions who campaigned through strike action were
frequently, and violently suppressed. After independence was won in 1947, the Constitution of
India of 1950 embedded a series of fundamental labour rights in the constitution, particularly the
right to join and take action in a trade union, the principle of equality at work, and the aspiration
of creating a living wage with decent working conditions.

o 1921 Buckingham and Carnatic Mills Strike

o 1926 Binny Mills Strike
o 1928 South Indian Railway Strike
o Meerut Conspiracy Case (1929)
o 1974 railway strike in India
o Great Bombay Textile Strike in 1982
o Harthal in Kerala 2012
National employment policy

A national employment policy is a vision and a practical plan for achieving a country’s
employment goals. To make such a plan, a government has to clearly see a country’s challenges
and opportunities. It has to consult widely to reach common agreement among all interested
parties in the economy, including employers’ and workers’ organizations.

A national employment policy is not just a job creation programme. It takes into account a whole
range of social and economic issues. It affects many areas of government—not just the areas in
charge of labour and employment—and every part of the economy. It brings together various

13
measures, programmes and institutions that influence the demand and supply of labour and the
functioning of labour markets. A

national employment policy should promote decent work, in which international labour
standards, social protection and workers’ fundamental rights go hand in hand with job creation.

A national employment policy is something that each country must forge for itself, according to
its own context and state of development. It is not just an inspiring statement of what we hope
for. It is a real plan for how we get there. Many stakeholders have to be involved in making it,
and the result has to be something that they can all work towards.

The need for comprehensive national employment policies has been rising to the top of the
agenda globally, especially in the wake of the 2008 world financial crisis. In this part of the
guide, we tell you what has been happening, especially in developing countries. Trade unions
need to be involved in setting policy directions for employment in their countries.

No one speaks better for workers than their unions. But this new role goes well beyond trade
unions’ traditional areas of concern and means of action. They will have to widen their agenda to
deal with employment issues in a larger economic context. Unions will need stronger capacities
to take part meaningfully in complex national policy debates, with well-researched arguments
and credible representation from all parts of the labour force. They may need to build coalitions
within organized labour in their countries to achieve a national labour voice, and they may need
to build coalitions with like-minded organizations outside the labour movement.

Employment Policy of India

Any employment policy must include both quantitative and qualitative aspect of the employment
problem. This implies that the essentials of employment policy must include the increase in work
participation rate, rapid expansion of employment opportunities and improvement in the
productivity of the employed.

1) Increased Production:

It is the key element of the employment policy. In almost all our five year plans emphasis has
been· laid on the creation of additional employment. Between 1972-73 and 1987-88,
employment has grown at the rate of 2.21 % annually. But the GDP growth rate has been around
3.5% to 4.5% annually. Increased production or nation income should be the important element
of our employment policy. It will have direct impact on poverty, the greatest malady and polluter
of our economy.

2) More productive Employment:

The employment policy should aim at expanding the volume of employment. It means that there
should be higher participation of the labour force in different activities. As a result, employment

14
will be more productive. It will generate larger output per person per year. To increase labour
productivity steps should be taken for the education of laborers.

3) Appropriate Production Technique:

The employment policy should be such as to maximize labour employment without sacrificing
rapid growth. Both labour intensive and capital intensive techniques have their respective merits
and demerits. India is a country where labour is plenty but capital is scanty. Adoption of labour
intensive, technique will promote employment but will retard growth. Adoption of capital
intensive technique will promote growth but will retard employment expansion

4) Population control:

Control of population explosion should be an important element of employment policy in India.

There is huge backlog of unemployment in India. Population explosion overcrowds agriculture
of India. This leads to disguised unemployment. All steps should be taken to make the family
planning programme successful. This will enable the government to solve the problem of
unemployment.

5) Revamping the Education System:

The Education system in India is mainly unproductive. Unemployment among the educated
youth is a cause of serious concern in India: It is in favour of general education and not of
technical and vocational education. Educated unemployment gives rise to crime, prostitution,
juvenile delinquency etc. It. leads to poverty, misery and homelessness and other sins. It
encourages corruption, dishonesty, falsehood, gambling and gangsterism, moral turpitude and
degradation. The employment policy should be such as to provide employment to the educated
youth. The number of educated unemployed has increased from 5.9 lakhs in 1961 to 224 lakhs in
1991.

6) Manpower planning:

Manpower planning is indispensable with a view to solving the problem of unemployment.

Hence economic planning should be integrated with manpower planning. There are excess
supply of skilled labour in certain sectors and shortages in other sectors. The vast supply of
unskilled illiterate laborers are outside the manpower planning. The employment policy should
take manpower planning into consideration. Population control should be an inseparable element
of manpower planning.

7) Emphasis on small scale and cottage industries:

The employment objective and the output objective do not appear to be in conflict but can be
harmoniously reconciled if greater investment is directed to small enterprises rather than to large
enterprises. Cottage and small scale industries are capital-light, skill-light, import-light, quick

15
yielding, noninflationary and labour intensive. They create employment opportunities and are
sources of subsidiary employment. But their role is complementary not competitive with heavy
industry. The development of these industries will make work for the' unemployed, more work
for the underemployed and supplementary work for the seasonally unemployed.

8) Fictional and technological unemployment:

Technological unemployment is due to the employment of modem techniques to save labour.

Frictional unemployment is due to the breakdown of machines, immobility of labour and
shortage of raw materials etc. The employment policy should be such as to solve the problem of
technological and frictional unemployment.

9) Employment for women:

Women share only 14.1 % of employment to total employment. Women labour force
participation rate in rural areas is 33.1 % and in urban areas it is 16.2%. Only a meagre 6.60% of
women of the total employed are employed in government jobs. The progress of women
employment has been very slow. 94% of working women are in the unorganized sectors. Women
education should be given top priority. Women labourers should be paid fair wages. The
organized sector should give greater share to women in its total employment programme.
Training facilities should be provided to them in order to improve their productive capacity.
Residential accommodation for working mothers, medical facilities, maternity leave and child
care facilities should be emphasized. Therefore, while considering a prospective employment
policy, the problem of women employment should be given due significance.

10) Self Employment:

The employment policy should be such as to enthuse and encourage self-employment. In

advanced countries self-employment constitutes only a limited percentage of the labour force
(less than 30%) In India it was 55.0% in 1993-94. The largest percentage of self-employment is
engaged in agriculture and allied activities as big, small and marginal farmers. Self-employment
is also seen in collage and small industries. retail trade, transport and personal service. It is not
possible t0 provide employment to all in the organized sector in a vast continental economy like
India, the problem of unemployment in India is very acute. In the circumstances, the satisfactory
solution of the problem is the adequate facilities of self-employment to the continuously growing
labour force. The number of the self-employed is more than 50%. They have low level of
income. They are poverty stricken. Hence they deserve special attention in the national
employment policy. Proper training and encouragement should be given to the young educated
entrepreneurs. The Government should provide easy and timely credit and marketing facilities to
the self-employed persons. The Government must see that funds meant for the purpose is
properly utilized.

16
11) Avoidance of special employment programmes:

Often it is seen that special employment programmes appear attractive and fruitful from the view
of political considerations. When these programmes are implemented, they produce jobs where
labour becomes unproductive or less productive. Moreover, the volume of permanent
employment in those programmes tends to be less compared to the amount of capital invested
their in. Contrarily, increasing investment in income yielding projects like flood control,
hydroelectricity generation, rural electrification, soil conservation, cottage and small industries
etc. will create more permanent employment in future. The national employment policy makers
must take this into consideration.

Existing Unemployment insurance programmes in India

India has various organizations to provide social insurance programmers of different types. The
Employees State Insurance Corporation of India (ESIC) provides medical care, maternity, and
work-related disability benefits for employees earning less than Rs. 15,000 a month in factories
with 10 or more workers (20 or more in other establishments). It is funded by contributions from
both employees (1.75% of wages) and employers (4.75% of wages). In 2005, the Rajiv Gandhi
Shramik Kalyan Yojana(RGSKY) was added to the ESIC programme. RGSKY is the only form
of traditional unemployment insurance in the country. Under this scheme, an insured person who
loses his job after contributing premium for at least three years is eligible for unemployment
allowance equivalent to 50% of wages per month for a maximum period of one year. While the
benefits are moderate, the eligibility requirement of three years of contribution is quite stringent.
Also, the ESIC requirement that the monthly wage must be less than Rs. 15,000 makes a lot of
worker’s ineligible. The information on how many of the unemployed are actually getting
unemployment allowance is not readily available.

In 2006, the Government of India launched an ambitious programme of social protection for the
rural poor under the MNREGA (Mahatma Gandhi National Rural Employment Guarantee Act).
MNREGA guarantees 100 days of work to each rural household at the prevailing minimum
wage. The design of this programme is different from the standard unemployment insurance
programmes that provide temporary income to the unemployed while they are looking for a job.
Rather, a person must work on a public project to obtain income. Therefore, it is more suited to
the rural poor who cannot find employment all year round. One may think that the traditional
unemployment insurance schemes prevalent in developed countries are not suitable for a
developing country like India. However, studies show that these programmes can be successful
and enhance welfare significantly in developing countries (Gonzaga 2012). As a result, several
developing countries have launched unemployment insurance programmes.

Vocational Guidance means assistance given to an individual in solving problems related to

vocational planning and to occupational choice and profess with due regard for the individual's
characteristics and their relation to occupational opportunities.

17
Guidance is beneficial for the individual as well as to the society. It helps an individual by
providing assistance in solving problems relating to choice of career, occupational change and
adjustments. From the standpoint of the society, it is one of the means of achieving proper
utilization of manpower. Indirectly, it helps in raising productivity and in minimizing
unemployment/under-employment.

Vocational Guidance is an aspect of guidance, having focus on the problems relating to

vocational life. Guidance services are, therefore, a constellation of services concerned with
educational, vocational, personal, social or health aspects; such labelling has been done for
practical considerations.

Objectives

Vocational Guidance Programme is integrated with the placement functions as a whole.

Specific objectives of Vocational Guidance in the Employment Service are:-

i) To suggest measures with a view to enhancing the employability of an individual or groups of

individuals;

ii) To offer assistance to an individual or groups of individuals in preparing to choose, change

and adjust to occupational life;

iii) To evaluate the strengths and weaknesses of the individuals and match them with the job
requirements

iv) To generate awareness and appreciation of the realities of employment market in the
community;

v) To collaborate or co-operate with other agencies in the field of guidance to stimulate and
promote joint efforts; and

vi) To promote self-employment

Employment Services:

The Employment Service came into existence in India under the stress of postwar
demobilization. Towards the end of the Second World War, the need for a machinery which
could handle orderly reabsorption of civil life, of a large number of service personnel and war
workers .

In accordance with a scheme that was agreed upon by the Central and State Governments, the
Directorate General of Resettlement and Employment (D.G.R.&E) was set up in July 1945 and
Employment Exchanges were gradually opened in several parts of the country.

18
Till the end of 1946, Employment Service facilities were restricted to demobilized service
personnel and discharged war workers. In 1947, consequent upon the partition of the country, the
Employment Exchanges were called upon to deal with the resettlement of a large number of
persons who were displaced as a result of partition.

In response to popular demands, the scope of the service was gradually extended and by early
1948, Employment Exchanges were thrown open to all categories of applicants. Thus a
resettlement agency was transformed as an all India placement agency.

Based on the recommendations of the Training and Employment Services Organization

Committee, headed by Sri: Shiva Rao, the day-to-day administration of the organization was
handed over to the State Governments with effect from 1st November 1956.

The Employment Service is now the joint concern of the Central and State Governments. The
administrative control of the department is by the State Government.

To ensure the uniformity in the functioning of the Employment Exchanges all over India, the
policies and procedure to be adopted in the functional activities of the Employment Exchanges
are prescribed at the national level by the Director General of Employment & Training, New
Delhi.

The department is called National Employment Service this State.

Vocational Training programmes

Vocational education consists basically of practical courses through which one gains skills and
experience directly linked to a career in future. It helps students to be skilled and in turn, offers
better employment opportunities. These trainings are parallel to the other conventional courses of
study (like B. Sc., M. Sc. etc.). Time management and meeting deadlines play an important
role in success in a vocational course. which is taken as a demonstration of students’ capabilities
for a job. After finishing the courses, students are often offered placements in jobs. Vocational
trainings in a way give students some work related experiences that many employers look for.

According to a National Sample Survey Organization (NSSO) report two types of vocational
trainings are available in India:

a) Formal

b) Non-formal

Formal vocational training follows a structured training program and leads to certificates,
diplomas or degrees, recognized by State/Central Government, Public Sector and other reputed
concerns.

19
Non-formal vocational training helps in acquiring some marketable expertise, which enables a
person to carry out her/his ancestral trade or occupation

The Vocational Training in India is imparted by mainly two types of bodies:

 Public Industrial Training Institutes (ITIs)

 Private owned Industrial Training Centers (ITCs)
The Indian Government has invested a lot for the development of skills through ITIs. The
DGE&T generally regulates these ITIs and ITCs at national level and implements policies for
vocational training.

According to the Planning commission report for the 11th Five-year plan there are about 5,114
Industrial Training Institutes (ITIs) imparting training in 57 engineering and 50 non-engineering
trades. Of these, 1,896 are State Government-run ITIs while 3,218 are private. The total seating
capacity in these ITIs is 7.42 lakh (4 lakh seats in government ITIs and the remaining 3.42 lakh
in private ITCs).

National Manufacturing Competitive Council (NMCC):

This Body was set up by Govt. of India in the year of 2004 as a part of National
Common Minimum Program to help in accelerated growth of GDP, primarily focusing on
manufacturing Industry. According to the strategy for National Manufacturing-2006, vocational
training plays a key role on this. According to a report by NMCC, if Indian manufacturing has to
grow at around 12 percent per annum, it will be necessary for the education and training system
to produce at least 1.5 million technically skilled people every year. It is estimated that the
country would need an incremental requirement of about 20 million skilled technicians by 2015.

Industrial Relations:
Industrial Relation is a relation between employer and employees, employees and employees and
employees and trade unions. (Industrial dispute Act 1947)
Governments set the framework for labour relations through legislation and regulation. Industrial
relations has become one of the most delicate and complex problems of modern industrial
society. Industrial progress is impossible without cooperation of labours and harmonious
relationships. Therefore, it is in the interest of all to create and maintain good relations between
employees (labour) and employers (management).

Industrial Relation encompasses all such factors that influence behaviour of people at
work. A few such important factors are details below:

1. Institution: It includes government, employers, trade unions, unions’ federations or

20
associations, government bodies, labour courts, tribunals and other organizations which have
direct or indirect impact on the industrial relations systems

2. Characters : It aims to study the role of workers unions and employers’ federations officials,
shop stewards, industrial relations officers/ manager, mediator/conciliators / arbitrator, judges of
labour court, tribunal etc.

3. Methods : Focus on collective bargaining, workers’ participation in the Industrial Relation

schemes, discipline procedure, grievance re-dressal machinery, dispute settlements machinery
working of closed shops, union reorganization, organizations of protests through methods like
revisions of existing rules, regulations, policies, procedures, hearing of labour courts, tribunals
etc.

4. Contents : Includes matter pertaining to employment conditions like pay, hours of works,
leave with wages, health, and safety disciplinary actions, lay-off, dismissals retirements etc.,
laws relating to such activities, regulations governing labour welfare, social security, industrial
relations, issues concerning with workers’ participation in management, collective bargaining,
etc.

Services to Employer And Workers

Objectives of Industrial Relation:

1. To safeguard the interest of labour and management by securing the highest level of mutual
understanding and good-will among all those sections in the industry which participate in
the process of production.

2. To avoid industrial conflict or strife and develop harmonious relations, which are an
essential factor in the productivity of workers and the industrial progress of a country.

3. To raise productivity to a higher level in an era of full employment by lessening the tendency
to high turnover and frequency absenteeism.

4. To establish and nurse the growth of an Industrial Democracy based on labour partnership in
the sharing of profits and of managerial decisions, so that ban individuals personality may
grow its full stature for the benefit of the industry and of the country as well.

5. To eliminate, as far as is possible and practicable, strikes, lockouts and gheraos by providing
reasonable wages, improved living and working conditions, said fringe benefits.

21
6. To establish government control of such plants and units as are running at a loss or in which
productions has to be regulated in the public interest.

7. Improvements in the economic conditions of workers in the existing state of industrial

managements and political government.

8. Control exercised by the state over industrial undertaking with a view to regulating
production and promoting harmonious industrial relations.

9. Socializations or rationalization of industries by making the state itself a major employer.

10. Vesting of a proprietary interest of the workers in the industries in which they are employed.

Factors of industrial relations –

Good industrial relations depend on a great variety of factors. Some of the more obvious ones are
listed below:

1. History of industrial relations – No enterprise can escape its good and bad history of
industrial relations. A good history is marked by harmonious relationship between
management and workers. A bad history by contrast is characterized by militant strikes
and lockouts. Both types of history have a tendency to perpetuate themselves. Once
militancy is established as a mode of operations there is a tendency for militancy to
continue. Or once harmonious relationship is established there is a tendency for
harmony to continue.

2. Economic satisfaction of workers – Psychologists recognize that human needs have a

certain priority. Need number one is the basic survival need. Much of men conducted
are dominated by this need. Man works because he wants to survive. This is all the
more for underdeveloped countries where workers are still living under subsistence
conditions. Hence economic satisfaction of workers is another important prerequisite
for good industrial relations.

3. Social and Psychological satisfaction – Identifying the social and psychological urges of
workers is a very important step in the direction of building good industrial relations. A
man does not live by bread alone. He has several other needs besides his physical needs
which should also be given due attention by the employer. An organization is a joint
venture involving a climate of human and social relationships wherein each participant
feels that he is fulfilling his needs and contributing to the needs of others. This
supportive climate requires economic rewards as well as social and psychological

22
rewards such as workers’ participation in management, job enrichment, suggestion
schemes, re-dressal of grievances etc.

4. Off-the-Job Conditions – An employer employs a whole person rather than certain

separate characteristics. A person’s traits are all part of one system making up a whole
man. His home life is not separable from his work life and his emotional condition is not
separate from his physical condition. Hence for good industrial relations it is not enough
that the worker’s factory life alone should be taken care of his off-the-job conditions
should also be improved to make the industrial relations better.

5. Enlightened Trade Unions – The most important condition necessary for good industrial
relations is a strong and enlightened labour movement which may help to promote the
status of labour without harming the interests of management, Unions should talk of
employee contribution and responsibility. Unions should exhort workers to produce
more, persuade management to pay more, mobilize public opinion on vital labour
issues and help Government to enact progressive labour laws.

Collective Bargaining:

6. Negotiating skills and attitudes of management and workers – Both management and
workers’ representation in the area of industrial relations come from a great variety of
backgrounds in terms of training, education, experience and attitudes. These varying
backgrounds play a major role in shaping the character of industrial relations. Generally
speaking, well-trained and experienced negotiators who are motivated by a desire for industrial
peace create a bargaining atmosphere conducive to the writing of a just and equitable collective
agreement. On the other hand, ignorant, inexperienced and ill trained persons fail because they
do not recognize that collective bargaining is a difficult human activity which deals as much in
the emotions of people as in their economic interests. It requires careful preparation and top –
notch executive competence. It is not usually accomplished by some easy trick or gimmick.
Parties must have trust and confidence in each other. They must possess empathy, i.e. they
should be able to perceive a problem from the opposite angle with an open mind. They should
put themselves in the shoes of the other party and then diagnose the problem. Other
factors which help to create mutual trust are respect for the law and breadth of the
vision. Both parties should show full respect for legal and voluntary obligations and
should avoid the tendency to make a mountain of a mole hill.
Collective Bargaining in IndiaOrigin & Development - Since Collective Bargaining is the off-
shoot of Trade Union activity, it is worthwhile to trace the origin of Trade Union first. The credit
for organised labour movement in India goes to N.M. Lokhande, who was a factory worker
himself. In 1884, he organised an agitation in Bombay and prepared a memorandum demanding
limitation of working hours, a weekly rest day, compensation for injuries etc. and in response of
these demands a weekly holidays was actually granted by the mill owners of Bombay. In fact, in
1890, the Bombay Mill hands’ Association was organised with Lokhande as chairman and
workers newspaper “Deenabandhu” was started. The trade union movement got its momentum at

23
the close of the World War I and the period of 1918-21 was an epoch-making period in the
history of Indian labour movement. The Madras Labour Union (1918) founded by P.P. Wadia
was the first India’s Trade Union. By the year 1920 the Trade Union had emerged on the Indian
Scene in almost all the sector to protect the legitimate interests of the working classes. Collective
Bargaining formally started in 1920s in the textile industry in Ahmedabad at the time when
Mahatma Gandhi was introducing the concept of arbitration. Collective Bargaining started
because of failure of arbitration. Thereafter, lots of collective bargaining agreements were
executed especially after Independence. But there was little support for the growth of this
practice, since neither British India nor Independent India made legal provisions for collective
bargaining. Nevertheless, like many other countries, collective bargaining in India got some
impetus from various statutory provisions. The Trade Union Act, 1929, the Bombay Industrial
Relations Act, 1946, the Industrial Disputes Act, 1947, and the Madhya Pradesh Industrial
Relations Act, 1960 provided a machinery for consultation and paved the way for Collective
bargaining.

Settlement of disputes:
7. Public policy and legislation:- when Government, regulates employee relations, it
becomes a third major force determining industrial relations the first two being the
employer and the union. Human behaviour is then further complicated as all three
forces interact in a single employee relation situation. Nonetheless, government in all countries
intervenes in management – union relationship by enforcing labour laws and by insisting that the
goals of whole society shall take precedence over those of either of the parties. Government
intervention helps in three different ways 1) it helps in catching and solving problems before
they become serious. Almost everyone agrees that it is better to prevent fires them to try stopping
them after they start; 2) It provides a formalized means to the workers and employers to give
emotional release to their dissatisfaction; and 3) It acts as a check and balance upon arbitrary and
capricious management action.

8. Better education: - with rising skills and education workers’ expectations in respect of
rewards increase. It is a common knowledge that the industrial worker in India is
generally illiterate and is misled by outside trade union leaders who have their own axe
to grind. Better workers’ education can be a solution to this problem. This alone can
provide worker with a proper sense of responsibility, which they owe to the
organization in particular, and to the community in general.

9. Nature of industry: - In those industries where the costs constitute a major proportion
of the total cast, lowering down the labour costs become important when the product is
not a necessity and therefore, there is a little possibility to pass additional costs on to
consumer. Such periods, level of employment and wages rise in decline in employment
and wages. This makes workers unhappy and destroys good industrial relations.

INDUSTRIAL DISPUTE ACT,1947

24
 The Industrial Disputes Act, 1947 came into existence in April 1947. It was enacted to make
provisions for investigation and settlement of industrial disputes and for providing certain
safeguards to the workers.

"INDUSTRIAL DISPUTE" means any dispute between employers and employers, or between
employers and workmen, or between workmen and workmen, which is connected with the
employment or non-employment or the terms of employment or with the conditions of labour, of
any person.

Indian trade disputes act, 1929 was the first legislation in India for the settlement of industrial
disputes. Initially, the act was made to remain in force for 5 years. In 1932 certain
amendments were carried out in the act in 1934, in consultation with the provincial governments,
the central governments made the act to remain in permanent force. This act, inter alia, provided
for the settlement of disputes by appointment of ‘court of inquiry’ and ‘board of conciliation’
upon an application to the government by any party in disputes. The illegal strikes were banned
under the act.

In 1938, Bombay industrial development act was enacted. Under this act, an inquiry was made
compulsory before declaration of strikes or lock-outs. This was made, In fact, to ensure
uninterrupted working of industries Subsequently, after the outbreak of world war-2, defiance India
rule( DIR ) was enforced In 1939. under section 81a of DIR, strikes and lock-outs were banned in
the public utility services. In other establishments, prior notice was compulsory for strikes or lock-
out.

References:
http://smartlearningway.blogspot.com/2015/01/industrial-dispute-act1947-labour-laws.html
http://www.lawteacher.net/free-law-essays/employment-law/evolution-of-indian-labour-
legislations-employment-law-essay.php#ixzz41gEQZcQv
http://www.lawteacher.net/free-law-essays/employment-law/evolution-of-indian-labour-
legislations-employment-law-essay.php#ixzz41gEECY2U
http://www.lawteacher.net/free-law-essays/employment-law/evolution-of-indian-labour-
legislations-employment-law-essay.php#ixzz41gDy90bk
http://www.lawteacher.net/free-law-essays/employment-law/evolution-of-indian-labour-
legislations-employment-law-essay.php#ixzz41gDko37t

25
FATIMA JINNAH WOMEN UNIVERSITY

ASSIGNMENT NO.1

SUBJECT

LABOUR ADMINISTRATION

TOPIC

LABOUR ADMINISTRATION IN INDIA

Department MPA#4

SUBMITTED BY

IRUM SHAHZADI

MARIA IRAM

SAFIA ALTAF

SAIRA KANWAL

TAYYABA RASOOL

SUBMITTED TO

Ms MOMINA YOUSAF

SUBMISSION DATE

02-March-2016

26