INTRODUCTION
Labour and industrial law forms the backbone of how societies manage work and the people who do it. It weaves through factories, corporate towers, farms, and offices. While often tucked away in thick law books and policy files, its real home is in the everyday lives of workers, employers, trade unions and regulators.
India’s relationship with labour laws has always been layered. At independence, the country inherited a patchwork of colonial-era regulations, designed less to protect workers and more to ensure a steady, compliant workforce for British enterprises. Over time, this framework evolved, absorbing constitutional guarantees and international labour standards. Still, for decades, it remained tangled, overlapping and at times contradictory.
Roots in Constitutional Values
The Constitution sets the tone. The Directive Principles urge the State to secure just and humane conditions of work. Fundamental Rights protect against discrimination and forced labour, and guarantee freedom of association — the lifeblood of trade unions. Articles like 19(1)(c) and 23-24 serve as cornerstones for collective bargaining and protection from exploitation.
This constitutional mandate means no labour law can stand that violates human dignity or fairness at work. Yet, the challenge has always been to translate these ideals into workable, enforceable rules that balance the needs of workers and industry.
The Old Labyrinth
For much of independent India’s history, labour law was scattered across nearly 40 major central enactments and hundreds of state amendments. Think of the Industrial Disputes Act, 1947 — the principal statute for handling industrial disputes, strikes, layoffs and retrenchments. Add the Factories Act, 1948, the Minimum Wages Act, 1948, the Payment of Wages Act, 1936, the Trade Unions Act, 1926, and so on.
This abundance led to a curious paradox. While workers often found themselves vulnerable — especially those in the informal sector — industries too felt choked by procedural hurdles, outdated definitions and compliance headaches. Both sides, ironically, wanted reforms but feared each other’s gains.
The Code Consolidation
In recent years, India made a bold attempt to untangle this mess. Four Labour Codes were passed between 2019 and 2020: the Code on Wages, the Code on Social Security, the Industrial Relations Code, and the Occupational Safety, Health and Working Conditions Code. These aim to condense dozens of overlapping laws into a clearer, more modern framework.
The Code on Wages, for instance, merges laws on minimum wages, payment of wages, bonus and equal remuneration. The Social Security Code tries to universalise social benefits, extending coverage to gig and platform workers — a nod to the realities of app-driven work. The Industrial Relations Code reworks provisions on strikes, lockouts and trade unions, while the OSH Code focuses on safety and working conditions across industries.
But consolidation on paper does not automatically bring clarity on the ground. These Codes have sparked debates over whether they tilt too much towards ease of doing business at the expense of workers’ rights. Some worry that higher thresholds for prior government approval in layoffs may weaken job security. Others argue that outdated rigidities kept industries small and informal, trapping millions in low-wage, unprotected jobs.
Courts and Clarity
Judicial interpretation has played a big role in shaping labour law’s contours. Take the principle of ‘master-servant relationship’ or the test of who qualifies as a ‘workman’ under the Industrial Disputes Act. Courts have drawn the line between managerial staff and workmen, regular employees and contract labour, direct employment and sham contracts.
Landmark cases like Bangalore Water Supply expanded the definition of ‘industry’, bringing in a wide range of establishments under its scope. In contrast, decisions like Steel Authority of India Ltd. v. National Union Waterfront Workers addressed the regularisation of contract labour, balancing workers’ demands with employers’ flexibility.
Every such decision leaves footprints that influence policy, hiring practices and industrial relations across the country.
The Informal Question
No discussion on Indian labour law is complete without acknowledging the elephant in the room — informality. Over 90% of India’s workforce works without written contracts, formal social security or legal protection. Construction sites, street vending, domestic work, small workshops — these are governed more by custom and local practice than by any code.
Bringing these workers into the formal fold is not just about passing laws. It means building awareness, making registration hassle-free, and ensuring the inspectorates are robust but not oppressive. Digital tools offer promise — think of the E-Shram portal or Aadhaar-linked benefits — but tech alone cannot bridge every gap.
Trade Unions and Collective Bargaining
Unions remain a vital force but face challenges of their own. Membership has often been fragmented along political lines. While large public sector unions still wield considerable clout, in private industry, especially in IT, gig work, and start-ups, unions are rare or non-existent. This leaves many modern workers without collective bargaining power, negotiating contracts as individuals rather than as a collective.
Labour law’s effectiveness hinges partly on the space it gives for genuine negotiation. The Industrial Relations Code seeks to formalise this by mandating recognition of negotiating unions in establishments with multiple unions. Whether this empowers workers or gets diluted in practice remains to be seen.
Industrial Peace vs. Labour Rights
Governments often walk a tightrope: attract investment and maintain industrial peace while safeguarding workers’ rights. Strikes, lockouts, and protests remain tools of last resort but can quickly escalate into national headlines. From the textile strikes of the 1980s to recent farmer protests where labour issues overlap with land rights and rural employment, the lines blur between economic, social, and political spheres.
The Global Angle
In a globalised economy, supply chains cross borders. Multinational brands source from developing countries like India where cheap labour is abundant. But global buyers increasingly insist on ethical sourcing — no child labour, decent wages, safe conditions. This has pushed Indian industries to adopt international standards, sometimes more rigorously than domestic law requires.
The International Labour Organization (ILO) conventions, though not all ratified by India, still guide domestic labour law to align with global norms. This external push, combined with internal reforms, shapes how Indian industries stay competitive without sliding into a ‘race to the bottom’ on wages and conditions.
The Road Ahead
Labour and industrial law will keep evolving. Automation, artificial intelligence, and the gig economy pose fresh puzzles. Who is an ‘employee’ when your boss is an algorithm? How does one strike for better pay when the ‘employer’ is an app?
India’s demographic dividend will be realised only if its workers, especially the young and semi-skilled, can secure productive, dignified, and safe employment. Laws must be simple enough to follow, strong enough to protect, and flexible enough to adapt.
Ultimately, the spirit of labour and industrial law lies in fairness. It asks: how do we ensure that those who build the economy share fairly in its growth? The answer will be written not just in statutes and codes but in factories, farms, tech hubs, and every place where people earn their bread.
The law may set the floor, but the will to stand up for dignity and dialogue will always rest with the people it seeks to protect.
CONTRIBUTED BY : LAKSHAY NANDWANI (INTERN)