Historical Background of Labour Policy & Labour Laws

India’s Labour Policy is mainly based on Labour Laws. The labour laws of independent India
derive their origin, inspiration and strength partly from the views expressed by important
nationalist leaders during the days of national freedom struggle, partly from the debates of the
Constituent Assembly and partly from the provisions of the Constitution and the International
Conventions and Recommendations. 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. The Labour Laws were also influenced by important
human rights and the conventions and standards that have emerged from the United Nations.
These include right to work of one’s choice, right against discrimination, prohibition of child
labour, just and humane conditions of work, social security, protection of wages, redress of
grievances, right to organize and form trade unions, collective bargaining and participation in
management. Our labour laws have also been significantly influenced by the deliberations of
the various Sessions of the Indian Labour Conference and the International Labour
Conference. 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 etc1.

Constitutional Framework

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. As a result , a large
number of labour laws have been enacted catering to different aspects of labour namely,
occupational health, safety, employment, training of apprentices, fixation, review and
revision of minimum wages, mode of payment of wages, payment of compensation to
1
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workmen who suffer injuries as a result of accidents or causing death or disablement, bonded
labour, contract labour, women labour and child labour, resolution and adjudication of
industrial disputes, provision of social security such as provident fund, employees’ state
insurance, gratuity, provision for payment of bonus, regulating the working conditions of
certain specific categories of workmen such as plantation labour, beedi workers etc.

Besides, both Central and State Governments have formulated Rules to facilitate
implementation of these laws.

The Ministry of Labour & Employment is mandated to create a work environment conducive
to achieving a high rate of economic growth with due regard to protecting and safeguarding
the interests of the working class in general and those of the vulnerable sections of the society
in particular. The Ministry has been performing its assigned duties through the above stated
legislations with the help and cooperation of State Governments.

It needs to be stated that in a dynamic context, laws need to be reviewed from time to time.
Hence, review/updation of labour laws is a continuous process in order to bring them in tune
with the emerging needs of the economy such as attaining higher levels of productivity &
competitiveness, increasing employment opportunities, attaining more investment both
domestic and foreign etc2.

First National Commission on labour

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 3.

The FNCL located itself squarely but critically within the framework of Nehruvian objectives
of planned development. Labour Minister, Jagjivan Ram, had gone into some effort to ensure

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3
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that the FNCL was headed by the pro-labour judge and eminent jurist, Mr. Gajendragadkar.
Subsequent to his retirement as Chief Justice, the latter had agreed to the assignment on
condition that he be allowed to be headquartered in Bombay to help his duties as current
Vice-Chancellor of University of Bombay – from which he would make time to travel to the
Commission office in Delhi for meetings as needed 4 . Ram could not make it personally to
the inaugural meeting, also held in Bombay on January 18 1967. However the Labour
Minister’s address read at the inaugural meeting emphasised the values of planning for
harmonious industrial relations, the role of labour, responsibilities of industry to work not for
profit alone. Not surprisingly, the framing emphasis on tripartism was key: …labour policy
that has been pursued since Independence can hardly be called the exclusive handi work of
the Government. As you all know, tripartite forums, like the Indian Labour Conference and
various Industrial Committees have given direction to Government's labour policy. Though
Government has naturally been initiating the policies, the organisations of workers and
employers have not only played their parts in policy making but has also shared a
responsibility in deciding its manner of implementation. To what extent this system has
succeeded and whether they or the Government have discharged their responsibilities are
matters for the Commission to judge… Management through persuasion, conciliation and
adoption of flexible means and the need for industrial harmony, prominent as labour policy
objectives were highlighted. However, the Labour Minister was equally emphatic in striking
a forthright note in speaking of agriculture and rural labour: You would have noted that in
your terms of reference, special mention has been made of the conditions of rural labour and
other categories of unorganised labour. Our labour policy has hitherto somehow overlooked
this mass of workers even though they constitute the bulk of those who produce goods and
provide services. If social security for labour in the organised sector was a priority, equally
the need to extend legislative protection to contract labour was prominently signalled: There
are laws for protecting labour in factories, mines, plantations, road transport and bidi
industry. I hope that contract labour will also soon enjoy a measure of legislative protection.
It was acknowledged that the Minimum Wages Act was meant to protect agricultural
workers, yet beyond this nominal provision, little had been done for agriculture, rural
industries, sanitary workers, scavengers and other workers who made up the bulwark of the
economy: But apart from the ineffectively and imperfectly implemented minimum wages
law, the workers employed in agriculture and other rural industries have been by and large

4
Gajendragadkar, ‘To the Best of my Memory”, Bhartiya Vidya Bhavan, p. 293.
kept beyond the purview of labour legislation. The same is the fate of sanitary workers and
scavengers. As Minister for Labour, I have a sense of guilt in this regard. When I was first
called upon to take up the Labour portfolio, I went to Gandhiji for his blessings and his
instruction to me was to take good care of those workers who were the most neglected. I
cannot forget that I have not been able to carry out his desire… I hope it will be possible for
the Commission to go into the question and make recommendations which will help to bring
a better life to these workers who form the sheet anchor of our economy.[emphasis added].
Importantly, the government’s expectations from the Commission were outlined as follows,
oddly even as the possibility of selective (or non-) implementation was already being hinted
at:
recommendations that will emerge from the deliberations of this Commission, will provide
guidelines for labour policy for many years to come It would be unrealistic to expect that the
Commission's recommendations would all be such as can be put into practice by the
Government immediately after the submission of the report They will have an enduring
impact and call for continuing action, not by Government alone. Further striking a peculiarly
cagey note, it was also suggested responsibilities to follow recommendations would not rest
with the government alone; these would also need to be taken up by worker and employer
organisations. Was this an effort to signal that government could not take on sole
responsibility over implementation? Did the move to distribute responsibility gesture toward
fault lines within the tripartite partnership? Or did it gesture to the leeway the government
wanted to give itself through to conveniently disavow the authority that it otherwise claimed
quite assiduously? The Commission has been appointed by the Government and will submit
its recommendations to the Government but the recommendations will relate not merely to
what the Government has to do I am sure, they will cover areas where action will be called
for by others also, particularly by the workers' and employers organisations. Again, in the
light of state’s substantial investments in industrial regulation through its policy of tripartism,
seeking leadership and guidance from the government are oddly described as a ‘weakness’. In
particular, organisations, are advised to be more self-reliant; hinting perhaps at corporate
efforts to lean heavily on the state in dealing with burden of labour welfare: I think it has
been one of our weaknesses always to look to Government for initiative even when action is
due by individuals or groups and it is in the interests of the individuals or groups themselves
to take appropriate action. This is of special importance in the field of organisations
[Annexure p.4] Expectations that when appropriate groups and individuals must act
independently without awaiting state directives are noteworthy, indicating that the tripartite
partnership was less than equitable or smooth. The emphasis that individuals and groups were
served better by appropriate independent action is conceptually close to the bilateralism in
industrial relations that became the basis of labour policy in the years leading up to and from
1991, when through a combination of covert and subsequently overt measures, the state
sought to relinquish its own regulatory role, dismantle labour laws and weaken unions. 2
Staying with FNCL, we note the Chairman’s equally forthright response, outlining the proper
approach he would adopt to resolve conflicting views3 to uphold national good, taking equal
care to present the case of unorganised labour with due fairness: My effort throughout will be
to… place before the Commission the conflicting ideas in their proper perspective Labour,
naturally, must be treated fairly particularly the claims of inarticulate unorganized labour.
The case for the employers must also be considered fairly But in assessing the respective
claims of industry and employees, the requirement of a national good must always be borne
in mind. That I think, will be the proper approach to adopt. Implicitly acknowledging the core
labour market dualism sustained through policy paradigms, the Commission seemed keen to
strike a balance. Consider the concise note define its basic categories, placed at the head of
the Report: For the purposes of the Commission's work the term ‘labour' and 'worker' will
include, in addition to rural labour, all employees covered by the Industrial Disputes Act,
19475. The terms of reference did not mention either dualism or the unorganised sector by
name, making it clear the Commission’s efforts would focus largely address issues relating to
the organised sector. Thus notwithstanding the above-noted inclusive gestures towards rural,
agricultural and contract labour, echoing the premises of tripartism and foundational beliefs
of development theory, the FNCL agenda and structure of the report only underscored the
primacy that post-1947 labour policy accorded to the organised sector 6. This was clearly
brought out by the allocation of space within the report. Even while being fully cognisant of
the miniscule share of the organised sector in overall employment, after the introductory set
of chapters and Chapters 2-6 to review and summarise the Commission’s work and findings,
the bulk of the report [Chapters 7-27] were devoted to issues pertaining to the organised
sector. In marked contrast, only two [Chapters 28, 29] out of a total of 33 chapters focus on
agricultural labour and the unorganised sector respectively. Despite this preponderance, the
pronouncements are far from being one-sided or skewed to idealize the norms, standards or
achievements of the organised sector. Nor is there any hint of a derogatory approach towards
5
Gajendragadkar, ‘To the Best of my Memory”, Bhartiya Vidya Bhavan, p. 293.
6
FNCL Report page no.417
the constituents or performance of the unorganised sector. Equally, although the stakes being
drawn strongly in favour of the organised sector, there is little evidence of attempts to deny
the importance of or magnitude of dependence on the unorganised sector or to describe it
mainly in negative terms. Equally, there are few signs of projections of unorganised sector
unemployment as a temporary ‘waiting room’ until the organised sector expanded eventually
to absorb those in informal employment. It is also significant that no fuss is made over
difficulties in defining the unorganised sector or this becoming an alibi for an unwillingness
to discuss it with due seriousness. Clearly, as the ‘other’ of the organised industry, here in the
FNCL report, unambiguously, the unorganised sector has only a derivative identity. Thus we
are told : We now take up for discussion the issues connected with another group of workers,
who cannot be identified by a definition but could be described as those who have not been
able to organise in pursuit of a common objective because of constraints operating singly or
in combination such as (a) casual nature of employment, (b) ignorance and illiteracy, (c)
small size of establishments with low capital investment per person employed, (d) scattered
nature of establishments, and (e) superior strength of the employer. Similarly the lack of firm
and data and statistics are not cited as grounds to skirt issues.

This derivative definition notwithstanding, the adherence to development theory did not
totally nullify the room to heed to the conditions of the unorganised workforce. We are told
that three of the thirty Study Groups set up were meant to especially to understand the
problems of the following categories of unorganised workers (i) construction workers, (ii)
sweepers and scavengers, and (iii) tribal labour7.

Method of Work
The Commission was free to evolve its own procedure for work and for framing its report.
Three Committees, thirty Study Groups and five Working Groups were set up within the
FNCL to investigate various issues connected with terms of reference. Each group drew upon
(a) the expertise of its members, (b) the relevant material on the whole area of the
Commission's work on the concerned industry/subject, and (c) information which would help
project thinking on the challenges in the area in the years to come. Most significantly, many
of these Study Groups were set up to be headquartered outside Delhi. Operations of these
groups were thus distributed across many parts of the country, drawing upon regional
networks from headquarters that included cities of Mumbai, Ahmedabad, Kanpur, Madras,
7
pp 417.
Bangalore, Pune, Jaipur, Kolkata, Ranchi, among others. The conclusions reached by these
committees groups are reviewed and their implications clearly laid out in the report. Even
when some suggestions made were not accepted in the Report, attaching due importance to
these views from knowledgeable persons, the same were placed on record and acknowledged
in the report. An equally balanced approach come through in the way the work of information
gathering was planned; the proposed method of work was systematically and meticulously
laid out, as would be expected from a distinguished jurist. The Chairman considered the
present Commission to be far more fortunate than its predecessor, the Royal Commission of
Labour or the Whitley Commission.

He noted the FNCL had the advantage of a vast availability of published material. The FNCL
consulted a voluminous literature8 : We gather that the library of the Department of Labour
and Employment prepared bibliographies on selected topics while assistance was made
available by the International Labour Office, Geneva, on international experience. Even with
this fund of information and statistics, special efforts had to be made to comprehend changes
which had taken place with regard to certain categories of labour, particularly in agriculture
and small scale industries. In some other areas, where statistical support was not available,
the Commission relied on the assessment of experts. These sources were supplemented with
requests for materials from Central and State Governments, and memoranda from central
organisations of employers and workers to prepare material under the following broad
headings used to cover the entire area of inquiry :(1) wages, earnings and productivity; (2)
social security; (3) conditions of work; (4) industrial relations; (5) rural and other
unorganised labour; (6) labour research and intelligence; (7) organisation and functions of the
Department of Labour; (8) international obligations; (9) tripartite consultative machinery and
its impact on labour policy; and (10) employment and training (p.3). Framing a questionnaire
was the next task. The commission thought it fit to make the questionnaire elaborate but leave
adequate room to add to the issues if desired. The circular issued with the questionnaire
emphasised the need for re-examining the principles on which the current labour policy was
framed. The questionnaire was widely circulated within the country. Some copies were also
distributed in foreign countries among persons conversant with the Indian labour scene. The
proportion of responses were said to be satisfactory. The replies were processed in two ways.
Manual tabulation was undertaken to bring out a qualitative assessment of the views of
different categories of respondents. Services of a computer were availed of to bring out the
quantitative dimension of category-wise responses to the various issues. The tables so
prepared are being published separately. The report notes that both the tabulated qualitative
evidence collected through the questionnaire was published in separate volume with the main
report (p.3). Expert guidance was sought on problems connected with (a) working conditions,
(b) labour statistics, and (c) agricultural labour. This was facilitated through participation of
Commission members in seminars and conferences on these themes. Some of these academic
gathering were organised by academic institutions interested in labour problems. Under the
Commission’s sponsorship. For the conferences, a known expert was requested to prepare a
paper on the basis of his expertise and technical information. Written comments from invited
experts were subsequently invited. Lastly, the Commission sought to cull our conclusions on
the basis of detailed discussions of the paper and expert comments (p.5). As noted above,
efforts were made to identify informed and committed collaborators to form a decentralised
network spread across the country. For recording evidence at State headquarters the
following sequence was apparently adopted to tap the opinions and inputs of various
constituents and civil society leaders, before approaching officials and government
representatives. Sessions usually opened with a discussion with local union leaders in the
State, followed by a round with employer organisations or groups of individual employers
touching on the same range of topics. Meetings with eminent public personalities such as
Vice-Chancellors, university teachers, research scholars and persons associated in some
capacity with workers, employers or their organisations were arranged. Similarly, advice was
sought from members of local legislatures. A final session at each State headquarters was
devoted to the Government Departments/State Corporations and State public sector
undertakings. Final meetings of the visit were with the State Labour Minister and other
ministers and officials of the Labour Department to seek clarifications on evidence sent to us
in writing by many persons/organisations who had appeared previously before the
Commission (p.4). On some issues a deeper probe into certain points of the collected
evidence was thought necessary; suitable officers from the Commission’s Secretariat were
deputed to make an on-the-spot inquiry and prepare a report. A similar approach working
their way up from information gathering to consultations to seek clarifications from the
highest echelons of bureaucracy and state representatives at the Central level was also
followed. Observational visits were planned to get acquainted with local situations. These
inquiries and visits and discussions were followed by meetings with central organisations of
employers and workers. Members of Parliament, particularly those known for taking a keen
interest in rural and urban matters were met with to discuss the trend of evidence recorded on
important aspects of the inquiry. Meetings with Secretaries to the Government of India, with
officials of the Ministry of Home Affairs and with the Department of Labour and
Employment took place as the penultimate round of discussions. The final round of
discussions were with the Planning Commission and the Governor of the Reserve Bank of
India (p. 4).

Important Recommendations and Conclusions of the committee

Justice P.B Gajendragadkar heading as the chairman, the first National Labour Commission
was formed on 26th December 1966 to which the final report was submitted in August 1969.
The main aim and objectives of the Commission was to study, examine and give a review on
the lifestyle of the labour community of India since independence.
In developing the framework, the Commission was to take into account of the rapid
development and changes in the technological field along with the emerging nature of
economy. The other field the Commission had to focus on was the liberalization of trading
activities and globalization of economy.

Several groups were formed under the Commission to study with deep cautious and review
the various laws and legislation for the unorganized sector labourers, which in return impacts
the globalization of economy, social security, living standard, child labour, working condition
of labour, skill development, and in giving training and education to the labourers.

Important points of the Recommendation and Conclusion of the Commission

The report opens with the statement about the improvement and changes that had occurred in
the labour community of India. The significant development and strength was more in the
context of industrial labourers. The labourers working in the industries had managed to
acquire dignity which their predecessors had not known. And although there was a steady rise
in the number of industries which had given many work opportunities with multiple facilities,
the beneficiaries given to the labourers was comparatively low.

With the coming and development of the industries in the country, the rate of urbanization
was spontaneously increasing. This process of sudden rise in urbanization had given range of
benefits to the labourers living in and around the particular area. But the growth urbanization
came with a price and it was in the form of challenges and difficulties in the field of
transport, housing, sanitization and also brought changes in the labour’s attitude.
As industries grow, it attracted many working community who had earlier depended on
agriculture in the rural areas during the late 1950s. This led to a huge number of people
migrating from the rural areas to the suburb or urban areas in search of better work which
would result in higher rate of income and better living conditions. Some of the old industries
by the time the report was made had already had second or even third generation labourers
working. Being exposed to the heat of urban life the labourers had gained conscious that
education played a huge role when it comes to getting jobs. This led to self-education in the
adult literacy centers. What was more was that the labourers started to give importance to
education for themselves and especially for their children in the hope of a better future

On the other hand as there was a steady rise in the field of industries especially in the small
scale industries, more hardships had rise for the labourers and on top of all the hardships the
unfair wages for the bulk amount of work seems the most serious.

The Recommendations of the Commission can be briefly describe as follow:

1) Recruiting of Labourers.
Looking in overview, the condition of recruitment of labourers or work seekers had steadily
improved. Recruiting labourers on a contract basis was gaining popularity although not in
terms of large scale. This was seen especially in the mines and other plantation fields. 0n top
of this the National Employment has played an important role in bringing the work seekers or
labourers to the employers. This process was to even increase more and the National
Employment Service needs to organize more awareness programs regarding the job
opportunities and it should all be done in free of cost for the labourers or working community
who seeks for work.

2) Labour Administration.
The National Employment Service has to play a vital role to organize a uniform form of
wages, working condition, and working hours for the labourers across the country. Should
study in deep and take survey providing information on market employment. It should help to
strengthen the manpower and develop the skills for the economic growth of the country.

3) Worker’s Education and Training.

The condition of the worker’s education was far from satisfactory and it needed to improve.
The Central Board of Worker’s Education should act as the main pillar and allow the trade
unions to implement and formulate worker’s education. The employers on the other hand has
a vital role to play along the side of trade unions and grant permissions for the educational
programs to be held in the work place or grant leave on specific time for this purpose.

For training the workers, the Training and Employment Organizations in the states should be
under the control of the State Labour Department and carry out the needful activities. On top,
there should be a uniform qualification for all the trainers across the country. The main
burden should fall on the Trade Unions for training the workers. The trainings should include
skills development trainings in the field of machines and other needful skills depending on
the demands and needs of the particular employer or industry.

4) Working Conditions.
Like the other fields that needed to be improved, the working condition for the labourers also
needed improvement. For this matter more safety equipments for all labourers and a safety
officer for factories or industries employing 1000 or higher numbers of workers should be
provided. The states with no safety councils must introduce safety councils and the safety
councils should be set up in all industries or factories with precarious working conditions.
Trade Unions and Employer’s organizations should draw more attentions in the safety
measures for the workers. The working hour also needed to be checked as many employers
employ their workers for long hours but give inappropriate income.

5) Inspections.
The condition of inspection was seriously in need of revision as most of the factories or
industries were left uninspected. This was to change for the betterment of the workers live
and the production of the industries and factories. The state needs to appoint as many staff as
possible for this particular matter. The safety measures, working hours, working conditions
and other sphere of working community adds needs to be inspected frequently so that the
orders or the schemes are implemented without any delay or ignorance.

6) Labour Welfare.
For the welfare and well being of the labourers the factories and industries employing a
number of 1000 workers or more needed the following
facilities:

a) Sanitization and proper hygiene facilities.

b) Rest rooms for having lunch and taking rest during the breaks time of work.

c) Medical facilities

d) Crèche- facility where babies are taken care while their mothers are working.

e) Transport facilities – this was for the workers who live far from the work place and had to
travel daily.

f) Recreation and cultural facilities for the workers for specific day or time according to
convenience of the employer.

g) Distress relief and cash security in times of emergencies such as injury or other important
life events.

h) Personal Counseling-giving awareness to the labourers individually about the works they
are carrying out and the beneficiary adds they have for doing particular work.

Conclusion
All in all the commission had given a proper and precise report on the prevailing conditions
of the working community in the country during the period of post independence till 1969.
Their observations, study and surveys had given a clear picture on the areas where the state
and central government along with the employers need to focus on changing or improving or
what was needed for introduction and formations to be done.

The ground reality was that the conditions of the labourers were far from improvement even
after the report was made. Indeed there were some improvements and new beneficiaries were
introduce taking the recommendations given by the commission seriously but when it came
to the bigger picture it was a too little and almost ignorable as the employers and the factory
or industries owners look for more profit for themselves while ignoring the basic needs of the
labourers.

At the end the work of the commission has to be acknowledged as it is from their work that
the government and the people came to the lime light of understanding the harsh reality of the
labourers working in the factories or industries while the rapid development in this field had
blinded the people from seeing the real picture underneath
BIBLIOGRAPHY
1. Reports of the National Commission on Labour. New Delhi: Academic Foundation,
2003, page no: 229-260
2. Goyal, Pratibha. Labour Welfare and Job Satisfaction. Deep and Deep. 1995, page no:
1-3.
3. Punekar S.D. Deodhar S.B. Mrs. Sankaran Saraswathi. Labour Welfare Trade
Unionism and Industrial Relations. Himalaya Publishing House. 1978,
page no: 36-39, 77-95