SLD Document PDF

Indias
Labour Law Changes Indias Labour Law Changes

Toward advancing principles of rights, Toward advancing principles of rights,
inclusion and employment security inclusion and employment security
T he proposed labour law changes in India begin against a backdrop of limited protection
for individual and collective rights for the vast majority of workers principles that
have governed labour regulation in India from pre-independence British colonial rule to the
present. Since the 1920s when India first recognized trade unions, the central government has
maintained strict legislative control over collective rights. Although workers rights progressively
expanded in coverage post-independence, they also remained extremely limited in their
applicationincluding mostly industrial workers and therefore excluding the vast majority of
workers in India from protection. The reach of workplace protections, furthermore, has been
progressively circumscribed since the 1990s as an increasing number of workers are pushed
into the unorganized sector workforce.
As detailed in this report, proposed labour law changes aim to further increase workforce
flexibility, decrease the bargaining authority of trade unions and diminish the reach of Indias
state labour regulatory apparatus. These changes promise to push an increasing number of
workers into precarious workincreasing economic inequality, insecurity and instability among
workers.
Economic development should be undertaken to improve the lives of people, families and
communities. These principles are at the core of Indias constitutional and international
commitments. This publication has been brought out with the hope that it contributes to
an engagement with proposed changes through an inclusionary process that foregrounds
constitutional and international human rights, common to organized, unorganized and self-
employed workers.
Society for Labour & Development Society for Labour & Development
Indias Labour Law Changes
Toward advancing principles of rights,
inclusion and employment security
Society for Labour & Development
i
INDIAS LABOUR LAW CHANGES
Indias Labour Law Changes

Toward advancing principles of rights,
inclusion and employment security
Some rights reserved
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purposes under the same original license terms.
The Society for Labour and Development (SLD) is a Delhi-based labour rights organisation, that believes in equitable
development through social and economic well-being of labour, migrants, and women workers; and through cultural renewal
among disenfranchised people. SLD is a national organisation that originated with a focus on the National Capital Region
and works with partners in Uttar Pradesh, Bihar, Jharkhand and Kerala.
Society for Labour & Development
+91-11-26525806
+91-11-46179959
[email protected]
Citizens Rights Collective CiRiC is a policy-advocacy hub, which focuses on urban issues from the viewpoint of the
common citizens, whose voices and interests should take priority in the policies governing the city.
Our main constituency comprises the poor and marginalized communities. We work with researchers, academicians,
lawyers, journalists, trade unions and civil society organizations on issues of urbanization and urban development.
www.ciric.in
CitizensRightsCollective
CiRiC_India
ActionAid is a global social organisation working in India since 1972 with a mission to end poverty, patriarchy and injustice,
and to ensure that every person enjoys the right to life with dignity.
Every year, in partnership with over 300 grassroots organizations and networks, ActionAid India reaches out to over 6 million
people from marginalised and socially excluded communities belonging to 25 states and 1 Union Territory of the country. Its
efforts are dedicated towards building a sustainable and socially just future, built by the people and for people.
ActionAid India
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Phone: 91-11-4064 0500

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ii
Contents
Acknowledgements v
Abbreviations vii
Foreword ix
I. Guiding principles in defining labour standards 1

Human rights at work 3
Why human rights? 3
Rights at work 3
Discrimination in employment 4
International Labour Organization (ILO) standards 4
Constitutional rights at work 5
II. Brief history of labour regulations in India 7

Pre-independence: concurrent authority, introduction of
individual workers rights and constraints on collective rights 9
Post-independence: state-led industrialization,
expansion of individual rights and restrictions on collective bargaining 11
Post-independence: first phase of industrial relations (1950 to mid-1960s) 11
Post-independence: second phase of industrial relations (mid-1960s1979) 13
Post-independence: third phase of industrial relations (19801991) 15
Economic liberalization: increased workforce flexibility, decreased
bargaining authority of trade unions and deregulation (1992-present) 16
III. Indias contemporary labour market: demographic trends and precarious work 23
Precarious work 25
Unpaid and invisible work 27
iii
Unpaid work 27
Invisible workers 28
Bonded and other forms of coercive labour 30
Social structure of the labour market 32
IV. Payment of wages 39

Contemporary context 41
International standards on payment of wages 41
Labour law changes 41
Diluting protective standards 42
Decriminalizing arbitrary and illegal wage deductions 49
Dismantling accountability mechanisms 49
Recommendations 54
V. Industrial relations 57
Contemporary context 59
International standards on industrial relations 59
Labour law changes 60
Recognizing unorganized sector unions 60
Challenges to freedom of association and collective bargaining 61
Facilitating layoff and entrenchment 69
Weakening accountability mechanisms 69
Reducing protection under standing orders and conditions of service 71
Recommendations 72
VI. Bibliography 75
iv
Acknowledgements
This study was conducted by the Society for Labour and Development with the support of Action Aid. It was
researched and written by Shikha Silliman Bhattacharjee, JD.
Analysis of the 2015 Draft Labour Code on Wages and 2015 Draft Labour Code on Industrial Relations was
undertaken as part of a participatory process of the Working Peoples Charter, including Susana Barria, Anannya
Bhattacharjee, Shikha Silliman Bhattacharjee, Chandan Kumar, Benny Kuruvilla, Rohan Mathews, Ashim Roy and
Jayshree Satpute.
This report was edited by Anannya Bhattacharje and Ashim Roy. It was reviewed by Kavita Iyengar, Chandan
Kumar, Indu Prakash, Vaibhav Raaj, Jael Silliman and Mashkoor Alam. Research support was provided by Ananya
Basu and Neha Verma. Infographics were developed by Mridul Sharma and Shikha Silliman Bhattacharjee.
v
vi
Abbreviations
AITUC All India Trade Union Congress

ASHA Accredited Social Health Activists
CEACR Committee of Experts on the Application of Conventions and Recommendations of the ILO
CESCR Committee on Economic Social and Cultural Rights
CEDAW Convention on the Elimination of all Forms of Discrimination Against Women
CITU Centre for Indian Trade Unions
GDP Gross Domestic Product
GPN Global Production Network
GVC Global Value Chain
ICDS Integrated Child Development Service
ICESCR International Covenant on Economic, Social and Cultural Rights
ICERD International Convention on the Elimination of Racial Discrimination
IKP Indira Kranthi Patham
ILO International Labour Organization
ILO CEACR International Labour Organization Committee of Experts on the Application of
Conventions and Recommendations
IMF International Monetary Fund
INTUC Indian National Trade Union Congress
ITES IT-Enabled Service Sector
ITUC International Trade Union Conference
MBO membership based organization
MGNREGA Mahatma Gandhi National Rural Employment Guarantee Act, 2005
MIC Methyl-iso-cynate
MoLE Ministry of Labour and Employment
MRTP Monopolistic and Restrictive Trade Practices
NCEUS National Commission for Enterprises in the Unorganized Sector
vii
NCL National Commission on Labour

NFLMW National Floor Level Minimum Wage
NGO non governmental organization
NHRC National Human Rights Commission
NRF National Renewal Fund
NRHM National Rural Health Management
NRLM National Rural Livelihood Mission
NSSO National Sample Survey Organization
PIL Public Interest Litigation
PrEA private employment agency
SEWA Self Employed Womens Association
SEZ Special Economic Zone
UN United Nations
USD United States Dollar
VRS Voluntary Retirement Schemes
viii
Foreword
Since the 1990s, the labour market in India has been tle labour inspections, undermine legal remedies for
systematically restructured to increase workforce workers and diminish oversight from trade unions and
flexibility, decrease the bargaining authority of trade workers organizations. Draft Labour Codes governing
unions and diminish the reach of Indias state labour health and safety, welfare, working conditions and so-
regulations. While dejure labour law reforms have been cial security are imminently expected.
slower to materialize over the last twenty-five years,
While harmonization and rationalization of Indias
industrial relations have been defacto restructured
more than 150 labour laws may be required, this re-
along these lines. These shifts have been referred to
port argues that any process of consolidation should
as labour reforms by stealth.1
maintain progressive improvement of substantive and
In the last year, the Government of India has taken rap- procedural rights for workers in line with Indias consti-
id action to restructure Indias central labour laws. The tutional and human rights obligations. Under the Inter-
Labour Code on Wages Bill, 2015 aims to consolidate national Labour Organization, Tripartite Consultation
the Payment of Wages Act, 1936; Minimum Wages Act, (Activites of the International Labour Organization)
1948; Payment of Bonus Act, 1965; and Equal Remuner- Recommendation, 1976 (No. 152), India committed to
ation Act, 1976.2 The central government Labour Code an inclusionary process of defining labour standards
on Industrial Relations Bill, 2015 proposes to replace that includes government, workers and employers
the Trade Unions Act, 1926; Industrial Employment perspectives.4 Contemporary workers rights struggles
(Standing Orders) Act, 1946; and Industrial Disputes have focused on extending job security and social se-
Act, 1947.3 Consistent with systematic restructuring curity across sectors and defending collective bargain-
of Indias labour market since the 1990s, the 2015 La- ing against increasing restrictions.5
bour Bills on Wages and Industrial Relations disman-
1. Anamitra Roychowdhury, Recent Changes in Labour Laws and their implications for the working class, SANHATI, January 13, 2015: http: sanhati.com/excerpt-
ed/12592/ (citing R. Nagaraj, Fall in Organised Manufacturing Employment: A Brief Note, Economic And Political Weekly, July 24, 2004, p. 3387-3390).
2. Labour Code on Industrial Relations Bill, 2015, http://www.prsindia.org/uploads/media//draft/Labour%20Code%20on%20Industrial%20Relations%20Bill%20
2015.pdf (accessed July 11, 2016)
2015.pdf (accessed July 11, 2016).
4. International Labour Organization, Tripartite Consultation (Activities of the International Labour Organization) Recommendation, 1976 (No. 152), supple-
menting the International Labour Organization, Tripartite Consultation (International Labour Standards) Convention, 1976 (No. 144), paragraph 5(c), requiring
member states of the ILO to adopt procedures of effective consultation between representatives of the government, workers and employers organizations
in respect of the preparation and implementation of legislative or other measures. The need for public authorities to hold consultation with representatives
of workers and employers organization has also been emphasized in the International Labour Organization, Consultation (Industrial and National Level)
Recommendation, 1960 (No. 113) and the International Labour Organization, Right to Organise and Collective Bargaining Convention, 1949 (No. 98).
5. Surendra Pratap, The Political Economy of Labour Law Reforms in India, Part I, Centre for Workers Education, Delhi, accessed September 18, 2015,
http://sanhati.com/excerpted/12159/.
ix
This study is the first in a series of reports that aims of precarious, unpaid, invisible and coercive work;
to contribute to the evidentiary foundation for the and the vulnerabilities workers face due to increasing
Labour Law Changes Programme. By providing a de- employment insecurity and depressed wages. Not
tailed, contextualizedyet accessibleprimer on pro- surprisingly, some of Indias most vulnerable work-
posed labour law changes, it seeks to inform engage- ersincluding the intersecting categories of unorga-
ment with Indias current labour law reform process nized sector, migrant, women, child, Dalit and Adivasi
by formal and informal sector workers, trade unions, workersare particularly impacted by the expansion of
civil society organizations and government represen- precarious work.
tatives. To that end, it brings together guiding con-
Parts IV - V apply the principles articulated in Part I
stitutional and international human rights principles;
to thematic areas of labour protection: Payment of
detailed readings of Indian labour laws and proposed
Wages (Part IV) and Industrial Relations (Part V). Built
amendments; and insights from labour historians, law-
upon a line by line comparative reading between the
yers, scholars, journalists, trade unionists and social
2015 Labour Bills and the principle acts facing con-
activists.
solidation, these chapters highlight significant labour
Part I, Guiding principles in defining labour standards, law changes, including advances and erosion of ex-
reviews international norms and Indian constitutional isting protections under the proposed Labour Code
standards pertaining to rights at work. This discus- on Wages Bill, 2015 and Labour Code on Industrial
sion proceeds from the perspective that the process Relations Bill, 2015. These thematically focused sec-
of informing Indias labour laws should maintain pro- tions include full text citations of international, con-
gressive improvement of substantive and procedural stitutional and legislative provisions as footnotes to
rights for workers in line with Indias human rights and facilitate easy reference. Where possible, the issues
constitutional obligations. Incorporating Indian consti- discussed in these thematic sections are illustrat-
tutional law and international human rights standards, ed with short case studies of working conditions.
this section provides a legal benchmark of Indias com- The sections on Payment of Wages and Industrial
mitments to individual and collective rights that should Relations conclude by providing targeted recomm-
not be transgressed by the current labour law reform endations as a starting point for advocacy aimed at
process. maintaining and expanding individual and collective
labour rights.
Part II, Brief history of labour regulations in India,
traces concepts undergirding the development of In- Beyond legislation, the Ministry of Labour and Em-
dias current labour law from pre-independence to the ployment (MoLE)the nodal ministry for labour
present. This historical discussion aims to provide a welfare and implementation of labour laws in In-
cursory understanding of the more than 150 separate diamust implement current labour laws to ensure
pieces of labour legislation arising from Indias central workers rights. However, an assessment of Ministry
and state governments by presenting the contextual policies, programmes and budgets shows that the total
emergence of broad parameters of labour regulation. allocation made for labour and employment amount-
In particular, this brief history traces expansion of indi- ed to just .26 percent of the total union government
vidual rights and tenuous state negotiation of collec- budget in 2012-2013. No specific allocations have
tive rights, including freedom of association and col- been made for the implementation of labour laws,
lective bargaining. a vital component to ensure decent work within
labour markets.6 Where possible, Chapters IV and
Part III, Indias contemporary labour market: demo-
V of this report identify gaps in the implementation
graphic trends and precarious work, considers the im-
of existing protections and strategies for strengthen-
pact of the emergence of megacities and increasing
ing legal frameworks to improve implementation of
migration upon the structure of Indias contemporary
labour laws.
labour market. This section highlights the expansion
6. Harsh Mander and Gitanjali Prasad, INDIA EXCLUSION REPORT, 2013-2014 (Books for Change: Delhi, 2014), 23 (citing Ministry of Labour and Employment, Note
of Demand, 2012-13, Expenditure Budget, Vol. 2, http://indiabudget.nic.in).
x
I. Guiding principles in
defining labour standards
1
2
This report argues that the process of re- useful in evaluating Indias existing laws and
forming Indias labour laws should maintain proposed legislative amendments affecting
progressive improvement of substantive workers rights. First, the Government of India
and procedural rights for workers in line with has committed to upholding many of these
Indias human rights and constitutional obliga- standards. Second, they represent a growing
tions. Promotion of individual workers rights international consensus on workers rights.
at the expense of collective rights, however, Finally, human rights discourse has been suc-
risks undermining collective action and soli- cessfully mobilized by grassroots campaigns
darity among workers. While international hu- and social movements to project their per-
man rights frameworks have been critiqued spectives and advance their demands.
for promoting individualistic rights, this report
takes care to highlight human rights and con- Rights at work
stitutional norms and standards that protect The human right to work protects the right
not only individual rights, but also collective of everyone to the opportunity to gain [her]/
rights. his living by work which [s]/he freely chooses
or accepts.5 International standards protect-
Human rights at work ing the right to work are found in international
Why human rights? instruments, including International Labour
Organization (ILO) standards, United Nations
Human rights discourse, together with its
(UN) conventions and other instruments and
promises and shortcomings, is central to many
international agreements between or among
global conversations on domestic policies and
countries that pertain to workers rights. In
international relations, including Indias labour
order for a state to satisfy the right to work,
laws.1 The international human rights system,
it must fulfill the essential, interdependent ele-
at once, provides a generative space for ex-
ments of availability, acceptable conditions of
change of ideas on critical economic, political
work6 and accessibility of the labour market.7
and social issues; and constrains this con-
The labour market must not only be physi-
versation by privileging particular voices and
cally accessible, but individuals must also be
actors who frame rights and their forums for
able to access information on how to acquire
deliberation.3 For instance, human rights have
work.8 For a state to achieve the full realiza-
long been critiqued for dividing womens rights
tion9 of the right to work, therefore, it must pro-
from international human rights.4
vide technical and vocational guidance, train-
ing programs, and other techniques to create
Despite these shortcomings, international
employment.10
human rights standards prove nonetheless
1. See Isaac D. Balbus, Commodity Form and Legal Form: An Essay on the Relative Autonomy of the Law, 11 L. And Socy Rev., No. 3, 571, 576-581 (1977)
(arguing that conference of individual legal rights obscures inequality and undermines formation of collective class consciousness). The trend of privileging
individual rights and circumscribing collective rights, central to the evolution of Indias labour law regime, is discussed at length in the brief history of labour
regulations in India, contained in Chapter II of this report.
2. Jack Donnely, Human Rights and Human Dignity: An Analytic Critique of Non-Western Conceptions of Human Rights 76 AMERICAN POL. SC. REV., No. 2, 303, 311
(1982) (highlighting emphasis on individualism within the human rights approach).
3. E.g., V. Spike Peterson, Whose Rights? A Critique of the Givens in Human Rights Discourse, 15 Alternatives: Global, Local, Political, No. 3, 303 (1990)
(characterizing the model of human nature underlying human rights discourse as Western, liberal and individualistic).
4. E.g., Symposium: Women and International Human Rights, 3 Human Rights Qu. (1981).
5. International Covenant on Economic, Social and Cultural Rights (ICESCR), art. 6(1), opened for signature Dec. 16, 1966, 993 U.N.T.S. 3. Acceded to by India on
10 April 1979.
6. Acceptable conditions of work require, inter alia, safe working conditions, the right to form trade unions, and the right freely to choose and accept work.
Comm. on Econ., Social and Cultural Rights (CESCR), General Comment No. 18: The Right to Work, para. 12(c), U.N. Doc. E/C.12/GC/18 (2005).
7. CESCR, General Comment No. 18, supra note 6 at para. 12(a)-(c).
8. Id. at para. 12.
9. Id. at para. 19; ICESCR, supra note 5 at art. 2(1).
10. ICESCR, supra note 5 at art. 6(2).
3
The International Covenant on Economic, Social and protecting workers as a primary benchmark to
Cultural Rights (ICESCR) also recognizes individual evaluate protections for workers under Indian law.
rights to enjoy just and favorable conditions of work11 The ILO Declaration on Fundamental Principles and
and social security;12 and collective rights to form Rights at Work cites eight core Conventions that
trade unions that may function freely, including by define human rights at work:
exercising the right to strike.13 These rightsall l Freedom of Association and Protection of the
linked to economic interestsare referred to as
Right to Organise Convention, 1948 (No. 87)
second generation human rights and included in
a set of rights referred to as economic, social and l Right to Organise and Collective Bargaining
cultural rights.14 Convention, 1949 (No. 98)
l Forced Labour Convention, 1930 (No. 29)
Discrimination in employment
l Abolition of Forced Labour Convention, 1957
Under international human rights standards, dis-
(No. 105)
crimination in access to and maintenance of
employment on the basis of any internationally l Equal Remuneration Convention, 1951 (No. 100)
protected ground is strictly prohibited.15 Interna- l Discrimination (Employment and Occupation)
tionally protected grounds include race (caste), sex, Convention, 1958 (No. 111)
language, religion and social origin. Under the Con-
l Minimum Age Convention, 1973 (No. 138)
vention on the Elimination of all Forms of Discrim-
ination Against Women (CEDAW), States are obli- l Prohibition and Immediate Elimination of the
gated to take all appropriate measures to eliminate Worst Forms of Child Labour Convention, 1999
discrimination against women in employment and (No. 182)18
to ensure womens rights in the workplace.16 The
Committee on Economic Social and Cultural Rights While India has not ratified all of the above conven-
(CESCR) has encouraged the Government of India tions, under the 1998 ILO Declaration on Funda-
to enforce existing legal prohibitions on discrimina- mental Principles and Rights at Work, India has an
tion and enact comprehensive anti-discrimination obligation arising from the very fact of membership
legislation guaranteeing the right to equal treatment in the ILO, to respect, to promote and to realize in
and protection against discrimination, including in good faith and in accordance with the Constitution,
employment.17 the principles concerning the fundamental rights
which are the subject of these conventions.19
International Labour Organization (ILO)
standards In addition to these eight core conventions, this
India is a founding member of the International study includes analysis of Indias compliance with
Labour Organization (ILO). As the specialized law ILO conventions governing payment of wages
in this area, this study uses ILO labour standards and industrial relations. This study also considers
11. Id. at art. 7.

12. Id. at art. 9.
13. Id. at art. 8.
14. While referring to a particular cluster of rights, the definitional value of the term economic, social and cultural rights is limited by the fact that inclusion of
rights in the International Convenant on Economic, Social and Cultural Rights (ICESCR) and the International Covenant on Civil and Political Rights (ICCPR)
respectively was the result of compromise between various states over political differences and has been widely acknowledged to be somewhat arbitrary.
See Terence Daintith, The constitutional protection of economic rights, 2 Intl. J. Const. L., 56, 58 (2004).
15. CESCR, General Comment No. 18, supra note 6 at para. 12; International Convention on the Elimination of All Forms of Racial Discrimination (ICERD), art.5(e)
(i), opened for signature Mar. 7, 1966, 660 U.N.T.S. 195.
16. Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW), art. 11(a)-(f), opened for signature Mar. 1, 1980, 1249 U.N.T.S. 13.
See also ICESCR, supra note 5 at art. 3; CESCR, General Comment No. 18, supra note 6 at para.13. These rights include the right to the same employment
opportunities as men, choices of profession, vocational training, and equal remuneration and benefits.
17. CESCR, 2008, Concluding Comments on India report. UN Doc.E/C.12/IND/CO/5, para. 52.
18. India has only ratified four of the fundamental conventions: Forced Labour Convention, 1930 (No. 29); ratified by India on 30 November 1954; Equal
Remuneration Convention, 1951 (No. 100), ratified by India on 25 September 1958; Abolition of Forced Labour Convention, 1957 (No. 105), ratified by India
on 18 May 2000; and Discrimination (Employment and Occupation) Convention, 1958 (No. 111), ratified by India on 3 June 1960.
19. International Labour Organization, ILO Declaration on Fundamental Principles and Rights at Work, Adopted by the International Labour Conference at its
Eighty-sixth Session, Geneva, 18 June 1998, art. 2.
4
I. GUIDING PRINCIPLES IN DEFINING LABOUR STANDARDS
compliance with ILO standards calling for public Freedom of Association and Protection of the
authorities to develop labour laws and policies in Right to Organise Convention, 1948 (No. 87) and
consultation with employers and workers repre- Right to Organise and Collective Bargaining Conven-
sentatives. These standards are articulated in the tion, 1949 (No. 98) should be extended to working
the Consultation (Industrial and National Level) Rec- people in the unorganized sector.
ommendation, 1960 (No. 113), Tripartite Consulta-
tion (International Labour Standards) Convention, Constitutional rights at work
1976 (No. 144) and Tripartite Consultation (Activi-
The Constitution of India, 1949, has been distin-
ties of the International Labour Organizations), Rec-
guished as an exemplar in aspiring to protect eco-
ommendation, 1976 (No. 152). The Committee on
nomic rights.23 Rights at work are enshrined in In-
Freedom of Association, a supervisory mechanism
dias Constitution under both the Directive Principles
of the ILO, has also emphasized the value of con-
of State Policy and Fundamental Rights. Together,
sulting employers and workers organizations while
the Directive Principles and Fundamental Rights
preparing legislation which affects their interests.20
have been described as the conscience of the Con-
stitution.24 Fundamental Rights are distinct from
India has declared a constitutional commitment
Directive Principles in that Fundamental Rights can
to foster respect for international law and treaty
be enforced directly by the Supreme Court while Di-
obligations.21 This fundamental duty has been in-
rective Principles aim to guide governance and law
terpreted by the Supreme Court as the duty of . . .
making but are non-justiciable.25
courts to construe legislation so as to be in confor-
mity with international law and not in conflict with
The Directive Principles of State Policy, articulated
it.22 International standards should, however, be
in Part IV of Indias Constitution guide the establish-
considered as a baseline rather than an endpoint
ment of laws and policies aimed at conferring basic
for rights protection.
rights for all citizens. 26
The structure of the global economy has changed l Article 39 of the Directive Principles recog-
fundamentally since many conventions foundation-
nizes the need for the state to direct its policy to-
al to the international human rights system were
wards securing the right to an adequate means
adopted. Accordingly, in order to respond to the
of livelihood for all men and women, distributing
needs of workers who inhabit precarious working
ownership and control of material resources of
relationships, international norms protecting rights
the community to serve the common good and
at work should be extended to protect the rights
of unorganized sector workers. In particular, the
20. Ramapriya Gopalakrishnan, Handbook On Labour Reforms In India (2016)(citing Digest of decisions and principles of the Committee on Freedom of
Association (CFA), International Labour Office, Geneva, paras. 1065, 1072, 1075) and CFA, Case No. 2980 (El Salvador), Report No. 368, paras. 300-322,
observing: The process of consultation on legislation helps to give laws, programmes and measures adopted or applied by public authorities a firmer
justification and to ensure that they are well respected and successfully applied; the Government should seek general consensus as much as possible, given
that employers and workers organizations should be able to share in the responsibility of securing the well-being and prosperity of the community as a
whole, this being particularly important in light of the growing complexity of the problems faced by societies and of the fact that no public authority can claim
to have all the answers or assume that its proposals will naturally achieve all of their objective).
21. Constitution of India, 1949, art. 51(c): foster respect for international law and treaty obligations in the dealings of organised peoples with one another; and
encourage settlement of international disputes by arbitration.
22. Kesavananda Bharti Sripadagalvaru v. State of Kerala, AIR 1973 SC 1461. See also Vishaka v. State of Rajasthan, AIR 1997 SC 3011 (holding it is now an
accepted rule of judicial construction that regard must be had to international conventions and norms for construing domestic law where there is no
inconsistency between them and there is a void in the domestic law).
23. Daintith, supra note 14 at 56, 73.
24. Surya Deva, Public Interest Litigation in India: A Critical Review, 8 Civil J.Q., No. 1, 20 (2009)(citing Granville Austin, THE INDIAN CONSTITUTION: CORNERSTONE
OF A NATION, Oxford: Clarendon Press, 1966, 50).
25. Id. at 22, 31 (noting the role of Public Interest Litigation in expanding the jurisprudence of fundamental (human) rights in India, including by importing
principles from non judiciable Directive Principles into the Fundamental Rights and thereby making various socio-economic rights as legally significant as the
civil and political rights articulated in the Fundamental Rights).
26. Together, the Fundamental Rights, Directive Principles of State Policy and Fundamental Duties sections of the Constitution of India comprise a constitutional
bill of rights that guides government action.
5
protecting the right to equal pay for equal work.27 l Article 19, of the Fundamental Rights guaran-
tees all citizens the fundamental right to form
l Article 41 of the Directive Principles directs the
associations or unions.32 The right to form as-
state, within the limits of its economic capacity
sociations, is not, however, absolute: clause 4 of
and development, to secure the right to work, ed-
Article 19(1), empowers the state to restrict the
ucation and social assistance in cases of unem-
fundamental right to form associations in the in-
ployment, old age, sickness and disablement.28
terests of national sovereignty and integrity.
l Article 43 of the Directive Principles calls for l Under Article 21, the right to life has been inter-
just and humane conditions of work, including
preted to be more than mere physical existence
maternity leave, a living wage and conditions of
and includes the right to live with human dignity
work that ensure a decent standard of life.29
and all that goes along with it33 including the
l Under Article 46 of the Directive Principles, the right to livelihood.34
State is charged with promoting the economic
interests of particularly the Scheduled Castes As discussed in the next chapter, a brief history
and the Scheduled Tribes.30 of labour regulations in India, some of these con-
stitutional protections find articulation in the legal
Constitutionally protected Fundamental Rights are
framework governing labour and employment rela-
articulated in Part III of the Constitution. The fun-
tions in India. In particular, Indias labour laws have
damental rights to non-discrimination in matters of
made significant headway in protecting individual
employment and freedom of association are also
rights at work. However, while India espouses a
particularly relevant to labour regulation.
constitutional commitment to the collective right
to form associations, the scope of this right has
l Article 16(2) of the Fundamental Rights sets
been circumscribed through legislative, judicial and
forth that no citizen shallon grounds only of
political measures.
religion, race, caste, sex, descent, place of birth,
residence or any other groundsbe ineligible for,
or discriminated against in respect of any public
employment.31
27. Constitution of India, 1949, art. 39: The State shall, in particular, direct its policy towards securing(a) that the citizens, men and women equally, have
the right to an adequate means of livelihood; (b) that the ownership and control of the material resources of the community are so distributed as to best
subserve the common good; (c) that the operation of the economic system does not result in the concentration of wealth and means of production to the
common detriment; (d) that there is equal pay for equal work for both men and women; (e) that the health and strength of workers, men and women, and
the tender age of children are not abused and that citizens are not forced by economic necessity to enter vocations unsuited to their age or strength; (f)
that children are given opportunities and facilities to develop in a healthy manner and in conditions of freedom and dignity and that childhood and youth are
protected against exploitation and against moral and material abandonment.
28. Constitution of India, 1949, art. 41: Right to work, to education and to public assistance in certain casesThe State shall, within the limits of its economic
capacity and development, make effective provision for securing the right to work, to education and to public assistance in cases of unemployment, old
age, sickness and disablement, and in other cases of undeserved want.
29. Constitution of India, 1949, art. 43: Living wage, etc., for workersThe State shall endeavor to secure, by suitable legislation or economic organization
or in any other way, to all workers, agricultural, industrial or otherwise, work, a living wage, conditions of work ensuring a decent standard of life and full
enjoyment of leisure and social and cultural opportunities and, in particular, the State shall endeavor to promote cottage industries on an individual or
co-operative basis in rural areas.
30. Constitution of India, 1949, art. 46: Promotion of education and economic interests of Scheduled Castes, Scheduled Tribes and other weaker sections.
The State shall promote with special care the educational and economic interests of the weaker sections of the people, and, in particular, of the Scheduled
Castes and the Scheduled Tribes, and shall protect them from social injustice and all forms of exploitation.
31. Constitution of India, 1949, art. 16(2): No citizen shall, on grounds only of religion, race, caste, sex, descent, place of birth, residence or any of them, be
ineligible for, or discriminated against in respect of, any employment or office under the state.
32. Constitution of India, 1949, art. 19(1)(c): All citizens shall have the rightto form associations or unions.
33. Francis Coralie v. Union Territory of Delhi AIR 1981 SC 746, 753.
34. Olga Tellis v. Bombay Municipal Corp, AIR 1986 SC 180; DTC Corp v. DTC Mazdoor Congress AIR 1991 SC 101.
6
II. Brief history of
labour regulations in India
7
7
TIMELINE
I N D I A OF LABOUR
S LAB O U R L A W C HREGULATIONS
ANGES IN INDIA: PERIODS AND THEMES
CORE PRINCIPLES UNDERLYING INDIAN LABOUR LAWS
1920
Concurrent Introduction Constraints Exclusion 1921
authority of individual on of 1922
1923
workers collective unorganized 1924
rights rights sector 1925
1926
workers 1927
from legal 1928
protection 1929
1930
1931
1932
1933
1934
1935
1936
1937
PRE-INDEPENDENCE
1938
1939
1940
(1920-1949)
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
PHASE 1 (1950-1960s)
1953 government-directed nation
LOGIC OF INDUSTRIAL PEACE

1954 building and active state role
INDUSTRIALIZATION 1955
1956
1957
in ensuring uninterrupted
industrial production
POST-INDEPENDENCE
1958
1959
1960
(1949-1991)
1961
1962
1963
PHASE 2 (1960s-1979)
1964 Extending individual rights
1965
1966 at work and economic
1967 deceleration under state-led
1968
1969 industrialization
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981 PHASE 3 (1980-1991)
1982
Move away from inward-looking
LOGIC OF COMPETETIVENESS OF FIRMS & ECONOMY
1983
1984 economic growth strategies and
1985
1986 toward export promotion and
1987
1988
domestic competition
1989
1990
1991
1992
ECONOMIC 1993
1994
1995
Increased workforce
flexibility, decreased
LIBERALIZATION 1996
1997
1998
bargaining authority of
trade unions and
(1991- PRESENT)
1999
2000 deregulation
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
8
India has upwards of 150 separate pieces of labour discuss the potential impact of proposed changes
legislation arising from central and state govern- on working conditions and workers movements.
ments. Accordingly, understanding the regulatory
context of contemporary labour law changes is a Pre-Independence: concurrent
complex undertaking. Taking a genealogical ap- authority, introduction of individual
proach, this chapter aims to trace the origin of a workers rights and constraints on
limited number of concepts undergirding the devel- collective rights
opment of Indias current labour law from pre-inde-
The pre-independence years discussed in this
pendence to the present.1 These concepts include
section begin post-World War I and reach through
concurrent authority between central and state
to Indian independence in 1949. In this period, la-
governments, expansion of individual rights at work
bour regulations in India were influenced by several
for industrial workers and strict legislative, judicial
factors that together altered the industrial and po-
and political control over collective bargaining. In
litical landscape of the nation. Significant forces in-
keeping with this objective, discussion of labour leg-
clude communist influence in the labour movement
islation is selective and descriptions of legislation
following the 1917 Bolshevik Revolution in Russia;
remain general, aimed primarily at sketching the
establishment of the International Labour Organi-
emergence of broad parameters of Indian labour
zation (ILO) in 1919; and the rapid development of
regulations.
trade unions, including the formation of the All India
This history is divided into three phases: pre-inde- Trade Union Congress (AITUC) in 1920.2
pendence (1920-1949); industrialization post-inde-
The pre-independence framework of employment
pendence (1949-1991); and economic liberalization
regulation introduced core concepts that continue
(1991-present). These periods are defined, in large
to shape labour regulation in contemporary India.
part, by the state of the Indian economy at the time.
First, since 1919, Indias central and state govern-
Discussions of each period foreground emergence
ments have maintained shared legislative authority
of state laws and practices. Where possible, this
over labour and employment relations.3 Concurrent
section also attempts to briefly highlight the histori-
authority was carried into the Constitution of In-
cal contexts and conversations that informed devel-
dia in 1949 and remains the legal arrangement to
opment of labour regulations. A significant limita-
date. Second, from the 1920s through World War
tion of this approach is that it does not adequately
II, labour legislation under British colonial authori-
account for the role of workers, trade unions and
ties did, to a degree, strengthen individual workers
social movements in calling for the expansion of
rights within industrial establishments. This period
individual and collective rights. Since labour law in
was also characterized by strict legislative control
India has for the most part excluded non-industrial
over collective rights, including but not limited to
workers from the ambit of protectionthe struggles
restrictions on the right to strike. Third, labour pro-
of unorganized sector workers are also largely ab-
tections did not extend beyond industrial establish-
sent from this history. This report addresses these
ments, thereby excluding many categories of work-
gaps in subsequent sections. The position of unor-
ers from the ambit of protection.4
ganized sector workers in India is discussed in Part
III, Indias contemporary labour market: demograph- Beginning in the early 1920s, labour legislation
ic trends and precarious work. Thematic sections focused on regulating working conditions in fac-
on wages (Part IV) and industrial relations (Part V) tories. Laws of the period strengthening rights of
1. For discussion of labour legislation dating from 1859-1920, including introduction of the Factories Act, 1911, see V.K.R. Menon, The Influence of
International Labour Conventions on Indian Labour Legislation, 73 Intl Lab. Rev. 551, 554 (1956).
2. Richard Mitchell, The Evolution of Labour Law in India: An Overview and Commentary on Regulatory Objectives and Development, Asian J. Of L. And Socy,
413-453, 414 (2014).
3. Menon, supra note 1 at 552-553 (noting that the regulation of inter-state migration and labour and safety in mines, oil fields, federal railways and major
ports were subjects for central legislation; and factories, labour welfare, labour conditions, provident funds, employer liability, workmens compensation,
health insurance, pensions, unemployment insurance, trade unions and industrial disputes were subject of concurrent legislative jurisdiction).
4. Mitchell, supra note 2 at 421 (identifying the three central themes discussed above and describing the simultaneous promotion of individual rights and
restriction of collective rights as a dual pattern of regulation).
9
individual workers within factories included: the with a wave of strikes. Against this backdrop, the
Factories (Amendment) Act, 1922;5 Workmens Com- British government established the Royal Commis-
pensation Act, 1923;6 Payment of Wages Act, 1936;7 sion on Labour in India in 1929. Recommendations
and Employment of Children Act, 1938.8 These mea- of the Royal Commission contributed to legislation
sures have been attributed to the influence of inter- passed from 1931 onwards, including legislation
national labour Conventions,9 including: the Hours protecting individual rights and defining collective
of Work (Industry) Convention, 1919 (No. 1);10 Night rights.18 The Indian labour movement, however,
Work (Women) Convention, 1919 (No. 4);11 Night boycotted the Commission in protest of legislative
Work of Young Persons (Industry) Convention, 1919 restrictions on the trade union movement by the
(No. 6);12 and Workmens Compensation (Occupa- British Imperial government.19
tional Diseases) Convention, 1925 (No. 18).13
In response to industrial unrest against the condi-
The regulatory framework undergirding industrial tions and effects of World War II, regulation of em-
relations in present-day India was also introduced ployment relations by British colonial authorities
during the 1920s.14 Significant legislation included during the war years further restricted strikes and
the Trade Unions Act, 192615 and Trade Disputes Act, other forms of industrial action. Legislation of this
1929.16 The Trade Unions Act, 1926, provided for period included section 49A of the Bombay Industri-
registration of trade unions, gave unions legal sta- al Disputes Act, passed in 1941. The Bombay Indus-
tus and extended some protection against civil and trial Disputes Act granted the Bombay government
criminal liability in the course of industrial disputes. the authority to refer industrial disputes to compul-
However, both the Trade Unions Act, 1926 and sory arbitration by an Industrial Court and banned
Trade Disputes Act, 1929 remained limited in their all strikes and lockouts prior to arbitration. The cen-
protection of freedom of association and collec- tral governments Essential Services Act, 1941 and
tive bargaining. Unregistered unions were excluded Defence of India Rules (Rule 81-A of 1942 and Rule
from protection and the legislation did not obligate 56-A of 1943) laid down further restrictions against
employers to bargain with registered unions. The strikes and industrial action.20
Trade Disputes Act, 1929, severely limited the right
The pre-independence period set the legislative
to strike and required referral of industrial disputes
groundwork for central features of Indias contem-
to a conciliation board or court of enquiryalthough
porary labour law regime that persist to this day.
the outcomes of a referral were not binding upon
Shared legislative authority between Indias cen-
the parties. Both pieces of legislation faced strong
tral and state governments; simultaneous promo-
criticism by the emerging trade unions, including
tion of individual rights and limitation of collective
the AITUC.17
rights; and exclusion of non-industrial workers from
In the context of late 1920s and 1930s global the ambit of protection remain prominent features
economic depression and unemployment, mass of Indias contemporary labour law landscape.
dismissals of workers in 1928 and 1929 were met However, as the forthcoming sections describe,
5. Factories (Amendment) Act, 1922, No. 11 of 1922 (25 January 1922).

6. Workmens Compensation Act, 1923, No. 8 of 1923 (5 March 1923).
7. Payment of Wages Act, 1936, No. 4 of 1936 (23 April 1936).
8. Employment of Children Act, 1938, No. 26 of 1938, (1 December 1938).
9. Menon, supra note 1 at 557-560.
10. International Labour Organization, Hours of Work (Industry) Convention, 1919 (No. 1), ratified by India on 14 July 1921.
11. International Labour Organization, Night Work (Women) Convention, 1919 (No. 4), ratified by India on 14 July 1921.
12. International Labour Organization, Night Work of Young Persons (Industry) Convention, 1919 (No. 6), ratified by India on 14 July 1921.
13. International Labour Organization, Workmens Compensation (Occupational Diseases) Convention, 1925 (No. 18), ratified by India on 30 September 1927.
14. Mitchell, supra, note 2 at 417.
15. Trade Union Act, 1926, No. 16 of 1926 (25 March 1926).
16. Trade Disputes Act, 1929, No. 7 of 1929 (8 May 1929).
17. Mitchell, supra, note 2 at 417.
18. Menon, supra note 1 at 556.
19. Mitchell, supra note 2 at 417.
20. Id.
10
II. Brief history of labour regulations in India
legislation that protects individual rights at work ex- the principal role of ensuring uninterrupted industri-
panded significantly in the post-independence peri- al production. The shift to state-led industrial policy,
od as the central government was explicitly tasked was pursued through import substitution and for-
with strengthening workers rights consistent with mation of large, employment-intensive public sec-
constitutional articulations of social justice and the tor enterprises concentrated in production of capital
role of the welfare state. This proliferation of rights, and intermediate goods.23 India built up a diversified
however, did not extend to collective rights and con- industrial base and the public sector expanded to
tinued to exclude non-industrial workers. provide crucial infrastructure, raw materials and
capital goods sufficient to sustain industrial
Post-independence: state-led growth.24
industrialization, expansion of The development of large public sector enterprises
individual rights and restrictions on led to employment growth in the organized econ-
collective bargaining omy and to the formation of public sector unions.
This discussion of the post-independence peri- While AITUC continued to expand and consolidate
od includes the years from 1950-1991. This time its position within the union movement, the growth
frame is further divided into three sub-phases of of the public sector provided further scope for large-
industrialization: phase one of industrial relations scale unionization. The Congress Party-affiliated
covers from the 1950 to mid-1960s; phase two cov- Indian National Trade Union Congress (INTUC) de-
ers from the mid 1960s to 1979; and phase three veloped and expanded with clear links in authority
covers from 1980-1991.21 The logic of Indias legal between party and union.25
framework governing employment relations, draw-
Post-independence, pursuit of harmony in labour
ing from colonial precedents and extending through
relations was articulated as Gandhian doctrines
the 1980s, has been described as the logic of in-
of trusteeship and non-violence. Harmonious in-
dustrial peace. However, the third phase of post-in-
dustrial relations were pursued through measures
dependence industrial relations (1980-1991) begins
to avoid strikes and lockouts by channeling dispute
a shift within Indian state regulation of the econo-
resolution into governmental dispute settlement
my and labour relations from: thelogic of industrial
machinery.26 This labour relations regime has been
peace to the logic of competitiveness of firm and
referred to as responsible unionism, attendant to
the economy.22
the maintenance of industrial peace.27 Although
articulated as consonant with themes of post-inde-
Post-independence: first phase of industrial
pendence nation building, it has been widely recog-
relations (1950 to mid-1960s)
nized that the evolution of labour law in India post-
In the first phase of industrial relations following 1945 largely followed the pattern established by
independence, corresponding to the first three British colonial authorities.28 Significant features of
Five-Year Plans (1951-56, 1956-61, 1961-66), In- this colonial pattern include a significant expansion
dia entered a period of national development. of individual rights, however, limited to formal sector
Following independence, in order to advance gov- workers; exclusion of informal sector workers; and
ernment-directed nation building, the state took on restrictions on collective bargaining.
21. This periodization of post-independence industrial relations follows the periodization laid out by Debashish Bhattacherjee in The Evolution of Indian Industrial
Relations: A Comparative Perspective, 32 Indus. Rel. J., No. 3, 248 (2001).
22. K.R. Shyam Sundar, Emerging Trends in Employment Relations in India, 45 Indian J. Of Indus. Rel., No. 4, 585, 586 (2010).
23. Indias Third Five Year Plan laid out the objectives of planned development to be comprised of economic and social goals pursued within the national demo-
cratic system. Government of India Planning Commission, Third Five Year Plan, 1961-66.
24. CP Chandrasekhar and Jayati Ghosh, The Market That Failed: A Decade Of Neoliberal Economic Reforms In India (New Delhi: LeftWord, 2006), 3.
25. Bhattacherjee, supra note 21 at 248.
26. Van D. Kennedy, The Sources and Evolution of Indian Labour Relations Policy, 1 Indian J. Of Indus. Rel., No. 1, 15, 37-38 (1965) (citing Prime Minister Nehrus
repeated insistence that peaceful negotiation and compromise were the Indian way, that they were unique and democratic methods and that conflict mil-
itates against the spirit of cooperative endeavour and represented an out-of-date mentality which is not in keeping with the conditions of today); and Gulzari
Lal Nandas questioning of the appropriateness of collective bargaining: Collective bargaining is not suited to our socialistic pattern of society. It may be valid
for a capitalist economy like the United States and the United Kingdom).
28. Mitchell, supra note 2 at 420
11
Strengthening protection for individual workers l Employees Provident Fund and Miscellaneous
rights was articulated as the responsibility of the Provisions Act, 1952, providing retirement ben-
central government. The central government was efits to employees through provident funds,
tasked with dealing with all phases of the workers pensions funds and deposit linked insurance
life, including housing, welfare, work, better work- funds;36
ing conditions and fair wages.29 Ideas of social jus- l Maternity Benefit Act, 1961, providing both
tice and the role of the welfare state, articulated by
pre-natal and post-natal leave entitlements and
the national movement for Independence and en-
wage allowances for female employees;37
shrined in the Indian Constitution, were articulated
as the grounds for labour regulations aimed at ad- l Payment of Bonus Act, 1965, securing payment
vancing workers rights in this period.30 Consistent of an annual bonus to all employees receiving
with these articulated objectives, a range of protec- wages below a specified limit.38
tive legislation was introduced between 1946 and Parallel to this advance in individual workers rights
1962. Highlights include: within industrial establishments, however, regula-
l Industrial Employment (Standing Orders) Act, tion of industrial relations also excluded numerous
1946 requiring employers to provide employees workers from protection. The Industrial Disputes
with clear terms of employment as set down by Act, 1947, applies only to workmen in industries.
a certified employment Schedule;31 The term industry, however, has been progressive-
ly expanded to include an increasing but still limited
l Factories Act, 1948 regulating conditions of
range of employment under subsequent amend-
work in manufacturing establishments to en-
ments to the Act.39
sure adequate safety, sanitation, health, welfare
measures, hours of work and leave parameters While individual workers rights were expanded
for workers employed in factories;32 post-independence, collective bargaining rights
were circumscribed through legislative measures,
l Minimum Wages Act, 1948, establishing wage
strong state intervention in industrial relations
standards by fixing distinct rather than universal
and judicial precedents. Trade unions were legally
minimum wages for scheduled forms of em-
sanctioned but strikes and lockouts were strictly
ployment;33
regulated. The Industrial Disputes Act, 1947 applied
l Employees State Insurance Act, 1948, providing conditions under which workers were allowed to
a system of insurance in cases of sickness, ma- strike and distinguished between legal and illegal
ternity, injury, disablement and death;34 strikes.40 The Act also designated no procedures
to determine the representative union in a particu-
l Plantations Labour Act, 1951 and Mines Act,
lar bargaining unit. Since employers were under no
1952, regulating conditions of work on tea and
legal obligation to bargain with unions, there was
rubber plantations and in the mining sector;35
29. Id. 421.

30. T.S. Papola and Jesim Pais, Debate on Labour Market Reforms in India: A Case of Misplaced Focus, Indian J. Of Labour Economics, Vol. 50, No. 2 (2007)
(citing Jaivir Singh, Incentives and Judicially Determined Terms of Employment in India: Endemic Trade-Off between Justice and Efficiency, Economic And
Political Weekly (2003), pp. 123-133; C.P. Thakur, Labour Policy and Legal Framework in India: A Review, Institute for Studies in Industrial Development, New
Delhi (2007)).
31. Industrial Employment (Standing Orders) Act, 1946, No. 20 of 1946 (23 April 1946).
32. Factories Act, 1948, No. 63 of 1948 (23 September 1948).
33. Minimum Wages Act, 1948, No. 11 of 1948 (15 March 1948). Under The Minimum Wages Act, 1948, the minimum wage schedule is to be revised periodically
by central and state governments in order to enable workers to subsist at least above the poverty line. The Act may be applied to any class of employment in
which collective bargaining is not in operation.
34. Employees State Insurance Act, 1948, No. 34 of 1948 (19 April 1948).
35. Plantations Labour Act, 1951, No. 69 of 1951 (2 November 1951); Mines Act, 1952, No. 35 of 1952 (15 March 1952).
36. Employees Provident Funds and Miscellaneous Provisions Act, 1952, No. 19 of 1952 (4 March 1952).
37. Maternity Benefit Act, 1961, No. 53 of 1961 (12 Dec. 1961).
38. Payment of Bonus Act, 1965, No. 21 of 1965 (25 September 1965).
39. Industrial Disputes Act, 1947, No. 14 of 1947 (11 March 1947).
40. Industrial Disputes Act, 1947, No. 14 of 1947 (11 March 1947), arts. 22 and 23.
12
no incentive for collective bargaining.41 Instead, Employees Association v. National Industrial

privileging strong state intervention in industrial dis- Tribunal (1962), the Supreme Court expressly cir-
putes, compulsory arbitration lies at the core of the cumscribed the boundaries of the constitutional
Industrial Disputes Act, 1947, permitting the state to right to form a union. The Court held that the con-
force any conflict into compulsory arbitration and stitutional right to form a union does not carry with
to declare any strike or lockout illegal. These pro- it the right of collective bargaining and the right to
visions allowed the state to intervene in industrial strike.47 Under this line of reasoning, while the right
disputes and direct industrial relationships through to strike is a legal right, it does not amount to a fun-
civil dispute mechanisms.42 For the most part, un- damental right and can therefore be circumscribed.
der these provisions, disputes were referred to con-
In summation, from the 1950s to mid-1960s, the
ciliation, then to the labour commissionerand if
state pursued uninterrupted industrial production
these mechanisms failed, disputes were settled in
through pursuit of harmonious industrial relations.
industrial courts, labour courts or through binding
This dual approach of conferring individual rights
arbitration.43 While during the late 1950s attempts
and restricting collective rights, rooted in British
were made to introduce labour legislation promot-
colonial frameworks, has been described as a pa-
ing collective bargaining, these attempts ultimately
ternalistic approach toward workers. Although this
failed.44
approach to workers rights was propelled through
The system of interest representation that held post-independence public articulation of socialist
sway during this period, including interactions be- principles, it has also been critiqued as ultimately
tween unions, politics and the state, exemplifies aimed at promoting the narrow goal of industrial
what has been called state pluralism. Under this harmony.48
framework, the state also intervened in determining
wages and working conditions. Central and Industri- Post-independence: second phase of industrial
al Wage Boards and the Bureau for Public Enterpris- relations (mid-1960s1979)
es were responsible for setting wagesexcept in The second phase of post-independence industri-
cases of dispute in which adjudicators were called al relations corresponds with the 1967-69 Annu-
upon to mediate. Collective bargaining was central- al Plans, the Fourth Five Year Plan (1969-74) and
ized, for the most part, at the national level but also, the Fifth Five Year Plan (1974-79). From the mid-
in some cases, at the industry and regional levels. 1960s-1979, state policy persisted in the mode of
This structure for determining wages, referred to as extending individual rights at work. However, this
tripartism, ultimately resulted in wages rising at a period also reflected two crises that began to re-
slower rate than labour productivity.45 shape the landscape of collective bargaining: eco-
Although this period is marked by a significant rise nomic deceleration under state-led industrialization;
in registered unions, due to strong state intervention and a crisis of legitimacy for the state pluralism
in labour relations, collective bargaining remained model of industrial relations, characterized by state
underdeveloped.46 Reinforcing limitations on av- mediation of interactions between workers and
enues for collective bargaining, in All India Bank employers.49 These forces prompted the growth of
41. Bhattacherjee, supra note 21 at 248-49.

42. Mitchell, supra note 2 at 423.
44. For discussion of these attempts, see Bhattacherjee, supra note 21 at 249 (discussing the Code of Discipline, inter-union Code of Conduct and various bills
ultimately vetoed by the executive branch).
45. Id. at 249, 250 (referencing the concept of state pluralism, articulated by R. Chatterjee in Unions, Politics And The State: A Study Of Indian Labour Politics
(South Asian Publishers: New Delhi, 1980).
46. Id. at 250.
47. All India Bank Employees Association v. National Industrial Tribunal, AIR 1962 S.C., 171; Radhashyam Sharma v. Post Master General, Nagpur, AIR 1965 S.C.,
311 (holding that while the right to strike is not a fundamental right, it is recognized as a mode of redress for resolving worker grievances). See B.P. Rath and
B.B. Das, Right to Strike an Analysis, 41 INDIAN J. OF INDUS. REL., No. 2 (2005) for further discussion of the status of the right to strike under Indian constitu-
tional law, jurisprudence and international law.
48. Kennedy, supra note 26 at 38; Bhattacherjee, supra note 21 at 250.
13
left unions and informed decentralized bargaining practices and industrial relations. The 1965 amend-
in growth sectors. However, although trade union ments to the Industrial Disputes Act, 1947 facilitat-
strategies diversified, the government and central- ed a new pattern in bargaining: coalition bargain-
ized unions simultaneously proceeded in the mode ing between multiple unions and an employer led
of state pluralism. to settlements; and conciliation proceedings were
then sought to convert these agreements into le-
The period from the mid-1960s-1979, is associated
gally binding documents. Particular states, includ-
with overall industrial stagnation, falling wages, fall-
ing Gujarat, Madhya Pradesh, Maharashtra and
ing productivity, rising inflation (above 10 percent in
Rajasthan also enacted state-level laws regard-
1966-67 and 1967-68) and severe food price infla-
ing union recognition. Following earlier legislation
tion (around 20 percent). There have been various
on union recognition, Maharashtra, for instance,
explanations posited for this period of stagnation,
passed the Maharashtra Recognition of Trade
including: deceleration in public investment; unequal
Unions and Prevention of Unfair Labour Practices
terms of trade between agriculture and industry; in-
Act, effective in 1975, making failure to bargain with
efficient state regulation in the public sector;50 and,
a representative union an unfair labour practice.55
despite socialist rhetoric, little progress in redress-
Real wage gains beginning in the late 1970s have
ing asset and income inequality, leaving rural land
been attributed to the acceleration of union activity
monopolies and industrial sector asset concen-
and shifts in the structure of collective bargaining
tration largely intact.51 The economy also suffered
from the mid 1960s through the 1970s.56
from oil price shocks in 1973 and 1978.52
Further, changing the landscape of collective bar-
Between 1966 and 1974, this downturn in the econ-
gaining, the 1976 amendments to the Industrial Dis-
omy led to a sharp rise in industrial disputes (strikes
putes Act, 1947 brought closure, retrenchment and
and lockouts) and the number of workers involved in
layoff into the ambit of regulationfurther strength-
industrial disputes. Many workers also turned away
ening state authority and extending it to somewhat
from party-aligned leadership and toward more rad-
limit the impact of market forces in determining
ical union leaders, including lawyers and student ac-
employment status. These amendments, however,
tivists.53 Rising union activity came to a peak during
led to a sharp spike in lockouts. In 1976 the number
the all-India Railway Strike of 1974. In response to
of working days lost due to lockouts exceeded the
the Railway Strike, Indira Gandhi declared an inter-
number of days lost due to strikes. 57
nal emergency from 1975-77suspending a range
of civil rights and liberties. State insistence on in- Consistent with the raft of legislation protecting in-
dustrial peace and discipline were reasserted, trade dividual workers rights that began in the colonial
union rights were suspended and industrial conflict era and extended rapidly in the first post-indepen-
was suppressed.54 dence phase of industrialization, the 1970s saw
the passage of a series of central laws protecting
This second phase of industrialization saw legisla-
extraordinarily vulnerable workers.58 The Contract
tive changes in the structure of collective bargaining
50. Id. at 250-51.

51 Chandrasekhar, supra note 24 at 1 (arguing that one consequence of the persistence of asset and income inequality, particularly in rural India which was
home to the majority of the population, was that there were definite limits to the expansion of the market for mass consumption goods in India, limiting em-
ployment and income growth in the private sector; another consequence was agricultural output far below the potential; and, as a result, continuous growth
in state spending was essential for the growth of the market.)
52. Bhattacherjee, supra note 21 at 250-51.
53. Id. at 251.
54. K.R. Shyam Sundar, Trade Unions and the New Challenges: One Step Forward and Two Steps Backward, 49 Indian J. Of Lab. Econ., No. 4, 904, 905 (2006).
55. Bhattacherjee, supra note 21 at 251 (citing A.K. Sengupta, Trends in Industrial Conflict in India (1961-1987) and Government Policy, Working Paper Series No.
174/92 (Calcutta Institute of Management)).
56. Id. at 252 (citing B.K. Madan, The Real Wages of Industrial Labour in India (New Delhi: Management Development Institute, 1977), noting that wage data in
earlier studies suffered from a serious downward bias since earlier studies were based upon a restricted category of low paid workers and using wage data
from the Annual Survey of Industries to find a real wage increase among manufacturing workers; and Tulpule and Datta, 1988 and 1989, Real Wages in Indian
Industry, Economic And Political Weekly, 23 October 1988 and Real Wages and Productivity in Industry: A Disaggregated Analysis, Economic And Political
Weekly 24 August 1989, finding evidence of real wage gains since the late 1980s even though there were substantial variations across industries).
57. The 1976 amendments to the Industrial Disputes Act introduced Chapter V-B which makes it compulsory for employers to give 90 days notice before closure,
retrenchment or layoff in enterprises engaging 300 or more workers. In 1982, Chapter V-B was made applicable to enterprises engaging 100 or more workers.
58. Usha Ramanathan, Through the Looking Glass, SEMINAR 669, May 1, 2015, p. 42.
14
Labour (Regulation and Abolition) Act, 1970, reg- including the 1979 droughtone of the worst
ulated the employment of contract labour and droughts since independence; political instability in
prohibited its use in perennial activities engaging the northeast, a recession in 1980-81, rising inflation,
20 or more workers.59 Other legislation of the peri- and increasing oil import bills. These factors, togeth-
od, protecting particularly vulnerable workers, in- er, led toward Indias balance of payment crisis.67
cluded the Limestone and Dolomite Mines Labour By the mid-1980s, the economy began to move
Welfare Fund Act, 1972;60 Bonded Labour System away from inward-looking growth strategies and to-
(Abolition) Act, 1976;61 Equal Remuneration Act, ward export promotion and domestic competition.68
1976;62 Iron Ore, Manganese Ore and Chrome Ore
The massive public sector strike in Bangalore in
Mines Labour Welfare Fund Act, 1976;63 and Inter-
1980-81 and the definitive Bombay textile strike of
state Workmen (Regulation of Employment and
1982the longest strike in post-independence la-
Conditions of Service) Act, 1979.64 This string of
bour historymark a period of significant changes
laws conferring progressive protection of individual
in the landscape of the union movement. The rise
workers culminated in passage of the Child Labour
and proliferation of independent unions operating
(Prohibition and Regulation Act), 1986 which abol-
in major industrial centres has been recognized as
ishes child labour in particular operations and strict-
a defining feature of this phase. Due to segmented
ly regulates working conditions where child labour
and uneven developments in the industrial sector,
is present.65
plant-level bargaining by independent unions was
In explaining the impetus of the neoliberal economic often able to deliver higher wages and benefits
reforms that began in the early 1990s, both advo- packages than party-affiliated unions. However,
cates and critics of neoliberal reform take as their the structure of labour-management relations var-
reference the development impasse of this second ied widely between cities: for instance, the Mumbai
phase of industrial relations, from the mid-1960s labour movement experienced a proliferation of
through the 1970s.66 The emerging dual crises that labour leaders who disclaimed allegiance to politi-
characterizes this perioda crisis in state-led indus- cal parties; while in Kolkata, the industrial relations
trialization and simultaneous crisis in state-pluralism regime remained highly politicized with strong links
as a mode of industrial relationsextended into the maintained between CITU and the ruling communi-
third phase of industrial relations, from 1980-1991. ty party.69
In 1984, the Bhopal gas disasterthe accidental re-
Post-independence: third phase of industrial
lease of forty tons of toxic methy-iso-cynate (MIC)
relations (19801991)
killed an estimated 10,000 people and caused mas-
The third phase of post-independence industrial re- sive poisoning of more than 500,000 others.70 This
lations corresponds to the Sixth and Seventh Five catastrophe, which continues to have severe impacts
Year Plans (1980-85, 1985-90) and the 1990 and upon successive generations, had no parallel in the
1992 Annual Plans. During this period, the economy worlds industrial history. The horror of the Bhopal
suffered from severe internal and external shocks, gas disaster shattered the silence on exposure of
59. Contract Labour (Regulation and Abolition) Act, 1970, No. 37 of 1970 (5 September 1970).
60. Limestone and Dolomite Mines Labour Welfare Fund Act, 1972, No. 62 of 1972 (2 December 1972).
61. Bonded Labour System (Abolition) Act, 1976, No. 19 of 1976 (9 February 1976).
62. Equal Remuneration Act, 1976, No. 25 of 1976 (11 February 1976).
63. Iron Ore Mines Manganese Ore Mines and Chrome Ore Mines Labour Welfare Act, 1976, No. 61 of 1976 (10 April 1976).
64. Inter-state Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979, No. 30 of 1979 (11 June 1979).
65. Child Labour (Prohibition and Regulation) Act, 1986, No. 61 of 1986 (23 December 1986).
66. Chandrasekhar, supra note 64 at 1.
67. J.S. Sodhi, New Economic Policies and Their Impact on Industrial Relations, 29 Indian J. Of Indus. Rel.No. 1, 31-54 (1993)(arguing in 1993 from the per-
spective that export oriented industrialization and World Bank and International Monetary Fund (IMF) conditionalities were necessary to revive the Indian
economy).
69. Id. at 255.
70. Bhopal Memorial Hospital and Research Centre, The Bhopal Gas Tragedy, accessed August 1, 2015, http://www.bmhrc.org/Bhopal percent20Gas percent20
Tragedy.htm.
15
workers and communities residing in the vicinity of labourers, prisoners, persons with intellectual dis-
industrial establishments to hazardous waste within abilities, pavement dwellers and women.76 The rise
factories. The 1987 amendment to the Factories Act, of PIL has been seen to correspond to the extent
1948 gave workers the right to information about the and level of judicial activism shown by the Supreme
nature and extent of workplace hazards and held di- Court,77 including in interpretation and application
rectors of companies responsible for risks imposed of labour law.78
by hazardous waste and other dangers.71
During the three phases of industrialization post-in-
This period also saw the rise of judicial intervention dependence (1949-1991) discussed above, India
in interpretation and application of labour rights saw a robust period of state-led industrialization
through Public Interest Litigation (PIL). PIL facili- and experienced deceleration of the economy with
tated access to the courts for disadvantaged sec- the inability to sustain this model. These shifts in the
tors of society by modifying traditional standing economy precipitated a shift from the logic of in-
requirements, procedure to file writ petitions and dustrial peace that in large part governed the years
evidentiary processesincluding by appointing immediately post-independence to the logic of
fact-finding commissions and amicus curiae.72 The competitiveness of firm and the economy. Despite
introduction of PIL in 1979 provided a new avenue this significant evolution in the economy, however,
for the Supreme Court to vindicate constitutional throughout this period, labour laws and Supreme
commitments to social welfare. This platform, ori- Court jurisprudence expanded constitutionally pro-
ented to remedial innovation and large questions tected individual workers rights. At the same time,
of policy, facilitated cases on behalf of marginal- the central government maintained strict legislative
ized groups, including industrial and other work- control over collective rightsalthough by the sec-
ers.73 Famous cases in which the Supreme Court ond phase of industrialization (mid-1960s -1970s),
protected workers rights, include Peoples Union particular states began enacting state-level laws
For Democratic Rights v. Union of India (1983),74 pertaining to union recognition. It is against this reg-
ruling that working for less than minimum wage ulatory backdrop that neoliberal economic reforms
falls within the scope of forced labour prohibited unfolded, beginning in 1991 and continuing through
by the constitution; Bandhua Mukti Morcha v. Union contemporary proposals for labour law reform.
of India (1984) tackling the bonded labour system;
and Vishaka v. State of Rajasthan (1997) laying Economic liberalization: increased
down detailed guidelines on sexual harassment at workforce flexibility, decreased
the workplace.75 bargaining authority of trade unions
The period from the late 1970s through the 1980s
and deregulation (1992-present)79
has been distinguished as the first phase of PIL, In June 1991, Indias balance of payment crisis, be-
characterized by litigation by public-spirited law- ginning in the early 1980s and reaching its peak in
yers, journalists, social activists and academics early 1991, prompted the government to adopt the
that addressed the rights of disadvantaged sec- World Bank-IMF stabilization and structural adjust-
tions of society, including child labourers, bonded ment programme.80 Consistent with the pressure
71. Ramanathan, supra note 58 at 42.

72. See Surya Deva, Public Interest Litigation in India: A Critical Review, 8 CIVIL J.Q., No.1 23-26 for a more detailed discussion of these innovations.
73. Marc Galanter, Legal Torpor: Why So Little Has Happened in India After the Bhopal Tragedy, 20 TEX. Intl. L. J. 273, 288-89 (1985).
74. Bandhua Mukti Morcha v. Union of India, AIR 1984 SC 802.
75. Vishaka v. State of Rajasthan, AIR 1997 SC 3011.
76. See Deva, supra note 72 at 27 for a discussion of three phases of PIL. However, since under Devas schematic, the second and third phases of PIL are only
tangentially related to interpretation and application of labour law, these phases are not covered in this discussion.
77. Id. at 30 (citing Jain, The Supreme Court and Fundamental Rights, Fifty Years Of The Supreme Court Of India (Verma and Kusum eds.), p. 86).
78. Under the Supreme Court, Guidelines to be Followed for Entertaining Letters/Petitions Received by it as PIL, December 1, 1988, the bonded labour matters and
non-payment of minimum wages are included as distinct categories under which PIL should be entertained.
79. Bhattacherjee, supra note 21 refers to the beginning of this phase as the fourth phase of industrial relations (1992-2000). However, given the significant
impact of the June 1991 World Bank-IMF stabilization and structural adjustment programme, this report treats June 1991-present as a distinct period.
80. Sodhi 1993, supra note 67 at 31-54 (arguing in 1993 from the perspective that export oriented industrialization and World Bank and International Monetary
Fund (IMF) conditionalities were necessary to revive the Indian economy).
16
towards privatization and openness to foreign in- has come to include cheap, skilled and controlled
vestment imposed upon governments across the and disciplined labour.84 Within this context, In-
Global South, this conditionality-driven structural dias labour laws have been critiqued for facilitating
adjustment loan from the IMF called for reduction the rising power of unions and protecting rights at
in the public sector, a larger role for private enter- work. In particular, criticism was leveled against in-
prises and opening up Indias economy. Central and efficiency in Indias state machinery for adjudicating
state-level government promotion of trade liberal- industrial disputes and the 1982 amendments to
ization, international competition and privatization the Industrial Disputes Act, 1947 that were seen as
relied on wage constraints and diminished bargain- curtailing employers rights and enhancing bargain-
ing power of unionized sectors.81 Although India has ing power of unions.85
seen relatively high economic growth in the past de-
Such critiques have been mobilized to advocate for
cade, very few jobs have been added, mostly of low
labour law reforms that increase workforce flexibili-
quality, and employment opportunities in public en-
ty, decrease the bargaining authority of trade unions
terprises, the formal private sector and agriculture
and diminish the reach of Indias state labour regu-
have declined.82
latory apparatus.86 While dejure labour law reforms
The process of liberalization initiated in the mid- have been slower to materialize, over the last twen-
1980s led to the formulation of new industrial pol- ty-five years, industrial relations have been defacto
icies in 1990 and 1991. The 1991 industrial policy restructured along these lines. Labour reforms by
opened up space for development of the private stealth87 have included amendments in trade union
sector by relaxing labour regulations, removing law, reductions in provident fund interest rates and
limits under the Monopolistic and Restrictive Trade special concessions to units in special economic
Practice Act, 1969 (MRTP) and decreasing the ex- zones (SEZs).88
clusive domain of the public sector in core sector
The 1991 reform climate prompted systematic
industries. India also eased trade restrictions to
downsizing of the organized workforce, undertak-
attract multinational investment in Indian industry.
en through measures such as voluntary retirement
While these new economic policies offered Indian
schemes (VRS). The Indian government also consti-
private sector industries opportunities for growth
tuted the National Renewal Fund (NRF) to compen-
and expansion, they also opened up competition
sate employees affected by restructuring or closure
from foreign business interests.83
of public and private sector industrial units. It has
The global marketization of the economy has not been estimated that between 1991 and 1995, this
only required nation states to compete for high- dedicated fund enabled firms to retrench 78,000
ly mobile investmentsbut, in turn, for workers to labourers from the public sector and further aimed
compete for decent jobs. Competitive advantage to reduce 2 million workers. Micro-level studies
81. K.R. Shyam Sundar Industrial Relations in India- Working Towards a Possible Framework for the Future, unpublished paper presented at International Labour
Organization Bureau for Workers Activities (ACTRAV) & Centre for Informal Sector and Labour Studies, Jawaharlal Nehru University (JNU) National Trade
Union Conference on Labour Law Reform, Industrial Relations and Industry Development, June 29, 2015 (paper on file with author).
82. Coen Kompier, et.al., Chapter 4: Labour Markets: Exclusion from Decent Work, India Exclusion Report, 2013-2014 (Books for Change: Delhi, 2014), 111
(citing International Labour Organization, Global Employment Trends, 2013: Recovering From A Second Jobs Dip (Geneva: ILO, 2013).
83. Significant trade measures introduced in the early 1990s include abolishing export subsidy (CSS), replacing REP licenses by Exim scripts, ceasing issuance
of licenses to non-exporters and reducing customs duties at various stages. Sodhi 1993, supra note 107 at 33.
84. Kevin Hewison and Arne L. Kalleberg, Precarious Work and Flexibilization in South and Southeast Asia, 57 American Behavioral Scientist, No. 4, 395-402
(2013).
85. E.g. C.K. Johri, Industrialism and Industrial Relations in India: The Task Ahead, 25 Indian J. Of Indus. Rel., No. 3, 238 (1990) (arguing that laws governing industrial
relations go beyond protecting workers from unfair practices and bind the management, hand and feet, and place legal obstructions before it in the discharge
of normal functions); E.M. Rao, The Rise and Fall of Indian Trade Unions: A Legislative and Judicial Perspective, 42 Indian J. Of Indus Rel, No. 4, 678-695 (1993).
In particular, critiques have been leveled at the Industrial Disputes (Amendment) Act, 1982 (introducing unfair labour practices under the Fifth Schedule of the
Industrial Disputes Act, 1947 and including refusal by an employer to bargain collectively in good faith with a registered trade union and hiring practices that
deprive workers on casual or temporary contracts with the object of depriving them of the status and privileges of permanent workers as unfair).
86. Papola, supra note Surya Deva, Public Interest Litigation in India: A Critical Review, 8 Civil J.Q., No.1.
87. Anamitra Roy chowdhury, Recent Changes in Labour Laws and their implications for the working class, Sanhati, January 13, 2015: http://sanhati.com/excerpt-
ed/12592/.
88. Sundar 2010, supra note 22 at 587.
17
of this period have also documented large-scale workplace flexibility.93 The Supreme Court further
employment adjustments in response to adverse rolled back protection for casual and temporary
demand shocks. For instance, due to the collapse workers by ruling that they could not seek regular-
of Ahmedabads textile factories in the 1980s and ization of their services, even after employment of
1990s, 36,000 workers lost their jobs between 1983 more than 10 years, in Secretary, State of Karnataka
and 1984.89 v. Umadevi.94 In 2005, in Haryana State Co-Op Land
Development Bank v. Neelam, a worker who was ille-
Other systematic measures to achieve labour flex-
gally terminated was not entitled to reinstatement.95
ibility during this period have included illegal clo-
Such precedents stripped contract workers of la-
sures, increased use of contract labour, outsourcing
bour protections and fueled unorganized employ-
and subcontracting.90 As a result of such system-
ment within the organized sector.96
atic downsizing of the organized sector, workers
were increasingly channeled into delivering flexible, Against this backdrop of economic liberalization,
labour intensive production activities at low cost recently proposed labour law changes have been
and without wage, job or social security.91 Simul- anticipated for more than a decade. The 2002 re-
taneously reducing the bargaining power of what port of the Second National Commission on Labour
remains of the organized industrial sector, 2001 provides a blueprint for the rapid consolidation of
amendments to the Trade Unions Act, 1926 required labour laws currently underway.97 Support for labour
unions to have at least 100 members or to repre- law changes also continued under former Prime
sent at least 10 percent of the workforce in order Minister Dr. Manmohan Singh who advocated la-
to register under the Actmaking the formation and bour law changes in order to make the process of
registration of unions far more challenging than had doing business in India less intimidating, cumber-
previously been the case.92 some and bureaucratic.98
The growth in the unorganized sector has been Labour law changes are now well on their way. In
backed by judicial precedents. For instance, in 2001, 2014, the central government amended the Labour
in Steel Authority of India Ltd. v. National Union Wa- Laws (Exemption from Filing Returns and Maintain-
terfront Workers, the Supreme Court ruled that the ing Registers by Certain Establishments) Act, 1988.99
Contract Labour Act, 1970 did not require manda- The principle Act exempted small establishments
tory absorption of contract workers as permanent employing less than 19 workers from maintaining
workers, even if those workers were employed in registers and filing returns under nine central acts.
contract work that was prohibited under the Act. The 2014 Amendment extends this exemption to
This judgment abolished entitlements protecting small establishments employing up to 40 work-
secure employment of contract workers, facilitating ers and now relieves them of the requirements of
89. Roychowdhury, supra note 87 (citing R. Nagaraj, Fall in Organised Manufacturing Employment: A Brief Note, Economic And Political Weekly, July 24, 2004,
p. 3387-3390).
90. Id. (citing Nagaraj, supra note 129; Roberto Zagha, Labour and Indias Economic Reforms, in JD Sachs et. al. (eds.), India In The Era Of Economic Reforms
(New Delhi: Oxford University Press, 1999.).
91. Surendra Pratap, The Political Economy of Labour Law Reforms in India, Part I, Centre for Workers Education, Delhi, accessed September 18, 2015, http://
sanhati.com/excerpted/12159/.
92. Trade Unions (Amendment) Act, 2001 (Act 31 of 2001)(section 5 inserted section 9A into the Trade Unions Act, 1926).
93. Steel Authority of India Ltd. v. National Union Waterfront Workers, Appeal (civil) 4263 of 2006 (Supreme Court).
94. Secretary, State of Karnataka v. Umadevi, Appeal (civil) 3595-3612 of 1999 (Supreme Court).
95. Haryana State Co-Op Land Development Bank v. Neelam, Appeal (civil) 1672 of 2002 (Supreme Court).
96. Roychowdhury, supra note 87 (citing Nagaraj, supra note 89).
97. T.K. Rajalakshmi, Loaded against labour: The report of the Second National Commission on Labour draws flak from across the political spectrum for its attempt
to dilute labour rights citing a changed economic situation, Frontline, August 3-16, 2002: http://www.frontline.in/static/html/fl1916/19160990.htm.
98. J.S. Sodhi, Labour Law Reform in India, Indian Journal Of Industrial Relations, July 2014, Vol. 50 Issue 1, p. 100-117, at 102 (citing Manmohan Singh at
the ILC 40th Session).
99. Labour Laws (Exemption from Filing Returns and Maintaining Registers by Certain Establishments) Amendment Act, 2014, No. 33 of 2014 (10 December 2014)
amends the Labour Laws (Exemption from Filing Returns and Maintaining Registers by Certain Establishments) Act, 1988.
18
maintaining registers under 16 central acts.100 Cen- Legislation introduced by the Ministry of Labour
tral trade unions have expressed concern that these and Employment in 2015 includes the 2015 La-
Amendments will make a growing number of small bour Code on Wages Bill which aims to consoli-
establishments less accountable for upholding date the Payment of Wages Act, 1936; Minimum
workers rights.101 Wages Act, 1948; Payment of Bonus Act, 1965;
and Equal Remuneration Act, 1976;106 the Labour
The Apprentices (Amendment) Act, 2014 widens
Code on Industrial Relations Bill, 2015 which aims
the scope for engagement of apprentices and in-
to consolidate the Trade Unions Act, 1926; Indus-
creases flexibility to employers under the Appren-
trial Employment (Standing Orders) Act, 1946; and
ticeship Act, 1961.102 The Amendment extends the
Industrial Disputes Act, 1947;107 the Small Facto-
scope for engagement of apprentices by allowing
ries Bill (Regulation of Employment and Condi-
employers to engage graduates without diplomas in
tions of Service) Bill, 2014; the Factories (Amend-
engineering and technology as graduate technician
ment) Bill, 2014; and proposed amendments to the
apprentices; and engage migrant workers from oth-
Child Labour (Regulation and Abolition) Act, 1986.
er states as apprentices in addition to apprentices
from the home states where businesses are locat-
ed. The Amendment also affords greater flexibility
State-level labour law changes
to employers by allowing them to: initiate training State governments have concurrent authority to
in an optional trade without waiting for central enact labour laws and amend central labour laws.
government notification of this trade; determine With the liberalization of the Indian economy, states
the weekly and daily hours of work for apprentices; have introduced significant changes in their labour
and engage apprentices according to the minimum policies and administration to deregulate industry
and maximum numbers prescribed by the central and attract capital into their regions.108
government.103 Finally, the Amendment reduces the
For the last decade, in order to provide incentives for
penalties for contravening the Act from up to six
private investment, many state governments have
months imprisonment to the mere requirement of
modified labour laws in favour of employers oper-
answering a notice in writing and paying a fine.104
ating in Special Economic Zones (SEZs)duty-free
These amendments reduce penalties against
enclaves deemed foreign territory for the purpose of
employers for engaging apprentices for regular
trade operations, duties and tariffs under the Spe-
production work instead of direct or contract
cial Economic Zones Act,2005.109 Reliable data on
workersa practice that is already prevalent across
the country.105
100. Under the Labour Laws (Exemption from Filing Returns and Maintaining Registers by Certain Establishments) Amendment Act, 2014, Schedule I, establish-
ments employing up to 40 workers are now exempt from maintaining registers under the following Acts: Payment of Wages Act, 1936; Weekly Holidays Act,
1942; Minimum Wages Act, 1948; Factories Act, 1948; Plantation Labour Act, 1951; Working Journalists and other Newspaper Employees (Conditions of Service)
and Miscellaneous Provisions Act, 1955; Motor Transport Workers Act, 1961; Payment of Bonus Act, 1965; Beedi and Cigar Workers (Conditions of Employment)
Act, 1966; Contract Labour (Regulation and Abolition) Act, 1970; Sales Promotion Employees (Conditions of Service) Act, 1976; Inter-State Migrant Workmen
(Regulation of Employment and Conditions of Service) Act, 1979; Dock Workers (Safety, Health and Welfare) Act, 1986; Child Labour (Prohibition and Regulation)
Act, 1986; Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996.
101. Ramapriya Gopalakrishnan, Handbook on Labour Reforms In India (2016), 60.
102. Apprentices (Amendment) Act, 2014, No. 29 of 2014, December 5, 2014.
103. Gopalakrishnan, supra note 101 at 61 (explaining that earlier the number of apprentices who could be engaged in a particular trade was determined on the
basis of ratio of apprentices to workers other than unskilled workers and the training facilities available in the establishment. The number varied from trade to
trade. The ratio requirement has been done away with and the employer may engage apprentices in accordance with the minimum and maximum numbers
prescribed by the central government in relation to the total worker strength which would also include workers engaged through an intermediary contractor).
104. Id., supra note 101 at 60-62 (listing the violations for which an employer could be punished: the punishment of imprisonment for a term which may extend
to six months could be imposed if an exployer (a) engaged as an apprentice a person who is not qualified for being so engaged; or (b) failed to carry out the
terms of a contract of apprenticeship; or (c) contravened the provisions of the Act relating to the number of apprentices he or she is required to engage; or
(d) required an apprentice to work overtime without the approval of the Apprenticeship Adviser or; (e) employed an apprentice on any work not connect with
his or her training or (f) made payment to an apprentice on the basis of piece work or; (g) required an apprentice to take part in any output bonus or incentive
scheme).
105. Id., supra note at 61-62.
106. Labour Code on Wages Bill, 2015, http://www.prsindia.org/uploads/media/draft/Labour%20Code%20on%20Wages%20Bill,%202015.pdf (accessed July 11,
2016).
2015.pdf (accessed July 11, 2016).
108. Sundar 2015, supra note 81.
109. Special Economic Zones Act, 2005, No. 28 of 2005 (23 June 2005).
19
working conditions in SEZs is unavailable because l Industrial Disputes Act, 1947;

employers are permitted to obtain reports from l Factories Act, 1948;
accredited agencies rather than completing man-
datory labour inspections by government author- l Minimum Wages Act, 1948;
ities. SEZs have also been declared public utility l Motor Transport Workers Act, 1961;
services in order to make strikes more difficult.110
l Payment of Bonus Act, 1965;
As of October 2011, 583 SEZs had been formally
approved but only 143 were operational. Direct em- l Beedi and Cigar Workers (Regulation of Employ-
ployment in SEZs reached almost 400,000 workers ment and Conditions of Service) Act, 1966;
in 2009.111 l Contract Labour (Regulation and Abolition) Act,
Within the last two years, Rajasthan, Gujarat, Mad- 1970;
hya Pradesh and some other states have under- l Payment of Gratuity Act, 1972; and
taken significant labour law changes to further de-
regulate industry and attract investment.112 State l Equal Remuneration Act, 1976.117
amendments have increased the threshold number State-level changes also include promoting engage-
of workers in an establishment required for appli- ment of apprentices through economic incentives
cability of the Factories Act, 1948 (Rajasthan);113 (Rajasthan)118 and self-certification schemes ex-
Contract Labour (Regulation and Abolition) Act, 1970 empting employers who self-report compliance
(Rajasthan)114; Chapters V A and B of the Indus- from inspection under numerous central acts
trial Disputes Act, 1947 related to lay off retrench- (Andhra Pradesh, Gujarat, Jharkhand, Madhya
ment and closure (Rajasthan, Andhra Pradesh);115 Pradesh, Rajasthan).119 Rajasthan, Madhya Pradesh
and the Industrial Employment Standing Orders and Gujarat had already already undertaken signifi-
Act, 1961 (Madhya Pradesh).116 States have also cant labour law changes.120 Following this pattern,
diminished the likelihood for criminal sanctions Andhra Pradesh, Haryana, Himachal Pradesh, Ma-
against employers by allowing for compound- harashtra, Uttar Pradesh and Telengana are also
ing of offenses under some or all of the following expected to introduce further labour law changes.
central laws:
110. Sundar 2010, supra note 22 at 587.

111. Kompier, supra note 82 at 114.
112. Mukul G. Asher, Reforming labour laws, creating livelihoods, THE HINDU October 30, 2014, accessed online on October 31, 2014: http://www.thehindu.com/
opinion/op-ed/comment-reforming-labour-laws-creating-livelihoods/article6545494.ece?css=print.
113. This state level law amends the Factories Act, 1948, No. 63 of 1948,23 September 1948, amended by the Factories (Amendment) Act, 1987, No. 20 of 1987.
Gopalakrishnan, supra note 26 at 66 explains: In Rajasthan, under the Factories (Rajasthan Amendment) Act, 2014, the definition of the term factory in
section 2(m) of the Factories Act was amended. As a result, in the state, the Factories Act would be applicable to premises where 20 or more workers are
employed and a manufacturing process is carried on with the aid of power[;] or 40 or more workers are employed and a manufacturing process is carried on
without power. The Factories (Andhra Pradesh Amendment) Bill, 2015 proposes a to similarly amend the definition of factory.
114. This state level law amends the Contract Labour (Regulation and Abolition) Act, 1970, No. 37 of 1970 (5 September 1970). Gopalakrishnan, supra note 26 at
66-67 explains: The Government of Rajasthan has under the Contract Labour (Regulation and Abolition)(Rajasthan Amendment) Act, 2014 amended the Act
so as to make it applicable only to establishments in which 50 or more workers are employed and to contractors who employ 50 or more workers.
115. These state level laws amend Chapter V-B of the Industrial Disputes Act, 1947, No. 14 of 1947 (11 March 1947). Gopalakrishnan, supra note 101 at 67 explains:
The Government of Rajasthan has also increased the threshold for application of Chapter V-B of the Industrial Disputes Act to 300. As a result, industries
in the state employing between 100 and 299 workers will now not need the prior permission of the government before effecting any lay off, retrenchment
or closure. Moreover, on account of an amendment to the definition of the term workman under section 2(s) of the Act, the number of contract workers
employed through an intermediary contractor will not be taken into consideration while computing the number of workers employed in an industry. The
Industrial Disputes Act (Andhra Pradesh Amendment) Act, 2015 also proposes to similarly enhance the threshold for the application of Chapter V-B to 300
workers.
116. This state level law amends the Industrial Employment (Standing Orders) Act, 1946, No. 20 of 1946 (23 April 1946). Gopalakrishnan, supra note 26 at 67
explains: The Madhya Pradesh Industrial Employment Standing Orders Act, 1961 applies to undertaking in which 20 or more workers are employed. Under the
Madhya Pradesh Industrial Employment (Standing Orders) Amendment Act, 2014, it is proposed to increase the threshold for application of the Act to fifty. The
Act also will not apply to industries classified as micro industrices under the Micro, Small and Medium Industries Act, 2006.
117. Gopalakrishnan, supra note 101 at 68-69.
118. The Apprentices (Rajasthan) Amendment Act, 2014 amends the Apprentices Act, 1961, No. 52 of 1961. Gopalakrishnan, supra note 101 at 66-67 explains:
The amendments encourage employers to engage apprentices by providing for sharing the cost towards payment of stipend to apprentices (except those
who have undergone institutional training and passed the relevant trade tests). In the case of employers employing 250 or more workers, the employer and
government would bear an equal share of the cost of stipend; if an employer employs less than 250 workers, 75% of the cost would be borne by the state
government. The amendments grant more powers to the state apprenticeship council by enabling it to prescribe the duration of training and to expedite the
grievance redressal mechanism in case of termination of apprenticeship contract.
119. See Gopalakrishnan, supra note 101 at 69-70 for a detailed discussion of exemption from inspection under self certification schemes.
120. Asher, supra note 112.
20
State-level labour law changes have been justified on of 2 percent per annum over the four decades since
the grounds of promoting more competitive environ- 1972. Just 2.7 million jobs were added in the peri-
ments for business within particular states. In 2015, od from 2004-5 to 2009-10, compared to over 60
Rajasthans Chief Minister Vasundhara Raje explained million during the previous five-year period.124 These
the role of labour law reforms in the state as creating figures suggest that growth does not automatically
a fertile habitat for jobs creation. 121 Chief Minister of trickle down to working people. Poverty is also af-
Maharashtra, Devendra Fadnavis, promises to intro- fected by inflation, income inequality, asset distribu-
duce a Maharashtra model of labour law reforms: tion and government policy.
Along with Make in India we are pitching for Make
The current blueprint underlying Indias labour law
in Maharashtra, he says. If the Indian economy
changes promotes deregulation, employer flexibil-
has to grow at 8 per cent, Maharasthra has to grow
ity and reduced protection for workers and trade
at 10 per cent.122 Consistent with this logic, an in-
unions as critical elements of promoting business
creasing number of Indian states are promising to
interests and attracting foreign investment. Ac-
enact labour law changes that segment the labour
counts that foreground individual and collective
market and promote business within the state by
workers rights as the foremost barriers to eco-
deregulating industry and eroding accountability for
nomic growth, however, neither account for key ele-
upholding workers rights. In the language of wel-
ments of Indias industrial trajectory nor address the
fare economics, the competitive erosion of labour
actual structure of labour regulations in India. For
standards has been referred to as the race to the
instance, foregrounding protection of workers indi-
bottom.123
vidual and collective rights as the foremost histori-
Although India has seen relatively high economic cal limitations to Indias post-independence industri-
growth in the past decade, this growth has not met al growth collapses the significance of Indias dual
trickle down expectations. While the growth rate crises in state-led industrialization and state-plural-
of the Gross Domestic Product (GDP) in the past ism in industrial relations between 1966 and 1974.
decades accelerated to 7.52 percent per annum, These factors were compounded by severe internal
employment growth during this period was just 1.5 and global market shocks of the second and third
percentbelow the long-term employment growth period of post-independence industrial relations.
121. Gujarat Labour Minister Vijay Rupanis Note on Amendments in Labour Laws, Desh Gujarat, 25 February 2015.
122. Changes in Industrial Disputes Act to accelerate Make in Maharashtra, Indian Express, January 28, 2015, http://indianexpress.com/article/cities/pune/
changes-in-industrial-disputes-act-to-accelerate-make-in-maharashtra.
123. Ajit Singh and Ann Zammit, Labout Standards and the Race to the Bottom: Rethinking Globalization And Workers Rights From Developmental And
Solidaristic Perspectives, 20 Oxford Review of Economic Policy, No. 1, (2004), 89 (defining the race to the bottom, however in context of competitive
erosion of labour standards between countries).
124. Kompier, supra note 122 at 111 (citing International Labour Organization, GLOBAL EMPLOYMENT TRENDS, 2013: RECOVERING FROM A SECOND JOBS DIP, Geneva:
ILO, 2013).
21
22
III. Indias contemporary
labour market:
demographic trends and
precarious work
23
23
24
Rather than decent employment opportunities, sup- Within India, precarious work encompasses a spec-
ply-side economics, wage stagnation and high lev- trum of work regularly traversed by vulnerable work-
els of inflation have relegated an increasing number ersincluding unorganized workers within the orga-
of Indians to lifelong work without transcending the nized and public sectors. For precarious workers,
status of working poor.1 Work is more temporary, the insecurities and instabilities that arise from flex-
unstable and outsourced as functions are divided ibilization and casualization include reduced protec-
up along global value chains (GVCs). The use of tion under labour legislation, increasingly intensive
standard employment models continues to decline work patterns and isolation from labour unions and
and employer-employee relationships are increas- collective bargaining.4
ingly ambiguous. This section details the prolifer-
ation of precarious, unpaid, invisible and coercive Unorganized work
work in India. The section concludes by highlighting The National Commission on Enterprises in the Un-
the impact of these employment relationships on organized Sector (NCEUS) defines the term unor-
particularly vulnerable workers, including the inter- ganized workers to include both workers in unorga-
secting categories of migrant, women, child, Dalit, nized enterprises and households, and workers in
Adivasi and Muslim workers. the organized sector who are not provided with any
employment or social security benefits. In common
Precarious work parlance, the terms organized and unorganized
The term precarious work refers to employment sector are used interchangeably with the terms for-
that is uncertain, unpredictable and risky from the mal and informal sector.5
perspective of the worker. As employers seek to In Indias contemporary labour market, the bound-
easily adjust their workforce in response to sup- aries between the organized and unorganized sec-
ply and demand conditions, they generate more tors are eroding as precarious employment relation-
non-standard work. These forms of work shift risk ships increase within organized sectors, the public
from employers to employees. Precarious workers sector and the economy as a whole. The proportion
receive limited if any social benefits and statutory of unorganized workers in the organized sector rose
entitlements. Across organized and unorganized to 51 percent in 2009-2010. By 2009-2010, without
sectors of developing and developed economies, accounting for unorganized workers within the pub-
precarious work is steadily replacing standard em- lic sector, 92 percent of all workers in the organized
ployment relationships.2 Proliferation of precarious and unorganized sectors were effectively in unor-
work has a far-reaching impact upon the nature of ganized employment. Put another way: more than
work and workplaces and the gender-based distri- 400 million workers in India are employed with low
bution of work. Consequences of precarious work wages, little job security and no entitlement to state
include greater economic inequality, insecurity and protection of their rights at work.6 In 2004-2005, 95
instability among workersincluding through rou- percent of Scheduled Caste and Scheduled Tribe
tine dislocation as workers travel to follow transient workers were employed in the unorganized sector.
employment opportunities. These forces have se- This situation has not fundamentally changed in the
vere impacts on workers lives and their roles within last decade.7
their families and communities.3
1. Coen Kompier, et.al., Chapter 4: Labour Markets: Exclusion from Decent Work, India Exclusion Report, 2013-2014 (Books for Change: Delhi, 2014), 122
(citing Government of india, Situation Analysis of the Elderly in India (New Delhi, MoSPI, 2011)).
2. Arne L. Kalleberg, Precarious Work, Insecure Work: Employment Relations in Transition, 74 AMERICAN SOCIOLOGICAL REV. (2009), 2; Arne L. Kalleberg and
Kevin Hewison, Precarious Work and the Challenge for Asia, 57 AMERICAN BEHAVIORAL SCIENTIST, no. 3, 271-88 (2013).
3. Kalleberg 2009, supra note 2.
4. Hewison, supra note 2 at 3.
5. Surendra Pratap, The Political Economy of Labour Law Reforms in India, Part I, Centre for Workers Education, Delhi, accessed September 18, 2015, http://
sanhati.com/excerpted/12159/.
6. Kompier, supra note 1, 113.
7. Jayshree Mangubhai, ed., Benchmarking The Draft Un Principles And Guidelines On The Elimination Of (Caste)Discrimination Based On Work And
Descent, India Report, 51 (citing Sengupta, A., K.P. Kannan and G Raveendran, Indias Common People: Who are They, How Many are They and How do they
Live? 2008 Economic And Political Weekly 43(II), pp. 49-63)
25
Unorganized work within the organized sector across shop floors depending on the seasonal flow
Casualization and contractualization of the Indian of business. Working in fixed-tenure employment,
labour force is well underway in the organized man- these workers are outside of the ambit of protection
ufacturing sector. In 2009-10, in factories employing of section V-B of the Industrial Disputes Act, 1947.
more than 5,000 workers, almost half of the workers When business ebbs, they are the first to lose their
were employed through contractors and not directly jobs.10
by the establishments where they worked. Accord- Proliferation of unorganized work within the orga-
ing to the NSSO, in 2011-2012, contract workers nized sector has led to a sharp increase in the num-
amounted to about 25 percent of all workers in ber of precarious workers engaged in work that was
establishments employing between 100 and 5,000 once protected. Common employment practices
workers. More than 80 percent of all workers in the to transform protected work into precarious work
organized manufacturing sector had no written con- include use of short-term contracts, casualization,
tracts or contracts that were valid for less than a labour supply agencies and employment of foreign
year.8 This trend toward casualization and contrac- and domestic migrant workers. These employment
tualization has put a large section of the labour force strategies are also used to restrict collective bar-
outside the purview of Indias labour protections. gaining and reduce the bargaining power of unions.
For instance, within the garment sector, hiring work- As a result, jobs that were once associated with reg-
ers on a regular contract is on decline. 60 percent ulated wages and labour standards governing paid
of the garment workforce in India is composed of leave, maternity benefits, workplace safety, retire-
unorganized workers, employed as casual and con- ment and other non-wage benefits are now uncer-
tract workers. Around 80 percent of the workers tain, unpredictable and risky for workers.
employed in this sector are women. Garment sector
workers have been recognized by the National Com- Unorganized work within the public sector
mission for Enterprises in the Unorganized Sector Outsourcing and casualization of employment re-
(NCEUS) as informal workers in the formal sector. lationships are also increasingly common in Indias
This designation appropriately accounts for the public sector, including on the railwaysone of the
range of unorganized sector roles garment workers biggest employers in the country.11 Indias cen-
fill, including home-based work, daily wage work tral government is currently the largest purchaser
and contractual labour in small production units. of contract services. In 2012-13, the central gov-
Within the textile industry, this trend has been most ernment alone hired more than 20 lakh (2 million)
apparent in the ready-made garment industrya contract workers through nearly 43,000 licensed
leading destination for outsourcing by multinational contractors.12 According to data collected by the
enterprises for the past two decades.9 Seventh Pay Commission, in 2012-2013, the cen-
tral government spent `300.49 crore on contract or
To provide another example: in the automobile in-
temporary workers. Among government ministries
dustry, flexible forms of labour deployment are a
and departments, the Indian Railways spent the
primary means by which companies maximize
highest amount on contract or temporary work-
productivity. For instance, at the Bosch Audugodi
ersabout 35 crore (350 million) rupees a year.13
plant in Bangalore, on-job trainees who perform
the same tasks as other workers can be deployed
8. V. Sridhar, The curse of cheap labour: A society that systematically shortchanges its workforce will have to pay dearly, Frontline, October 29, 2014, accessed
online November 1, 2014: http://www.frontline.in/cover-story/the-curse-of-cheap-labour/article6540760.ece?homepage=true&css=print.
9. Interview with Anannya Bhattacharjee, Garment and Allied Workers Union, March 15, 2015. For further information on the garment industry in India, see
Susana Barria, National Peoples Tribunals On Living Wage For Garment Workers In Asia (Delhi: Asia Floor Wage Alliance, 2014).
10. Sridhar, supra note 8.
11. Id.
12. Yogima Sharma, Fostering equality: Government may limit portion of contract workers in companies to 50%, Economic Times, September 8, 2015, accessed,
February 9, 2016, http://articles.economictimes.indiatimes.com/2015-09-08/news/66326646_1_contract-workers-contract-labour-regular-workers
13. Prashant K. Nanda, Central govt one of the biggest users of temps and contract workers in India, Livemint, November 24, 2015, accessed February 9, 2016,
http://www.livemint.com/Industry/D2PEAR2RL7eZTX47kjp7UM/Meet-one-of-the-biggest-user-of-temps-and-contract-workers-i.html.
26
III. Indias contemporary labour market:
demographic trends and precarious work
Government departments make three types of con- Anganwadi workers are also denied protection under
tractual appointments. These include: outsourcing the Minimum Wages Act, 1948 and access to ave-
of routine work such as housekeeping, maintenance nues for promotion, job security and social security.
and data entry which are bundled and entrusted to
staffing agencies; introduction of select posts for Anganwadi workers and helpers working at the
high-level professionals through contractual appoint- grassroots level are uniquely singled out for exclu-
ments; and contractual hiring of retired government sion. Programme authorities in the Women and
employees with particular skills and expertise.14 The Child Development Ministry at the apex level and
first category encompasses various categories of Programme Officers at the District level are recog-
low skill work while the latter two facilitate short-term nized as government employees but grassroots lev-
contracts with high-skill consultants. el staff, comprised of women from the local com-
munity, lack protection as government workers on
Contract workers are not protected by the same
the grounds that there are no set qualifications pre-
labour standards or entitled to the same benefits
scribed for their recruitment. Notably, regularization
as other public sector workers. This exclusion has
of Anganwadi workers and helpers as Group III and
a significant impact on workers from the first cat-
Group IV employees would amount to .6 percent of
egory delineated above. For instance, 10 million
Indias GDP.17
workers involved in delivering government schemes
are currently not entitled to benefits or protected by According to the Seventh Pay Commission Report,
labour standards, including wage standards. These current expenditure on contractual workers is rela-
workers include Anganwadi workers, Integrated tively small compared to expenditure on salaries of
Child Development Service (ICDS) Workers, Ac- personnel serving in the government`300.49 crore
credited Social Health Activists (ASHAs) under the on contractual workers, compared to `129,599 crore
National Rural Health Management (NRHM), Indira on permanent employees.18 This comparison does
Kranthi Patham (IKP) and Grama Deepika workers not account for disproportionate salaries between
of the National Rural Livelihood Mission (NRLM) contract workers completing low wage work, such
and Shiksha Karmis involved in primary education.15 as maintenance and sanitation work, and higher
paid permanent employees. The pay commission,
These workers provide critical public services. The
moreover, anticipates that government expenditure
ICDS scheme, launched 30 years ago, has devel-
on contract workers is likely to increase in the up-
oped into an institution with tremendous service
coming years.19
delivery capacity. Anganwadi workers under ICDS
are frequently made responsible for multiple health,
education and livelihood security responsibilities
Unpaid and invisible work
at the grassroots level in rural, tribal and slum ar- Unpaid work
eas.16 Since the ICDS has continued as a scheme, According to the NSSO, in 2011-2012, 55.6 percent
however, Anganwadi workers and helpers are de- of the total male population and 22.5 percent of the
nied protected status as government employees. total female population of India participated in the
They are paid an honorarium rather than a salary labour force.20 The remaining share of the popula-
with no remuneration for additional responsibilities tion44.4 percent of men and 77.5 percent of wom-
beyond those envisioned by their role under ICDS. enare not recorded as being a part of the labour
14. Id.
15. T.K. Rajalakshmi, Labour under attack, Frontline, October 31, 2014.
16. Responsibilities of Anganwadi workers include: treating oral rehydration and upper respiratory infections, providing directly observed treatment systems
(DOTS) for tuberculosis, AIDS awareness and reproductive health planning; conducting total literacy, Sarva Shiksha Abhiyan and non formal education
programmes; and promoting savings, group insurance, formation of Self Help Groups (SHGs) and identifying Below Poverty Line (BPL) families.
17. Rajya Sabha, Committee on Petitions, Hundred and Twenty-Ninth Report, On the Petitions Praying for Instituionalization of Integrated Child Development
Services (ICDS) Scheme by Converting it Into a Regular Department Under the Ministry of Human Resource Development and Regularization of Services of
Anganwadi Workers/Helpers as Employees of that Department, 17 May, 2006 (C.S. II-129).
18. Nanda, supra note 13.
19. Id.
20. Kompier, supra note 1 at 114 (citing National Sample Survey Organization, Key Indicators of Employment and Unemployment in India, 2011-2012; and
NSSO, Employment and Unemployment Situation among Social Groups in India, NSS 66th Round, 2009-2010 (New Delhi: MoSPI, 2012)).
27
force. These workers are, nonetheless, involved in a where nearly 80 percent of all women workers are
range of labour activities, including household work associated with a range of employment that in-
and caregiving. Responsibility for household work cludes unpaid and invisible work, recognition of
and caregiving are deeply gendered in their distri- unpaid work and its consequences for women
bution. Women in India spend, on average, over five workers is particularly significant.24 The Special
hours a day on housework compared to an average Rapporteur on Extreme Poverty and Human Rights
of 24 minutes spent by men.21 This work is invisible has positioned unpaid care work as a human rights
to the extent that it does not lead directly to visible issue and recommended that care be a social and
income generation and does not occur in conven- collective responsibility.25
tional sites of production.
Invisible workers
Privatization of social services has further exacer- Engaged in their homes and the homes of their
bated the burden of care work for poor and mar- employers, off the public radar, domestic and
ginalized women. Those who can afford care, pay home-based workers are particularly vulnerable to
for support from low wage workers who are most exploitation and abuse. Most labour laws to date
often women. Those who cannot, do their best to are designed to regulate working conditions in the
look after sick family members at home, a task that organized sector. Therefore, domestic and home-
also disproportionately falls to women. As a result, based workers are invisible under organized labour
women at the bottom of the socioeconomic pyra- registration systems.26 Labour protections capa-
mid meet the care needs of others while their rights ble of meeting the distinct needs of domestic and
to healthcare, social protection and decent work are home-based workers will require formulation out-
systematically denied.22 side the structure of organized employer-employee
Despite the significant contributions of women relations. The particular vulnerabilities of domestic
engaged in unpaid work, national laws and inter- and home-based workers are described in detail in
national conventions address only the concerns this section.
of workers in remunerative employment. In India,
Table: Typology of Womens Unpaid Work23
Care work
Household livelihood work Economic enterprise work
Direct care Indirect care
Physical care for the daily living of Washing clothes, cleaning Sourcing basic input for Work done inside or outside
household members (especially utensils, giving medicine, daily survival from outside the house for family
children, elderly and the sick, overseeing activities of the home such as fuel, food, enterprise (non-farm as
including bathing, feeding, children and elderly persons and water; transforming raw well as agriculture and
cleaning and nursing) and work as needed, maintenance of the food into cooked food for agriculture-allied activities.)
involved in social interaction, household for cleanliness and household consumption, food
learning and leisure activities hygiene. preservation, fodder collection,
for childs social cognitive and taking care of livestock, etc.
psychological development or of
elderly persons healthy living.
21. International Trade Union Confederation (ITUC), FROZEN IN TIME: GENDER PAY GAP UNCHANGED FOR 10 YEARS, accessed September 24, 2015 http://www.
ituc-csi.org/IMG/pdf/pay_gap_en_final.pdf.
22. The fine line between unpaid care work and domestic servitude, Interactions, accessed 2 February 2015, http://interactions.eldis.org/blog/fine-line-
between-unpaid-care-work-and-domestic-servitude.
23. Radhika Desai, Womens Work Counts: Feminist Arguments For Human Rights At Work, Programme on Womens Economic Social and Cultural
Rights, 2.
24. Report Of The National Workshop On Womens Unpaid Work (Draft for circulation) on file with author.
25. United Nations Office of the High Commissioner, Unpaid work, poverty and womens human rights, accessed February 11, 2016, http://www.ohchr.org/EN/
Issues/Poverty/Pages/UnpaidWork.aspx.
26. Kompier, supra note 1 at 114-115.
28
Domestic workers cable national legislation that guarantees them fair

Hired domestic workers undertake household work terms of employment and working conditions. Ab-
in return for remuneration. Tasks frequently include sent protection, domestic workers are subjected to
care of children and the elderly, cooking, driving, below minimum wages and long work hours. Since
cleaning, grocery shopping and running errands.27 domestic workers spend significant time within
Women and girls who are employed as domestic employers homes, they are particularly vulnerable
workers frequently lack literacy, alternate income to a range of abuses, including physical and sexual
generating opportunities, land and assets. Domes- abuse.32
tic workers are also typically from some of the poor-
est and most socially marginalized communities in Home-based workers
India, often facing discrimination in employment on Home-based workers can be divided into two basic
the basis of caste or other identities. For instance, categories: self- employed home-based workers
domestic workers who migrate for employment who operate independently and sell their own fin-
from Jharkhands districts of Gumla and Simde- ished goods; and sub-contracted home-based work-
ga to the NCR are predominantly Adivasi women ers, who are given raw materials, paid by piece and
who move to urban centres through informal con- typically contracted through an intermediary. Many
tacts. Among twenty-five young women (returned sub-contracted home-based workers produce un-
migrants) interviewed for a 2015 ILO study of the der contracts for global value chains.33 Home-based
Jharkhand-Delhi route, thirteen respondents were workers in India do at least 48 different types of
below the age of sixteen when they migrated for piece-rate workranging from handicrafts, embroi-
employment and seven respondents had no formal dering, fashioning key rings, assembling TV parts,
education.28 making insulators for ironing elements and chem-
ical washing car parts. Many of these jobs include
Young female domestic workers make up a signif-
hazardous work, such as working with shards of
icant portion of the population of Indias working
glass and toxic chemicals.34 Home-based workers
children. A 2007 study conducted by the Nation-
are also engaged in agricultural produce process-
al Commission for the Protection of Child Rights
ing, fish processing, seed preserving, processing
found that 23.2 percent of all working children are
minor forest produce, livestock rearing, metal work
domestic workers and 81.16 percent of domestic
and carpentry.35
child workers are girls. Child domestic workers are
frequently sent by their parents with agents to be According to 2009-2010 NSSO estimates, 79.2 per-
placed with employer families.29 cent of the non-agricultural female workforce in
urban areas was employed in home-based work.
While several laws, including the Unorganized Work-
These numbers may be an underestimate due to
ers Social Security Act, 2008,30 Sexual Harassment
the difficulty in comprehensively identifying home-
of Women at Workplace (Prevention, Prohibition
based workers. A 2012 study of 3000 home-based
and Redressal) Act, 201331 and Minimum Wages
workers conducted by the Centre for Indian Trade
Schedules notified in some states refer to domestic
Unions (CITU) found that the large majority of wom-
workers, there is no comprehensive, uniformly appli-
27. United Nations in India, About Domestic Workers, accessed February 9, 2016, http://in.one.un.org/page/rights-for-domestic-workers.
28. International Labour Organization, Indispensable Yet Unprotected: Working Conditions Of Indian Domestic Workers At Home And Abroad, 2015, at p.
38, accessed November 7, 2015, http://www.ilo.org/global/topics/forced-labour/publications/WCMS_378058/lang--en/index.htm.
29. Id.
30. Unorganized Workers Social Security Act, 2008, No. 33 of 2008 (30 December 2008).
31. Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, No. 14 of 2013 (22 April 2013).
32. United Nations in India, About Domestic Workers, supra note 27 (citing data released by the Ministry of Women and Child Development in February 2014 in
response to a question tabled in the upper house of Parliament).
33. Women in Informal Employment Globalizing and Organizing, Home-Based Workers, accessed on February 9, 2016, http://wiego.org/informal-economy/
occupational-groups/home-based-workers.
34. Pamela Phillipose, Indias Home-Based Workers Fall Through Safety Net, Womens eNews, August 30, 2011, accessed February 9, 2016, http://
womensenews.org/2011/08/indias-home-based-workers-fall-through-safety-net/.
35. Self-Employed Womens Association (SEWA), Home-Based Workers In India: Need For Protection Under Law, Wiego Law and Informality Resources
(Cambridge, MA, USA: WIEGO, 2014).
29
en involved in home-based piece work identified worker registration by labour departments; invest in
poverty and economic crises as the reasons for skill recognition and upgrade opportunities; secure
undertaking this type of employment alongside do- social protection, including childcare, pension, dis-
mestic and other responsibilities.36 ability benefits, maternity benefits and educational
and housing assistance; and recognize and engage
Home-based workers are impacted by irregular or
with membership based organizations (MBOs), in-
cancelled work orders, unreliable supplies of mate-
cluding womens only MBOs.42
rials, delayed payments and rejected goods. Piece-
rate work can be highly irregular.37 On average,
women work 16 days a month and seven months
Bonded and other forms of coercive
a year. Other members of the family, including the
labour
elderly and children, may be drawn into the produc- Labour bondage and coercive work have existed in
tion process. Since payments are made on a piece India for centuries. Coercive work is also assuming
rate basis, contributions from other family mem- new forms in the contemporary labour market. Vul-
bers remain completely unaccounted for.38 nerability to bondage and other forms of coercive
labour is rooted in longstanding patterns of inequal-
Particular trade groups of home-based workers
ity, social exclusion, discrimination and inadequate
have won protection under trade-specific
labour market governance. Traditional forms of
legislation. For instance, beedi workers are prote-
labour bondage, mostly observed in agriculture, in-
cted under the Beedi and Cigar Workers (Conditions
volve several generations of the same family being
of Employment) Act, 196639 and the Beedi Workers
bonded to the same household. Apart from agri-
Welfare Fund Act, 1976.40 Implementation of these
culture, where both traditional and newer forms of
welfare schemes required work by the Self Emp-
bonded labour co-exist, bonded labour is also found
loyed Womens Association (SEWA) to translate
among workers in a wide range of sectors, includ-
these Acts into local languages and advocate,
ing: stone quarries, brick kilns, sex work, fishermen,
through grassroots and legal advocacy, to secure
forest labourers, bidi workers, carpet makers, weav-
workers rights under these Acts. The vast majority
ers, head load carriers and children in match and
of home-based workers, however, are not protected
firework factories.43
by Indias labour laws. In fact, they are largely
invisible from the policy landscape. The first and Indias poorest and most socially vulnerable com-
last time home-based workers were surveyed by the munities fall into bondage for many reasons. Most
NSSO was in 1999-2000.41 workers in bonded or other forms of coercive la-
Workers representatives have argued that measures bour are landless, with little access to formal credit.
to protect the rights of unorganized sector workers, In times of need, they may have no option except
including domestic and home-based workers, must to turn to moneylenders. For instance, the brick
include recognition, representation and protec- kiln sector in India employs about 8 million work-
tions formulated outside the structure of organized ers annually, providing seasonal employment to
employer-employee relations. Policy measures distressed migrant workers in the agricultural lean
should recognize these forms of work in national season from October to March. Labour contrac-
macro-level statistics; ensure worker representa- tors provide migrant workers with advances rang-
tion in government, tripartite and other stakeholder ing from `4,000 to 40,000. A contractor will typic-
forumssuch as minimum wage boards; include
36. Kompier, supra note 1 at 117 (citing inputs from a case study on home-based workers on file with the author).
37. Women in Informal Employment Globalizing and Organizing, supra note 33.
38. Kompier, supra note1 at 117 (citing NSSO, Home-Based Workers in India, NSS 66th Round (2009-10)(New Delhi: MoSPI, 2012)).
39. Beedi and Cigar Workers (Conditions of Employment) Act, 1966, No. 32 of 1966 (30 November 1966).
40. Beedi Workers Welfare Fund Act, 1976, No. 62 of 1976 (10 April 1976).
41. SEWA, supra note 35.
42. SEWA, supra note 35 at 2-4 (discussing measures to protect home-based workers).
43. Harsh Mander and Gitanjali Prasad, India Exclusion Report, 2013-2014 (Books for Change: Delhi, 2014) 34.
30
ally settle advances at the end of the employment force it would be forced labour. The word
period. In the interim, workers completely depen- force must be construed to include not only
dent upon the labour contractor, face exploitative physical or legal force but also force arising
working conditions and other forms of workplace from compulsion of economic circumstanc-
violence. In most cases, children accompanying es which leaves no choice of economic cir-
parents also work at the kilns.44 cumstance to a person in want and compels
him to provide labour or service even though
Within the garment global value chain, begin-
the remuneration received for it is less than
ning in the early 1990s in Tamil Nadu, more than
the minimum wage. Therefore, when a per-
100,000 young Dalit girls have worked in spinning
son provides labour or service to another for
mills under Sumangali or happily married women
remuneration, which is less than the mini-
schemes. They are promised money for dowry in
mum wage, the labour or service provided by
a lump sum at the end of a three-year period but
him clearly falls within the scope and ambit
receive no regular payment apart from pocket mon-
of the words forced labour.48
ey. These schemes offer `30,000 to 60,000 for three
years work, but workers say that they do not receive The definition of what constitutes bonded or forced
the full amount after deductions are taken for their labour in India, has two elements to note: first, the
food and lodging. Girls as young as thirteen years presence of a creditor-debtor relationship between
old report not being allowed to leave mill com- a labourer and an employer is not sufficient to
pounds, being made to work double shifts and fac- denote bonded labour unless it imposes involuntary
ing physical and sexual abuse. As a result of their restraints; second, a creditor-debtor relationship is
extended working hours, often more than 12 hours not a necessary condition of bondage since this
a day, women and girls report migraines, excessive definition incorporates various categories of forced
stomach pain and heavy bleeding during menstru- labourincluding payment less than minimum
ation as a result of dust and poor ventilation within wage.49
factories.45
While the legislative framework of the Bonded La-
Bonded and forced labour is outlawed under Article bour System (Abolition) Act, 1976 and subsequent
23 of the Constitution of India. The Bonded Labour interpretations by the Supreme Court provide a ro-
System Abolition Act, 1976, recognizes forced and bust standard outlawing bonded and other forms of
bonded labour in customary relationships and man- coercive labour, implementation of this framework
ifestations of these forms of coercive labour in in- by the states has remained weak. The Supreme
ter-state migration.46 The Supreme Court in Peoples Court of India has, in a series of judgments directed
Union for Democratic Right v. Union of India (1982) that action be taken to strengthen enforcement of
and Bandhua Mukti Morcha v. Union of India (1984),47 the Act. Accordingly, since 1997, the National Hu-
has taken a wide view of what may constitute force man Rights Commission (NHRC) has been directly
in a labour relationship: involved in monitoring bonded and coercive labour
and reporting to the Supreme Court. Despite these
Any factor which deprives a person of a
initiatives, bonded and other forms of coercive la-
choice of alternatives and compels him to
bour persist, due in significant part to the persistent
adopt a particular course of action, may
lack of assets and livelihood opportunities among
properly be regarded as force and if labour
marginalized communities in India.50
and service is compelled as a result of such
44. Kompier, supra note 1 at 114 (citing Building and Wood Workers International, Brick Kiln Industry: Joint Advocacy Efforts Reap Benefits, http://www.bwint.
org/default.asp?index=4562).
45. Nita Bhalla, Captured by cotton: girls duped into bonded labour in Indias textile mills, Reuters, August 6, 2015, accessed, February 8, 2016, http://in.reuters.
com/article/india-textiles-women-idINKCN0QB04920150806.
46. Ravi Srivastava, Bonded Labour in India: its Incidence and Pattern, Working Paper for Work in Freedom, Special Action Programme to Combat Forced Labour,
(Geneva: International Labour Office, 2005), 2 (explaining the contours of the Bonded Labour System (Abolition) Act, 1976, No. 19 of 1976 (9 February 1976)).
47. Bandhua Mukti Morcha v. Union of India, AIR 1984 SC 802.
48. Peoples Union for Democratic Righst v. Union of India, 1982 LLJ 454 SC (1982)
49. Srivastava 2005, supra note 46 at 4.
50. Id. at 33.
31
Social structure of the labour market The violence migrants face in transit is largely un-
mapped and unaddressed.
Within Indias labour marketmigrant, women, child,
Dalit and Adivasi workers are at severe risk of ex- Migrant workers traveling in search of employment
ploitation and exclusion from decent work. Workers tend to be from some of the poorest, most back-
at the intersection of these categories are particu- ward castes and social groups in India. Traveling
larly vulnerable to rights abuses. While Indias Equal long distances from rural to urban areas, migrants
Remuneration Act, 1973, requires an employer to pay have described the migration process as akin to
women and men equally for the same work or work moving to a foreign land. Without family and kinship
of a similar nature, this protection does not extend to support, they internalize that undocumented status
protecting workers from wage discrimination along translates into having no rights. Within this context,
caste or tribal lines.51 India currently has no laws women who migrate for employment face the add-
specifically outlawing discrimination against Dalit, ed challenge of shouldering the double burden of
Adivasi, Muslim disabled or sexual minority workers. wage employment and socially productive and re-
Without protection against exclusion and wage dis- productive labour. For most migrants, wages for a
crimination, the market in India consolidates rather standard workweek fall below the UN threshold for
than reduces social processes of exclusion. absolute poverty.
Upon reaching urban destinations, migrants face
Migrant workers violent workplaces and dangerous living conditions.
An estimated 15 million people in India enter the la- At work, they may face a range of physical, sexu-
bour market each year.52 As employment in agricul- al and economic violenceincluding forced labour,
tural sectors has declined over the last two decades, discrimination in low wage work and withheld wag-
migration, and particularly womens migration, from es. The Sexual Harassment of Women at Workplace
rural to urban areas has increased manifold. Today, Act, 2013 mandates sexual harassment prevention
millions of workers migrate to urban areas to work committees, but most committees exist only in for-
at the growing base of global value chains and as- mal records and fail to safeguard women workers.
sociated services. Indias megacitieshubs of in- These protections, moreover, remain largely unac-
dustrial, service and home-based employmentare cessible to unorganized sector workers. In many of
manifestations of this imbalanced economic growth Indias urban industrial hubs, migrants live in dan-
within the country.53 By 2011, Indias Census report- gerous slums, housing colonies and on worksites.
ed that urban population growth exceeded rural pop- As rural-urban migration increases, facilitating mi-
ulation growth for the first time since independence. gration for employment has become highly profit-
While there is no official or conclusive data on in- able and recruitment intermediaries are assuming a
ter-state migration within India, according to one crucial role in Indias economic growth.55 Moreover,
estimate, between 30 and 50 million people in India the growth of Indias unorganized labour force and
are engaged in circular migration.54 For migrants, corresponding increase in temporary employment
transit is regular and includes initial rural-urban has created further opportunities for private em-
migration, travel between transient employment, ployment agencies (PrEAs) to match workers to
daily commutes through unsafe streets and long employers. As a result, Indias contemporary labour
journeys to native villages. Without safe transpor- market operates in large part through a network of
tation options for low-wage workers, transit-related employment agencies and middlemen, often un-
violence, especially for migrant women, is ongoing. registered and unregulated. Intermediaries match
51. Equal Remuneration Act, 1976, No. 25 of 1976, Chapter II, Section 4.
52. India Needs to Create 15 million Jobs Annually: Pitroda, The Indian Express, 23 March 2013, http://archive.indianexpress.com/news/india-needs-to-
create-15-million-jobs-annually-pitroda/1092411.
53. Amitabh Kundu, Urbanization and Urban Governance: Search for a Perspective beyond Neo-liberalism, 38 Economic And Political Weekly, No. 29, 3079-87
(December 2002).
54. Ravi Srivastava, Labour Migration, Inequality and Development Dynamics in India: An Introduction, 54 Indian J. Of Lab. Econ. No. 3 (2011).
55. ILO-FICCI-MOIA, Workshop on Strengthening RecruitmentLegislation and Structure, Delhi, August 26, 2015.
32
employees to employers and frequently deter- in India, catering to distinct labour market needs,
mine wages, hours and working conditions.56 This India currently lacks a well-defined labour law spe-
employment structure contributes to disregard for cific to governing PrEAs. Lack of regulation, licens-
decent labour practices by diminishing accountabil- ing and a well-defined labour law governing private
ity for offenses and eliminating direct bargaining to placement agencies leave workers vulnerable to ex-
secure decent work between employees and em- ploitation. Responding to these challenges, in 2014,
ployers. Chhattisgarh enacted the Private Placement (Regu-
lation) Actthe first state-level legislation to regu-
Without adequate regulation of PrEAs, workers are
late PrEAs. The Delhi Private Placement Regulation
vulnerable to exploitation and multiple forms of vi-
Bill, 2012 is currently pending. State-level measures,
olence by recruitment intermediaries, including un-
however, face critique for their inadequacy in ad-
informed placement with employers where working
dressing inter-state rights abuses faced by migrant
conditions fall far short of decent work standards.
workers.
Workers are routinely misinformed about the nature
of employment and working conditions, denied reg-
ular payment and subjected to physical and sexual
Women
violence. At the far end of the spectrum, exploitative Nearly all women in India work, engaging in multi-
recruitment practices by PrEAs can lead to traffick- ple economic activities significant for their house-
ing and forced labour.57 holds and the national economy. They are involved
in a spectrum of work which includes care giving to
The Inter-State Migrant Workmen (Regulation of
children, elderly and sick family members; domestic
Employment and Conditions of Service) Act, 1979
work such as cooking, cleaning, water and fuel col-
applies to every establishment in which four or
lection; and subsistence work in family farms and
more interstate workers are employed and to every
enterprises. These contributions are highly under-
contractor who engages five or more interstate mi-
valued, unrecognized and regarded as economical-
grant workers.58 Under the Act, establishments and
ly insignificant.
contractors are required to register with the Deputy
Labour Commissioner, maintain registers and re- Mainstream economics does not recognize these
cords of particulars of migrant workers employed, contributions because much of the time, labour,
the nature of work performed by these workers and products and services rendered by women are not
their wage rate. Under the Inter-State Migrant Work- exchanged in the marketplace.60 Currently, wom-
mens Act, 1979 no recruitment can take place for ens participation in the labour force is measured at
the purpose of employing workers in another state around 27 percentlower than any other country in
without a proper license.59 However, this provision the G-20 except for Saudi Arabia. Out of 189 coun-
is neither followed nor enforced by home states. tries studied by the International Labour Organiza-
The Inter-State Migrant Workmens Act, 1979, is also tion, India ranks 17th from the bottom on measures
restricted to regulating contractors who engage nu- of womens participation in the market.61
merous workers, thereby excluding migrant domes- Unfair and unrecognized divisions of domestic
tic workers from protection under the Act. work constrain womens ability to enter the labour
Due to the limitations of existing legislation, within market as wage earners. There is a strong, inverse
India, regulation of complex recruiting chains that link between the amount of time that women and
stretch from remote villages to rapidly expand- girls spend on unpaid care work and their economic
ing urban destination hubs remains a significant empowerment. This relationship is defined by two
challenge. Although a wide range of PrEAs work reinforcing dynamics: first, women face discrimi-

57. International Labour Organization, TRAFFICKING FOR FORCED LABOUR: HOW TO MONITOR THE RECRUITMENT OF MIGRANT WORKERS, 2005, page 9-11, 21.
58. Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979, no. 30 of 1979 (11 June 1979).
59. Id. Section 8.
60. Desai, supra note 23 at v.
61. Ellen Barry, In India, a Small Band of Women Risk it All for a Chance to Work, January 30, 2016, NEW YORK TIMES, accessed February 10, 2016, http://mobile.
nytimes.com/2016/01/31/world/asia/indian-women-labor-work-force.html?referer=&_r=0
33
nation in the labour market; and second, drudgery labour regulations and social protections, female
involved in carrying out domestic responsibilities domestic workers tend to work long hours, earn low
impacts the health and well being of women, com- wages and receive fewer benefits and less legal and
promising their ability to participate in civil, econom- social protection than most other wage workers.
ic, social and political spheres. This double burden
With little assistance from the state in terms of public
has been term time poverty.62
provision of services, many women face increasing
Due to economic pressure on households and de- levels of time poverty, making it difficult for them to
cline in traditional sectors of employment such as consider looking for better-paid jobs. While hiring and
coir, handloom and other home-based small indus- wage discrimination on the basis of gender is cur-
tries, an increasing number of women in India have rently prohibited under the Equal Remuneration Act,
been drawn into direct economic roles as wage 1976, women in paid work on average earn between
earners in the unorganized sector, finding employ- 10 percent and 46 percent less than men.64 Women
ment in factories, construction sites, homes and employed in the public sector tend to be clustered
farms. Undervaluation of womens work in the paid in junior and lower-paying positions as well as in
economy adds to the already precarious nature of typically feminized sectors such as education and
womens employment.63 In the unorganized sec- health.65 A 2011 study on India estimated, however,
tor, womens work is characterized by low wages, that if minimum wages were extended to all wage
long working hours, hazardous working conditions, earners, the gender pay gap would decline from 16
very little job security and lack of basic services at percent to 10 percent for salaried workers and from
workincluding water and sanitation. 26 percent to 8 percent for casual workers.66
Retention and promotion in the labour force is also
Children
affected by womens lifecycle stageboth in terms
of the choices that they make in terms of choosing Child labour refers to full time work done by any
not to work or to work fewer or more flexible hours; working child who is under the legally specified
and in terms of the way they are perceived by em- agewhether they work in wage or non-wage work,
ployers in terms of wages, career progression and for the family or others, in hazardous or non-haz-
types of employment options. Women from more ardous occupations, or on a daily wage or con-
financially stable households who can afford to pay tractual basis.67 In the last decade, India has made
for childcare are more likely to be employed in orga- considerable progress in reducing child labour. Gov-
nized sector jobs. Poorer women, who often have ernment measures have included laws to protect
to care for children and sick and elderly relatives children from exploitative employment and ensure
themselves, may not to able to sustain regular em- their schooling, as well as a range of social welfare
ployment. schemes. However, according to International La-
bour Organization estimates, there are still 5.7 mil-
Women with little education and few marketable lion child workers in India who are between five and
skills often have few options besides paid domestic seventeen years old.68 In 2011, the highest number
workincluding cleaning, cooking, child and elderly of child labourers were from Andhra Pradesh, Bi-
care. As previously discussed, outside the realm of har, Madhya Pradesh, Maharashtra, Rajasthan and
62. D. Chopra, Balancing Paid Work and Unpaid Care Work to Achieve Womens Economic Empowerment, 83 Institute Of Development Studies Policy
Briefing January 2015, accessed February 11, 2016, http://www.ids.ac.uk/publication/balancing-paid-work-and-unpaid-care-work-to-achieve-women-
s-economic-empowerment.
63. Id. 226.
64. International Trade Union Confederation (ITUC), Frozen In Time: Gender Pay Gap Unchanged For 10 Years, accessed September 24, 2015, http://www.
ituc-csi.org/IMG/pdf/pay_gap_en_final.pdf (accessed 24 September 2015).
65. UN Women, Progress Of The Worlds Women 2015-16: Transforming Economies, Realizing Rights (2016), at p. 112.
66. Patrick Belser and Uma Rani, Extending the Coverage of Minimum Wages in India: Simulations from Household Data, Economic And Political Weekly,
May 28, 2011 (estimating based on simulations, the effects of extending minimum wage to all workers in India, including those in informal employment
and assuming perfect compliance).
67. N.K. Chadha and Vandana Gambhir Chopra, Child Labour: An Indian Scenario, in S. Deb (ed.) Child Safety, Welfare And Well-Being (Springer, 2016), 205.
68. Nita Bhalla, Why govts promise to end child labour by 2025 is farcical, Businesstoday.in, September 16, 2015, accessed February 8, 2016, http://www.
businesstoday.in/current/economy-politics/ending-child-labour-by-2025-farcical-as-govt-plans-to-allow-children-under-14-family-work/story/223796.
html.
34
Uttar Pradesh.69 NSSO data from 2009-2010 also contributing to work that ranges from agricultural
reports a significant number of working children in labour to home-based piecework.72
Gujarat, Uttarakhand and West Bengal.70 The vast
Child labour has severe physical and psychosocial
majority of working children in India are from so-
consequences for child workers. Extended work-
cio-economically disadvantaged communities.
ing hours negatively impact physical development
Children in India work in a range of occupations, and put children at risk of injury and long-term ex-
many of them harmful to their physical and psycho- posure to unsafe work environments. Children are
logical wellbeing. More than half of child workers in also more prone to accidents since they are likely to
India work in agriculture, including rice paddies and be less aware of dangers and precautionary mea-
cotton and sugarcane fields, where they may be ex- sures. Children are also often subjected to physical,
posed to pesticides and risk injury from sharp tools sexual, mental and emotional abuse, with girls fac-
and heavy equipment. Another 25 percent work ing more abuse than boys.73 Deprived of education,
in manufacturing where they are likely confined working children are more likely to become trapped
to poorly ventilated spaces. Children also work in in cycles of poverty.
restaurants, hotels and middle class homes. On the
The Child Labour (Prohibition and Regulation) Act,
basis of census data, it is estimated that nearly 85
1986 defines a child as any person who has not
percent of child workers in India work in the unorga-
completed 14 years of age. The Act prohibits child
nized sector, including within the family or in house-
labour in occupations identified as hazardous un-
hold based units in both rural and urban areas.71
der the Act. It does, however, permit employment
The ILO estimates 54 percent of working children
of children in other occupations under particular
in India work within the structure of the family unit,
conditions.74 Under the Factories Act, 1948, children
Dangerous occupations notified under Child labour in manufacturing, Child labour in the unorganized sector
the Child Labour (Prohibition and including home-based production
Regulation) Act, 1986
glass making matches domestic work
mining bricks construction
construction carpets street vending
carpet weaving locks repairing vehicles and tires
zari making glass bangles scavenging
fireworks fireworks rag picking
sandstone quarrying bidis (cigarettes) service sector (hotels, food service)
breaking stones incense sticks (agarbatti) commercial sexual exploitation
polishing gems footwear
garments
hand-loomed silk
leather
brass and metal goods
Source: Chadha, Child Labour: An Indian Scenario, in S. Deb (ed.) Child Safety, Welfare And Well-Being (Springer, 2016), 211.
69. Chadha, supra note 67 at 208 (citing data from the 2011 Census of India).
70. Id. at 209 (citing data from the NSSO 66th Round of Survey on Child Labour, 2009-2010).
71. Id. at 208 (citing data from the Census of India, 2001 and 2011).
72. Bhalla 2015, supra note 68.
73. Chadha, supra note 67 at 213-215.
74. Child Labour (Prohibition and Regulation) Act, 1986, No. 61 of 1986 (23 December 1986).
35
under 15 years old cannot be required to work more areas, 59 percent of Dalits work as casual labourers
than four and a half hours during the day or to work in agriculture or otherwise, compared to an overall
at night. A child above 15 years old, however, can average of 40.4 percent of the rural population. In
be given a certificate of fitness to work as an adult urban areas, 25.1 percent of Dalits worked as casu-
in a factory. The Factories Act, 1948 does, however, al labourers compared to 13.4 percent of the overall
impose some limitations on allowing young people population.79
to work on dangerous machines without adequate
training and supervision.75 Dalits continue to face significant barriers in tran-
scending caste-designated labour. In parts of India,
Dalits Dalits who seek to break caste-designated employ-
Dalits continue to be one of the poorest segments ment barriers face economic boycotts and even
of the Indian population. Generally, they have little if physical violence from castes considered domi-
any access to social services or economic resourc- nant. Caste-designated labour practices remain so
es, including land and financial capital. They also deeply internalized within the social fabric of India
continue to be subjected to widespread exclusion that even state institutions such as village coun-
and discrimination in labour and employment. They cils and municipal corporations perpetuate these
face exclusion in hiring, wages lower than mar- practices. For instance, many from caste groups
ket rates and unfavorable terms and conditions of that traditionally worked as manual scavengers are
work involving overwork and other forms of extra denied any other jobs, leaving them dependent on
economic coercion and caste-related obligations.76 manual scavenging for subsistence. A 2013 survey
Policy and legislative measures to promote equal conducted in approximately 500 villages in five cit-
rights and opportunities for Dalits in employment, ies in Dhule district, Maharashtra, found that in 31
including reservations in government employment, villages and all five cities, a total of 162 women and
have not sufficiently impacted access to the labour 90 men from caste groups that traditionally worked
market. As a result, Dalits remain concentrated in as manual scavengers are still hired by panchayats
the most exploitative forms of labour. Many remain and municipal corporations to manually clean toi-
confined to menial and lowly valued caste-desig- lets and open defecation areas.80
nated occupations. Dalits also form a significant The Mahatma Gandhi National Rural Employment
proportion of unorganized sector workers who sub- Guarantee Act, 2005 (MGNREGA) has the potential
sist on low wages with poor working conditions and to provide immediate livelihood security in rural ar-
no social security.77 eas by guaranteeing 100 days of employment to ev-
Dalits have historically either been landless or nom- ery household.81 MGNREGA has managed to offer a
inal landholders, a trend that continues today due way out for some daily wage labourers from tradi-
to lack of adequate land reforms.78 NSSO data for tional feudal structures intrinsically linked to class
2009-2010 shows that 92.1 percent of Scheduled and caste based discriminationand often bonded
Castes in rural areas were landless or held less forms of labour. The law is particularly significant
than one hectare of land. As a result, landless Dalits for women workers belonging to marginalized com-
are disproportionately represented among casu- munities, who would otherwise have no access to
al labourers in rural and urban areas alike. In rural just employment opportunities.82
75. Factories Act, 1948, No. 63 of 1948 (23 September 1948), Sections 2(c), 23, 69, 71.
76. Manghubai, supra note 7 at 50 (citing A. Namala, DISMANTLING DESCENT-BASED DISCRIMINATION: REPORT ON DALITS ACCESS TO RIGHTS. (New Delhi: NCDHR
and IIDS, 2006))
77. Manghubai, supra note 7 at 44.
79. Id. (citing NSSO, Employment and Unemployment among Social Gropus in India, NSS 66th Round (2009-10)(New Delhi: MoSPI, 2012)).
80. Shikha Bhattacharjee, Cleaning Human Waste: Manual Scavenging, Caste And Discrimination In India, Human Rights Watch, 2014.
81. Mahatma Gandhi National Rural Employment Guarantee Act, 2005, (MGNREGA), No. 42 of 2005.
82. Subhalakshmi Nandi and Rebecca Reichmann Tavares, Making the NREGA more Gender Responsive: Reflections from the Field, Policy In Focus: Protagonist
Women, No. 27, March 2014, pp. 16-19.
36
Adivasis areas. According to NSSO data, work participation

Like Dalits, Adivasis are largely landless and dis- rates of Muslim women are also particularly low.
proportionately represented among casual labour- Muslim workers do, however, comprise 46 percent
ers. In 2009-10, 76.5 percent of Scheduled Tribe of Indias urban population with self-employment
households were either landless or held less than as their primary source of earnings.87
one hectare of land.83 Over time, as the tradition-
al non-monetized Adivasi economy has gradually This low level of organized sector employment has
eroded, many Adivasis have moved into settled ag- been attributed to a range of factors, including dis-
riculture or been driven to urban areas to seek work. crimination in employment, preference for self-em-
Dependence upon credit and money lenders has ployment and barriers to accessing education
also pushed many Adivasis into coercive forms of including lack of educational facilities in Muslim
labour. communities.88 These employment trends correlate
to low living standards among Muslim communi-
Along with Dalits, Adivasis make up a substantial ties. According to survey data from Pew Research,
portion of the workforce engaged in casual labour Muslims in India spend the lowest amount per day
in both rural and urban areasearning well below on a per capita basisonly 32.7 rupees per day,
national minimum wage standards.84 For instance, compared to 55.3 rupees per capita per day by In-
in 2014, Adivasi tea workers in Assam were paid dian Sikhs, 51.4 rupees per capita per day by Indian
`94 per day, well below the legal minimum wage of Christians and 37.5 rupees per capita per day by
`69. Twenty-five percent of this daily income is lost Indian Hindus.89
to illegal deductions made by plantation owners, in-
cluding electricity and retirement schemes, leaving Indias contemporary labour market is being struc-
workers with just `70 per day in take-home pay.85 tured by the proliferation of precarious, unpaid, in-
Muslims visible and coercive work. For these workers, the
insecurities and instabilities that arise from flexibili-
Significant barriers to accessing employment and
zation and casualization include reduced protection
education for Muslim communities have been doc-
under labour legislation, increasingly intensive work
umented in detail as early as 2006, with the release
patterns, isolation from labour unions and season-
of the Sachar Report.86 Five years later, according
al labour patterns that fuel unemploymentand
to 2009-2010 data from the NSSO, Muslim workers
coercive labour.90 This section has discussed the
remained disproportionately represented among
social structure of the marketplace for migrant
unorganized sector workers and unemployed.
workers, women, children, Dalits, Adivasis and
While Muslims hold a 13.4 per cent share of Indias
Muslims as discrete categories. However, the case
population, they represent only 5 per cent of em-
studies of working conditions in particular sectors
ployees in government departments, agencies and
have also highlighted ways in which workers at the
institutions. According to the NSSO, in 2009-2010,
intersection of these identities are most vulnerable
only 30.7 per cent of Muslim workers in urban areas
to rights violations.
were engaged in regular salaried workcompared
to 39.7 percent of the total population in urban
83. Kompier, supra note 1 at 116 (citing NSSO, Employment and Unemployment among Social Groups in India, NSS 66th Round (2009-10)(New Delhi: MoSPI,
2012)).
84. Kompier, supra note 1 at 116 (citing National Sample Survey Organization, Employment and Unemployment among Social Gropus in India, NSS 66th Round,
2009-10(New Delhi: MoSPI, 2012)).
85. Nazdeek, Visualising a living wage for Assams tea workers, accessed 24 September 2015, http://nazdeek.org/visualising-a-living-wage-for-assams-tea-
workers/
86. Rajindar Sachar, Government of India, Prime Ministers High Level Committee, Report on Social, Economic and Educational Status of the Muslim Community
in India (2006).
87. Kompier, supra note 1.
88. NSSO data: Why Indian Muslims rely on self employment, F.India, August 20, 2013, accessed http://www.firstpost.com/india/muslims-dont-get-jobs-due-
to-bias-in-the-system-experts-1047351.html.
89. Palash Ghosh, Muslims are Indias Poorest and Worst Educated Religious Group, IBT. August 21, 2013, http://www.ibtimes.com/surprise-surprise-
muslims-are-indias-poorest-worst-educated-religious-group-1392849.
90. Hewison, supra note 2 at 3.
37
38
IV. Payment of Wages
39
LABOUR CODE ON WAGES BILL, 2015

KEY CHANGES
Diluting protective standards
1
Minimum wage standards
Standards prohibiting gender discrimination
Standards prohibiting other discrimination
Standards protecting bonuses
Decriminalizing wage-related rights
2 abuses
Decriminalizing arbitrary and illegal wage
deduction
Decriminalizing forced labour
Dismantling accountability
mechanisms
3
Dismantling labour inspections
Restricting accountability functions of
workers organizations and trade unions
Undermining access to justice
40
Contemporary context the minimum needs of workers and their families.
Under the Minimum Wage Fixing Convention, 1970
Contrary to economic assumptions that wages and (No. 31) minimum wages should be established for
productivity move in tandem, data from the 2013 groups of wage earners in consultation with em-
Annual Survey of Industries data shows that work- ployers and workers organizations and enforced
ers real wages have been stagnant in India between by law. Failure to pay minimum wages should be
1983 and 2013 while real productivity has increased subject to penal or other sanctions. Although India
at an annual average rate of 7 percent. While a large has not ratified the Protection of Wages Convention
part of this growth is attributed to increasing mech- or the Minimum Wages Convention, they retain the
anization, requiring workers to upgrade their skills, status of international law and therefore serve as a
this has not translated into higher wages.1 Data valuable benchmark in evaluating proposed labour
from the last 25 years shows that wages for Indian law changes.
workers have barely kept up with inflation. Account-
ing for inflation and calculating in 2011-12 prices, if Labour Code on Wages Bill, 2015
a worker earned `8,154 per month in 1990-91, they
earned only `7,972 per month in 2011-12. In real The central government Labour Code on Wages Bill,
terms, workers today earn less proportionally than 20156 aims to consolidate the Payment of Wages
they did in 1990.2 Act, 1936,7 Minimum Wages Act, 1948,8 Payment
of Bonus Act, 19659 and Equal Remuneration Act,
International standards on payment 1976.10 This section outlines implications for work-
of wages ers and trade unions that arise from this proposed
consolidation. It also discusses the Small Factories
The ILO Protection of Wages Convention, 1949 (No. (Regulation of Employment and Conditions of Ser-
95) aims to guarantee payment of wages in a full vices) Bill, 2014 and the Factories (Amendment) Bill,
and timely manner, whether fixed by mutual agree- 2014,11 as they pertain to matters covered under
ment, national law or regulation; or payable under the Labour Code on Wages Bill, 2015 or the rele-
a written or unwritten employment contract.3 The vant principal Acts. It is significant to note that the
Convention applies to all persons to whom wages Small Factories (Regulation of Employment and
are paid or payable.4 Workers have to be informed Conditions of Services) Bill, 2014 does not require
of the conditions of their employment with respect factories where less than 40 workers are employed
to wages and the conditions under which their to adhere to the Payment of Wages Act, 1936, Mini-
wages are subject to change.5 mum Wages Act, 1948, Payment of Bonus Act, 1965
The ILO Minimum Wage Fixing Convention, 1970 or Equal Remuneration Act, 1976.12
(No. 31) calls for a minimum sum payable to work- Labour law changes under the Labour Code on Wag-
ers that is guaranteed by law and fixed to cover es Bill, 2015 impact workers in three thematic areas.
1. Prabhat Singh, Higher productivity equals higher wages? Not for the Indian industrial worker: real wages have grown at an average 1 percent annually between
1983 and 2013, Livemint, January 22, 2015, accessed February 9, 2016, http://www.livemint.com/Opinion/Vxmd5HHO8qeLuqYUiobbpM/Higher-productivity-
equals-higher-wages-Not-for-the-Indian.html.
2. Anumeha Yadav, Theres a wage crisis in Delhis factoriesand the Modi governments new labour laws wont help, Scroll.in, June 22, 2015, accessed February
9, 2016 http://scroll.in/article/732336/theres-a-wage-crisis-in-delhis-factories-and-the-modi-governments-new-labour-laws-wont-help.
3. International Labour Organization, Protection of Wages Convention, 1949 (No. 95), Article 1.
4. Id. Article 2.
5. Id. Articles 8, 14.
6. Labour Code on Wages Bill, 2015, http://www.prsindia.org/uploads/media/draft/Labour%20Code%20on%20Wages%20Bill,%202015.pdf (accessed July 11,
2016).
7. Payment of Wages Act, 1936, No. 4 of 1936 (23 April 1936).
8. Minimum Wages Act, 1948, No. 11 of 1948 (15 March 1948).
10. Equal Remuneration Act, 1976, No. 25 of 1976 (11 February 1976).
11. Factories (Amendment) Bill, 2014, Bill No. 93 of 2014.
12. See Small Factories (Regulation of Employment and Conditions of Services) Bill, 2014, Section 54 for a proposed list of Acts from which small factories would
be exempt under the 2014 Bill. For further discussion of the Small Factories (Regulation of Employment and Conditions of Service) Bill, 2014, see Ramapriya
Gopalakrishnan, Handbook on Labour Reforms in India (2016), supra note 26 at 33-50.
41
First, proposed changes dilute protective stan- Supreme Court definitively held that every em-
dards, including standards governing minimum ployer, regardless of their capacity, must pay min-
wages, equal treatment of women workers and imum wages to their employees.15 In Bhikusa Ya-
protected bonuses. Second, the Labour Code on masa Kahatriya v. Sangamner Akola Taluka Bidi
Wages Bill, 2015 weakens protection against wage Kamgar Union (1962), the Supreme Court upheld
related abuses, such as arbitrary and illegal wage inclusion of unorganized and unregulated sectors
deduction and forced labour. Third, the Wages Bill within the ambit of the Minimum Wages Act, 1948.16
dismantles accountability mechanisms, including
The Labour Code on Wages Bill, 2015 propos-
by undermining inspections mechanisms, restrict-
es significant changes to both the process and
ing oversight by workers organizations and trade
criteria for fixing minimum wage standards. Chang-
unions and instituting barriers to accessing justice
es include shifting complete authority for setting
in cases of wage related rights abuses.
wages to the states; dismantling the current tripar-
tite composition of the Central Advisory Board; elim-
Diluting protective standards inating time-bound wage revision; and replacing
Proposed changes under the Labour Code on employment schedules establishing distinct wages
Wages Bill, 2015 dilute protective standards, in- by sector with baseline wages for time and piece
cluding standards governing minimum wages, work. Prescribed criteria for fixing minimum wages
equal treatment of women workers and bonuses. under the Labour Code on Wages Bill, 2015 also de-
Together, these changes create the potential for part from constitutionally based needs criteria artic-
state governments to entirely reshape the wage ulated by the Supreme Court.
landscape within each state without representa-
Notably, under the Small Factories (Regulation of
tion from workers or their organizations. This sec-
Employment and Conditions of Services) Bill, 2014,
tion also suggests challenges to the constitution-
minimum wages do apply to small factories.17
ality of provisions of the Labour Code on Wages
Bill, 2015 that violate principles of concurrent au-
Authority for fixing minimum wages
thority and equality.
Under the Minimum Wages Act, 1948, minimum
Minimum wage standards wage fixing is to be undertaken by the appropri-
ate government.18 Under the principal Act, the
Securing a living wage for all workers is a direc-
appropriate government includes the central gov-
tive principle of state policy, embodied in Arti-
ernment in relation to any scheduled employment
cle 43 of the Constitution.13 This principle has
under the authority of the central government;
been legislatively enacted through the Minimum
and state governments in relation to any other
Wages Act, 194814 and upheld by the Supreme
scheduled employment.19 In either instance, the
Court in numerous cases. For instance, in Crown
appropriate government sets wages according to
Aluminum Works v. Their Workmen (1958), the
13. Constitution of India, 1949, Article 43: Living wage, etc. for workers: The State shall endeavor to secure, by suitable legislation or economic organization or in
any other way, to all workers, agricultural, industrial or otherwise, work, a living wage, conditions of work ensuring a decent standard of life and full enjoyment
of leisure and social and cultural opportunities and, in particular, the State shall endeavor to promote cottage industries on an individual or co cooperative
basis in rural areas.
14. Minimum Wages Act, 1948, No. 11 of 1948 (15 March 1948).
15. Crown Aluminum Works v. Their Workmen, 1958 AIR 30 (1947)(holding: No industry has a right to exist unless it is able to pay its workmen at least a bare
minimum wage. It is quite likely that in under-developed countries, where unemployment prevails on a very large scale, unorganized labour may be available
on starvation wages; but the employment of labour on starvation wages cannot be encouraged or favored in a modern democratic welfare state. If an
employer cannot maintain his enterprise without cutting down the wages of his employees below even a bare subsistence or minimum wage, he would have
no right to conduct his enterprise on such terms).
16. Bhikusa Yamasa Kahatriya v. Sangamner Akola Taluka Bidi Kamgar Union, 1963 AIR 806 (1962)(upholding minimum wage notification by the Government
of Bombay pertaining to piece-rate bidi making).
17. Small Factories (Regulation of Employment and Conditions of Services) Bill, 2014, Section 9: Minimum Wages: The appropriate government shall extend the
rates of minimum wages fixed under the provisions of the Minimum Wages Act,1948, to the small factories and no employer shall pay less than the minimum
wages, so fixed. 948 (15 March 1948), Section 3.
18. Minimum Wages Act, 1948, No. 11 of 1948.
19. Minimum Wages Act, 1948, No. 11 of 1948 (15 March 1948), Section 2(b)(defining appropriate government: appropriate Government means, (i) in relation
to any scheduled employment carried on by or under the authority of the Central Government or a railway administration, or in relation to a mine, oilfield
or major port, or any corporation established by a Central Act, the Central Government, and (ii) in relation to any other scheduled employment, the State
Government.
42
I V. P a y m e n t o f W a g e s
industry-specific schedules. Currently, 45 sectors mechanisms. They exclude workers and their repre-
are governed by central authority and 1,679 sectors sentatives from the process of informing minimum
remain under state jurisdiction.20 Under the Mini- wage standards. They also further facilitate compe-
mum Wages Act, 1948, wages must be revised every tition between stateswhich, at its worst, may lead
five years.21 to a race to drive down wage standards in order to
attract business and capital.
The principle Act also establishes a Central Adviso-
ry Board, tasked with advising central and state gov- First, undermining the tripartite composition of the
ernments in fixing and revising minimum wages. Central Advisory Board prescribed under the princi-
The Central Advisory Board, nominated by the cen- pal Act, under, the Wages Bill, 2015, the Central Advi-
tral government currently includes equal numbers sory Board would be comprised of a Chairman and
of employer representatives, employee representa- such number of members as may be prescribed.24
tives from scheduled employments and indepen- This mode of composition does not require work-
dent representatives.22 The tripartite character of er or employer representationa proposed change
the Central Advisory Board under the principal Act that violates international standards set forth under
is consistent with standards set by ILO Minimum the ILO Minimum Wage Convention, 1970.25 While
Wage Convention, 1970, establishing that minimum under this standard the Central Advisory Board
wages should be set in consultation with employ- may include worker and employer representatives,
ers and workers organizations.23 tri-partite representation is no longer mandatory.
The Wages Bill, 2015 departs from this process Second, the Wages Bill, 2015 eliminates the sched-
for fixing minimum wages in significant ways. It ule of employment26 the current mechanism
eliminates standards for workers and employ- for establishing wage standards by fixing dis-
ers representation on the Central Advisory Board; tinct wages for different scheduled forms of em-
replaces scheduled, industry-specific minimum ployment under the Minimum Wages Act, 1948.
wage determinations with blanket state-level min- Instead, the Wages Bill, 2015 tasks states with
imum wages for time-work and piece-work; con- setting state-level minimum wage rates for time
centrates authority for fixing minimum wages at and piece work. This shift from industry-specific
the state level; and removes provisions that call to standardized minimum wages for time and piece-
for time-bound revision of minimum wages. These work will likely result in minimum wage threshholds
measures fundamentally change wage-fixing fixed according to the wages paid to the poorest
20. Surendra Pratap, The Political Economy of Labour Law Reforms in India, Part III, Centre for Workers Education, Delhi, accessed February 9, 2016, https://
workerscentre.files.wordpress.com/2015/05/the-political-economy-of-labour-law-reforms-in-india-iii.pdf.
21. Minimum Wages Act, 1948, No. 11 of 1948 (15 March 1948), Section 3(1)(b): 3. Fixing of minimum rates of wages.- (1) The appropriate Government shall, in
the manner hereinafter provided,-- . . . (b) review at such intervals as it may think fit, such intervals not exceeding five years, the minimum rates of wages so
fixed and revise the minimum rates, if necessary. Note: the subsequent section provides that if the appropriate government has not reviewed the minimum
wage rates within an interval of five years, nothing prevents them from doing so after the expiry of the five year period.
22. Minimum Wages Act, 1948, No. 11 of 1948 (15 March 1948), Section 8, defining the role and composition of the Central Advisory Board: Central Advisory
Board.- (1) For the purpose of advising the Central and State Governments in the matters of the fixation and revision of minimum rates of wages and other
matters under this Act and for co-ordinating the work of the Advisory Boards, the Central Government shall appoint a Central Advisory Board. (2) The Central
Advisory Board shall consist of persons to be nominated by the Central Government representing employers and employees in the scheduled employments,
who shall be equal in number, and independent persons not exceeding one-third of its total number of members; one of such independent persons shall be
appointed the Chairman of the Board by the Central Government.
23. International Labour Organization, Minimum Wage Fixing Convention, 1970 (No. 131), Article 1(2): The competent authority in each country shall, in
agreement or after full consultation with the representative organisations of employers and workers concerned, where such exist, determine the groups of
wage earners to be covered; Article 4: 1. Each Member which ratifies this Convention shall create and/or maintain machinery adapted to national conditions
and requirements whereby minimum wages for groups of wage earners covered in pursuance of Article 1 thereof can be fixed and adjusted from time to
time. 2. Provision shall be made, in connection with the establishment, operation and modification of such machinery, for full consultation with representative
organisations of employers and workers concerned or, where no such organisations exist, representatives of employers and workers concerned. 3. Wherever
it is appropriate to the nature of the minimum wage fixing machinery, provision shall also be made for the direct participation in its operation of--(a)
representatives of organisations of employers and workers concerned or, where no such organisations exist, representatives of employers and workers
concerned, on a basis of equality; (b) persons having recognised competence for representing the general interests of the country and appointed after full
consultation with representative organisations of employers and workers concerned, where such organisations exist and such consultation is in accordance
with national law or practice.
24. Labour Code on Wages Bill, 2015, supra note 6 at Section 15(3).
25. International Labour Organization, Minimum Wage Fixing Convention, 1970 (No. 131), Article 1(2). See full text of relevant articles at note 23.
26. Minimum Wages Act, 1948, No. 11 of 1948 (15 March 1948), Section 2(g), defining scheduled employment: scheduled employment means an employment
specified in the Schedule, or any process or branch of work forming part of such employment.
43
workers. This standard appears to universally in- This singular delegation of authority for fixing min-
clude organized and unorganized sector workers imum wages to the states runs contrary to estab-
and, therefore, may benefit workers not previously lished constitutional principles. Concentration of
included in wage schedules. However, there is ev- wage-fixing authority at the state-level poses a
idence to suggest that low baseline wages may challenge to concurrent authority over labour regu-
depress wages for workers employed in occupa- lation under Article 246 of the Constitution.29 More-
tions where rates were scheduled at a higher level. over, by permitting distinct minimum wage rates in
Studies suggest that minimum wages become ref- similar Central Government employment undertak-
erence wages in the bargaining between individual ings, the Wages Bill, 2015 violates constitutional
workers and employers.27 principles of equality under Article 14 of the Con-
stitution.30 Applying the constitutional principle of
Moreover, advocacy for explicit inclusion in em-
equality to equal remuneration, in N.M. Wadia Char-
ployment schedules has been a strategy used by
itable Hospitals v. State of Maharashtra (1986), the
unorganized sector workers to establish enforce-
Bombay High Court held: There can be little doubt
able minimum wages at the central and state level.
that if there are workers in different employments
For instance, domestic workers in 13 states and 1
whose duties and functions are similar, they should
Union Territory have fought for and won inclusion in
be similarly treated in the matter of minimum
employment schedules. By eliminating this mecha-
wages, given their employers capacity to pay.31
nism, the Wages Bill, 2015 reduces the capacity for
This standard applies to government workers em-
trade unions and membership based organizations
ployed in similar employment but in different states
to bargain for industry-wide minimum wages. Elim-
who, under the Wages Bill, 2015, may be subjected
inating central and state-level wage schedules also
to segmented and distinct state-determined wages.
rolls back explicit recognition of minimum wages
for particular unorganized sectorsstandards that Singular allocation of authority to the states for fix-
have been hard won through workers struggles. ing minimum wages also has significant practical
significance in promoting competitive federalism.
Third, while the appropriate government for fix-
State authority to fix wages facilitates competition
ing minimum wages under the principal Act in-
between states to lower wage standards, promot-
cludes central and state governments, the Wages
ing a race to the bottom to lower wage standards.
Bill, 2015 concentrates authority for fixing and re-
For instance, the minimum wage rate fixed by the
vising wages at the state level. This includes au-
Delhi government is 25 percent-35 percent higher
thority for fixing minimum wages for time-work
than in neighboring Haryana and Uttar Pradesh.
and piece-work.28 Functionally speaking, this provi-
This wage differential has led a significant number
sion promotes distinct minimum wages between
of industrialists to relocate from the Okhla Industrial
states, including for similar central government
Area in South Delhi to Uttar Pradesh and Haryana
employment.
between 2010 and 2015.32
27. Catherine Saget, Fixing minimum wage levels in developing countries: common failures and remedies, 147 International Labour Review, No.1 (2008), 35
(finding that in some situations minimum wages seemed to be a reference wage in bargaining between individuals and employers).
28. Labour Code on Wages Bill, 2015, supra note 6, Section 6: 6. Fixation of minimum wages: (1) The State Government shall fix the minimum rates of wages
payable to employees employed in an employment. (2) For the purposes of sub-section (1), the State Government shall fix (a) a minimum rate of wages for
time work; or (b) a minimum rates of wages for piece work; or (c) a minimum rate of remuneration to apply in the case of employees employed on piece work
for the purpose of securing to such employees a minimum rate of wages on a time work basis; and such rate of wages may be fixed for a period determined
-(i) by the hour; or (ii) by the day; or (iii) by the month; and where such rates are fixed by the hour or by the day or by the month, the manner of calculating
the wages, as the case may be, shall be as may be prescribed. (3) The State Government may revise from time to time the minimum rate of wages or
remuneration fixed under sub-section (2). (4)The State Government, in fixing or revising the minimum rates of the wages under foregoing sub-sections, shall
take into account the skill required, the arduousness of the work assigned to the worker, the cost of living of the worker, geographical location of the place of
work and other factors which the State Government considers appropriate: Provided that while fixing or revising such minimum wage the State Government
shall take into consideration any guidelines made by the Minimum Wages Advisory Board constituted by the Central Government under sub-section (3) of
section 15 and shall abide by such guidelines.
29. Constitution of India, 1949, Article 246, Schedule 7, List III, Section 24 lists welfare of labour as an area of concurrent authority: 24. Welfare of labour including
conditions of work, provident funds, employers liability, workmens compensation, invalidity and old age pensions and maternity benefits.
30. Constitution of India, 1949, Article 14: 14. Equality before law The State shall not deny to any person equality before the law or the equal protection of the
laws within the territory of India Prohibition of discrimination on grounds of religion, race, caste, sex or place of birth.
31. N.M. Wadia Charitable Hospitals v. State of Maharashtra, (1993) IIILLJ 536 Bom.
32. Yadav, Theres a wage crisis in Delhis factoriesand the Modi governments new labour laws wont help, supra note 2 (comparing the wage for unskilled work
(loading and unloading trays) at Rs. 348 per day in Delhi and Rs. 259 in Uttar Pradesh).
44
Moreover, while shifting authority in assigning min- process of informing minimum wage standards. Ab-
imum wages to the states, the Wages Bill, 2015, sent the ability to negotiate central standards through
risks confusion by failing to align respective central collective bargaining, states are left with the ability to
and state authority and responsibility. States are determine wage standardsand drive down mini-
responsible for fixing and implementing minimum mum wages in order to attract business and capital.
wages under the Labour Code on Wages Bill, 2015
but the Central Government has been given singular Criteria for fixing wage standards
rulemaking authority and authority33 to remove dif- The criteria for fixing minimum wage standards has
ficulties within the code.34 This division of authority been definitively established by the Supreme Court
suggests potential grounds for center-state conflicts in a series of cases, including Hydro (Engineers)
and delays on matters critical to workers well being. P. Ltd. v. Workmen (1968)37 and Workmen Repre-
sented by Secretary v. Management of Reptakos
Finally, the Minimum Wages Act, 1948 protects work-
Brett (1991): minimum wages should be defined
ers interests by establishing a five-year time limit
by needs-based criteria that extend beyond basic
within which minimum wages must be revisedal-
physical needs.38 Under these standards, needs-
lowing trade unions and membership based orga-
based criteria for fixing minimum wages include:
nizations to call for wage revisions at regular inter-
specific nutrition requirements (defined in calories),
vals.35 The Wage Bill, 2015 replaces this discrete
clothing and housing needs, medical expenses,
time frame with an ambiguous time framerequir-
family expenses, education, fuel, lighting, festival
ing revision from time to time.36 This formulation
expenses, provisions for old age and other miscella-
removes state accountability for revising minimum
neous expenditure.
wages periodically in order to account for inflation
and other contextual factors. Diluting these established standards, the Labour
Code on Wages Bill, 2015 instead instructs state
The Labour Code on Wages Bill, 2015 departs sig-
governments to fix or revise minimum wages taking
nificantly from the process for fixing minimum wag-
into account the skill required, the arduousness of
es under the Minimum Wages Act, 1948. Proposed
the work assigned to the worker, the cost of living
changes have the cumulative effect of eliminating
of the worker, geographical location of the place of
concurrent authority over wages and concentrating
work and other factors which the state government
authority over minimum wages at the state-level; and
considers appropriate.39 While this formulation
excluding workers and their representatives from the
33. Labour Code on Wages Bill, 2015 supra note 6, Section 58: Power of the Central Government to make rules: (1) The Central Government may, by notification,
make rules for carrying out the provisions of this Code. (2) Every rule made under this section shall be laid, as soon as may be after it is made, before each
House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and
if, before the expiry of the session immediately following the session or the successive sessions aforesaid both Houses agree in making any modification in
the rule or both Houses agree that rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may
be; so, however, that any such modification or amendment shall be without prejudice to the validity of anything previously done under that rule.
34. Labour Code on Wages Bill, 2015, supra note 6, Section 40: Removal of difficulties: (1) If any difficulty arises in giving effect to the provisions of this code,
the Central Government may, by order, published in the official gazette, make such provision not inconsistent with the provisions of this code, as appear to be
necessary; (2) Every order made under this section shall be laid, as soon as may be after it is made, before each House of Parliament.
35. Minimum Wages Act, 1948, No. 11 of 1948 (15 March 1948), Section 3(1)(b): 3. Fixing of minimum rates of wages.- (1) The appropriate Government shall, in
the manner hereinafter provided,-- . . . (b) review at such intervals as it may think fit, such intervals not exceeding five years, the minimum ratesof wages so
fixed and revise the minimum rates, if necessary. Note: the subsequent section provides that if the appropriate government has not reviewed the minimum
wage rates within an interval of five years, nothing prevents them from doing so after the expiry of the five year period.
36. Labour Code on Wages Bill, 2015, supra note 6, section 6(1), (3): 6. Fixation of minimum wages: (1) The State Government shall fix the minimum rates
of wages payable to employees employed in an employment . . . (3) The State Government may revise from time to time the minimum rate of wages or
remuneration fixed under sub-section (2).
37. Hydro (Engineers) P. Ltd. v. Workmen, 1969 AIR 182 (citing precedent to confirm that minimum wage rates must ensure not merely the mere physical need
of the worker which would keep him just above starvation but must ensure for him not only his subsistence and that of his family but also preserve his
efficiency as a workman. It should, therefore, provide as the Fair Wages Committee appointed by the Government recommended, not merely for the bare
subsistence of his life but for the preservation of the worker and so must provide for some measure of education, medical requirements and amenities).
38. Workmen Represented by Secretary v. Management of Reptakos Brett, 1992 AIR 504 (citing five norms formulated by the Tripartite Committee of the Indian
Labour Conference, 1957 and adding one additional criteria to arrive at six criteria for minimum wage determination: (1) 3 consumption units for one earner;
(2) minimum food requirements of 2700 calories per average Indian adult; (3) clothing requirements of 72 yards per annum per family; rent corresponding
to the minimum area provided for under the Government Industrial Housing Scheme; (5) fuel, lighting and other miscellaneous items of expenditure to
constitute 20 percent of the total Minimum Wages; (6) children, education, medical requirements, minimum recreation including festivals/ceremonies and
provision for old age, marriage, etc. to constitute 25 percent of the total minimum wage).
39. Labour Code on Wages Bill, 2015, supra note 6, Section 6(4).
45
leaves space for considerations of workers needs therefore risks promoting a competitive race to drive
as they have been defined by the Supreme Court, down wages. In addition to threatening workers live-
states are not required to uphold these established lihoods, state competition may threaten Indias na-
standards. Rather than progressively expanding tional growth by reducing effective wage demands.
substantive rights for workers in line with Supreme
Court interpretation of constitutional standards, this Standards prohibiting gender based discrimination
provision provides states with the space to define The Equal Remuneration Act, 1976 prohibits dis-
their own standards for minimum wage determina- crimination between men and women with regard
tionproviding yet another avenue for a competitive to wages, recruitment and other conditions of ser-
race to the bottom between states. vice.42 The Labour Code on Wages Bill, 2015 claims
The changes in the procedure and criteria for fixing to consolidate the Equal Remuneration Act, 1976
minimum wage standards proposed in the Labour with other significant central legislation governing
Code on Wages Bill, 2015 effectively give state payment of wages. The consolidation envisioned by
governments unchecked authority to fix minimum the Labour Code on Wages Bill, 2015 is multifacet-
wage levels within their states. As the previous his- ed: on one hand, it is socially progressive in its con-
torical discussion in Section II of this report sug- struction of gender; however, it is regressive in that
gests, state level labour law reforms have at times it functionally dismantles the mechanisms within
advanced the interests of workers and their rep- the Equal Remuneration Act, 1976 for promoting
resentatives. For instance, in the second phase of womens employment and seeking accountability
post-independence industrial relations, (mid-1960s for gender based discrimination.
through 1979), states, including Gujarat, Madhya In relation to gender-based discrimination, the La-
Pradesh, Maharashtra and Rajasthan enacted bour Code on Wages Bill, 2015 takes one significant
state-level laws regarding union recognition. More step beyond the Equal Remuneration Act, 1976, to-
specifically, the Maharashtra Recognition of Trade ward progressive improvement of substantive and
Unions and Prevention of Unfair Labour Practices procedural rights for workers. The Labour Code
Act, 1975, made failure to bargain with a representa- on Wages Bill, 2015 extends the definition of gen-
tive union an unfair labour practice.40 der-based discrimination to include discrimination
However, in the current period of economic liberal- against transgender employees.43 This measure
ization, states have sought to deregulate industry consistent with Indias landmark 2014 Supreme
in order to attract private investmentwith Rajas- Court judgment, National Legal Services Authority
than, Gujarat and Madhya Pradesh as the forerun- v. Union of India44 recognizes the discrimination
ners in this approach to comprehensive labour and employment exclusion faced by transgender
law changes. State-level labour law changes have people in India.45 By contrast, the Small Factories
explicitly been justified on the grounds of promot- (Regulation of Employment and Conditions of
ing more competitive environments for business Service) Bill, 2014, retains a limited conception of
within particular states.41 Promotion of competitive gender-based discrimination as applicable only to
federalism by the Labour Code on Wages Bill, 2015 female workers.46
40. Debashish Bhattacherjee, The Evolution of Indian Industrial Relations: A Comparative Perspective, 32 Indus. Rel. J., No. 3 (2001), 251 (citing A.K. Sengupta,
Trends in Industrial Conflict in India (1961-1987) and Government Policy, Working Paper Series No. 174/92 (Calcutta Institute of Management)).
41. Gujarat Labour Minister Vijay Rupanis Note on Amendments in Labour Laws, Desh Gujarat, 25 February 2015; Changes in Industrial Disputes Act to
accelerate Make in Maharashtra, Indian Express, January 28, 2015, http://indianexpress.com/article/cities/pune/changes-in-industrial-disputes-act-to-
accelerate-make-in-maharashtra
42. Equal Remuneration Act, 1976, No. 25 of 1976 (11 February 1976), Sections 4, 5.
43. Ministry of Labour and Employment, Labour Code on Wages Bill, 2015: supra note 2, Section 3: Prohibition of discrimination on ground of gender- (1) There
shall be no discrimination among male, female and transgender [emphasis supplied] employees on the ground of sex in the matter of wages; under the same
employer, in respect of work of same or similar nature. (2) No employer shall, for the purpose of complying with the provisions of subsection (1), reduce the
rate of wages of any employee.
44. National Legal Services Authority v. Union of India, Writ Petition (Civil) No. 604 of 2013 (2014)(creating a third gender status for hijras or transgender people).
45. One year after third gender recognized in India, parliament considers affirmative action measures, Free Speech Radio News, july 10, 2015, accessed
February 9, 2016, http://fsrn.org/2015/07/one-year-after-third-gender-recognized-in-india-parliament-considers-affirmative-action-measures/
46. Small Factories (Regulation of Employment and Conditions of Service) Bill, 2014, Section 16: No Discrimination against female workers: No female worker
shall be discriminated against in matters of recruitment, training, transfers or promotions or payment of wages. Note: the Small Factories (Regulation
of Employment and Conditions of Service) Bill, 2014 suspends application of the Equal Remineration Act, 1976. Section 16 of the Bill is the only Section
pertaining to equal remuneration in small factories.
46
However, while broadening the category of workers spread exclusion and discrimination in labour and
protected from employment discrimination on the employment, including: exclusion in hiring, wages
basis of gender, the Labour Code on Wages Bill, 2015 lower than market rates, and unfavorable terms
also dismantles accountability mechanisms set and conditions of work such as caste-related
forth in the Equal Remuneration Act, 1976. In fact, obligations.51
the entire Equal Remuneration Act, 1976 has been
The Committee on Economic Social and Cultural
limited to one section within the Wages Bill that re-
Rights (CESCR) has encouraged the Government
fers to Prohibition of discrimination on the ground
of India to strengthen enforcement of existing le-
of gender.47 This limited provision within the Labour
gal prohibitions of discrimination. In addition, the
Code on Wages Bill, 2015 eliminates mechanisms
CESCR has called upon India to enact comprehen-
aimed at promoting equality of opportunity and
sive anti-discrimination legislation guaranteeing
non-discrimination, including: promotion of wom-
the right to equal treatment and protection against
ens employment through advisory committees, to
discrimination, including in employment.52 The min-
be comprised of at least 50 percent women;48 ap-
imalist and non-committal approach to the question
pointment of labour officers to hear discrimination
of discrimination in the Wages Bill, 2015 demon-
cases;49 and central government authority to direct
strates outright rejection of the recommendations
state enforcement of prohibitions on gender-based
of the CESCR.
discrimination in employment.50
As previously discussed, womens work in the paid Standards protecting bonuses
economy is undervaluedrelegating many working Indias Higher Judiciary has derived the constitu-
women to precarious employment, characterized tional validity of the Payment of Bonus Act, 1965
by low wages, long working hours, hazardous work- from Articles 39 and Article 43 of the Constitution of
ing conditions and very little job security. Unfair and Indiaand particularly Article 39(b) of the Directive
unrecognized divisions of domestic work also con- Principles of State Policy, prescribing distribution of
tinue to constrain womens ability to enter the labour the ownership and control of the material resourc-
market as wage earners. Within this context, mea- es of the community as to best serve the common
sures to promote employment and mechanisms for good.53 Consistent with these principles, the Pay-
adjudicating discrimination cases, as established in ment of Bonus Act, 1965 protects the right of em-
the Equal Remuneration Act, 1976, are critical mech- ployees to bonuses, including increased bonuses
anisms to achieve more equal opportunities and linked with profit, productivity and the instances of
outcomes for women workers. allocable surplus.54 The Labour Code on Wages Bill,
2015 dilutes protected access to bonuses by intro-
Standards prohibiting other forms of discrimination ducing a loophole under which establishments can
The Labour Code on Wages Bill, 2015 does not avoid paying bonuses. The Wage Bill also limits the
include any measures to prohibit discrimination capacity for increasing bonuses through profit shar-
in employment on the basis of caste, religion or ing; and eliminates mechanisms for trade unions to
social originall included among internationally pursue accountability for transparent collective bar-
protected categories. As discussed in the previ- gaining around profits.
ous section, Dalit and Adivasi workers face wide-
47. Labour Code on Wages Bill, 2015 supra note 6, Section 3. See full text of section above at note 293.
48. Equal Remuneration Act, 1976, No. 25 of 1976 (11 February 1976), Section 6.
49. Id. at Section 7.
50. Id. at Section 14.
51. Jayshree Mangubhai, ed., Benchmarking The Draft UN Principles And Guidelines On The Elimination Of (Caste) Discrimination Based On Work And
Descent, India Report. 50 (citing A. Namala, Dismantling Descent-Based Discrimination: Report On Dalits Access To Rights. (New Delhi: NCDHR and
IIDS, 2006))
52. CESCR, 2008, Concluding Comments on India report. UN Doc.E/C.12/IND/CO/5, para. 52..
53. Constitution of India, Article 39(b): that the ownership and control of the material resources of the community are so distributed as best to subserve the
common good. UCO Bank Employees Association v. Union of India, Madras High Court, W.A. No. 2893 of 2002, 29 July, 2008.
47
First, while entitling every employee to be paid a accessing audited accounts and balance-sheets
bonus on the basis of productivity, the Payment of of employers in order to ensure sound financial re-
Bonus Act, 1965 exempts new establishments from porting. This is currently the only legal mechanism
these bonus requirements.55 The Labour Code on that allows trade unions to seek legal remedy for
Wages Bill, 2015 expands this loophole. Under the unsound financial disclosure.60
Wages Bil, not only are new establishments exempt
Practically speaking, these proposed changes un-
from bonuses, but existing establishments can also
der the Labour Code on Wages Bill, 2015 would
establish new ownership in order to gain exemption
permit establishments to avoid paying bonuses
from paying bonuses to their employees. This is a
by changing their location, management, name or
marked shift from the principal Act which clearly
ownership. The Wages Bill, 2015 also removes the
states that an establishment shall not be deemed
ability of trade unions to promote transparent bar-
to be newly set up merely by reason of change in its
gaining and accountability by eliminating access to
location, management, name or ownership.56
company profit and loss accounts.
Second, under the Payment of Bonus Act, 1965,
The Small Factories (Regulation of Employment
employees can claim higher bonuses in instances
and Conditions of Services) Bill, 2014 also restricts
where the establishment has allocable surplus due
access to bonuses. The Bill only requires employers
to production or productivity.57 In order to promote
to pay bonuses at the rate of 8.33 percent of the
transparent profit sharing and collective bargaining,
wages earned by the worker during the accounting
under Section 23(2) of the Payment of Bonus Act,
year.61 There are no further provisions governing
1965, in cases of dispute, trade unions may appeal
payment of bonuses in small factories under the Bill
to authorities under the Act to require a company
and the Payment of Bonus Act, 1965 is suspended in
to furnish profit and loss accounts.58 These provi-
these workplaces.
sions are omitted in the Labour Code on Wages
Bill, 2015. Instead, the Labour Code on Wages Bill, In sum, protective standards diluted under the pro-
2015 protects employers from having to disclose posed Labour Code on Wages Bill, 2015 include
profit and loss accounts by prohibiting authorities standards governing minimum wages, equal treat-
from disclosing balance sheets without the express ment of women workers and bonuses. Common
permission of the employer.59 features of these changes include diminished work-
er representation in establishing wage standards
Removing Section 23(2) of the Payment of Bonus
including fixing minimum wages; dismantling of ac-
Act, 1965 de-authorizes trade unions from legally
countability mechanisms; and restrictions on union
55. Id. at Section 16(1A)(exempting newly set up establishments from section 15, entitling employees to additional bonus payments in the subsequent year when
allocable surplus for the accounting year exceeds the amount of maximum bonus payable to employees in the establishment).
56. Id. at Section 16, Explanation I: For the purpose of sub-section (1), an establishment shall not be newly set up merely by reason of a change in its location,
management, name orownership.
57. Id. at Section 31(A): Special provision with respect to payment of bonus linked with production or productivity. Notwithstanding anything contained in this
Act,-- (i) where an agreement or a settlement has been entered into by the employees with their employer before the commencement of the Payment of Bonus
(Amendment) Act, 1976 (23 of 1976), or (ii) where the employees enter into any agreement or settlement with their employer after such commencement, for
payment of an annual bonus linked with production or productivity in lieu of bonus based on profits payable under this Act, then, such employees shall be
entitled to receive bonus due to them under such agreement or settlement, as the case may be: 1[Provided that any such agreement or settlement whereby
the employees relinquish their right to receive the minimum bonus under section 10 shall be null and void in so far as it purports to deprive them of such
right:] 2[Provided further that] such employees shall not be entitled to be paid such bonus in excess of twenty per cent. of the salary or wage earned by them
during the relevant accounting year.
58. Id. at Section 23 (2): When an application is made to the said authority by any trade union being a party to the dispute or where there is no trade union,
by the employeesbeing a party to the dispute requiring any clarification relating to any item in thebalance-sheet or the profit and loss account it may, after
satisfying itself thatsuch clarification is necessary, by order, direct the corporation or, as the casemay be, the company, to furnish to the trade union or the
employees suchclarification within such time as may be specified in the direction and thecorporation or , as the case may be, the company, shall comply
with such direction.
59. Labour Code on Wages Bill, 2015 supra note 6, Section 29(2): Audited accounts of companies shall not normally be questioned: Provided that wherever
there is any dispute regarding the quantum of payment of bonus the authority notified by the appropriate Government having jurisdiction may call upon the
employer to produce the balance sheet before it, but the authority shall not disclose any information contained in the balance sheet unless agreed to by the
employer.
60. The right of trade unions to legally access audited accounts and balance sheets is currently protection under Section 23(2) of the Payment of Bonus Act, 1965.
61. Small Factories (Regulation of Employment and Conditions of Services) Bill, 2014, Section 14: Payment of Bonus: Every employer shall, within a period of six
months of the close of accounting year, pay bonus, at the rate of 8.33 percent of the wages earned by the worker during the accounting year.
48
oversight and accountability mechanisms. Togeth- potential is particularly dangerous in context of a

er, these changes create the potential for state gov- labour climate in which employers have responded
ernments to entirely reshape the wage landscape to attempts to unionize through illegal lockouts, ille-
within each state without representation from work- gal terminations, assault and kidnapping of workers
ers or their organizations. This section also raises who attempt to form unions.63
the constitutionality of provisions of the Wage Bill,
2015 that violate principles of concurrent authority Decriminalizing forced labour
and equality. As previously discussed, labour bondage and other
forms of coercive work have existed in India for cen-
Decriminalizing wage-related rights abuses turies. Coercive work is also assuming new forms
Wage related rights violations are intimately linked in the contemporary labour market. Vulnerability to
to serious human rights abuses. At the most se- coercive labour is rooted in longstanding patterns
vere end of the spectrum, wage-related abuses may of inequality, social exclusion, discrimination and
amount to wage theft, forced or bonded labour. inadequate labour market governance. In the con-
Running contrary to Supreme Court jurisprudence, temporary economy, distressed migrants employed
the Labour Code on Wages Bill, 2015 undermines in the informal sector who are willing to accept ad-
protections against arbitrary and illegal wage de- vances are particularly vulnerable to coercive labour
duction and forced and bonded labour. relationships. The Labour Code on Wages Bill, 2015
leaves marginalized workers exposed to coercive
Decriminalizing arbitrary and illegal wage deductions forms of labour by permitting recoverable advances
The Labour Code on Wages Bill, 2015 permits em- and extended overtime hours that may amount to
ployers to deduct wages based upon deeming the forced overtime.
performance of an employee to be unsatisfactory; First, by permitting recoverable advances, the La-
and to recover losses.62 These clauses are not bour Code on Wages Bill, 2015 leaves marginalized
qualified by ensuring due process prior to deduc- workers vulnerable to coercive labour. Recognizing
tion. Accordingly, by suspending due process, this the stubborn persistence of coercive labour in India,
provision opens the door for arbitrary and punitive the Supreme Court has explicitly linked advances to
wage deduction. coercive labour and has even declared a legal pre-
The potential for punitive wage deduction activat- sumption that advances suggest the presence of
ed under the Wages Bill, 2015 may have significant bonded labour.64 Despite this presumptive link be-
consequences for collective bargainingfor in- tween advances and coercive labour relationships
stance, by allowing employers to financially penal- highlighted by the Supreme Court, the Wages Bill,
ize workers for joining a union or exercising their 2015 retains provisions permitting employers to re-
fundamental right to freedom of association. This cover advances.65
62. Labour Code on Wages Bill, 2015 supra note 6., Section 19(2)(ii)(b), 19 (3)(k).
63. For a case study of such extreme actions to break unions, see Society for Labour and Development, The Empty Promise Of Freedom Of Association:
A Study Of Anti-Union Practices In Haryana (2015), 15.
64. Bandhua Mukti Morcha v. Union of India, AIR 1984 SC 802, para. 19: It is now statistically established that most of bonded labourers are members of
Scheduled Castes and Scheduled Tribes or other backward classes and ordinary course of human affairs would show, indeed judicial notice can be taken
of it, that there would be no occasion for a labourer to be placed in a situation where he is required to supply forced labour for no wage or for nominal wage,
unless he has received some advance of other economic considerationfrom the employer [emphasis supplied] and under the consideration from the employer
and under the pretext of not having returned such advance or other economic consideration, he is required to render service to the employer or is deprived
of his freedom of employment or of the right to move freely wherever he wants. Therefore, whenever itis shown that a labourers is made to provide forced
labour, the Court would raise a presumption that he is required to do so in consideration of an advance or other economic consideration received by him and
he is therefore a bonded labourer. This presumption may be rebutted by the employer and also by the State Government if it so chooses but unless and until
satisfactory material is produced for reubutting this presumption, the Court must proceed on the basis that the labourer is a bonded labourer entitled to the
benefit of the provisions of the Act.
65. Labour Code on Wages Bill, 2015, supra note 6, Section 24: Deductions for recovery of advances: Deductions for recovery of advances given to an employee
shall be subject to the following conditions namely:-(a) recovery of an advance of money given to an employee before employment began shall be made
from the first payment of wages to him in respect of a complete wage-period but no recovery shall be made of such advances given for travelling-expenses;
(b) recovery of an advance of money given to an employee after employment began shall be subject to such conditions as the Appropriate Government
may impose; (c) recovery of advances of wages to an employee not already earned shall be subject to such conditions as the Appropriate Government may
impose.
49
Here, it is significant to note that there is legal prec- or to employment defined by the state as intermit-
edent for allowing displacement or relocation al- tent employment.67 This definition of overtime work
lowances to support workers in transition to new eliminates the express provision under the Mini-
employment, while explicitly making allowances mum Wages Act, 1948 that any definition of over-
to workers non-refundable. For instance, under the time cannot violate protections under Section 59 of
Inter-state Migrant Workmen (Regulation of Employ- the Factories Act, 1948. Section 59 clearly defines
ment and Conditions of Service) Act, 1979, contrac- overtime to be any work in a factory for more than
tors are required to pay inter-state migrant workers nine hours a day or 48 hours in a week.68 By remov-
displacement allowances equal to 50 percent of the ing a clear definition of overtime and allowing com-
monthly wages payable but allowances are in addi- plimentary and intermittent work to exceed normal
tion to wages and not refundable.66 By contrast, re- hours, the Wages Bill, 2015 opens the door to com-
tention of provisions allowing recoverable advances pulsory overtime.
under the Wages Bill, 2015 signal outright disregard
The Factories (Amendment) Bill, 2014 also pro-
for a line of Supreme Court jurisprudence aimed at
poses an increase in permissible overtime work
eliminating coercive labour.
and the number of consecutive hours of work
Second, the Labour Code on Wages Bill, 2015 re- that are allowed (spreadover hours). The Bill pro-
duces protection against compulsory overtime. poses an increase in the number of permissible
Under the Labour Code on Wages Bill, 2015, states over-time working hours in a quarter from a cur-
are delegated the authority to fix hours of work for rent maximum of 50 hoursor 75 hours with state
a normal working daythis definition of normal government authorization;69 to a maximum of 100
working hours, however, does not apply to prepa- hoursor 125 hours with state authorization.70
ratory or complementary work which must be car- The Bill also proposes an increase in the number
ried on outside limits laid down for general working; of spreadover hours from a current maximum of
66. Inter-state Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979, No. 30 of 1979 (11 June 1979), Section 14: Displacement
allowance. -- (1) There shall be paid by the contractor to every inter-State migrant workman at the time of recruitment, a displacement allowance equal to
fifty per cent of the monthly wages payable to him or seventy-five rupees, whichever is higher. (2) The amount paid to a workman as displacement allowance
under sub-section (1) shall not be refundable and shall be in addition to the wages or other amounts payable to him.
67. Labour Code on Wages Bill, 2015 supra note 6, Section 13: 13. Fixing hours of work for normal working day: (1) In regard to any employment in respect of
which the minimum rates of wages have been fixed under this Code, the State Government may (a) fix the number of hours of work which shall constitute
a normal working day inclusive of one or more specified intervals; (b) provide for a day of rest in every period of seven days which shall be allowed to all
employees or to any specified class of employees and for the payment of remuneration in respect of such days of rest; (c) provide for payment for work on
a day of rest at a rate not less than the overtime rate. (2) The provisions of sub-section (1) shall in relation to the following classes of employees apply only
to such extent and subject to such conditions as may be prescribed, namely:- (a) employees engaged on urgent work or in any emergency which could not
have been foreseen or prevented; (b) employees engaged in work of the nature of preparatory or complementary work which must necessarily be carried
on outside the limits laid down for the general working in the employment concerned; (c) employees whose employment is essentially intermittent; (d)
employees engaged in any work which for technical reasons has to be completed before the duty is over; and (e) employees engaged in a work which could
not be carried on except at times dependent on the irregular action of natural forces. (3) For the purposes of clause (c) of sub-section (2), employment of an
employee is essentially intermittent when it is declared to be so by the appropriate Government on the ground that the daily hours of duty of the employee or
if there be no daily hours of duty as such for the employee the hours of duty normally include periods of inaction during which the employee may be on duty
but is not called upon to display either physical activity or sustained attention.
68. Minimum Wage Act, 1948, Section 14: Overtime.- (1) Where an employee, whose minimum rate of wages is fixed under this Act by the hour, by the day or by
such a longer wage-period as may be prescribed, works on any day in excess of the number of hours constituting a normal working day, the employer shall
pay him for every hour or for part of an hour so worked in excess at the overtime rate fixed under this Act or under any law of the appropriate Government for
the time being in force, whichever is higher. (2) Nothing in this Act shall prejudice the operation of the provisions of section 59 of the Factories Act, 1948 (63
of 1948) ] in any case where those provisions are applicable. This provision cites the Factories Act, 1948, Section 59: Extra wages for overtime. (1) Where
a worker works in a factory for more than nine hours in any day or for more than forty-eight hours in any week, he shall, in respect of overtime work, be entitled
to wages at the rate of twice his ordinary rate of wages[emphasis supplied.]
69. Factories Act, 1948, Section 64(4)(iv): the total number of hours of overtime shall not exceed fifty for any one quarter; Section 65(2): (2) The State
Government or, subject to the control of the State Government, the Chief Inspector may by written order exempt, on such conditions as it or he may deem
expedient, any or all of the adult workers in any factory or group or class or description of factories from any or all of the provisions of sections 51, 52, 54
and 56 on the ground that the exemption is required to enable the factory or factories to deal with an exceptional press of work. 1[(3) Any exemption granted
under sub-section (2) shall be subject to the following conditions, namely: (i) the total number of hours of work in any day shall not exceed twelve; (ii) the
spreadover, inclusive of intervals for rest, shall not exceed thirteen hours in any one day; (iii) the total number of hours of work in any week, including overtime,
shall not exceed sixty; (iv) no worker shall be allowed to work overtime, for more than seven days at a stretch and the total number of hours of overtime work
in any quarter shall not exceed seventy-five. Explanation.In this sub-section quarter has the same meaning as in sub-section (4) of section 64.]
70. Factories (Amendment) Bill, 2014, Bill No. 93 of 2014, Section 38, 39: 38. In section 64 of the principal Act, (a) in sub-section (4), in sub-clause (iv), for the
word fifty, the words one hundred shall be substituted; (b) in sub-section (5), for the words Rules made, the words, brackets and figures Rules made
before the commencement of the Factories (Amendment) Act, 2014 shall be substituted. 39. In section 65 of the principal Act, in sub-section (3), in clause
(iv),(a) for the word seventy-five, the words one hundred and fifteen shall be substituted; (b) after Explanation, the following proviso shall be inserted,
namely: Provided that the State Government or the Chief Inspector may, subject to the prior approval of the State Government, by order further enhance
the total number of hours of overtime work in any quarter to one hundred and twenty-five in the public interest..
50
10.5 hoursor 12 hours with state authorization hours for the purpose of inspection. Under the Equal
made to individual employers;71 to 12 hours un- Remuneration Act, 1976 and Payment of Bonus
der a blanket authorization that can be made by a Act, 1965, inspectors are empowered to examine
state government through official gazette notifica- workers, employers and agents. Under the Mini-
tion. Gazette notification may pertain to a factory, mum Wages Act, 1948, inspectors may also exam-
class or description of factories.72 These proposed ine anyone giving work to home-based workers and
increases in the number of permissible overtime other out-workers. These provisions for inspection
hours and spreadover hours risk further worker ex- are consistent with Indias commitments under the
ploitation. Many workers already work beyond the ILO Labour Inspection Convention, 1947 (No. 81).77
permitted overtime hours andespecially in the
The Labour Code on Wages Bill, 2015 replaces
case of contract and temporary workersthey may
commissioners and inspectors with facilitators and
not be compensated at overtime rates.73
an ambiguous appointment of one or more au-
thoritieswithout, however, specifying the nature
Dismantling accountability mechanisms of these authorities.78 The facilitator is appointed to
The Labour Code on Wages Bill, 2015 takes sig- supply information and advice to employers and
nificant steps to dismantle accountability mecha- workers concerning the most effective means of
nisms for upholding wage related rights under the complying with the provisions of [the] code.79
principal acts. Measures include dismantling labour
Facilitators are also responsible for undertaking
inspection mechanisms, restricting the functioning
inspection consistent with inspection regimes set
of trade unions and workers organizations and un-
forth by state governments. However, the 2015
dermining access to justice.
Wages Bill requires state inspection schemes to
provide for web-based inspection schedules based
Dismantling labour inspections
on self-certification by employers.80 Within these
Under the Payment of Wages Act, 1936,74 Minimum
parameters, in the instance of defaulters, facili-
Wages Act, 1948,75 Payment of Bonus Act, 1965 and
tators are granted authority to examine workers,
Equal Remuneration Act,1976,76 labour inspectors
require information, seize registers and records,
and commissioners are tasked with exercising stat-
require documents and search and seize as pro-
utory enforcement authority. Inspectors under the
vided under section 94(4) of the Code of Criminal
principal Acts may enter premises at all reasonable
Procedure.
71. Factories Act, 1948, Section 56: Spreadover.The periods of work of an adult worker in a factory shall be so arranged that inclusive of his intervals for rest
under section 55, they shall not spreadover more than ten and a half hours in any day: Provided that the Chief Inspector may, for reasons to be specified in
writing increase the 1[spreadover up to twelve hours].
72 Factories (Amendment) Bill, 2014, Section 36: In section 56 of the principal Act, for the proviso, the following proviso shall be substituted, namely: Provided
that where the State Government is satisfied, it may, by notification in the Official Gazette, increase the period of spreadover up to twelve hours in a factory or
group or class or description of factories.
73. Ramapriya Gopalakrishnan, Handbook On Labour Reforms In India (2016), 52.
74. Payment of Wages Act, 1936, Section 14, 15
75. Minimum Wages Act, 1948, Sections 19, 20.
76. Equal Remuneration Act, 1976, Section 9.
77. International Labour Organization, Labour Inspection Convention, 1947 (No. 81), Article 16: Workplaces shall be inspected as often and as thoroughly as is
necessary to ensure the effective application of the relevant legal provisions. Article 12 outlines the powers that should be granted to inspectors: 1. Labour
inspectors provided with proper credentials shall be empowered:(a) to enter freely and without previous notice at any hour of the day or night any workplace
liable to inspection; (b) to enter by day any premises which they may have reasonable cause to believe to be liable to inspection; and (c) to carry out any
examination, test or enquiry which they may consider necessary in order to satisfy themselves that the legal provisions are being strictly observed, and in
particular-- (i) to interrogate, alone or in the presence of witnesses, the employer or the staff of the undertaking on any matters concerning the application of
the legal provisions; (ii) to require the production of any books, registers or other documents the keeping of which is prescribed by national laws or regulations
relating to conditions of work, in order to see that they are in conformity with the legal provisions, and to copy such documents or make extracts from them;
(iii) to enforce the posting of notices required by the legal provisions; (iv) to take or remove for purposes of analysis samples of materials and substances
used or handled, subject to the employer or his representative being notified of any samples or substances taken or removed for such purpose. 2. On the
occasion of an inspection visit, inspectors shall notify the employer or his representative of their presence, unless they consider that such a notification may
be prejudicial to the performance of their duties. The Labour Inspection Convention, 1947 (No. 81) was ratified by India on April 7, 1949.
78. Labour Code on Wages Bill, 2015 supra note 6 at Section 43 and 47.
79. Labour Code on Wages Bill, 2015 supra note 6 at Section 47(4)(i)(a): supply information and advice to employers and workers concerning the most effective
means of complying with the provisions of this code.
80. Labour Code on Wages Bill, 2015 supra note 6, Section 47(2): The appropriate Government may lay down an inspection scheme which shall provide for
generation of a web-based inspection schedule, based on self certification, utilizing services of technical experts or agencies and complaint received and list
of defaulters.
51
In response to imposition of self-certification Trade Unions Act, 1926. Instead, under the 2015
schemes within the IT-enabled service sectors in Wages Bill, deductions that may be made from
India, the International Labour Organization, Com- wages and allocated toward trade union activity are
mittee of Experts on the Application of Conventions limited exclusively to membership dues.83
and Recommendations (CEACR) urged the gov-
This consolidation explicitly omits the capacity for
ernment of India to ensure that self-certification
workers to choose to contribute wages to develop-
schemes do not impact the efficacy of the labour
ment of cooperative societies to promote common
inspection systemand especially the frequency
economic, social and cultural needs. It also under-
and thoroughness of inspection visits.81 This rec-
mines the capacity for trade unions to promote co-
ommendation was made in response to reports
operatives as articulated in ILO Promotion of Coop-
from Indias central trade unions that very few in-
eratives Recommendation, 2002 (No.193).84
spections had been carried out under self-certi-
fication schemes within the IT-enabled services
Undermining access to justice
sectors (ITES).
The Labour Code on Wages Bill, 2015, contains nu-
The inspection system proposed under the merous provisions that restrict access to justice for
Labour Code on Wages Bill, 2015 violates Indias workers facing wage-related rights abuses. These
commitments under the Labour Inspection Con- measures include: shifting from criminal and civ-
vention, 1947 (No. 81). The proposed inspection il liability for wage related rights abuses to strictly
system based upon self-assessment and complaint civil liability; designating appellate authorities with
allows employers to avoid accountability by repo- ambiguous form and jurisdiction; undermining the
rting false information. It also puts the onus on workers ability of workers to seek representation in legal
to make complaintsa system that both depends proceedings; and removing attachment of employ-
upon workers having a thorough understanding of er assets as a legal remedy for wage related rights
their rights and potentially puts workers at risk of re- abuses. The Labour Code on Wages Bill, 2015, also
prisal for making complaints.82 undermines access to justice by removing account-
ability for wage abuse by government employers.
Restricting accountability functions of workers
organizations and trade unions First, the Labour Code on Wages Bill 2015 shifts
from criminal liability to civil liability in matters
The Labour Code on Wages Bill, 2015 systemat-
pertaining to wages, payment of wages and pay-
ically limits the scope of trade union members to
ment of bonuses.85 Employers who violate the La-
contribute independent funds designated for their
bour Code on Wages Bill are provided with written
welfare to other activities as legislated under the
81. Gopalakrishnan, supra note 26 at 30-31 (citing CEACR, Labour Inspection Convention,1947 (No.81), Observation, India, adopted 2010, published 100th ILC
session, 2011).
82. Gopalakrishnan, supra note 72 at 30-31.
83. Labour Code on Wages Bill, 2015 note 6, Section 19.
84. International Labour Organization, Promotion of Cooperatives Recommendation, 2002 (No. 193), Article 16: Workers organizations should be encouraged
to: (a) advise and assist workers in cooperatives to join workers organizations; (b) assist their members to establish cooperatives, including with the aim of
facilitating access to basic goods and services; (c) participate in committees and working groups at the local, national and international levels that consider
economic and social issues having an impact on cooperatives; (d) assist and participate in the setting up of new cooperatives with a view to the creation
or maintenance of employment, including in cases of proposed closures of enterprises; (e) assist and participate in programmes for cooperatives aimed at
improving their productivity; (f) promote equality of opportunity in cooperatives; (g) promote the exercise of the rights of worker-members of cooperatives;
and (h) undertake any other activities for the promotion of cooperatives, including education and training.
85. Labour Code on Wages Bill, 2015 supra note 6, provides exclusively for civil liability pertaining to non-payment of wages, Article 43: Claims under the Code
and procedure thereof: (1) The appropriate Government may by notification appoint one or more authorities to hear and decide the claims arising out of non-
payment of wages, deduction made by employer from the wages of an employee which are not as per this Code, payment of less wages than the minimum
wages, non-payment of wages for the leave period, non-payment of over time, non-payment of equal remuneration to male, female and transgender
employees as may be prescribed and non-payment of bonus. (2) The authority appointed under sub-section (1) may order payment of compensation up
to 10 times in addition to the dues involved as specified in subsection (1) to the employee and such authority shall, before ordering compensation, have
regard to the circumstances due to which the dues had remained unpaid or less paid. (3) If an employer fails to pay the outstanding dues of an employee
that are decided to be paid by the authority under sub-section (1), the authority shall issue a certificate of recovery to the Collector or District Magistrate of
the District where the establishment is located who shall recover the same as arrears of land revenue and remit the same to the authority for payment to
the concerned employee. (4) Any application for claim arising out of any dues payable as specified under subsection (1) may be filed before the authority by
either the employee or any Trade Union of which the employee is a member or a Non-Government Organisation duly authorised...[Contd.]
52
notice and the opportunity to comply with provi- Third, under the Minimum Wages Act, 194891 and
sions of the Code prior to receiving any penalty.86 the Payment of Bonus Act, 196592 employees can
Those who commit offences can be acquitted recover, through a Magistrate or Collector, any
by compounding offenses.87 Under the Minimum amount they are to be paid by an employer. The
Wages Act, 1948, by contrast, payment of less than Labour Code on Wages Bill removes this recovery
minimum wage is punishable with imprisonment.88 provision under the principal Act. By this omission,
Indias laws, policies and jurisprudence have sys- under the 2015 Wages Bill, recovery claims are
tematically challenged non-payment of legal wag- now functionally de-linked from any guarantee of
es by criminalizing these practicesplacing India at assets provided by the employer. The Small Facto-
the global forefront of legislative and judicial action ries (Regulation of Employment and Conditions of
to shift social norms on wage theft and coercive Services) Bill, 2014 also does not contain any provi-
labour. By decriminalizing non-payment of wages, sions for recovering wages from an employer.
the Labour Code on Wages Bill, 2015 undermines
Fourth, while the Minimum Wages Act, 1948 pro-
the Supreme Court decision in Sanjit Roy v. State of
tects the right of an employee to seek representa-
Rajasthan (1983) establishing that non-payment of
tion from a legal practitioner,93 the Wages Bill under-
minimum wages amounts to constitutionally pro-
mines right of legal representation by an advocate.
hibited forced labour.89
The role of advocates under the Wages Bill, 2015
Second, the 2015 Wages Bill undermines due pro- has instead been assigned exclusively to a repre-
cess in the case of wage related abuses. Replacing sentative trade union or non-governmental orga-
judicial appellate authority, the Code assigns all nization (NGO)although no standard or statutory
powers of a civil court to an ambiguous authority
that may or not may not be judicial.90
[contd.] by the employee or an Inspector appointed under this Code. (5) Authority appointed under sub-section (1) and the appellate authority appointed
under sub-section (1) of section 44, or as the case may be, the Chairperson and every Member of the Board referred to in sub-section (2) of section 44 shall
have all the powers of a Civil Court under the Code of Civil Procedure, 1908 (5 of 1908), for the purpose of taking evidence and of enforcing the attendance
of witnesses and compelling the production of documents, and every such authority, appellate authority or, as the case may be, the Chairperson and every
Member shall be deemed to be a Civil Court for all the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974). By
contrast, the Minimum Wages Act, 1948, Section 20, clearly delineates criminal procedure for cases of wage abuse.
86. Labour Code on Wages Bill, 2015 supra note 6, Section 49(3): Notwithstanding anything contained in sub-section (1) or sub-section (2), the Facilitator shall,
before initiation of prosecution proceedings, give an opportunity, to the employer to comply with the provisions of this Code by way of a written direction,
which shall lay down a time period for such compliance and if the employer complies with the direction within such period, the Facilitator shall not initiate
such prosecution proceedings.
87. Labour Code on Wages Bill, 2015 supra note 6, Section 50: Compounding of offences: (1) Notwithstanding anything contained in the Code of Criminal
Procedure, 1973 (2 of 1974),on the application of the employer concerned, any offence under this code shall be compounded, by such officer being a
gazetted officer of the appropriate Government in such manner and on payment of such amount to such government as may be prescribed and if the
employer does not agree to pay such amount for composition of the offence, then, the proceedings shall be initiated against such employer in accordance
with law. (2) The offence referred to in sub-section (1) may be compounded before or pending the trial of the offence and when the offence is compounded
during the trial of the offence, the officer compounding the offence under sub-section (1) shall file a report in the court in which the trial of the offence is
pending and the court shall on filing of such report discharge the accused with whom the offence has been compounded and such composition shall have
the effect of an acquittal of the accused. (3) No offence under this section shall be compounded if the accused has previously been convicted by a Court for
committing same offence. (4) No offence under this code shall be compounded, except as provided under this section.
88. Minimum Wages Act, 1948, Section 22: Penalties for certain offences.- Any employer who--(a) pays to any employee less than the minimum rates of wages
fixed for that employees class of work, or less than the amount due to him under the provisions of this Act, or (b) contravenes any rule or order made under
section 13, shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to five hundred rupees, or with
both: Provided that in imposing any fine for an offence under this section, the Court shall take into consideration the amount of any compensation already
awarded against the accused in any proceedings taken under section 20.
89. Sanjit Roy v. State of Rajasthan, 1983 AIR 328 (holding where a person provides labour or service to another for remuneration which is less than the minimum
wage,the labour or service provided by him clearly falls within the meaning of the words forced labour and attracts the condemnation of Article 23. Every
person who provides labour or service to another is entitled at the least to the minimum wage and if anything less than the minimum wage is paid to him he
can complain of violation of his fundamental right under Article 23 and ask the court to direct payment of the minimum wage to him so that the breach of
Article 23 may be abated.
90. Labour Code on Wages Bill, 2015 supra note 6, Section 43-44.
91. Minimum Wages Act, 1948, Section 20(5): (5) Any amount directed to be paid under this section may be recovered-- (a) if the Authority is a Magistrate, by
the Authority as if it were a fine imposed by the Authority as a Magistrate, or (b) if the Authority is not a Magistrate, by any Magistrate to whom the Authority
makes application in this behalf, as if it were a fine imposed by such Magistrate.
92. Payment of Bonus Act, 1965, Section 21: Recovery of bonus due from an employer.-Where any money is due to an employee by way of bonus from his
employer under a settlement or an award or agreement, the employee himself or any other person authorised by him in writing in this behalf, or in the case
of the death of the employee, his assignee or heirs may, without prejudice to any other mode of recovery, make an application to the appropriate Government
for the recovery of the money due to him, and if the appropriate Government or such authority as the appropriate Government may specify in this behalf is
satisfied that any money is so due, it shall issue a certificate for that amount to the Collector who shall proceed to recover the same in the same manner as
an arrear of land revenue . . .
93. Minimum Wages Act, 1948, Section 20(2): Where an employee has any claim of the nature referred to in sub-section (1)], the employee himself, or any legal
practitioner or any official of a registered trade union authorized in writing to act on his behalf, or any Inspector, or any person acting with the permission of
the Authority appointed under sub-section (1), may apply to such Authority for a direction under sub-section (3). . .
53
registration systems for NGOs is specified.94 This wages and require incremental wage increases.
provision violates the Advocates Act, 1961, authoriz- l Current needs based allocations should ac-
ing all duly registered advocates to practice in all courts
count for 30 percent of wages; be raised to
and before any tribunal or person legally authorized
four consumption units in place of three;
to take evidence.95
consider the actual rent of a two-room ac-
Finally, the Labour Code on Wages Bill, 2015 re- commodation and the cost of children, edu-
stricts access to justice in cases in which the gov- cation, medical costs, travel and communi-
ernment fails to pay wages in a timely manner by cation.
exempting the government from the requirement of l Determination of minimum wages should
paying timely wages.96
be transparent to ensure that all need-based
Wage-related abuses are intimately linked to seri- factors are accounted for.
ous human rights abuses. At the most severe end of l Minimum wages should not be less than
the spectrum, these abuses can amount to bonded
`15,000 per month in any sector, including
and forced labour. The Wages Bill, 2015 by disabling
within the unorganized sector.
labour inspection mechanisms, removing criminal
liability, restricting the role of legal advocates and 4. Wage laws should require employers to pro-
undermining due processconstitutes a systemat- vide employees with wage slips showing all
ic assault on access to justice for workers facing payments made in a month, including overtime
wage-related abuses. wages.
5. In order to effectively prohibit wage discrimi-
Recommendations nation, wage laws should include precedential
Labour law changes under the 2015 Wages Bill im- jurisprudence on same and similar work. If it is
pact workers by diluting protective standards and established that the job content is similar, there
dismantling accountability mechanisms. In context should be a presumption that the skill, effort and
of these proposed changes, the following recom- responsibility required is the same.
mendations seek to protect workers from wage-re- 6. Wage laws should specifically establish that the
lated abuses. piece-rate beyond the standard output per day
1. Wage laws should apply to all workers, including should be double the rate, complying with over-
unorganized sector workers and home based time norms.
workers, without any exception. l The Wages Bill, under section 2(c) does not
2. Provisions prohibiting discrimination in wages clearly state that the piece rate should spec-
and hiring should extend to all internationally ify the standard output for eight hours of
protected categories, including but not limited work.
to Dalit, Adivasi, Muslim, women, disabled and 7. Wage laws should specify that weekly wage
sexual minority workers. is seven times the daily wage; monthly wage
3. Consistent with Supreme Court jurisprudence, is thirty times the daily wage; and hourly wage
determination of minimum wages should be should be the daily wage divided by not more
based upon needs-based criteria. Minimum than eight hours.
wages should be a floor rather than a ceiling for
94. Labour Code on Wages Bill, 2015 supra note 6, Section 43(4): (4) Any application for claim arising out of any dues payable as specified under subsection
(1) may be filed before the authority by either the employee or any Trade Union of which the employee is a member or a Non-Government Organisation duly
authorised by the employee or an Inspector appointed under this Code.
95. Advocates Act, 1961, No. 25 of 1961 (19 May 1961), Section 30: Right of advocates to practise.Subject to provisions of this Act, every advocate whose
name is entered in the 1[State roll] shall be entitled as of right to practise throughout the territories to which this Act extends, (i) in all courts including the
Supreme Court; (ii) before any tribunal or person legally authorised to take evidence; and (iii) before any other authority or person before whom such advocate
is by or under any law for the time being in force entitled to practise.
96. Labour Code on Wages Bill. 2015 supra note 6, Section 18(5): Notwithstanding anything contained in this section, the provisions of this section shall not
apply to the Government establishment except where theappropriate Government applies, by notification, such provisions to the Government establishments
specified in such notification.
54
8. In order to ensure access to justice in cases of (a) the full restitution of the claim amount
wage-related abuses: based on existing bank rates; (b) compensa-
tion; and (c) any penalty/fine imposed.
l In all cases of non-payment of wages, the
burden of proof should vest with the employ- l Under Section 41, a specific clause should
er and not with the employee. be added wherein the Principal employer of
an establishment will be held liable in any
l With regards to recovery, wage laws should
case of non-payment of wages to all workers
include a clause that requires employers to
working within an establishment.
pay an amount based on three components:
55
56
V. Industrial Relations
57
LABOUR CODE ON INDUSTRIAL

RELATIONS BILL, 2015
KEY CHANGES
1
Recognizing unorganized sector unions
Recognizes the right to freedom of association
within the unorganized sector
Undermining freedom of association

and collective bargaining
2
Barriers to registering trade unions
Restrictions on union governance
Lack of procedure for recognizing
representative trade unions
Increased provisions for canceling union
registration and recognition
3
Prohibiting strikes
Restricts disputes in small factories
Restricts unfair labour practice complaints
in small factories
Reducing barriers to layoff and
4
retrenchment
Introduces flexibility through fixed term
employment.
Deregulates retrenchment
Streamlines closure of small factories Weakening accountability mechanisms
Removes adjudication forums and appeals
5
mechanisms
Undermines accountability for just
adjudication
Limits employer liability for workplace rights
violations
Exempts government departments and
establishments
6
Undermining Standing Orders and
Conditions of Service
Eliminates worker input in rulemaking
Exempts small factories from Standing
58
Contemporary context International standards on industrial
The Indian economy currently represents a mix of
relations
three levels of collective bargaining and a range of The ILO Declaration of Fundamental Principles and
union structures. In the private corporate sector, Rights at Work recognizes the right to organize as
enterprise-based workers unions that may or may one of four fundamental rights to be upheld by ILO
not be affiliated to political parties may undertake member states. Together, the Freedom of Associ-
plant-level collective bargaining for organized and ation and Protection of the Right to Organize Con-
unorganized sector workers. In public sector en- vention, 1948 (No. 87) and Right to Organize and
terprises, centralized union federations affiliated to Collective Bargaining Convention, 1949 (No.98) out-
political parties bargain with the state (as employer) line the right to join a trade union and the right to
at the industry or national level, and at times at both organize. In particular:
levels. Central and state government employees in l The Freedom of Association and Protection of
the service sector (transportation, postal services,
the Right to Organize Convention, 1948 (No.
banking and insurance, police and firefighters, etc.)
87) calls upon states to prevent discrimination
typically have politically affiliated unions bargaining
against trade unions; protect employers and
at the national or regional levels, or both.1
workers organizations against mutual interfer-
The last decade has seen significant decline in reg- ence; and undertake measures to promote col-
istered trade union members and strikes in India. lective bargaining.
Together, Indias 11 central trade unions constitute l The Right to Organize and Collective Bargain-
15 percent of Indias workforce and are concentrat-
ing Convention, 1949 (No. 98), protects workers
ed in the public and formal sectors.2 According to
who are exercising the right to organize; upholds
Labour Bureau reports, while the 1970s witnessed
the principle of non-interference between work-
almost 100,000 strikes each year, there were only
ers and employers organizations; and promotes
250 strikes in 2008; 167 in 2009; 199 in 2010; and
voluntary collective bargaining.
179 in 2011.3
Although India has not ratified either of these con-
For instance, in the Sriperumbudur belt of Tamil Na-
ventions, they represent a growing international
dua special economic zone established in 2008
consensus on workers rights and as core labour
with over 2 billion USD invested by companies pri-
standards are binding on India as an ILO member
marily in the automotive and electronic sectorsthe
country.6
number of strikes declined from 110 in 2003 to just
28 in 2013.4 Since 2010, labour department officials In addition to these core standards, under the La-
have not recorded any strikes in industrial areas in bour Inspection Convention, 1947 (No. 81), India
Delhi.5 These trends correspond with a rise in con- has committed to protect the rights of industrial
tract labour and increasing fear among non-perma- workers by empowering labour inspectors to enter
nent workers of repercussions for joining a union. any premises where they have reasonable cause to
1. The three levels of collective bargaining and range of union structures referenced above is articulated by Debashish Bhattacherjee, The Evolution of Indian
Industrial Relations: A Comparative Perspective, 32 Indus. Rel. J., No. 3 (2001) 247-48.The only addition to Bhattacherjees schema is inclusion of explicit
reference to organized and unorganized sector unions.
2. Anumeha Yadav, Workers get more militant as space for unionization shrinks, Scroll.In, June 24, 2015, http://scroll.in/article/736208/workers-get-more-
militant-as-space-for-unionisation-shrinks.
3. Id.
4. Anu Kurian, Labors love lost, People Matters, Feb. 3, 2015, accessed Feb. 3, 2016 https://www.peoplematters.in/article/2015/02/03/employee-relations/
labors-love-lost/10515; Ajai Seevatsan, Data show labour unrest is not the problem, The Hindu, Nov. 1, 2014, accessed Feb. 3. 2016, http://www.thehindu.
com/news/cities/chennai/data-show-labour-unrest-is-not-the-problem/article6553308.ece (both citing M. Vijayabaskar, Madras Institute of Development
Studies).
5. Yadav, Workers get more militant as space for unionization shrinks, supra note 348.
6. Convention No. 87 has been ratified by 153 countries and Convention No. 98 has been ratified by 164 countries.
59
believe inspection is required; and to carry out any Act, 194812. Defining a factory as small based only
examination, test or enquiry which they may consid- upon the number of workers employed in the facto-
er necessary in order to satisfy themselves that le- ry does not adequately account for variation in cap-
gal provisions are being strictly observed.7 This sec- ital investment, turnover and volume of output. Fur-
tion provides further details on these standards as ther, size based classification provides incentives
they pertain to labour law changes proposed under to employers to spread manufacturing work over
the Labour Code on Industrial Relations Bill, 2015. more than one factory to seek exemptions under
the Act.13 It is unclear what law will apply to industri-
Labour law changes al units with 1-9 workers.
The central government Labour Code on Industri- The remainder of this section outlines implications
al Relations Bill, 2015 (hereafter, Labour Code on for workers and trade unions under the Labour Code
IR Bill, 2015) aims to consolidate the Trade Unions on IR Bill, 2015, Industrial Employment (Standing Or-
Act, 1926, Industrial Employment (Standing Or- ders) Central (Amendment) Rules, 2015 andwhere
ders) Act, 1946 and Industrial Disputes Act, 1947.8 it pertains to matters covered under the Industrial
The Central Government has also published gazette Disputes Act, 1949the Small Factories (Regulation
notification of Draft Industrial Employment (Stand- of Employment and Conditions of Services) Bill,
ing Orders) Central (Amendment) Rules, 20159 to 2014. These proposed changes do include some
amend the Industrial Employment (Standing Or- gains in protection for unorganized sector unions.
ders) Central Rules, 1946.10 Changes under the La- However, they also significantly undermine freedom
bour Code on IR Bill, 2015 apply only to industrial of association and collective bargaining; prohibit the
units with 40 or more workers. right to strike; reduce barriers to retrenchment; and
weaken mechanisms for employer accountability.
Under proposed labour law changes, factories em-
ploying 10-40 workers will be governed by the Small
Factories (Regulation of Employment and Condi-
Recognizing unorganized sector unions
tions of Services) Bill, 2014. The 2014 Small Facto- The Labour Code on IR Bill, 2015 explicitly recog-
ries Bill suspends application of 14 labour laws to nizes the right to freedom of association within the
small units.11 The Bill also reduces standards for unorganized sector where no easily discernible
health and safety established under the Factories employer-employee relationship may obtain. In
7. International Labour Organization, Labour Inspection Convention, 1947 (No. 81), ratified by India on April 7, 1949, Article 12: 1. Labour inspectors provided
with proper credentials shall be empowered: (a) to enter freely and without previous notice at any hour of the day or night any workplace liable to inspection;
(b) to enter by day any premises which they may have reasonable cause to believe to be liable to inspection; and (c) to carry out any examination, test
or enquiry which they may consider necessary in order to satisfy themselves that the legal provisions are being strictly observed, and in particular-- (i)
to interrogate, alone or in the presence of witnesses, the employer or the staff of the undertaking on any matters concerning the application of the legal
provisions; (ii) to require the production of any books, registers or other documents the keeping of which is prescribed by national laws or regulations relating
to conditions of work, in order to see that they are in conformity with the legal provisions, and to copy such documents or make extracts from them; (iii) to
enforce the posting of notices required by the legal provisions; (iv) to take or remove for purposes of analysis samples of materials and substances used or
handled, subject to the employer or his representative being notified of any samples or substances taken or removed for such purpose.
On the occasion of an inspection visit, inspectors shall notify the employer or his representative of their presence, unless they consider that such a notification
may be prejudicial to the performance of their duties.
8. Labour Code on Industrial Relations Bill, 2015, http://www.prsindia.org/uploads/media//draft/Labour%20Code%20on%20Industrial%20Relations%20
Bill%202015.pdf (accessed July 11, 2016).
9. Ministry of Labour and Employment, Gazette Notification G.S.R.327(E), New Delhi, 29 April 2015.
10. Industrial Employment (Standing Orders) Central Rules, 1946 (No. 20 of 1946).
11. The following labour laws are not applicable to small factories under the 2014 Bill: Factories Act, 1947; Industrial Disputes Act, 1947; Industrial Employment
(Standing Orders) Act, 1946); Minimum Wages Act, 1948; Payment of Wages Act, 1936; Payment of Bonus Act, 1965; Employees State Insurance Act, 1948;
Employees Provident Funds and Miscellaneous Provisions Act, 1952; Maternity Benefit Act, 1961; Employees Compensation Act, 1923; Inter-state Migrant
Workmen (Regulation of Employment and Conditions of Service) Act, 1979; (State) Shops and Establishments Acts, Equal Remuneration Act, 1976 and Child
Labour (Prohibition and Regulation) Act, 1986.
12. Ramapriya Gopalakrishnan, Handbook on Labour Reforms in India (2016) at 36 explains: The Bill does not contain provisions relating to maintenance of
cleanliness, adequate ventilation, suitable temperature, measures to contain dust and fumes, and the safety of persons working on machines. It also does
not contain any provisions relating to provision of personal protective equipment, periodic medical testing of workers, reporting of work-related accidents
and injuries and occupational diseases to the labour authorities. In the circumstances, the provisions relating to health and safety in the bill cannot be said
to be adequate.
13. Gopalakrishnan, supra note 12 at 34.
60
V. I n d u s t r i a l R e l a t i o n s
such cases, the 2015 IR Bill suspends the requir- unions that operate across jurisdictions, required
ement that the union achieve 10 percent member- disclosure of the names of workers applying for
ship in the concerned establishment, undertaking union registration and grounds for technically dis-
or industry.14 Relaxation of this requirement may fa- qualifying unions. The Labour Code on IR Bill also
cilitate freedom of association among unorganized contains no clear instructions for recognizing
sector workers. trade unions.
Challenges to freedom of association and Registering general, sector-wide, multi-state and

collective bargaining national unions
By virtue of Indias membership in the ILO, the Right Under the Labour Code on IR Bill, 2015, there is am-
to Organise and Collective Bargaining Convention, biguity with regard to whether unions that operate
1949 (No. 98) commits India to take measures to across jurisdictions or sectors require more than
promote collective bargaining.15 Undermining these a single registration. This ambiguity impacts both
obligations, the Labour Code on IR Bill, 2015 has no general workers unions and sector-wide unions be-
provisions aimed at promoting collective bargain- cause lack of clarity under the IR Bill 2015 may cre-
ing. Instead, the IR Bill, 2015 undermines freedom ate obstacles to registering multi-state plants and
of association and collective bargaining by creat- national unionsultimately preventing a common
ing additional barriers to registering trade unions, national labour market from emerging.
placing restrictions on the structure of union gover-
nance, including additional grounds for the cancel- Requiring disclosure of applicants identity
lation of unions and prohibiting the right to strike. In order to apply for registration of a trade union, the
The Small Factories (Regulation of Employment Labour Code on IR Bill, 2015 requires disclosure of
and Conditions of Services) Bill, 2014 also limits the names and addresses of workers applying for
freedom of association and collective bargaining by registration to the registrar.17 Without confidential-
providing grounds to cancel representative status ity and other protective measures, this disclosure
of unions and restrict disputes in small factories. clause opens the door for retaliation against work-
ers who attempt to form a union.
Barriers to registering trade unions
Retaliation for union activity is a common feature
Under the Labour Code on IR Bill, 2015, the authority
of Indias contemporary economy. For instance,
to appoint a registrar of trade unions is transferred
during the 2014-15 fiscal year, NVH India Auto Lim-
solely to the state government, undermining con-
ited, one of the suppliers for Hyundai Motor India
current authority under the principal act.16 Barriers
Limited, suspended 15 employees for seeking basic
to registering trade unions under the Labour Code
facilities and permission to set up an employees
on IR Bill include potential difficulties in registering
14. Labour Code on Industrial Relations Bill, 2015 supra note 8, Section 5(b): (b) In the case of unions or association of workers in unorganised sector where
there is no employer-employee relationship or such relationship is not clear, the requirement of 10 percent membership in an establishment or undertaking
or industry shall not apply.
15. International Labour Organization, Right to Organise and Collective Bargaining Convention, 1949 (No. 98), Article 4: Measures appropriate to national
conditions shall be taken, where necessary, to encourage and promote the full development and utilisation of machinery for voluntary negotiation between
employers or employers organisations and workers organisations, with a view to the regulation of terms and conditions of employment by means of
collective agreements.
16. Labour Code on Industrial Relations Bill, 2015 supra note 8, Section 7: Registrar of Trade Unions - (1) State Government may, by notification, appoint a
person to be the Registrar of Trade Unions, and other person as Additional Registrar of Trade Union, Joint registrar of Trade Union and Deputy registrar of
Trade Unions who shall exercise such powers and perform such duties of the Registrar as the appropriate Government may, by notification, specify from
time to time. (2) Subject to the provisions of any order made by the appropriate Government, where an Additional Registrar of Trade Unions or a Joint
Registrar of Trade Unions or a Deputy Registrar of Trade Unions exercises the powers and performs the duties of the Registrar in an area within which the
registered office of a Trade Union is situated, such Additional Registrar of Trade Unions or a Joint Registrar of Trade Unions or a Deputy Registrar of Trade
Unions, as the case may be, shall be deemed to be the Registrar in relation to that Trade Union for the purposes of this Code..
17. Labour Code on Industrial Relations Bill, 2015 supra note 8, Section 6(1)(a)(i): Application for Registration - (1) Every application for registration of a Trade
Union shall be accompanied by - (a) a statement showing (i) the names, occupations and addresses of the persons making the application, the name and
address of the establishment, undertaking or industry, and where the establishment has two or more units, branches or offices, the name and address of the
unit, branch or office, wherein such persons are employed.
61
union in the company.18 In Haryanas Bawal indus- 1926, up to half the office bearers may be persons
trial area, on the proposed Delhi-Mumbai Industrial not actually engaged or employed in the establish-
Corridor, workers who submit their names and de- ment or industry.21
tails in union applications are routinely transferred
Under the Labour Code on IR Bill, 2015, all office
to another division or fired.19
bearers of a registered union must be people ac-
tually engaged or employed in the establishment.22
Permitting technical qualification during
The IR Bill does make an exception for the unor-
registration
ganized sector, but still restricts the proportion of
The Labour Code on IR Bill, 2015 does not distinguish non-workers who can become office bearers to
between substantive and technical grounds for re- two. This allowance for non-worker office bearers
fusing an application for union registration.20 Tech- in the unorganized sector is not absolute. The Code
nical issues should not warrant refusal. Moreover, on IR Bill, 2015 allows the government to issue an
registrars should not have the authority to reject an order declaring that this sub-section does not apply
application for registration until workers are grant- to any trade union or class of trade unions.
ed a time-bound window within which to remedy
objections. The Labour Code on IR Bill, 2015 also provides for
disqualification of an office bearer of a union on
Restrictions on union governance grounds of being an office bearer of 10 or more
unionsan entirely new provision introduced under
Restrictions on free choice of office bearers
the 2015 IR Bill.23 Over the last two decades, govern-
Under the Trade Unions Act, 1926, up to one-third ment circumscription of plant-level, industry-level
of the office bearers of a registered trade union and general union registration has led to the prolifer-
(although this number cannot exceed five) may be ation of office bearers working with multiple unions.
people not actually engaged or employed in the es- Accordingly, this provision would cause significant
tablishment or industry. With regard to unorganized hardship to workers and union leadership.
sector trade unions, under the Trade Unions Act,
18. Kurian, supra note 4

19. Yadav, Workers get more militant as space for unionization shrinks, supra note 2
20. Labour Code on Industrial Relations Bill, 2015 supra note 8, Section 10: Registration of a Trade Union - (1) If the information furnished by the trade union
which has made the application is complete in all respects the Registrar shall make an order within 60 days from the date of receipt of the application for
registration of the Trade Union for either granting or refusing to grant the registration and shall communicate his order to the applicant union electronically
or otherwise: Provided that where the Registrar refuses to grant the registration, he shall state the reasons thereof for such refusal.
21. Trade Unions Act, 1926, Section 22: Proportion of officebearers to be connected with the industry (1) Not less than onehalf of the total number of the
officebearers of every registered Trade Union in an unrecognised sector shall be persons actually engaged or employed in an industry with which the Trade
Union is connected: Provided that the appropriate Government may, by special or general order, declare that the provisions of this section shall not apply
to any Trade Union or class of Trade Unions specified in the order. Explanation. For the purposes of this section, unorganised sector means any sector
which the appropriate Government may, by notification in the Official Gazette, specify. (2) Save as otherwise provided in subsection (1), all officebearers of a
registered Trade Union, except not more than one third of the total number of the officebearers or five, whichever is less, shall be persons acutally engaged
or employed in the establishment or industry with which the Trade Union is connected. Explanation. For the purposes of this subsection, an employee who
has retired or has been retrenched shall not be construed as outsider for the purpose of holding an office in a Trade Union. (3) No member of the Council
of Ministers or a person holding an office of profit (not being an engagement or employment in an establishment or industry with which the Trade Union is
connected), in the Union or a State, shall be a member of the executive or other officebearer of a registered Trade Union.]
22. Labour Code on Industrial Relations Bill, 2015 supra note 8, Section 27: Proportion of Office Bearers not engaged in the Establishment or Industry- (1) Not
more than two of the office bearers of every registered trade union in an unorganised sector shall be the persons who are not actually engaged or employed
in the establishment or industry with which the trade union is connected: Provided that the appropriate Government may by special or general order declare
that the provisions of this sub section shall not apply to any trade union or class of trade unions specified in the order: Provided further that out of President
and Secretary of such registered company at least the President or the Secretary shall be held by the worker employed in such sector. Explanation: For the
purpose of this Sub section a worker who has retired or has been retrenched from the establishment or industry with which the trade union is connected
shall not be construed as outsider for the purposes of this sub section. (2) Save as otherwise provided in sub-section (1), all office bearers of a registered
trade union shall be persons actually engaged or employed in the establishment or industry with which the trade union is concerned. (3) No member of the
Council of Ministers or a person holding an office of profit (not being an engagement or employment in an establishment or industry with which the trade
union is connected) in the Union or a State shall be a member of the executive or other office bearer of a trade union.
23. Labour Code on Industrial Relations Bill, 2015 supra note 8, Section 25: Disqualification of Office Bearers of Trade Unions - (1) A person shall be disqualified
for being chosen as, and for being, a member of the executive or any other office bearer of a registered trade union if(i) he has not attained the age of 18
years; (ii) he has been convicted by a court in India of any offence involving moral turpitude and sentenced to imprisonment unless a period of 5 years has
elapsed since his release after undergoing such imprisonment; (iii) he is already office bearer of 10 trade unions; (iv) the Industrial Tribunal has directed that
he shall be disqualified for being chosen or for being office bearer of a trade union for a period specified therein.
62
Choice of representation is inherent to the right to l Under the Labour Code on IR Bill, 2015 the
freedom of association under the Freedom of As- grounds for fining the office bearers and
sociation and Right to Organize Convention, 1948 executive members of a trade union extend be-
(Convention No. 87). 24 The right to freedom of asso- yond failure to submit returns to encompass de-
ciation protects the rights of workers to choose and fault with regard to any notice, or sending any
elect their representatives. Non-worker members statement or other document.26 Fines can range
of trade unions play a crucial role in forming and from `10,000 to `50,000 and attract an addition-
strengthening trade unions. Unprotected, semi-lit- al penalty of `100 per day as long as the default
erate and illiterate workers facing rights abuses at continues.
work may be entirely unable to address these issues l The Labour Code on IR Bill, 2015 allows for a
without support from non-worker members of trade fine of `25,000 for any false entry made in the
unions with the time and expertise to support the returns of a union or alteration of any rule by a
unionization process. union.27
Overly frequent election requirements l Any individual deemed to have provided false
information to a trade union (on issues unspec-
Under the Labour Code on IR Bill, 2015, the frequency
ified) or a worker (with reference to the registra-
of electing union executives and office bearers has
tion status of a union) can be punished by a fine
been increased to every two years, from every three
of up to `25,000.28 False information, however,
years under the principal Act.25 Within India, trade and
is not further defined. The ambiguous definition
general union membership is usually spread across
of false information opens the door to levy fi-
a considerable area and frequently multiple states.
nancial penalties against trade unions or work-
Two-year election cycles would require an immense
ers by selectively branding information provided
and unreasonable expenditure of resources.
to workers as false.
Authority to leverage extensive fines against trade unions l Finally, commission of unfair labour practices
and workers by workers and trade unions attracts a penal-
The Labour Code on IR Bill, 2015 expands grounds ty from `50,000 to `2 lakhs.29 Practices con-
to levy fines against trade unions and workers, pro- sidered unfair labour practices by workers and
viding an avenue to drain the resources and capaci- trade unions include: advising, supporting or in-
ty of unions, with potentially debilitating effects. stigating a strike deemed illegal under the code,
preventing non-striking workers from entering
24. Right to Organize Convention, 1948 (Convention No. 87), Article 3: (1) Workers and employers organisations shall have the right to draw up their constitutions
and rules, to elect their representatives in full freedom, to organise their administration and activities and to formulate their programmes.(2) The public
authorities shall refrain from any interference which would restrict this right or impede the lawful exercise thereof.
25. Labour Code on Industrial Relations Bill, 2015 supra note 8, Section 9(i): the manner in which the members of the executive and the other office bearers of
the trade union shall be elected once in a period of every two years and removed and filling of casual vacancies . . .
26. Labour Code on Industrial Relations Bill, 2015 supra note 8, Section 103(7): If default is made on the part of any registered trade union in giving any notice or
sending any statement or other document as required by or under any provisions of this Code, every office-bearer or other person bound by the rules of the
trade union to give or send the same, or, if there is no such office-bearers or person, every member of the executive of the trade union, shall be punishable
with fine which shall not be less than rupees ten thousand but which may extend to rupees fifty thousand. The continuing default would attract an additional
penalty of rupees hundred per day so long as the default continues.
27. Labour Code on Industrial Relations Bill, 2015 supra note 8, Section 103(8): Any person who wilfully makes, or causes to be made, any false entry in, or any
omission from, the general statement required by section 33 or in or form any copy of rules or of alterations of rules sent to the Registrar under that section,
shall be punishable with fine which may extend to twenty five thousand rupees.
28. Labour Code on Industrial Relations Bill, 2015 supra note 8, Section 103(9): Any person who, with intent to deceive, gives to any member of a registered trade
union or to any person intending or applying to become a member of such trade union any document purporting to be a copy of the rules of the trade union
or of any alterations to the same which he knows, or has reason to believe, is not a correct copy of such rules or alterations as are for the time being in force,
or any person who, with the intent, gives a copy of any rules of an unregistered trade union to any person on the pretence that such rules are the rules of a
registered trade union, shall be punishable with fine which may be extended up to rupees twenty five thousand.
29. Labour Code on Industrial Relations Bill, 2015 supra note 8, Section 103(5): Any person who commits any unfair labour practice as specified in the Third
Schedule shall be punishable with a fine which shall not be less than rupees fifty thousand but which may extend to rupees two lakhs.
63
work places, violence in connection with a strike, processes for establishing representative trade
refusal to bargain in good faith with an employer union status, employers may choose to ignore and
and demonstrations at the residence of employ- bypass representative unions.34
ers and managers.30
While particular states, including Gujarat, Mad-
These penalties, raised significantly from those hya Pradesh, Maharashtra and Rajasthan enacted
prescribed under the Trade Unions Act, 1926 and state-level laws governing union recognition, there
Industrial Disputes Act, 1947,31 are disproportion- is currently no central law in place explicitly mandat-
ately high: higher than the average monthly wage of ing employers to grant recognition to representative
a worker in formal employment and several times trade unions.35 As a result of this legal lacuna, many
higher than those in informal employment. They employers resist recognizing representative trade
disproportionately impact workerswith fines im- unions, leading to protracted struggles for recogni-
posed on individuals in the case of worker lapses tion.36
but on the employer as a single entity in cases of
employer lapses.32 Provisions for canceling union registration and recognition
The Labour Code on IR Bill, 2015 introduces three
Lack of procedure for recognizing representative new grounds under which a registrar can cancel a
trade unions unions registration. These include failure to main-
The importance of recognizing representative trade tain accounts or submit an annual return within the
unions in order to promote collective bargaining prescribed manner or period; failure to hold elec-
is articulated in the ILO Collective Bargaining Rec- tions every two years as prescribed by the code; and
ommendation, 1981 (Recommendation No. 163).33 any other failure to fulfill registration requirements.37
Recognition by an employer of one ore more rep-
The Labour Code on IR Bill, 2015 permits an ag-
resentative trade unions in an industrial estab-
grieved union to appeal an order of cancellation
lishment establishes the basis for collective bar-
before an Industrial Tribunal and posits that the
gaining procedures at the enterprise level. Absent
provisions mandating recognition and delineating
30. The following actions are considered to be unfair labour practices by worker and trade unions under the Ministry of Labour and Employment, Labour Code
on Industrial Relations Bill, 2015, supra note 8, Schedule III, Part II: (1) To advise or actively support or instigate any strike deemed to be illegal under this
Code. (2) To coerce workers in the exercise of their right to self-organization or to join a trade union or refrain from, joining any trade union, that is to say- (a)
for a trade union or its members to picketing in such a manner that non-striking workers are physically debarred from entering the work places; (b) to indulge
in acts of force or violence or to hold out threats of intimidation in connection with a strike against non-striking workers or against managerial staff. (3) For
a recognized union to refuse to bargain collectively in good faith with the employer. (4) To indulge in coercive activities against certification of a bargaining
representative. (5) To stage, encourage or instigate such forms of coercive actions as willful, ,go-slow, squatting on the work premises after working hours
or gherao of any of the members of the managerial or other staff. (6) To stage demonstrations at the residence of the employers or the managerial staff
members. (7) To incite or indulge in willful damage to employers property connected with the industry. (8) To indulge in acts of force or violence or to hold
out threats of intimidation against any worker with a view to prevent him from attending work.
31. Penalties for parallel offenses are covered under Section 31 and 32 of the Trade Unions Act, 1926 and Section 25-U of the Industrial Disputes Act, 1947.
32. Sharit Bhowmik, The Labour Code on Industrial Relations Bill 2015: Tough times ahead for labour in India, Global Labour Column, No. 207, June 2015.
International Labour Organization Collective Bargaining Recommendation, 1981 (No. 98), Article 3: As appropriate and necessary, measures adapted to
national conditions should be taken so that--
33. International Labour Organization Collective Bargaining Recommendation, 1981 (No. 98), Article 3: As appropriate and necessary, measures adapted to
national conditions should be taken so that--
(a) representative employers and workers organisations are recognised for the purposes of collective bargaining; (b) in countries in which the competent
authorities apply procedures for recognition with a view to determining the organisations to be granted the right to bargain collectively, such determination
is based on pre-established and objective criteria with regard to the organisations representative character, established in consultation with representative
employers and workers organisations.

35. Bhattacherjee, supra note 61 at 251 (citing A.K. Sengupta, Trends in Industrial Conflict in India (1961-1987) and Government Policy, Working Paper Series No.
174/92 (Calcutta Institute of Management)).
37. Labour Code on Industrial Relations Bill, 2015 supra note 3, Section 12(1)(c),(e),(g): Certificate of registration of a trade union may be withdrawn or cancelled
by the registrar. . . (c) if the union has failed to maintain the accounts or to submit the annual return in the prescribed manner or within the prescribed period
or the annual return submitted by it is false or defective and the defect is not rectified within the prescribed period . . . (e) if the trade union has not held its
elections as prescribed under this code within the prescribed period . . . (g) if the trade union no longer fulfills the requirements of registration as prescribed
under section 18.
64
decision of the Tribunal is considered final.38 This workers organizations by administrative authori-
procedure departs from the procedure established ty.41 As explained by the ILO, The dissolution and
under the Trade Unions Act, 1926. The principal Act suspension of trade union organizations constitute
allows an aggrieved union to appeal cancellation extreme forms of interference by the authorities in
of registration to a high court, labour court or civil the activities of organizations and should therefore
court with jurisdiction over the area. If a civil court be accompanied by all the necessary guarantees.
initially hears the matter, the aggrieved union retains This can only be ensured through a normal judicial
a further right of appeal to the high court.39 procedure, which should also have the effect of a
stay of execution.42 By eliminating the right of ap-
peal in cases of trade union cancellation, the Labour
and Conditions of Services) Bill, 2014, contains pro-
Code on IR Bill, 2015 violates due process for the
visions for canceling union recognition. If a union
aggrieved trade union and fundamental rights at
recognized by an employer is found to engage in
work, protected under ILO Convention No. 87.
any unfair labour practice, its recognition will be
canceled. All trade union rights protected under
the Trade Unions Act, 1926 will also be suspend-
Prohibiting strikes
ed.40 This provision is newly introduced. There is no The fundamental right to strike is protected under
parallel provision under the Industrial Disputes Act, international human rights standards and the le-
1947. It is significant to note, moreover, that at the gal right to strike is protected under the Industrial
time of writing the schedule of unfair labour practic- Disputes Act, 1947. This legal right has also been
es Small Factories (Regulation of Employment and upheld by the Supreme Court of India. Departing
Conditions of Services) Bill, 2014 had not yet been from these established protections, the Labour
released. Code on IR Bill, 2015 prohibits both strikes and
lockouts and establishes penalties for strikes and
The procedure for cancelling the registration of a
lockouts that disproportionately impact workers.
union under the Labour Code on IR Bill, 2015 vio-
lates the Freedom of Association and Protection Article 8 of the International Covenant on Econom-
of the Right to Organize Convention, 1948 (No. ic, Social and Cultural Rights (ICESCR), ratified by
87) which prohibits dissolution of suspension of India in 1979, protects the right to strike.43 The ILO
38. Labour Code on Industrial Relations Bill, 2015 supra note 8, Section 13: Appeal against Non-Registration or Cancellation of Registration- (1) Any person
aggrieved by the refusal of the Registrar to grant registration to a trade union under section 23 or by cancellation of a certificate of registration under section
26 or if the Registrar has not acted within 60 days on the application for registration may within such period as may be prescribed prefer an appeal to the
Industrial Tribunal whose decision shall be final. (2) The Industrial Tribunal my after giving the parties concerned an opportunity to be heard dismiss the
appeal or pass an order directing the Registrar to register the trade union and to issue a certificate of registration or set aside the order of a cancellation or
certificate of registration as the case may be and forward a copy of the order to the Registrar.
39. Trade Union Act, 1926, Section 11: 11. Appeal. (1) Any person aggrieved by any refusal of the Registrar to register a Trade Union or by the withdrawal or
cancellation of a certificate of registration may, within such period as may be prescribed, appeal (a) where the head office of the Trade Union is situated
within the limits of a Presidency town to the High Court, or (aa) where the head office is situated in an area, falling within the jurisdiction of a Labour Court or
an Industrial Tribunal, to that Court or Tribunal, as the case may be; (b) where the head office is situated in any area, to such Court, not inferior to the Court
of an additional or assistant Judge of a principal Civil Court of original jurisdiction, as the20[appropriate Government] may appoint in this behalf for that
area. (2)The appellate Court may dismiss the appeal, or pass an order directing the Registrar to register the Union and to issue a certificate of registration
under the provisions of section 9 or setting aside the order or withdrawal or cancellation of the certificate, as the case may be, and the Registrar shall comply
with such order. (3) For the purpose of an appeal under sub-section (1) an appellate Court shall, so far as may be, follow the same procedure and have the
same powers as it follows and has when trying a suit under the Code of Civil Procedure, 1908 (5 of 1908), and may direct by whom the whole or any part
of the costs of the appeal shall be paid, and such costs shall be recovered as if they had been awarded in a suit under the said Code. (4) In the event of the
dismissal of an appeal by any Court appointed under clause (b) of sub-section (1) the person aggrieved shall have a right of appeal to the High Court, and
the High Court shall, for the purpose of such appeal, have all the powers of an appellate Court under sub-sections (2) and (3), and the provisions of those
sub-sections shall apply accordingly.
40. Small Factories (Regulation of Employment and Conditions of Services) Bill, 2014, 32(1)(c): where a union recognised by the employer has engaged in or
is engaging in, any unfair labour practice, direct that its recognition shall be cancelled or that all of any or its rights under the Trade Unios Act, 1923, shall be
suspended.
41. International Labour Organization, Freedom of Association and Protection of the Right to Organize Convention, 1948 (No. 87), Article 4: Workers and
employers organisations shall not be liable to be dissolved or suspended by administrative authority.
42. International Labour Organization Committee of Experts, Dissolution and suspension of organizations by administrative authority, General Survey On
The Fundamental Conventions Concerning Rights At Work In Light Of the ILO Declaration On Social Justice For A Fail Globalization, 2008,
International Labour Conference, 101st Session, 2012, para. 162, accessed Feb. 3, 2016, http://www.ilo.org/wcmsp5/groups/public/@ed_norm/@relconf/
documents/meetingdocument/wcms_174846.pdf.
43. ICESCR, supra note 11: Article 8: The right of everyone to form a trade union, join the trade union of [her/]his choice and the right to strike.
65
Freedom of Association and Protection of the Right the exception of these qualifications, the Industrial
to Organise Convention, 1948 (No. 87) and Right Disputes Act, 1947 protects the legal right to strike.
to Organize and Collective Bargaining Convention, The Supreme Court has also upheld the legal right
1949 (No. 98) concern freedom of association and to strike and recognized the legitimacy of this ap-
protection of the right to organize and also indirectly proach to articulating collective demands.46
protect the right to strike as an indispensable cor-
Undermining the right to strike, the Labour Code
ollary of the right to organize.44 Although India has
on IR Bill, 2015 extends prohibitions on strikes and
not ratified these conventions, under the 1998 ILO
lockouts that under the principle act only applied to
Declaration on Fundamental Principles and Rights
public utilities to all industrial establishments.47 Sig-
at Work, India has an obligation to promote the
nificantly, the Labour Code on IR Bill, 2015 requires
fundamental rights articulated in these conven-
workers to give employers between two and six
tions.45
weeks notice prior to a strike.48 However, by giving
The Industrial Disputes Act, 1947, both protects the notice, workers automatically initiate conciliation
legal right to strike and provides conditions under proceedings. Once conciliation proceedings are ini-
which workers can go on strike, positing a distinc- tiated, workers are prohibited from going on strike
tion between legal and illegal strikes. Section 22 of until one week after proceedings have concluded.
the Industrial Disputes Act, 1947 sets out parame- However, the 2015 Draft Code on IR does not pro-
ters under which employees in public utilities are vide a time-limit for completion of conciliation pro-
permitted to declare a strike. Section 23 of the Act ceedings. Together, these provisions allow strikes
prohibits strikes and lockouts during pending con- to be prohibited indefinitely. Violations of these pro-
ciliation, arbitration and adjudication and during the visions trigger significant penalties.49
period of operation of settlements and awards. With
44. The right to strike has been affirmed by the ILO in the Resolution concerning the Abolition of Anti-Trade Union Legislation in the States Members of the
International Labour Organization, 1957 and the Resolution concerning Trade Union Rights and Their Relation to Civil Liberties, 1970 as well as numerous
resolutions of the ILOs regional conferences and industrial committees. For further discussion, see Bernard Gernigon, et. al, ILO Principles Concerning the
Right to Strike (International Labour Office: Geneva, 1998), 1, 11 (delineating four dimensions of the right to strike articulated by the Committee on Freedom
of Association: [T]he Committee on Freedom of Association has recognized that strike action is a right and not simply a social act, and has also: (1) made
it clear it is a right which workers and their organizations (trade unions, federations and confederations) are entitled to enjoy; (2) reduced the number of
categories of workers who may be deprived of this right, as well as the legal restrictions on its exercise, which should not be excessive; (3) linked the exercise
of the right to strike to the objective of promoting and defending the economic and social interests of workers (which criterion excludes strikes of a purely
political nature from the scope of international protection provided by the ILO, although the Committee makes no direct statement or indication regarding
sympathy strikes other than that they cannot be banned outright; (4) stated that the legitimate exercise of the right to strike should not entail prejudicial
penalties of any sort, which would imply acts of anti-union discrimination).
45. International Labour Organization, ILO Declaration on Fundamental Principles and Rights at Work, Adopted by the International Labour Conference at its
Eighty-sixth Session, Geneva, 18 June 1998.
46. See Chandramalai Estate v. Their Workmen, LLJ, 1960(2) SC; Kairbetta Estate, Kotagiri v. Rajamanicakam and others, LLJ, 1960(2) SC.
47. Labour Code on Industrial Relations Bill, 2015, Section 71(1),(7): 71. Prohibition of Strikes and Lockouts (1) No worker employed in an industrial
establishment shall go on strike in breach of contract(a) without giving to the employer notice of strike, as hereinafter provided, within six weeks before
striking; or (b) within fourteen days of giving such notice; or (c) before the expiry of the date of strike specified in any such notice as aforesaid; or (d) during
the pendency of any conciliation proceedings before a conciliation officer and seven days after the conclusion of such proceedings; (e) during the pendency
of proceedings before an Industrial Tribunal or National Tribunal and two months, after the conclusion of such proceedings; (f) during the pendency of
arbitration proceedings before an arbitrator and two months after the conclusion of such proceedings, where a notification has been issued under sub-
section (5) of section 50; or (g) during any period in which a settlement or award is in operation, in respect of any of the matters covered by the settlement
or award. . . (7) No worker who is employed in any industrial establishment shall go on strike in break of contract and no employer of any such worker shall
declare a lock-out.
48. Labour Code on Industrial Relations Bill, 2015 supra note 8, Section 71(1)(a)-(b). See full text of provision in footnote 47
49. Labour Code on Industrial Relations Bill, 2015 supra note 8, Sections 71(1)(a)-(b) reproduced in footnote 47; Section 69: Commencement and conclusion
of proceedings (1) A conciliation proceeding shall be deemed to have commenced on the date on which a notice of strike or lock-out is received by
the Conciliation Officer. (2) A conciliation proceeding shall be deemed to have concluded (a) where a settlement is arrived at, when a memorandum of
the settlement is signed by the parties to the dispute; (b) where not settlement is arrived at, when the report of the conciliation officer is received by the
appropriate Government or; (c) when a reference is made to a National Tribunal, under this code, then, during the pendency of conciliation proceedings;
Section 71(1)(e) reproduced in footnote 47; Section 72(1): A strike or lock-out shall be illegal if- (i) it is commenced or declared in contravention of section 71;
or (ii) it is continued in contravention of an order made under sub-section (7) of Section 50. Compare with the Industrial Disputes Act, 1947, Section 22(1):
Section 22- Prohibition of strikes and lock-outs (1) No person employed in a public utility service shall go on strike, in breach of contract(a) without giving
to the employer notice of strike, as hereinafter provided, within six weeks before striking; or (b) within fourteen days of giving such notice; or (c) before the
expiry of the date of strike specified in any such notice as aforesaid; or (d) during the pendency of any conciliation proceedings before a conciliation officer
and seven days after the conclusion of such proceedings.
66
The Labour Code on IR Bill, 2015 also extends the levied against individual workers if their strike is de-
definition of strike to include instances in which at clared illegal. Under the Labour Code on IR Bill, 2015,
least 50 percent of workers take casual leave simul- trade union leaders are also liable to `20,000 to
taneously.50 This provision creates an avenue for `50,000 and/or imprisonment of one month if they
targeting workers who exercise freedom of associ- are deemed to have instigated, incited or taken
ation. For instance, if more than 50 percent of work- part in a strike that is deemed illegal.55 Anyone who
ers in an establishment opt to take casual leave in lends monetary support to striking workers is sub-
order to attend a meeting, rally or demonstration, ject to the same penalty of `20,000 to `50,000 and/
employers may use this provision to target workers or imprisonment of one month if they are deemed
for supporting causes they see as unfit. to have instigated, incited or taken part in a strike
that is deemed illegal.56 By penalizing support to
While the Labour Code on IR Bill, 2015 prohibits both
striking workers, this provision leaves workers who
strikes and lockouts, penalties for illegal strikes and
exercise the fundamental human right to strike vul-
lockouts51 disproportionately penalize workers. Out
nerable to severe human rights consequences, in-
of the four subsections dealing with penalties for
cluding deprivation of food and other basic needs.
illegal strikes and lockouts, only one covers punish-
ments for lockouts.52 An employer who commenc- Provisions prohibiting strikes and lockouts in pub-
es, continues or otherwise furthers an illegal lockout lic utilities have been justified on the grounds that a
can be punished with a fine extending from `20,000 strike or lockout in a public utility has the potential to
to `50,000 or imprisonment of one month or both.53 immediately and directly adversely impact the public
However, this section provides no relief to workers at large. The Labour Code on IR Bill, 2015 expands
deprived of wages during an illegal lockout. this prohibition to undermine the fundamental hu-
man right and domestically protected legal right to
Workers who engage in an illegal strike are subject
strike with no limitations. Prescribing penal sanc-
to a parallel fine as that imposed upon employ-
tions against workers for carrying out a peaceful
ers for a lockout (`20,000 to `50,000 and/or im-
strike also violates international norms. The ILO
prisonment of one month).54 Application of these
Committee on Freedom of Association has upheld
penalties, however, is not proportional: an employer
the right to strike under international law and stat-
is treated as one entity and will pay a singular pen-
ed that the legitimate exercise of the right to strike
alty for an illegal lockout while multiple fines can be
50. Labour Code on Industrial Relations Bill, 2015 supra note 8, 2(za): strike means a cessation of work by a body of persons employed in any industry
acting in combination or a concerted refusal, or a refusal, under; a common understanding of any number of persons who are or have been so employed
to continue to work or to accept employment and includes the casual leave on a given day by the fifty per cent or more workers employed in an industry.
Compare to Industrial Disputes Act, 1947, 2(q): strike means a cessation of work by a body of persons employed in any industry acting in combination,
or a concerted refusal, or a refusal, under a common understanding of any number or persons who are or have been so employed to continue to work or to
accept employment. Note: this provision of the 2015 Draft Code on IR as published by the Ministry of Labour Employment contains grammatical errors. The
author has not introduced this error.
51. Labour Code on Industrial Relations Bill, 2015 supra note 8, Section 7(2) for restrictions on the ability of employers to lock-out employees.
52. Labour Code on Industrial Relations Bill, 2015 supra note 8, Section 103(14), (15), (16) and (17).
53. Labour Code on Industrial Relations Bill, 2015 supra note 8, Section 103(15): Any employer who commences, continues or otherwise acts in furtherance of
a lock-out which is illegal under this Code, shall be punishable with a fine which shall not be less than rupees twenty thousand but which may be extended
up to rupees fifty thousand or with imprisonment up to one month, or with both.
54. Labour Code on Industrial Relations Bill, 2015 supra note 8, Section 103(14): Any worker who commences, continues or otherwise acts in furtherance of, a
strike which is illegal under this Code, shall be punishable with a fine which shall not be less than rupees twenty thousand but which may be extended up to
rupees fifty thousand or with imprisonment up to one month, or with both. Compare to Industrial Disputes Act, 1947, Section 26: Penalty for illegal strikes
and lockouts.- (1) Any workman who commences, continues or otherwise acts in furtherance of, a strike which is illegal under this Act, shall be punishable
with imprisonment for a term which may extend to one month, or with fine which may extend to fifty rupees, or with both. (2) Any employer who commences,
continues, or otherwise acts in furtherance of a lock- out which is illegal under this Act, shall be punishable with imprisonment for a term which may extend
to one month, or with fine which may extend to one thousand rupees, or with both.
55. Labour Code on Industrial Relations Bill, 2015 supra note 8, Section 103(16).
56. Labour Code on Industrial Relations Bill, 2015 supra note 8, Section 103(16),(17): (16) Any person who instigates or incites others to take part in, or otherwise
acts in furtherance of, a strike or lock-out which is illegal under this Code, shall be punishable with a fine which shall not be less than rupees twenty thousand
but which may be extended up to rupees fifty thousand or with imprisonment up to one month, or with both. (17) Any person who knowingly expends or
applies any money in direct furtherance or support of any illegal strike or lock-out shall be punishable with a fine which shall not be less than rupees twenty
five thousand but which may be extended up to rupees fifty thousand or with imprisonment up to one month, or with both.
67
should not entail prejudicial penalties of any sort. Collective disputes may only be raised by a mini-
In fact, the Committee on Freedom of Association mum of 51 percent of workers in a small factory.
has held that penalties for striking imply acts of an- Disputes can be raised directly by workers or with
ti-union discrimination.57 the support of a trade union. Prior to filing for ad-
judication in accordance with provisions of the
While international standards protect the right to
Industrial Disputes Act, 1947, however, workers
strike for trade unions, federations and confedera-
must complete a 90-day window in which they at-
tions,58 these standards do not respond to the needs
tempt to reach a settlement.60 This 90-day waiting
of workers precariously inhabiting casual, seasonal,
requirement is unique to the Small Factories (Reg-
temporary and other types of informal working re-
ulation of Employment and Conditions of Services)
lationships. In order to support unorganized sector
Bill, 2014 and does not existing in the Industrial
workers in India who seek to take collective action
Disputes Act, 1947.
to uphold the right to decent work, international and
domestic standards should be expanded to defend
Restricting unfair labour practice complaints in small
the right to strike for all workerswhether or not
factories
they have been able to form a union.
Under the Small Factories (Regulation of Employ-
Restricting disputes in small factories ment and Conditions of Services) Bill, 2014, a work-
er, union or inspector must file a complaint of unfair
labour practices to the Labour Court within 90 days
ment and Conditions of Services) Bill, 2014, individ-
of the incident. In order for a union to make a com-
ual industrial disputes pertaining to dismissal, dis-
plaint, however, it must show support of at least 50
charge, retrenchment or termination must first be
percent of the workers in the small factory. 61
raised before a conciliation officer. Prior to filing for
adjudication in accordance with provisions of the
Facilitating layoff and entrenchment
Industrial Disputes Act, 1947, workers must com-
Introducing flexibility through fixed term
plete a 45-day window in which they attempt to
employment
reach a settlement. Only after this window has
elapsed are the eligible for adjudication under the Draft amendments under the Industrial Employ-
Industrial Disputes Act, 1947.59 ment (Standing Orders) Central (Amendment)
Rules, 2015, increase employer flexibility in hiring
57. Gernigon, supra note 44 at 11.

58. Gernigon, supra note 44 at 11.
59. Small Factories (Regulation of Employment and Conditions of Services) Bill, 2014, 27(1): Where any employer discharges, dismisses, retrenches, or
otherwise terminates the services of an individual worker, any dispute or difference between that worker and his employer connected with, or arising out of,
such discharge, dismissal, retrenchment or termination shall be deemed to be an industrial dispute notwithstanding that no other worker nor any union of
workers is a party to the dispute. The worker may raise his dispute before the Conciliation Officer appointed under the Industrial Disputes Act, 1947and having
jurisdiction in respect of the area where the small factory is situated. In the event of the dispute not being settled within 45 days of filing the dispute before
the Conciliation Officer, the worker may submit his statement of claim before the Labour Court and on receipt of such application the Labour Court shall have
powers and jurisdiction to adjudicate upon the dispute, as if it were a dispute referred to it by the appropriate Government in accordance with the provisions
of the Industrial Disputes Act,1947 and all the provisions of the Industrial Disputes Act,1947 shall apply in relation to such adjudication as they apply in relation
to an industrial dispute referred to it by the appropriate Government.
60. Small Factories (Regulation of Employment and Conditions of Services) Bill, 2014, 27(2): Collective dispute: Not less than fifty one percent of the workers,
directly or through a trade union of workers, may raise a dispute about general demands before the Conciliation Officer appointed under the Industrial
Disputes Act, 1947and having jurisdiction in respect of the area where the small factory is situated. In the event of the dispute not being settled within 90 days
of filing the dispute before the Conciliation Officer, the workers or the trade union may submit a statement of claim before the Labour Court and on receipt
of such application the Labour Court shall have powers and jurisdiction to adjudicate upon the dispute, as if it were a dispute referred to it by the appropriate
Government in accordance with the provisions of the Industrial Disputes Act,1947 and all the provisions of the Industrial Disputes Act,1947shall apply in
relation to such adjudication as they apply in relation to an industrial dispute referred to it by the appropriate Government.
61. Small Factories (Regulation of Employment and Conditions of Services) Bill, 2014, Section 30: Procedure for dealing with complaints relating to unfair labour
practices - (1) Where any person has engaged in or is engaging in any unfair labour practice, then any union or any worker or any employer or any Inspector
may, within ninety days of the occurrence of such unfair labour practice, file a complaint before the Labour Court having jurisdiction over the area in which
the small factory is situate : Provided that, the Court may entertain a complaint after the period of ninety days from the date of the alleged occurrence, if
good and sufficient reasons are shown by the complainant for the late filing of the complaint. Provided further that, where the complaint relates to more than
one worker, then all the workers shall support the complaint, in writing, at the time of filing of the complaint and where the complaint has been filed by the
union, such union will also have to show support by appending signatures of atleast fifty percent of the workers in that small factory. (2) The Court shall take
a decision on every such complaint as far as possible within a period of six months from the date of receipt of the complaint. (3) The decision of the Court,
which shall be in writing, shall be in the form of an order. The order of the Court shall be final and shall not be called in question in any civil or criminal court.
(4) The Court shall cause its order to be published on the notice board of the Court, and also send a copy of the order to the parties to the case. The order of
the Court shall become enforceable from the date specified in the order. (5) The Court shall forward a copy of its order to the State Government for publication
on the Web site or notice board of the Labour Department of the State.
68
and firing workers. The Amendment Rules, 2015 lation of Employment and Conditions of Services)
permit engagement of workers on fixed term con- Bill, 2014, remain similar to established procedures
tracts. Fixed term employees under the Amendment under the Industrial Disputes Act, 1947.65
Rules, 2015 can be terminated through non-renewal
The Labour Code on IR Bill, 2015, however, raises
of their contract. Under these conditions, fixed term
the threshold number at which employers must
employees are not entitled to notice or compensa-
take permission from the government before re-
tion upon termination.62 This provision allows em-
trenchment to factories employing 300 or more
ployers to engage employees on fixed terms and
workers.66 This reduces oversight and protection
thereby avoid incurring any costs for terminating
against retrenchment to workers employed in in-
employees at will.
dustries employing between 100 and 299 workers.
This measure is consistent with defacto promotion
Deregulating retrenchment
of increased flexibility to retrench workers and close
Under the Industrial Disputes Act, 1947 employers industrial establishments.
are required to take government permission before
laying-off a worker or retrenching workers in indus- Streamlining closure of small factories
trial units with 100 or more workers.63 The consti-
tutional validity of these provisions was upheld by
ment and Conditions of Services) Bill, 2014, own-
the Supreme Court in Workmen of Meenakshi Mills
ers or employers can close a small factory within
v. Meenakshi Mills (1992) and Papnasam Labour
fifteen days of closing the factory by electronically
Union v. Madura Coats Ltd. (1995) in which the court
notifying the Chief Inspector who holds jurisdiction
argued that Section 25 protections against layoff
over the factorys registration. Upon being satisfied
and retrenchment do not impose an unreasonable
that workers have received their wages and that the
restriction on the rights of employers.64 Conditions
for retrenchment under the Small Factories (Regu-
62. Industrial Employment (Standing Orders) Central (Amendment) Rules, 2015, part b, introduces definition h: (h) A fixed term employment workman is a
workman who has been engaged on the basis of contract of employment for a fixed period. However, his working hours, wages, allowances and other benefits
shall not be less than that of a permanent workman. He shall also be eligible for all statutory benefits available to a permanent workman proportionately
according to the period of service rendered by him even though his period of employment does not extend to the qualifying period of employment required
in the statute; part c(i),(ii) establishes: (i) no notice of termination of employment shall be necessary in the case of temporary and badli workmen; (ii) no
workman employed on fixed term employment basis as a result of non-renewal of contract or employment or on its expiry, shall be entitled to any notice or
pay in lieu thereof, if his services are terminated:.
63. Industrial Disputes Act, 1947, Sections 25(K),(M),(N): 25K. Application of Chapter VB.- (1) The provisions of this Chapter shall apply to an industrial
establishment (not being an establishment of a seasonal character or in which work is performed only intermittently) in which not less than 2 one hundred]
workmen were employed on an average per working day for the preceding twelve months. (2) If a question arises whether an industrial establishment
is of a seasonal character or whether work is performed therein only intermittently, the decision of the appropriate Government thereon shall be final;
25M. Prohibition of layoff.- (1) No workman (other than a badli workman or a casual workman) whose name is borne on the muster rolls of an industrial
establishment to which this Chapter applies shall be laid- off by his employer except 1 with the prior permission of the appropriate Government or such
authority as may be specified by that Government by notification in the Official Gazette (hereinafter in this section referred to as the specified authority),
obtained on an application made in this behalf, unless such layoff is due to shortage of power or to natural calamity, and in the case of a mine, such layoff
is due also to fire, flood, excess of inflammable gas or explosion] (Note: Sections 25M(2)-(10) govern applications for lay-off and conditions in the case of lay-
off ); 25N. Conditions precedent to retrenchment of workmen.- (1) No workman employed in any industrial establishment to which this Chapter applies, who
has been in continuous service for not less than one year under an employer shall be retrenched by that employer until,-- (a) the workman has been given three
months notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice,
wages for the period of the notice; and (b) the prior permission of the appropriate Government or such authority as may be specified by that Government by
notification in the Official Gazette (hereafter in this section referred to as the specified authority) has been obtained on an application made in this behalf.
64. Workmen of Meenakshi Mills v. Meenakshi Mills, 1994 AIR 2696 at para. 8.3 (a 5 judge bench of the Supreme Court, holding: It is, therefore, not correct to
say that sub-section (2) of Section 25-N by enabling the appropriate Government or authority to take into consideration the condition of employment in the
industry or the condition of employment in the state imposes an unreasonable restriction on the right of the employer under Article 19(1)(g)) and Papnasam
Labour Union v. Madura Coats Ltd., 1995 AIR 2200 (following reasoning in Meenakshi Mills).
65. Gopalakrishnan, supra note 12 at 37 explains the procedure for retrenchment under the Small Factories (Regulation of Employment and Conditions of
Services) Bill, 2014: Section 26 of the Bill regulates the retrenchment of workers. The prescribed conditions need to be followed prior to the retrenchment of
any worker who has worked for a minimum of 240 days in a year. Prior to retrenchment, a worker is required to be given one months notice in writing stating
the reasons for retrenchment or 1 months wages in lieu of notice. The rule of last come first go is required to be followed. At the time of retrenchment,
compensation equivalent to 15 days of wages for every completed year of service needs to be deposited by the employer into the account of the worker. The
conditions precedent for retrenchment are thus similar to that under the Industrial Disputes Act.
66. Chapter X of the Labour Code on IR Bill covers provisions relating to lay-off, retrenchment and closure in certain establishments. Section 85 defines
the applicability of this chapter: Application of this Chapter - (1) The provisions of this Chapter shall apply to an industrial establishment (not being an
establishment of a seasonal character or in which work is performed only intermittently) in which not less than three hundred workers were employed on an,
average per working day for the preceding twelve months.
69
factory is closed, the register of small factories will 2015, by contrast, prior judicial experience is not
cancel its registration.67 required to be appointed as Presiding Officer of an
Industrial Tribunal.70
Weakening accountability mechanisms
The Labour Code on IR Bill, 2015 weakens employer Undermining accountability for just adjudication
accountability by removing adjudication forums and Under the Labour Code on IR Bill, 2015, in instanc-
appeals mechanisms. The Code also undermines es where no settlement between an employer and
accountability for just adjudication, limits employer employee has been reached, conciliation officers
liability and exempts government employers from are charged with completing a report setting forth
upholding the provisions of the Code. next steps.71 While this measure is consistent with
reporting provisions under the Industrial Disputes
Removing of adjudication forums and appeals mechanisms Act, 1947, the Labour Code on IR Bill, 2015 weakens
in adjudicating industrial disputes the reporting provisions in two ways: first, under
Under the Labour Code on IR Bill, 2015, Industri- the Industrial Disputes Act, 1947, reports are to be
al Tribunals are the single mechanism for ensuring submitted to the appropriate government, providing
accountabilityremoving the labour court, board a measure of accountability to the parties to the
of arbitration and tribunal court under the principle dispute in undergoing the next steps; further, under
Act.68 This framework dismantles the three-tiered the principal Act, reporting on the status of settle-
adjudication structure under the Industrial Disputes ment was time-bound, encouraging timely action in
Act, 1947including the tribunal or court, High Court cases of non-resolution.72
and Supreme Courtand therefore removes the Limiting employer liability
guaranteed right to appeal decisions of tribunals.
Strong penalties against employers for unfair labour
Moreover, under the Industrial Disputes Act, 1947, practices, including anti-union discrimination and
only someone who held judicial office in the past interference have the potential to protect individual
could function as a Presiding Officer of the La- and collective workers rights. However, the Labour
bour Court or Industrial Tribunal.69 Under the IR Bill, Code on IR Bill, 2015 limits employer liability by
67. Small Factories (Regulation of Employment and Conditions of Services) Bill, 2014, Section 6(5): Closing of the small factory to be communicated to the
Chief Inspector -The owner or employer of the small factory shall, within fifteen days of his closing the small factory, notify the closure to the Chief Inspector
electronically. The Chief Inspector shall, on receiving the information and being satisfied about the nature of closure, and payment of all wages to the workers
shall remove such small factory from the register of small factories and cancel the registration certificate.
68. Labour Code on Industrial Relations Bill, 2015 note 8, Section 60, referring to duties of National Tribunals: Duties of National Tribunals - Where an industrial
dispute has been referred by the Central Government to a National Tribunal for adjudication, it shall hold its proceedings expeditiously and shall, within the
period specified in the order referring such industrial dispute or further period extended by the Central Government submits its award to such Government.
Note: In this section, National Tribunals functionally assume the activities of labour boards and courts as laid out in the Industrial Disputes Act, 1947,
Sections 13 and 14.
69. See Industrial Disputes Act, 1947, Section 7-A detailing qualifications to be a Presiding Officer of an Industrial Tribunal; and 7(3) detailing qualifications to be
appointed a Presiding Officer of the Labour Court.
70. Labour Code on Industrial Relations Bill, 2015 supra note 8, see Sections 52(3)(e)(f): Tribunal - (1) The appropriate Government may, by notification,
constitute one or more Tribunal for the adjudication of industrial disputes and for performing such other functions as may be assigned to them under this
Code. (2) A Tribunal shall consist of one person only to be appointed by the appropriate Government. (3) A person shall not be, qualified for appointment as
the Presiding Officer of a Tribunal, unless - (a) he is, or has been, a judge of a High Court; or (b) he has, for a period of not less than three years, been a District
Judge or an Additional District Judge; or (c) he has held any judicial office in India for not less than seven years; or (d) he has been the Presiding Officer of
a Industrial Tribunal constituted under any State Act for not less than five years; or (e) he is or has been a Grade III Officer of Central Labour Service or Joint
or Deputy Commissioner of the State Labour Department , having a degree in law and at least seven years experience in the labour department after having
acquired degree in law including three years of experience as Conciliation Officer; or (f) he is an officer of Indian Legal Service in Grade III with three years
experience in the grade [emphasis supplied].
71. Labour Code on Industrial Relations Bill, 2015 supra note 8, Section 59(4): (4) If no such settlement is arrived at, the Conciliation Officer shall, as soon
as practicable after the close of the investigation, send to the parties a full report setting forth the steps taken by him for ascertaining the facts and
circumstances relating to the dispute and for bringing about a settlement thereof.
72. Industrial Disputes Act, 1947, Sections 12(4) and 12(6): (4) If no such settlement is arrived at, the conciliation officer shall, as soon as practicable after the
close of the investigation, send to the appropriate Government a full report setting forth the steps taken by him for ascertaining the facts and circumstances
relating to the dispute and for bringing about a settlement thereof, together with a full statement of such facts and circumstances, and the reasons on
account of which, in his opinion, a settlement could not be arrived at. . . (6) A report under this section shall be submitted within fourteen days of the
commencement of the conciliation proceedings or within such shorter period as may be fixed by the appropriate Government: Provided that, subject to the
approval of the conciliation officer, the time for the submission of the report may be extended by such period as may be agreed upon in writing by all the
parties to the dispute.
70
allowing for compounding of employer offences and Conditions of Services) Bill, 2014 also does not
thereby allowing employers to avoid prosecution by contain provisions relating to layoff and the pay-
paying a fine.73 ment of layoff compensation.77 It is also significant
to note that at the time of writing the schedule of un-
Further undermining employer accountability, un-
fair labour practices Small Factories (Regulation of
der the Labour Code on IR Bill, 2015, offences are
Employment and Conditions of Services) Bill, 2014
not cognizable unless they are based upon a com-
had not yet been released.
plaint by the appropriate government.74 This circum-
scribes the ability of trade unions to file legal com-
Exempting government departments and establishments
plaints directly, further shielding employers from
accountability. The Labour Code on IR Bill, 2015 retains govern-
ment authority to exempt any establishment, class
Finally, under the Labour Code on IR Bill, 2015, re-
of establishments or undertakings carried on by
sponsibility for employer offenses is restricted to
a government department from provision of the
every person who, at the time the offense was com-
Code.78 This provision is similar to Section 36B of
mitted, was in charge.75 This provision provides a
the Industrial Disputes Act, 1947 which was inserted
loophole for finding no managing authority directly
under the Amending Act, No. 46 of 1982, but never
accountable.
brought into force.79
The ILO Committee on Freedom of Association has
ment and Conditions of Services) Bill, 2014, if an em-
explicitly noted that this provision gives the gov-
ployer is found to have committed an unfair labour
ernment unduly wide discretion to place workers in
practice, a Labour Court can determine whether to
exempted industries in a less favorable position
order reasonable compensation or reinstatement
including by subjecting them to dispute resolution
with or without back wages.76 By leaving the grant
procedures in which they may lack confidence.
of relief in the form of back wages, compensation,
Practically speaking, this provision would deprive
reinstatement (or a combination of these reliefs) to
public sector workers of various rights under the
the Labour Court, this provision opens up the possi-
Code, including but not limited to rights pertain-
bility that workers who are victims of unfair labour
ing to investigation and settlement of industrial
practices may not be granted any of these reliefs.
disputes.80
73. Labour Code on Industrial Relations Bill, 2015, Section 104: 104. Compounding of offences: (1) Notwithstanding anything contained in the Code of Criminal
Procedure, 1973 (2 of 1974),on the application of the accused concerned, any offence under this code shall be compounded, by such officer being a gazetted
officer of the appropriate Government in such manner and on payment of such amount to such government as may be prescribed and if the accused does
not agree to pay such amount for composition of the offence, then, the proceedings shall be initiated against such accused in accordance with law. (2) The
offence referred to in sub-section (1) may be compounded before or pending the trial of the offence and when the offence is compounded during the trial of
the offence, the officer compounding the offence under sub-section (1) shall file a report in the court in which the trial of the offence is pending and the court
shall on filing of such report discharge the accused with whom the offence has been compounded and such composition shall have the effect of an acquittal
of the accused. (3) No offence under this section shall be compounded if the accused has previously been convicted by a Court for committing same offence.
(4) No offence under this code shall be compounded, except as provided under this section.
74. Labour Code on Industrial Relations Bill, 2015, Section 106(1): 106. Cognizance of offences - (1) No court shall take cognizance of any offence punishable
under this Code or of the abetment of any such offence, save on complaint made by or under the authority of the appropriate Government.
75. Labour Code on Industrial Relations Bill, 2015, Section 105(1): Offences by companies: (1) If the person committing an offence under this Code is a company,
every person who, at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of business of the
company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: Provided
that nothing contained in this sub-section shall render any such person liable to any punishment if he proves that the offence was committed without his
knowledge or that he exercised all due diligence to prevent the commission of such offence.
76. Small Factories (Regulation of Employment and Conditions of Services) Bill, 2014, 32(1)(b): (1) Where a Court decides that any person named in the
complaint has engaged in, or is engaging in, any unfair labour practice, it may in its order -. . . (b)direct all such persons to cease and desist from such unfair
labour practice, and take such affirmative action (including payment of reasonable compensation to the employee or employees affected by the unfair labour
practice, or reinstatement of the employee or employees with or without back wages, or the payment of reasonable compensation), as may in the opinion of
the Court be necessary to effectuate the policy of the Act.
78. Labour Code on Industrial Relations Bill, 2015, supra note 8, Section 97: Power to exempt - Where the appropriate Government is satisfied in relation to
any industrial establishment or undertaking or any class of industrial establishments or undertakings carried on by a department of that Government that
adequate provisions exist for the investigation and settlement of industrial disputes in respect of workers employed in such establishment or undertaking
or class of establishments or undertakings, it may, by notification, exempt, conditionally or unconditionally such establishment or undertaking or, class of
establishments or undertakings from all or any of the provisions of this Code.
79. See Gopalakrishnan, supra note 12 at 23 for further discussion.
80. Gopalakrishnan, supra note 12 at 24 (citing Committee on Freedom of Asociation, Case No. 1113 (India), discussed in the 226th Report of the Committee).
71
Reducing protection under standing orders and Recommendations

conditions of service The Labour Code on Industrial Relations Bill, 2015
The Industrial Employment Standing Orders Act, undermines freedom of association and collective
1946 makes it mandatory for employers to frame bargaining; prohibits the right to strike; reduces bar-
standing orders that define conditions of employ- riers to retrenchment; and weakens mechanisms
ment. Matters covered by standing orders should for employer accountability. In context of these
include hours of work, wages, leave, acts and omis- proposed changes, the following recommendations
sions that constitute misconduct and grounds for seek to protect fundamental rights to freedom of
terminating employment. The Act applies to all in- association and collective bargaining.
dustrial establishments in which 100 or more work-
ers are employed. Standing orders must be certified Registration of unions
by a designated certifying officer.81 1. Disclosing names of workers applying for
union registration puts workers at risk. Workers
Eliminating worker input in rulemaking should be protected from retaliation for seeking
Under the Industrial Employment (Standing Orders) to unionize. Workers names should remain con-
Act, 1946, rule-making procedure includes a tripar- fidential. In order to defend the right to organize,
tite mechanism for including worker perspectives workers should be granted protected status
during certification of standing orders.82 The Labour while their application for registration is pending
and for a period of not less than one month after
Code on IR Bill, 2015 removes this tripartite mech-
registration is complete.
anism. While the Labour Code on IR Bill, 2015 in-
cludes negotiating agents in the development of 2. If an application for registration is furnished to
standing orders, this position remains undefined. the registrar of trade unions, a formal receipt
should be provided. While the application is
Exempting small factories from standing orders pending, the receipt should retain the status of
a certificate of registration.
and Conditions of Services) Bill, 2014, does not re- 3. In order to facilitate formation of unions across
quire standing orders. multiple states, a registrar in any one of the
states where the union operates should be em-
Standing orders are instrumental in ensuring
powered to register the union. Moreover, this
transparent, uniform conditions of work among
registration must be applicable across all states
employees. In particular, issues such as perma- where the union has membership.
nency, conduct attracting penalties and conditions
of termination should be fair and transparent. By 4. In order to facilitate registration, unions should
removing tripartite processes for certifying stand- be granted sufficient time to remedy inconsis-
ing orders under the 2015 Draft Code on IR and tencies between applications for registration
removing standing orders entirely under the Small and governing guidelines. In instances of failure
to remedy inconsistencies, registrars should
Factories (Regulation of Employment and Condi-
amend provisions of applications so that they
tions of Services) Bill, 2014, proposed labour law
are in line with the Labour Code on IR.
changes significantly undermine fair notice and
transparency in the workplace.
81. Industrial Employment (Standing Orders) Act, 1946, No. 20 of 1946 (23 April 1946).
82.. Industrial Employment (Standing Orders) Act, 1946, Section 5(2): (2) After giving the employer and the trade union or such other representatives of the
workmen as may be prescribed an opportunity of being heard, the Certifying Officer shall decide whether or not any modification of or addition to the draft
submitted by the employer is necessary to render the draft standing orders certifiable under this Act, and shall make an order in writing accordingly.
72
Standing orders 10. The Labour Code on IR Bill, 2015 requires a reg-
5. The Labour Code on IR Bill, 2015 includes nego- istrar to cancel registration if a union has not
tiating agents in the development of standing held its elections as prescribed under the IR Bill,
orders but this position remains undefined. In 2015. Cancellation should not be the recourse.
order to ensure inclusion of workers perspec- Instead, the registrar should be granted the pow-
tives, a negotiating agent must be defined as a er to appoint an election officer to conduct elec-
representative from a union, or in the instance tions in a timely manner.
in which there is no union, an elected workers
committee. No rules of standing orders should Unjust retrenchment
be passed without inclusion of the perspectives 11. While notice and compensation to retrenched
or workers or workers representatives. workers has increasedtemporarily enhancing
6. Conditions of service should include measures security for workers who are fired, these mea-
to promote a gender-sensitive and discrimina- sures do not protect workers against unjust re-
tion free work environment. trenchment. Accordingly, the Labour Code on IR
Bill, 2015 should be amended to allow workers
and their representatives, within the notice pe-
Provisions for canceling unions
riod, to apply to the appropriate government au-
7. Consistent with internationally accepted princi- thority for approval of retrenchment.
ples of due process, the only acceptable ground
for cancellation of a union should be determi-
Employer liability
nation by a judicial body that the registration is
fraudulent. 12. Under the Labour Code on IR Bill, 2015 responsi-
bility for employer offenses is restricted to every
8. Any actions by a registrar that undermine the person who, at the time the offense was com-
registration or continuation of a union should be mitted, was in charge. This provision provides
subject to appeal. a loophole for finding no managing authority
9. Deviations from standard registration proce- directly accountable. In instances in which re-
dures or other guidelines under the IR Bill, 2015 sponsibility cannot be designated, the managing
should not justify canceling a union. Instead, in- director or operation head of the establishment
dustrial relations law should allow a time-bound should be held accountable.
window for unions to make any necessary
changes to assure compliance.
73
74
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Indias
Labour Law Changes Indias Labour Law Changes
Toward advancing principles of rights, Toward advancing principles of rights,
inclusion and employment security inclusion and employment security
T he proposed labour law changes in India begin against a backdrop of limited protection
for individual and collective rights for the vast majority of workers principles that
have governed labour regulation in India from pre-independence British colonial rule to the
present. Since the 1920s when India first recognized trade unions, the central government has
maintained strict legislative control over collective rights. Although workers rights progressively
expanded in coverage post-independence, they also remained extremely limited in their
applicationincluding mostly industrial workers and therefore excluding the vast majority of
workers in India from protection. The reach of workplace protections, furthermore, has been
progressively circumscribed since the 1990s as an increasing number of workers are pushed
into the unorganized sector workforce.
As detailed in this report, proposed labour law changes aim to further increase workforce
flexibility, decrease the bargaining authority of trade unions and diminish the reach of Indias
state labour regulatory apparatus. These changes promise to push an increasing number of
workers into precarious workincreasing economic inequality, insecurity and instability among
workers.
Economic development should be undertaken to improve the lives of people, families and
communities. These principles are at the core of Indias constitutional and international
commitments. This publication has been brought out with the hope that it contributes to
an engagement with proposed changes through an inclusionary process that foregrounds
constitutional and international human rights, common to organized, unorganized and self-
employed workers.
Society for Labour & Development Society for Labour & Development

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What are the main concerns raised about the proposed labour law changes?

What are the main concerns raised about the proposed labour law changes?

How do the proposed changes impact workers?

How do the proposed changes impact workers?

Indias

Labour Law Changes Indias Labour Law Changes

Society for Labour & Development

Indias Labour Law Changes

Some rights reserved

Society for Labour & Development

Phone: 91-11-4064 0500

I. Guiding principles in defining labour standards 1

II. Brief history of labour regulations in India 7

IV. Payment of wages 39

AITUC All India Trade Union Congress

NCL National Commission on Labour

11. Id. at art. 7.

LOGIC OF INDUSTRIAL PEACE

5. Factories (Amendment) Act, 1922, No. 11 of 1922 (25 January 1922).

29. Id. 421.

no incentive for collective bargaining.41 Instead, Employees Association v. National Industrial

41. Bhattacherjee, supra note 21 at 248-49.

50. Id. at 250-51.

71. Ramanathan, supra note 58 at 42.

working conditions in SEZs is unavailable because l Industrial Disputes Act, 1947;

110. Sundar 2010, supra note 22 at 587.

Table: Typology of Womens Unpaid Work23

Domestic workers cable national legislation that guarantees them fair

56. Kompier, supra note 1 at 113.

Adivasis areas. According to NSSO data, work participation

LABOUR CODE ON WAGES BILL, 2015

Diluting protective standards

Decriminalizing wage-related rights

oversight and accountability mechanisms. Togeth- potential is particularly dangerous in context of a

LABOUR CODE ON INDUSTRIAL

Undermining freedom of association

Reducing barriers to layoff and

Challenges to freedom of association and Registering general, sector-wide, multi-state and

18. Kurian, supra note 4

34. Gopalakrishnan, supra note 12 at 19.

57. Gernigon, supra note 44 at 11.

Reducing protection under standing orders and Recommendations

9, 2016, http://www.livemint.com/Industry/D2PE- Peoples Union for Democratic Righst v. Union of

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