Posted on: September 23, 2020 Posted by: admin Comments: 0

Author: Ashish Nagpal, Student at Guru Gobind Singh Indraprastha University, (GGSIPU), New Delhi.

Co-Author: Bhavesh Vashisht, Student at Guru Gobind Singh Indraprastha University, (GGSIPU), New Delhi.


The main idea of this research paper is to look onto the different objectives and examining the various periods through which the Indian Labour Law has evolved upto this point and to see to what extent the labour laws in India has been able to maintain the two most core objectives i.e the protection of the labour forces and the maintenance of the Industrial peace. Although the condition of Indian Labour Law is seen to be highly protective of the worker’s interest by the International Standards and takes consideration particularly in the field of the dismissal regulation. However throughout the study or by studying any no. of theories and different studies of many authors it can be concluded and derived that there are no evidence that the pro-worker labour legislation leads to unemployment rather pro-worker labour legislation has in turn resulted in labour regulation.

Keywords: Labour, Labour Law, Legislation.


In the recent account of the trend in regulations of working conditions in Asia and the Pacific Region has indeed suggested that there is a lack of in-depth study of the labour laws across the countries. The condition of India has also been quite similar to this , although a large no. of material is available on the Indian Labour Law but it’s highly fragmented in nature and contains only short articles in it’s eternity.

In February 2014, the then Finance Minister of India ; Mr. P Chidambaram termed Manufacturing Sector as the Heels of the Indian Society owing to the growth in the Compound Annual Growth Rate of about 10% during that period, however the share of manufacturing sector has incumbbed to new lows. The reasons for the backlogging of India’s performance in the manufacturing process however are well researched. The other countries of our continent have already fared ahead of India owing to their International Production networks. India has not been able to seize the opportunity though because the foreign investors haven’t been able to find all the familiar conditions as they find in the other south east asian countries ,even the local investors have been finding problems and are looking to invest in foreign countries

Our country further lacks world class facilities particularly , logistics facility which is quite important for the delivery of goods from one place to another and from one country to another, India has been further quite behind it’s peers in this regard. Further, the complexities of labour regulations raise the cost of compliance generally and further possess difficulties in the manufacturing activities, it is further the constraint on the vary of the size of labour force in regard to the change in the market situation which in turn possess the greatest obstacle to the manufacturing process in this globalization era.


Regulation of the Labour Laws in the country is a subject of Union List but have some of the matters in the concurrent list too. Due to this reason the state and the union both have the power to make and amend labour law regulation in India and due to this there has been multiplicity of laws too. The main consequence of this is that a large no. of registers have to be maintained and this raise the cost of compliance and become a burden on the MSME’S (medium, small and micro enterprises) and recognizing this problem the government of India further enacted the Labour Laws Act, 1988 which simplifies the procedure for enterprises employing upto 19 workers. The growing problem of the “inspector raj” system has been one of the main issues and the state government in bid to stop these have moved in direction of not taking periodic inspections and inspection to be done only on the basis of complaints of non compliance even if it affects the labour regulations.


There are many statutes and acts which further aims at the influencing of the labour laws system in our country. The list of some of the important laws and statutes which in turn governs the Labour system in our country.

[3]Industrial Disputes Act, 1947

The Industrial Dispute Act which was enacted in 1947 is indeed a major legislation which affects the labour flexibility in India and once a workman in appointed, the laws gives very less power to the employer to downsize the employees.

 The procedure involved in this that if any permanent employee has to be removed from a company then dispute settlement procedures apply here which generally involves a 3 step process i.e consultation, conciliation and adjudication or arbitration; the workers usually aims to dissolve the matters through the process of adjudication as the matters of legal consideration takes a long time and India and hence the matters are not resolved quickly. In some cases the court decides to grant back the entire wages of the workers involved.

The Thing which makes the matters worse in this Act is that the proper guidelines are not stipulated on the laws on the circumstances in which permission would be denied when an application has been made by any of the employers.

[4]The Trade Unions Act, 1926

In India any 7 workmen and 10 in case of enterprises along with the support of more than 100 workers can start a union by themselves and no registration is required for it too. Other interesting thing is that there is no need by the employer to recognize these unions or the work done by them and the multiplicity of trade unions is the major issue as there is a lack of collective response and hence collective bargaining too. Also there are two other provisions that lower the efficiency of the collective bargaining in the country. The first one would be the appointment of non office bearers to hold considerable positions in these unions and also there is no decision or voting on the decision which is taken by these unions.

[5]The Contract Labour (Abolition and Regulation) Act, 1970

This act was intended to regulate the use of labours employed through intermediators or agents and to work towards the abolishment of the contractual labours in fields relating to employing them for longer periods of time. The main and the important segment of this act is the section 10 of the said act which allows the central and the state government to prohibit the use of contractual labour for any of the work done in aspect of taking consideration of all the factors like conditions of contractual labour in the establishment and also after looking at all the different work conditions they are involved in.


Necessary conditions for employment generation is economic growth sufficient jobs for new entrants into the labour force, as well as those migrating out of agriculture and whose large part is to be generated in labour intensive manufacturing sectors, construction and the services.

The current objectives of the labour law reforms in tackling the problem of unemployment is discussed as below :-

  1. Complete codification of Central Labour laws into four codes.
  2. Increase Female Labour Force Participation to at least 30 per cent by 2022-23.
  3. Disseminate publicly available data and further to innovatively use the administrative data on a quarterly basis by the end of 2022-23 period.
  4. Increased formalization of labour law by reforming labour laws.
  1. Rationalizing the 38 labour laws into 4 codes namely wage (under examination in LS), safety and work conditions, industrial relations and social security and welfare (which is under pre legislative mode).
  2. Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), MUDRA Yogna , Prime Minister’s Employment Generation Programme and making the platform of Employment Provident Funds Organisation (EPFO) completely online.
  3. Make Publicly available the data on employment collected by the EPFO, Employees State Insurance Corporation (ESIC) And National Pension Scheme (NPS).

The various constraints in the employment sector is discussed as below :-

  1. Productivity across all sectors :- The major reason for the unevenness in the productivity across all the major sectors is the uneven distribution of workforce labour among the different sectors , For example :- The labour employed in the agriculture sector is too much but the productivity in comparison to the employed labour is way too less.
  2. Protection and Social Security :- The social security in our country is not too much efficient, the various schemes such as thee medical facilities provided to the workforce is not too good in our country along with that the education schemes or the employment generation schemes do not work too good in India.
  3. Skills :- The skill set available in our country right now to the labour sector is under-developed which means the skills which is available to the workforce in our country is way too less as comparison to the work they are doing and further it leads to loss of revenue hence generated.
  4. Employment Data :- This Employment Data is not available precisely in our country. This problem has been a huge roadblock to the employment sector in our country. The government should work to provide employment data in a synthesized form.

The proper layout plan for the development of employment sector in our country is discussed in the various steps below :-

Enhance Skills and Apprenticeships

  • Labour Market Information System (LMIS)

It is defined as a system where both the employees and the employers can come together to work in a better system. It means that those who are willing for jobs and those who are making opportunities for it should work together. The various characteristics of LMIS is discusses as below :

  1. Regional Integration of the data available :- It means that is labour of one state wants to work in some other state then the proper data should be made available for this process
  2. One Stop Shop :- It means that those seeking jobs and those who are providing one should be set up under a one common roof
  3. Government Ownership :- It means that the government should have a good percentage of ownership in the job providing sector as various fake agencies are created now a days and there is a lack of trust among the people.
  4. User Friendly :- It means that such a platform should be created which is user friendly. The labour class people in our country are not so technologically advanced and a proper method by which they can access it is necessary
  • Wider Use of Apprenticeships Programmes by all the enterprises :- The apprenticeship and the vocalization courses should be introduced which can in turn skill the unskilled labour and provide them with better work and pay opportunities to them.

Labour Law Reforms

The various Labour Law reforms which are needed to eradicate the growing unemployment in our country are :-

  1. Complete codification of Labour Laws.
  2. Simplification and Modification of Labour Laws.
  3. Compliance of working conditions regulations more effective and transparent.
  4. National Policy for the Domestic Workers.

Thinking about the labour laws in India requires us to not only thinking about the application of a set of legal or regulatory conventions which helps in governing labour in a particular society. It also requires us to think about what “labour law” might mean in varying economic and the social contexts. In certain respects Indian labour law is much like the labour law of developed industrial societies. It has in  itself extensive legislation providing for minimum standards of employment, social security, occupational health and safety, and so on. The  labour law legalizes trade unions and their activities, and provides a framework for the settlement of industrial disputes. It legalizes industrial action in pursuit of collective interests. Yet, as we have seen, formally the labour law of India covers only a very small percentage of the Indian workforce, and even among that cohort the law’s application in practice is lax to say the least. Neither of the two principal objects of the labour law system identified in this paper appears to have been met in practice. To all intents and purposes then, this is a nonfunctioning system. 


[1] P.R.N. SINHA, Trade Unions and Labour Legislation,(3d ed.2004).

[2] SIMON DEAKIN, Labour Law, (6d ed.2012).

[3] ‘Workman’- Industrial Dispute Act, 1947, Section 2, Act No. 14 of 1947 (11• 03 • 1947).

[4]  Formation of Union, Trade Unions Act,1926, Section 2h.

[5] Abolition of Labour, The Contract Labour (Abolition & Regulation) Act, 1970, Section 10.

[6] Richard Mitchell, Petra Mahy, Peter Gahan, The Evolution of Labour law in India: An overview and Commentary on regulatory objectives and development, Asian Journal of Law and Society, Feb 1 (2014) 413-453 at A1.

[7] Anwarul Hoda, Durgesh K. Rai, Labour Regulations and Growth of Manufacturing and Employment in India: Balancing Protection and Flexibility, May 2015.

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