History of Labour Laws in India

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Labour laws encompass a comprehensive set of regulations that govern employees’ and organisations’ rights and responsibilities. They serve as a crucial framework that balances workers, employers and trade unions.

These laws can be categorised into two main groups. The first group focuses on the relationship between employers, employees and trade unions, while the second group addresses the individual rights of employees. Labour laws encompass various aspects, including:

  • Industrial relations: This pertains to regulating fair labour practices and the functioning of trade unions.
  •  Workplace safety: This entails establishing safety requirements and mechanisms to address any unfortunate incidents.
  •  Employment standards: This covers procedures for layoffs, regulations regarding working hours, minimum wage provisions and leave provisions.

History and Evolution of Labour Laws

Labour laws have diverse origins in different parts of the world. European scholars emphasised the significance of guilds and apprenticeship systems during the medieval period. Asian scholars trace the roots of labour laws back to the Babylon code in the 18th century BCE and the laws of Manu. American authors refer to the law of the Indies, established in 17th-century Spain, as a significant influence on labour laws.

The industrial revolution in the 18th century prompted the development of labour laws. The exploitation of workers and the detrimental impact on labour caused by rapid industrialisation necessitated the implementation of regulations. Concurrently, the French Revolution propelled society towards social justice. Consequently, labour laws emerged due to conflicts during the 18th century, although their widespread acceptance occurred in the 20th century.

History of Labour Laws in India 

In India, the history of labour laws dates back to the British era before independence. The British administration enacted these laws to safeguard the interests of British employers and industrialists. 

The introduction of the Factories Act in 1883 by the British Parliament aimed to raise the costs of Indian labour, favouring British textile magnates. This Act introduced regulations such as an 8-hour workday, overtime wages, the abolition of child labour and restrictions on women working at night. While these provisions benefited the labour market, their true motivation was to serve vested interests.

Following World War I and the international discussions on labour reforms, India witnessed the introduction of the Trade Union Act of 1923 and the Industrial Disputes Act of 1929. These acts aimed to regulate the relationship between employees and employers. They included provisions to protect workers’ rights to form unions for collective bargaining and engage in protests through strikes and lockouts.

Amidst the worldwide economic depression, rising unemployment and continued agitation for independence, the British government established the Royal Commission on Labour in 1929. The commission faced significant resistance and boycott from the Indian labour movement. 

Nonetheless, it issued a report that paved the way for a series of labour legislations between 1932 and 1937. Key legislations during this period included the Payment of Wages Act of 1936, which empowered employers to deduct wages for unexcused absences and the Trade Disputes (Amendment) Act of 1938, which authorised the government to appoint conciliation officers to settle disputes.

The labour laws of independent India derive inspiration from the views expressed by nationalist leaders during the freedom struggle, debates in the Constituent Assembly, provisions of the Constitution and international conventions and recommendations. The Constitution of India, in alignment with fundamental rights and directive principles of state policy, emphasises the dignity of human labour and the need to protect and safeguard the interests of workers.

Important human rights conventions and standards from the United Nations have also influenced labour laws in India. These include the right to work of one’s choice, protection against discrimination, prohibition of child labour, just and humane working conditions, social security, wage protection, grievance redressal, the right to form trade unions, collective bargaining and participation in management. 

The Indian Labour Conference and the International Labour Conference have also significantly shaped labour laws. Recommendations from national committees and commissions, such as the First National Commission on Labour (1969) and the Second National Commission on Labour (2002), along with judicial pronouncements on matters concerning minimum wages, bonded labour, child labour and contract labour, have further influenced labour legislation.

Code on Wages  

The objective of the Code is to consolidate and simplify various laws related to wages and ensure their smooth implementation. It combines the following acts:

  • Payment of Wages Act, 1936
  •  Minimum Wages Act, 1948
  •  Payment of Bonus Act, 1965
  •  Equal Remuneration Act, 1976

Under the new Code, certain changes are being introduced. Section 6 empowers the central and state governments to set minimum wages for all employees covered by the Code. This is different from the Minimum Wages Act of 1948, which listed minimum wages in the schedule of the Act. Additionally, Section 9 of the Code mandates that the central government determines floor wages, considering working conditions. State governments cannot set minimum wages below the floor rates established by the central government.

Code on Industrial Relations 

The Code on industrial relations deals with relaxations, retrenchment, strikes and lockouts. It consolidates the following acts:

  • Trade Unions Act, 1926
  •  Industrial Employment (Standing Orders) Act, 1946
  •  Industrial Disputes Act, 1947

Changes made to this Code include modifying the industry definition under Section 2(p) and eliminating exceptions listed under Section 2(j). The expanded definition of an industrial dispute under Section 2(k) encompasses workers’ discharge, dismissal, reduction or termination.

Code on Social Security 

The Code on social security provides social security benefits for workers and replaces multiple acts, including:

  • Employees Provident Fund Act, 1952
  •  Employees State Insurance Act, 1948
  •  Maternity Benefit Act, 1961
  •  Payment of Gratuity Act, 1972
  •  Employees Exchange (Compulsory Notification Of Vacancies) Act, 1959
  •  Cine Workers Welfare Fund Act, 1981
  •  Unorganised Workers Social Security Act, 2008
  •  Employees Compensation Act, 1923

Notably, the Code expands its coverage to include gig, platform, and unorganised workers. It aims to protect gig workers who work in non-traditional employment arrangements, such as food and e-commerce delivery services. Platform workers are those engaged by organisations to provide specific services or solve problems through Internet platforms, and they are not confined to an employer-employee relationship.

The Code on Occupational Safety, Health and Working Conditions

The Code on occupational safety, health and working conditions establishes standards for working conditions, health and safety. It replaces 13 previous laws, including:

  • Factories Act, 1948
  •  Mines Act, 1952
  •  Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996
  •  Contract Labour (Regulation and Abolition) Act, 1970

The state government is empowered to exempt new factories from the provisions of the Code. The government has also simplified licensing for contracting firms to hire workers nationwide. Gender parity has been introduced, allowing women to work in positions previously prohibited.


The history of labour laws demonstrates the ongoing struggle to secure fair treatment and rights for workers throughout history. These laws have evolved as a response to societal changes, industrial advancements and the demands of labour movements. 

In India, labour laws were initially enacted by the British administration to protect the interests of British employers. However, as the labour movement gained momentum and the fight for independence intensified, reforms were introduced to safeguard workers’ rights and regulate the employer-employee relationship.

Labour laws have been shaped by international labour discussions, recommendations from national committees and the principles enshrined in the Indian Constitution. They encompass human dignity, protection against discrimination, social security and the right to organise and engage in collective bargaining.

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