Transformation of Employment Laws in India

In today’s world, one of the vital roles of globalization is to transform human livelihoods and therefore mechanisms and products of globalization are likely to have a significant effect on people’s lives. After all, different sections of society are affected by the globalization process, and hard-working people stand out to be affected majorly. As globalization is generally understood as a process of sustainable economic growth between all the countries around the world, the primary focus of the globalization movement has always been to eliminate the established national legal protection mechanism for the health, well‐being of citizens in the face of any manipulative strategy or intervention on the part of industrialists or capitalists in multiple countries. Thus, by hitting at the core of the whole body of employment laws, the concept of globalization tends to reduce workers as an unfortunate bunch of people left to the industrialists to hire or fire them, with unfavourable contract terms being levied on them.

Several amendments to the current labour laws and regulations have been made over a period of time, depending upon the requirements of the industry. The latest amendment to the Factory Act allowed women workers to work between 7 p.m. and 6 a.m. Such changes were made following suggestions from industry groups such as NASSCOM and ASSOCHAM to the ministry of labour. Due to this amendment BPO and the IT sector benefits as they hire many female workers during night hours.

History of Labour Laws

Traditionally, at the beginning of the industrial revolution in Europe, the structure of human civilization witnessed a gradual change, as a result of which the patriarchal mode of production in society gave way to the capitalist mode of production. Over the decade, capital-driven, the industry has come to dominate a vital role in society’s overall socio-economic development. Another very significant aspect of capitalist society was the unclear relationship between capital and labour, in which the capitalists ruled over the labourer, forcing the workers to switch to protest and union representation to defend their interests, provided that the idea of co-operative societies and other forms of labour-friendly social systems were new to such a society.

The Indian labour legislative framework owes its foundation to the British Raj. Almost all of the labour protection laws were enacted before India’s independence. After the independence, implementation of major legislation in the field of workers protection and welfare originates partly from the idea of independent Indian leaders and partly from the clauses of the Indian Constitution and international provisions such as the International Labour Organization (ILO). Employment laws are also being enforced in the light of international human rights standards and the United Nations standards.

Labour laws emerged as a result of worker’s calls for fair wages, the right to organise and the reciprocal efforts of employers to limit worker’s rights in certain corporations and to keep labour costs down. The cost of employers can rise as a result of employees negotiating to earn higher wages or through regulation implementing expensive mandates, such as health and safety standards or equal opportunity.

Worker groups and individuals, such as labour unions, can also supersede purely labour disputes and gain political power which some companies resist. The condition of employment law is thus, at one time, both a consequence of and a part of the conflict between the various needs of the parties. The International Labour Organization (ILO) was among the first institutions to deal with labour issues. The ILO was constituted as an organization of the League of Nations after the Treaty of Versailles, which ended the First World War. Post-war rehabilitation and defence of trade unions became the subject of concern of several nations after and directly after the First World War in Great Britain.

Significance of Employment Laws

Employment law in India consists of various set of rules that have been enacted at a different period to serve a specific purpose, as well as various court rulings on vital issues such as job opportunities, etc. As a result, the structure of the emerging volume of employment laws is not uniform due to differences in the thrust of the issues to be addressed at different times. Today, the predominant body of labour law comprises several workplace problems, but with a different focus on the essence of the question to be addressed that has been implemented or directed by the judiciary. Therefore it is appropriate to have a spectacular view of the nature of employment laws as they have developed over some time.

Eventually, there is a significant collection of law in the body of the cooperative system, which has started to develop in the twenties of the nineteenth century to establish and define the essence and extent of industrial relations in the world. With the enactment of the Trade Unions Act, 1926, the cornerstone of the cooperative law was set down. It was born out of the government’s obsessive understanding that it recognized the unsoundness of trade unions to effectively manage labour and capital in the industrial system. However, the shaking motion in this field came with the implementation of the Industrial Disputes Act of 1947, which provided employers with safeguards from unfair dismissal and allowed for worker’s councils in factories with more than a hundred employees, in accordance with the acceptance of labour unions as an integral part of labour relations.

In brief, a look at the history and development of labour legislation in India clearly shows the essence of the laws enacted at different points of time with some distinguishable patterns. To start with, the attention appeared to be on treating the worker as an alienated person who needed protection, as a result of which numerous factory laws were enforced to shield the workers from cruel working conditions. Slowly but surely, the purpose of employment laws has been enhanced to treat labourers as members of the inspirational and advanced Group, which has enacted a variety of good laws on improving the working and wellbeing conditions of these individuals. Ultimately, employment law advanced to the field of industrial interactions, the prime purpose of which was to work as a countervailing force to rectify the disparities of negotiating power inherent in the employment agreement.

Globalisation of Labour Laws

The present state of social and political interactions between the various countries of the world is characterized by a step towards globalisation, which has contributed in both concerns and perceptions in the minds of the people in general and vulnerable i.e. backward sections of society in specific. As stated earlier, the entire objective of employment law has been structured to arrange for safe, improved and collaborative steps to ensure the environment of what the International Labour Organization (ILO) calls ‘decent jobs’ for employees.

The market-driven dynamic structure of manufacturing goods and work has intensified inequalities, unemployment and job insecurity across the globe. ‘Hollowing out of society’ has been at the origin of less respectable work. Therefore, the concept of respectable work has been gradually undermined by the acceleration of globalization mechanisms.

So far as its influence on labour is concerned, globalization is marked by both apprehensions and aspirations, while the former frequently surpasses the latter. As the Reviewer points out, while dislocation, inequality and reduced social security are seen as short-term effects, the expansion and diversification of job prospects, rising actual wages and enhancing the working standards of employees are seen to be the benefits that may result from globalization in the medium and long term. There have been widespread perceptions, that labour force would be the biggest loser, at least in the initial stage of the directional movement towards globalisation.

The misconceptions of becoming a loser in the cycle of globalization are being carried out by staff and their organisations in both industrialized and developing countries. Concerns have been voiced in industrialized countries regarding the displacement of workers in emerging countries by migration and capital changes. Besides, the consequent increase in unemployment, which is already high in most of these countries, Concerns are posed about the risk of what is sometimes known as ‘industrial dumping’ of exports of products manufactured under substandard working conditions from developing countries to industrialized countries and the danger of a ‘race to the bottom’ arising from the rivalry between manufacturers of industrialized and developing countries to reduce labour costs.

In emerging countries like India, on the other hand, globalization is also seen as a challenge to employment in established industries so far as rivalry from manufactured imports will contribute to technical improvements resulting in inefficiencies or even the closing of comparatively less productive enterprises. Furthermore, the necessity to adapt to shifting market trends and therefore to draw the greatest investment, in particular foreign direct investment, will contribute to demands for greater stability in jobs and education, resulting in a decrease of job security and social welfare and an overall decline of the standard of work. As a consequence, the most important dislocation induced by globalisation, is the job situation, legal security is being gradually undermined.

Given certain hope on the part of a few, the concept of globalization has been apprehended to have a detrimental effect on the sanctity and soundness of the employment structures produced as part of the process to provide legal security for workers. As a matter of fact, the entire discussion on the mechanisms of globalisation, which is taking place in different areas of the globe, generally revolves around the notion of structural convergence between the numerous countries on the topics of social welfare policies for citizens, aside from education and decent jobs.

The supporters of globalization are appealing for the abolition of purportedly destructive policies, such as the divisions of the Labour Commissioner, the Provident Fund associations, etc., which tend to establish barriers in the way that industry is conducted as easily and efficiently as it has been in developing countries. As a consequence, labour organizations are likely to experience tremendous pressure on their status as powerful mechanisms aimed at offering structural resources for the legal defence of workers in countries like India.

Recent Trends: Conclusion

Looking upon the current issues of employment law in India requires us to think about the application of specific legal or regulatory conventions governing workforce in a particular society. It also allows one to reflect upon what “employment law” might entail in various economic and social situations. In some respects, the employment law of India is just like the employment law of established industrialized societies. It has substantial laws providing for minimum conditions of the workforce, social welfare, health and safety at work, and so on. Its legal framework allowed labour unions and their operations to establish a mechanism for the arbitration of workplace conflicts.

However, as we’ve seen, the employment law of India explicitly covers only a very small proportion of Indian labour force, and even among that core group the interpretation of the law in practice is, to say the least. None of the two main objectives of the labour law system identified in this article appears to have been met in reality. That is, to all kinds of reasons, a nonfunctional framework.

The growth and advancement of employment law in India represents the hardship of employees in their search for benefits and compensation and dignified existence, which appears to have been put under significant restrictions with the acceleration of the mechanism of globalization in India. Largely, under influence of the persistent initiatives of the more educated and democratic people in society, essential and preventive regulation has been implemented to guarantee improved working standards at the workforce level. Eventually, the revised and inclusive law emerged amid the ongoing battle of the employees.

During independence, the body of employment laws in the country was quite exhaustive trying to cover almost all of the industrial disputes. Today, the constitution authors have expressed a broad variety of laws aimed at offering a framework for potential authorities to strive and strengthen the situation of the workforce. Even if the extremely abnormal, illegal and disruptive functioning of the system of employment laws were not sufficient, the surge of Liberalization, Privatization and Globalization (LPG) over the last few years tried to undermine the established parameters of employment law in India.

Various anti-labour steps in the sense of economic policies indicate the government’s vulnerability in India to hold back under pressure from the powerful entities behind the transition of globalization. Consequently, the obligation to improve the constitutional and substantive legal security of labour in the country lies with the workers themselves, since the cycle of globalization is likely to draw the majority, if not all, parts of society to its attractions and to make them mute observers of the weakening of the labour protection system.

  1. Agarwala, Rina, “Labour Institutions in a Globalized Era”, Economic and Political Weekly, 38(37), September 13, 2003, p. 3790.
  2. Bardhan, Pranab, “Social Justice in the Global Economy”, Economic and Political Weekly, February 3-10, pp. 467-80.
  3. Basu, Rumki, “Trade Union Movement”, in Verma, Meera, et al (ed.), Essays on the Indian Government and Politics, New Delhi, 2004, p. 446.
  4. Hensman, Rohini, “Globalization, Women and Work” Economic and Political Weekly, 3(10), March 06, 2004, pp. 1030-1034.
  5. John, J. (2007), “Overall Increase and Sectoral Setbacks: Lessons from Trade Union Verification 2002 Data (Provisional)”, Labour File, Jan-April, pp. 13-25.
  6. Parulekar, N.W., Model Manual on Labour Laws, Himalayan Publishing House, Bombay, 1993, pp. 1-2.
  7. Patibandla, Murali and Tripathy, Trilochan, “Capitalism and Cooperation”, Economic and Political Weekly, 39(27), July 03, 2004, pp. 2438.
  8. Reddy, D. Narasimha, “Challenges of Decent Work in the Globalising World”, The Indian Journal of Labour Economics, 48(1), 2005, pp. 3-17.
  9. Singh, Jaivir, “Incentives and Judicially Determined Terms of Employment in India”, Economic and Political Weekly, 38(2), January 11, 2003, pp. 123-134.

Aum Purohit from Institute of Law, Nirma University

“Aum is passionate legal guy who is always ready to work hard when it comes to legal world.”

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