UNIT 1

1. Industrial Jurisprudence
What it is:

● Think of it as the “body of law” and ideas that grew up around factories,
workers and managers in the twentieth century.
● Before Independence, courts and a few early factory laws already
touched on these issues, but after 1947 we consciously built a whole new
branch of law to deal with the employer–employee relationship on a big,
mass-production scale.

Why it mattered:

● Traditional contract law said “you and I agree, and the State won’t
interfere” (laissez-faire).
● But when huge factories employ thousands, that no-interference
approach led to terrible abuses: unsafe machines, low pay, no job
security.
● Industrial jurisprudence says: for the good of society, the State must step
in—set minimum standards, allow workers to join unions, and even let
special tribunals impose new rules that both sides must follow.

2. From “Master‐and‐Servant” to “Employer‐

Employee”
● Old view: If you put in money you were the master; if you worked you
were the servant—and you could be hired or fired at will.
● New view: Employers and employees are partners in production.
○ Employers can’t sack you on a whim—they need “just cause.”
○ Courts and tribunals can create binding agreements (even if one
side doesn’t agree) to protect everyone’s basic rights and safety.

3. Why the Change?

Industrialisation brought:

1. Huge factories with thousands of workers.

 2. Big wealth gaps: a few owners got richer and richer, while workers
stayed poor.
3. Social unrest: strikes, lock-outs, even political upheaval and wars that
drove up living costs.
4. Worker solidarity: once workers saw the power of numbers, they
formed unions and demanded better pay, hours, and conditions.
5. Democratic ideas: post-Independence India embraced equality, so the
State began to protect weaker groups—including labour.

4. Fundamental Principles of Modern Labour

Relations
Almost every industrialised country now agrees on these basics:

1. Right to Organise
○ Workers may form or join trade unions.
2. Collective Bargaining
○ Unions negotiate wages and rules on behalf of all members.
3. Acceptance of Conflict
○ Disagreements (strikes, lock-outs) are natural; better to manage
them than ignore them.
4. Welfare State
○ Government’s role is not just to stay out, but to actively ensure fair
treatment and not be a neutral onlooker (Laissez faire to welfare
state)
5. Tripartism
○ Government, employer groups and workers’ unions meet regularly
to discuss and resolve issues.
6. State Intervention
○ When talks fail, the State steps in to protect the larger social good
and weaker side.

7.

1. “Industrial jurisprudence developed only after

Independence”

● Before 1947, India’s courts and early Factory Acts tinkered around the
edges of worker protection—things like limiting child labour or unsafe
machines—but did not form a cohesive legal philosophy.
● After 1947, the new Constitution (especially the Fundamental Rights
and Directive Principles) gave us a clear set of values—social justice, fair
treatment, and the right to form unions—that underlie all labour law. It
 wasn’t just isolated statutes anymore but a coherent body of law and
policy: industrial jurisprudence.

2. “Why it matters”

● Large-scale factories create millions of employer–employee relationships.

If left entirely to “freedom of contract,” weaker parties (the workers) tend
to lose out. Industrial jurisprudence steps in with minimum standards,
collective bargaining rights, and dispute-resolution machinery to ensure
social justice in the workplace.
● Parliament writes the laws (Factories Act, Industrial Disputes Act, etc.);
the Supreme Court and labour tribunals interpret them in light of
constitutional values.

3. “Its scope—and its limits”

● Scope: Applies wherever there is an employer and employees in an

organized setting (factories, mines, large offices, etc.). It covers
everything from wages and hours to safety, social security, union rights,
and dispute resolution.
● Limits: Many millions of Indians still work in small, unregistered
establishments (home-based work, agricultural labour, casual daily-wage
earners). Their relationships often remain governed by ordinary contract
law (master–and-servant or “laissez-faire” principles), because the
machinery of industrial jurisprudence doesn’t reach them.

4. “A developing concept, rooted in social justice”

● Social justice isn’t a fixed thing—it evolves as society’s needs and values
change (for example, adding maternity leave, expanding social security,
or recognizing gig-workers). Industrial jurisprudence grows alongside
these changes.
● Courts and tribunals must balance two goals:
1. Social justice—protecting the weaker party, ensuring humane
conditions.
2. Legal certainty—respecting established legal rules, contracts, and
property rights.

5. “Industrial jurisprudence is a species of the same genus as

general jurisprudence”

● Think of general jurisprudence as the umbrella theory of “What is law?

How do rights and duties arise?”
● Industrial jurisprudence is a specialized branch, like traffic law or
family law. It applies the same basic legal principles—contracts, rights,
obligations—but with special rules tailored to the employer–employee
 context (e.g., minimum-wage statutes, unfair-labor-practice prohibitions,
collective bargaining frameworks).

Analogy: Just as medical jurisprudence applies core legal ideas to

questions of doctors, hospitals, and patients, industrial jurisprudence
applies them to factories, managers, and workers. It cannot—and
should not—abandon the core of “law” itself, but it layers on extra
safeguards to achieve social justice in the world of work

LABOUR POLICIES IN INDIA

. . From Self-Reliance to Government Reliance

1. Early Emphasis on Worker Self-Reliance (1947–54)

● In the immediate aftermath of Independence, policy-makers like

V. V. Giri urged workers to take charge of their own destinies.
● Official pronouncements stressed skill-building, union-formation
and collective upskilling — the idea being that an assertive,
organized workforce would command better conditions without
heavy State support.

2. The Counter-View: Reliance on the State

● Equally persuasive voices argued that newly freed India needed a

strong, proactive State to safeguard vulnerable workers, who
lacked bargaining power and could easily be exploited in the rush
for industrial growth.
● This school of thought held that leave-the-market-alone
(laissez-faire) was untenable in a society still emerging from
colonial inequalities; only the State could guarantee minimum
standards and equitable progress.

Emergence of Tripartism
The tug-of-war between self-reliance and State intervention gave birth to
tripartism — a three-party consultative process, which remains the cornerstone
of India’s labour policy.

1. What Is Tripartism?

● Definition: A formal dialogue mechanism bringing together

representatives of:
1. Workers’ unions (trade unions)
2. Employers’ associations
3. The Government-MOST IMPORTANT ROLE
 ● Role: Advisory rather than decisional—members meet, discuss
contentious issues, and strive for consensual recommendations.

2. Institutions of Tripartism(They were the chief institutions of

tripartism)

● Annual Labour Conferences: Premier forum since the 1950s for

national-level tripartite dialogue.
● Standing Labour Committees: Smaller, permanent bodies tasked with
examining specific policy questions year-round.

3. Landmark Outcome: Code of Discipline (1958)-16th conference

● Pledged all parties to:

○ Give prior notice before strikes or lock-outs.
○ Avoid unilateral actions and coercive tactics.
○ Adhere to agreed grievance-settlement procedures.
● This voluntary code set behavioural norms that smoothed industrial
relations long before statutory enforcement mechanisms were robust.

Tripartism is a method that focuses on the idea that both workers

(labour) and employers (capital) share common interests.It sees them as
partners who work together to keep production running smoothly and
help grow the country's economy.India’s labour policy is based on the
understanding that not just employers, but the whole community, has a
responsibility to protect workers' welfare and make sure they get a fair
share of the benefits from economic growth.

C. The Payment of Bonus Act, 1965

● Why It Mattered: Recognizing that profits alone should not enrich
owners, the Act mandated a share of annual profits (or a
productivity-linked sum) to be paid as bonus to workers.
● Core Features:
○ Applicable to factories and certain establishments employing 20+
persons.
○ Guarantee of a minimum bonus (currently 8.33% of salary) and a
maximum capped amount.
○ Calculations based on either profits or production/output,
whichever is higher.

D. Eleven Postulates of India’s Labour Policy

Below are the guiding principles that have shaped every major labour
enactment since Independence:

1. State as Custodian of Social Good

○ The government must champion community welfare, driving
social-uplift programmes rather than remaining a passive umpire.
2. Right to Peaceful Direct Action
○ Workers may resort to strikes or demonstrations—provided they
are peaceful and follow due notice—when all other remedies fail.
3. Encouragement of Mutual Settlement
○ Collective bargaining, mediation and voluntary arbitration are to
be preferred over adversarial litigation.
4. State Intervention for the Weaker Party
○ Where bargaining power is unequal, the State will step in—often
on behalf of labour—to secure equitable terms.
5. Primacy of Industrial Peace
○ Continuous production and harmony in workplaces are vital for
national economic health; disruption must be minimized.
6. Partnership Model between Employers and Employees
○ Both parties are seen as co-builders of industry and economy;
shared goals replace zero-sum competition.
7. Fair Wage Standards and Social Security
○ Statutory floors for wages, provident funds, insurance schemes and
retirement benefits are non-negotiable.
8. Co-operation to Augment Production & Productivity
○ Better industrial relations foster higher output and more efficient
use of resources.
9. Vigilant Enforcement of Legislation
○ Laws mean little without inspectors, labour courts and tribunals to
ensure compliance and resolve breaches.
10.Elevation of Worker Status
● Workers are recognized as dignified contributors to nation-building, not
mere ‘hands’ or cogs in the machine.
11.Tripartite Consultation as a Permanent Mechanism
● Ongoing dialogue among Government, employers and unions shapes
policy, pre-empts disputes and refines the legislatory framework.

In Sum:
India’s post-Independence labour policy navigated between self-reliant unions
and State-led protection, ultimately forging tripartism as its operational heart.
Layered atop this are statutory schemes like the Bonus Act and a rich tapestry
of eleven policy postulates—all designed to balance productivity, fairness,
worker dignity and social justice in our rapidly industrializing nation.

Industrial Revolution in India

Industrialisation in India, like in other countries, meant the rise of
factories and a shift to a system where people worked for wages.
Even though different factories and workers had different conditions, some
things were common—and those common patterns are important to
understand.

When factories started, they were mostly located in a few key cities. So,
workers from villages migrated to these citiesto find jobs, because they
couldn't earn enough in their villages.

As factories produced goods using machines, these goods were cheaper and
faster to make compared to handmade village products.
As a result, village handicrafts couldn’t compete, and many artisans lost
their traditional work.

The biggest change was that a skilled craftsman, who once worked
independently in villages, was now reduced to being a factory wage worker.
So, industrial growth forced village workers to move to cities, where they
had to take up jobs in factories to survive.

EVILS OF INDUSTRIALISATION-

ECONOMIC EVILS:

1. Loss of Creative Satisfaction and Mental Development

● In the handicraft system, artisans made entire products by themselves,

which gave them pride and creative satisfaction.
● Industrialisation introduced the factory system, where workers
performed only a small part of the job.
● Tools, machines, and raw materials were owned by the employer, and
work was done in the employer’s factory.
● The worker became just a machine operator, with no control over the
final product.
● Resulted in loss of personal connection to the work and suppressed
creativity and mental development.

2. Inadequate Wages

● Factory workers were paid very low wages, especially in the early
industrial phase.
● City life was much more expensive than rural life – food, housing,
clothing, etc.
● The wages did not meet even the basic needs of workers and their
families.
● This led to poverty, poor living conditions, and health problems
among industrial workers.
3. Job Insecurity and Unemployment

● Workers had no job security—employers could dismiss them at any time

without reason.
● There were no legal protections, contracts, or rights in place for
workers.
● Due to trade cycles and overproduction, factories would shut down or
reduce workforce.
● This led to frequent unemployment or underemployment, causing
stress and financial instability for workers.

SOCIAL EVILS

1. Overcrowding and Poor Living Conditions

● Factories brought not just economic, but also social problems.

● Large-scale migration from villages to industrial towns led to
overcrowded cities.
● This resulted in the growth of insanitary slums and acute housing
shortages.
● Poor housing and unhygienic conditions negatively affected the health,
morality, and social life of the workers.

2. Hazardous and Strenuous Factory Work

● Work in factories was physically hazardous and extremely

exhausting.
● Long duty hours, no proper rest, and no recreational facilities made
working life difficult.
● Machines were carefully maintained by employers, but little to no
attention was given to the safety or well-being of workers.
● The worker’s welfare was not a priority, and they were treated as mere
tools in the production process.

3. Accidents and No Compensation

● Machines were not properly screened or guarded, increasing

accident risks.
● Workers were regularly exposed to serious and even fatal accidents.
● Accidents were considered a normal part of factory work.
● If a worker met with an accident and was injured:
○ They were often terminated from employment.
○ They had no legal right to compensation or support from the
employer.
4. Low Wages and Family Exploitation

● Wages paid to workers were very low and insufficient for a decent
living.
● These wages were the only source of income for the entire family.
● Due to the high cost of living, workers had to find ways to supplement
their earnings.
● As a result:
○ Wives and children of the workers started working in factories.
○ Factory owners exploited the situation by employing them at
extremely low wages, with no concern for their physical
health or conditions.
○ This led to widespread exploitation of women and child
labourers.

5. Labour Problems Due to Harsh Conditions

● The harsh social conditions made it very difficult for workers to

adjust.
● The overall situation — bad living conditions, risky work, no security, and
family exploitation — led to conflict.
● There was no harmonious relationship between employers and
labourers.
● These tensions and poor conditions gave rise to what we now call labour
problems, such as:
○ Strikes
○ Lock-outs
○ Low productivity
○ Industrial disputes

LABOUR PROBLEMS

1. Seriousness of Labour Problems

● Labour problems became a major threat to society during early

industrialisation.
● These issues needed urgent action—not necessarily to eliminate them
completely, but at least to reduce (mitigate)them from the beginning.

2. Employer Neglect of Human Labour

● Employers focused only on maintaining machines and improving

technical skills, while neglecting human labour.
● Workers were treated as easily replaceable tools rather than as people.
● Their physical and mental well-being was not a concern for the employer.

3. Poor Socio-Economic Condition of Workers

 ● Workers were mostly illiterate, poor, and unaware of their rights.
● Their socio-economic status was far below that of the employer.
● They could not negotiate fairly for wages, working hours, or leave.
● Due to lack of options, they were forced to accept whatever terms the
employer imposed, as the job was their only livelihood.

4. Government and Judicial Inaction (Pre-Reform Period)

● Initially, the Government and courts ignored labour problems.

● The dominant philosophy was non-interference and freedom of
contract.
● This hands-off approach allowed exploitative conditions to worsen,
harming workers and society.

5. Role of Philanthropic Organisations and Social Reformers

● Organisations such as:

○ Servants of India Society
○ Social Service League
○ Industrial social workers
raised awareness about worker exploitation.
● These efforts mobilised public opinion in favour of reforms and worker
welfare.

6. Formation of Labour Unions

● Workers began to form organisations and unions to defend

themselves.
● Initially, they were unsuccessful due to:
○ Weak bargaining power
○ No financial backup when wages stopped
● Despite difficulties, this marked the beginning of collective labour
resistance.

7. Shift in Employer Attitude

● Some progressive employers recognised that poor labour conditions

harmed productivity.
● They realised that investing in worker welfare was beneficial:
○ A satisfied worker = better efficiency and output.
● This led to voluntary reforms in working conditions by some employers.

8. Government Intervention Becomes Necessary

● Over time, the Government recognised the gravity of the situation.

 ● Workers made up a large section of society, and their issues couldn’t
be ignored.
● Labour unrest had the potential to disrupt national industries and the
economy.
○ Disruption in key industries (e.g., energy, transport) could
paralyse the entire economic system.
● Therefore, preventing industrial conflict became a part of national
policy.

9. Labour Reforms After Independence

● After 1947, the national government began focusing on improving

labour conditions.
● Realised that industrial growth was vital to national prosperity.
● Recognised that no industry can grow without industrial peace and
cooperation.
● Labour must be seen as a partner in production, not just a cost.

10. Ensuring Labour’s Share and Rights

● Workers should be given:

○ Fair working conditions
○ A reasonable share in profits
○ Recognition of their role in increasing production
● This approach supports social justice and social security.

11. Constitutional Support – Social Justice

● The Constitution of India guarantees social justice to all citizens.

● Social justice means achieving fair economic conditions and equality
in society.
● Labour is entitled to just wages, job security, and dignity in the
workplace.

12. Labour Legislation as a Tool of Social Engineering

● Labour law is one of the most dynamic and socially impactful

branches of law.
● It goes beyond regulating employment—it plays a key role in shaping a
just society.
● Labour law requires a distinct legal philosophy (jurisprudence) to
explain and expand its goals.
● It is a powerful tool for social reform and economic balance.

Industrial Peace and Industrial Harmony

Though the terms Industrial Peace and Industrial Harmony are often used
interchangeably, they differ significantly in their nature, scope, and impact.
The following points highlight the key differences:

Basis of Industrial Peace Industrial Harmony

Distinction

1. Nature of Negative and restrictive Positive and comprehensive

Concept

2. Core Refers to the absence of Refers to the presence of

Meaning industrial disputes, cooperation, understanding,
strikes, or lockouts and mutual respect

3. Focus Emphasises avoiding Emphasises building healthy,

conflict productive relationships

4. Aims at preventing strife Promotes a sense of partnership

Relationshi between employers and between employers, employees,
p Between workers and the community
Parties

5. Impact May or may not lead to Directly linked to better

on higher productivity productivity and workplace
Productivity morale

6. Can exist even in the Depends on mutual trust,

Dependency absence of mutual trust dialogue, and cooperation

7. Role in Maintains status quo and Actively supports economic

Economic avoids disruption development by fostering
Growth engagement and participation

8. Seen mainly as a concern Seen as a matter of national

Involvement between employers and and community interest
of employees
Community

While Industrial Peace ensures stability by avoiding disruptions, Industrial

Harmony ensures progress through active cooperation. For sustainable
industrial development, harmony is more desirable than mere peace, as it
promotes collaboration and mutual growth.

Industrial Relation(Look into approaches of IR):

1. Industry as a Social Microcosm

An industry functions like a small version of society. It engages diverse human
groups—employers, workers, supervisors—and serves not only to produce goods
but also to provide employment. The relationship among these various groups is
the core subject of industrial law and is what we refer to as industrial relations.

2. Industrial Relations and Industrial Democracy

Industrial relations are essential for creating and maintaining industrial
democracy, where all members of an industry, especially workers, have a say
in decisions. These relations ensure fair participation, protect workers’ rights,
and promote a collaborative workplace culture.
3. Role of Economic Activity
Economic activity lies at the heart of industrial relations. The economic
system of a country heavily influences how industries operate, and in
turn, industrial relations impact the structure and order of society. Thus,
industrial relations are not isolated—they are integral to the nation's
socio-economic fabric.

4. Industrial Revolution and Material Needs

Industrial revolutions were driven by humanity’s need to improve
material conditions. However, they also created social imbalances, as
those who worked in industries did not control them. The ownership of
production remained with a few, resulting in exploitation and
inequality.

5. Unequal Wealth Distribution

Industrialisation led to a scenario where the dominant class—the owners
of industry—benefitted the most. They controlled resources and profits,
while workers remained economically weak, leading to unjust and
unequal wealth distribution.
6. Need for State Intervention
Due to the growing imbalance and unrest in industrial relations, it
became necessary for the State to step in. If left unchecked, such
imbalances could threaten the State’s role as a neutral guardian of public
welfare and social order. Intervention was crucial to maintain justice and
peace.
7. Industrial Peace and National Progress
Economic development is impossible without industrial peace, which
depends on fair and regulated industrial relations. This makes industrial
relations a matter of national importance, not just a private issue
between employers and workers.
8. Industrial Relations as a Community Concern
Industrial relations affect the entire community, not just those directly
involved in the industry. Therefore, the State has a duty to protect
broader social interests and promote fairness through regulations and
welfare measures.
9. Preventing Exploitation of the Weak
One key reason for government regulation is to protect workers (the
weaker section) from being exploited by employers (the stronger
section). Social justice demands this protection and active intervention to
correct power imbalances.

10. Shared Responsibility for Industrial Disorders

Industrial issues cannot be blamed solely on employers. The State is
equally responsible if it fails to provide safeguards or legal frameworks.
A just social order depends on both responsible industrialists and
proactive governance.

11. Labour Laws as Tools for Social Justice

Labour legislation stems from the broader principle of social justice. It
aims to correct structural inequalities and ensures fair treatment and
opportunities for workers. Legal regulation is thus not optional—it’s
essential for justice and order.
12. Role of National Policies and Socio-Economic Goals
The extent to which government regulates industrial relations depends
on the nation’s economic goals and labour policy. These reflect the
country’s commitment to justice, welfare, and equitable development.
13. Addressing Social Imbalance Through Law
The scope of industrial regulation also depends on how imbalanced the
society is. Where deep inequality exists, stronger legal action and
social adjustment are required to uphold harmony and fairness.
14. The Limits of Technological Progress
Technological progress alone cannot reduce inequality. In fact, it can
widen the social gap if not accompanied by thoughtful social policies.
Therefore, industrial growth must be supported by social development.
15. Importance of Social Sciences
To truly reform industrial relations, the State must invest in research
and education in social sciences. These disciplines help understand
societal needs and design policies aligned with social justice and
national growth.
Summary

Industrial relations are deeply connected to the economic system,

social justice, and national development. They require active
participation from employers, employees, and most importantly, the
State. Legal frameworks, policy-making, and social research are key to
achieving balance, fairness, and industrial peace.

PRINCIPLES OF LABOUR LEGISLATIONS

1. Social Justice
Meaning and Scope

● Definition & Components:

Social justice involves:
a) Equitable distribution of industrial profits between employers
and workers.
b) Protection of workers from health, safety, and moral hazards in
industrial employment.
● Early Position of Workers:
Originally, workers were treated as mere wage-earners without
protection.
Hazards were seen as incidental, and workers had no legal remedy
for injury until 1923.
● Significant Legislation under Social Justice:
○ Workmen’s Compensation Act, 1923 – Provided compensation
for injuries at work.
○ Minimum Wages Act, Factories Act, Payment of Wages Act –
Covered wages, working hours, safety, and welfare.
● Constitutional Mandate:
Labour welfare in India aligns with the Constitution:
○ Article 38: Calls for a social order informed by justice—social,
economic, and political.
○ Article 39: Directs the State to apply principles of social
justice while making laws.

2. Judicial Perspectives on Social Justice

● Justice Bhagwati:
Social justice must have a solid, rational foundation—not be based
on arbitrary ideas.
● Justice Gajendragadkar:
Described it as a “living concept of revolutionary import”.
It sustains the rule of law and fuels the idea of a welfare State.
● Supreme Court Reference:
Section 17A(1) of the Industrial Disputes Act (after 1956
amendment) is one of the few legal references to “social justice”.

3. Balance and Limits of Social Justice

● Balancing Interests:
Social justice is not about favouring labour while disregarding
employers.
It is neutral and aims to balance both sides—employers and
employees.
 ● Relation to Other Laws:
a) Subordinate to Fundamental Rights and other constitutional
provisions.
b) Cannot override Industrial Law or Supreme Court rulings.
c) Does not permit action against legal principles.

4. Social Justice and State Duty

● Government's Responsibility:
Social justice is a State obligation, not a charitable act.
Inspired by Roosevelt’s philosophy—it is a social duty to help the
less fortunate.
● Broader Impact:
The concept addresses inequalities of birth, opportunity, and
wealth.
It is meant to provide material necessities and equalise
opportunities.

5. Social Justice in Industrial Law

● Central Role in Industrial Relations:

Social justice is integral to industrial law—it guides legislation and
adjudication.
● Aim:
To eliminate socio-economic disparities and find just and fair
resolutions to worker-employer conflicts.
● Constitutional Support:
Though undefined in legislation, it remains the guiding principle for
enacting labour laws aimed at equity and justice.

6. Social Justice vs. Legal Justice

● Nature of Difference:
○ Legal justice focuses on individual rights and formal
contracts (e.g., under the Master-Servant doctrine).
○ Social justice addresses class disparities and applies
unorthodox, flexible methods rooted in human welfare.
● Philosophical Foundation:
Social justice is seen as a philosophy that enhances legal systems,
going beyond rigid law to achieve fairness at a societal level.

7. Social Equity – Meaning and Application

● Definition:
Social equity means adopting standardised legal norms based on
 current and historical social realities. It forms the foundation for
forward-looking labour legislation.
● Legislative Standards:
Once a standard is enacted (e.g., minimum wage), it remains
unchanged until legally amended. The administering authority
cannot alter it arbitrarily.
● Flexibility Through Rule-Making Powers:
To maintain flexibility, many labour laws delegate rule-making
power to the Government:
○ These rules can be adapted over time to match changing
social and economic conditions.
○ Such adaptability reflects the principle of social equity.
● Legislation Based on Social Equity:
○ Focuses on justice across different classes rather than just
individuals.
○ Seeks to reflect fairness and adaptability within statutory
frameworks.

Conclusion

● Labour legislation in India is deeply rooted in the principles of

social justice and social equity.
● Social justice is aimed at achieving fairness between classes
(employer and employee) and ensuring constitutional goals of
equality.
● Social equity, on the other hand, ensures that laws remain relevant
and just over time, giving the State room to adapt to changing
societal conditions.

2.SOCIAL SECURITY

1. Concept and Need for Social Security

● Root Cause:
Conflict over fair distribution of industrial output between
employer and employees is central to labour problems.
Two key manifestations:
○ Collective bargaining
○ Industrial conflict
● Impact of Industrialisation:
○ Alienates workers from their traditional community
structures.
 ○ Leads to income and job insecurities.
○ New industrial order lacks structural provisions for risks like
sickness, maternity, old age, and unemployment.
● Breakdown of Traditional Support:
In earlier village setups, community/family took care of individuals
in times of need.
Urbanisation has eroded these support systems, leaving workers
vulnerable.

2. Definition and Meaning

● ILO Definition (1942):

Social security is a collective protection against risks and
uncertainties that an individual with limited means cannot face
alone.
● V.V. Giri’s View:
Social security guarantees freedom from want and distress,
forming a core of welfare policy.
● Report of National Commission on Labour (1969):
Social security ensures stability and protection amid modern
economic challenges, helping to establish a welfare state.

3. Forms of Social Security

● Social Assistance Scheme:

○ Funded via taxation.
○ Benefits to the poor, granted as a right, to meet basic needs.
● Social Insurance Scheme:
○ Contributory in nature: worker + employer + state
contribute.
○ Benefits are earned and help maintain standard of living in
times of hardship.

4. Objectives and Significance

● Aims of Social Security:

1. Protection from social risks (accidents, old age,
unemployment, sickness).
2. Upholds human dignity and social justice.
3. Recognises that every contributing citizen deserves
protection in times of vulnerability.
● Two-fold Importance:
1. Welfare State Goal – Foundation for social development.
 2. Productivity Boost – Ensures healthier, more secure and
efficient workforce.
● Economic Justification:
Rather than being a burden, social security is a productive
investment for economic growth and industrial stability.

5. International Recognition

● Universal Declaration of Human Rights (UDHR), Article 22:

Every individual has the right to social security, to ensure dignity
and free personal development.
● UDHR, Article 25:
Every person has the right to:
○ Adequate standard of living (food, housing, healthcare).
○ Security in case of sickness, unemployment, disability,
widowhood, old age.
● ILO Convention on Social Security (1952):
Sets minimum global standards for social security systems, guiding
worldwide development.

6. Social Security Laws in India

1. Workmen’s Compensation Act, 1923:

○ Ensures compensation for personal injury due to
employment.
2. Employees' State Insurance (ESI) Act, 1948:
○ Provides medical, sickness, maternity, disablement, and
dependant benefits.
3. Employees' Provident Funds and Miscellaneous Provisions Act,
1952:
○ Ensures retirement and post-retirement benefits (Pension,
Provident Fund, Insurance).
4. Maternity Benefit Act (National and State versions):
○ E.g., U.P. Act, 1962.
○ Grants maternity leave and benefits to women workers.
5. Industrial Disputes Act, 1947:
○ Provides compensation for retrenchment and lay-off.

7. Conclusion

● Social security is not charity, but a state obligation rooted in

justice.
● It's essential for a welfare-oriented democracy.
 ● Enhances productivity, reduces industrial disputes, and contributes
to social peace and economic development.

Growth of Labour Legislation in India

1. Historical Background

● Pre-British Era:
India was not just an agrarian economy but also a major
manufacturing hub. Indian looms fed markets in Asia and Europe.
● British Economic Policy:
○ Aimed at de-industrializing India to support British
industries.
○ Discouraged Indian manufacturing; promoted cultivation of
raw materials only.
○ Resulted in economic subjugation and dismantling of India’s
industrial base.

2. Rise of Indian Nationalism and Swadeshi Movement

● Reaction to British Oppression:

○ Led to a vigorous renaissance and national awakening.
○ Economic nationalism emerged, demanding economic reform
and industrialisation.
● Swadeshi Movement:
○ Emphasised use of indigenous goods.
○ Called for boycotting British goods.
○ Boosted domestic industry and gave impetus to Indian private
sector growth.
● Indian Economists:
○ Initially influenced by British classical economists.
○ Later developed ideas of free trade and indigenous economic
planning suited to Indian conditions.

3. Legislative Control Begins with Plantation Industry

● First Target – Assam Plantation Industry:

○ Recruitment methods were exploitative and inhumane.
○ Workers hired through contractors, with restricted mobility
once employed.
● Initial Laws (1863 onwards):
○ Focused more on protecting employer interests than workers’
rights.
4. Key Labour Legislations Over Time

Protective & Social Security Laws:

● Factories Act, 1881 – First formal regulation of working conditions.

● Mines Act, 1901 – Regulated safety in mining operations.
● Workmen's Compensation Act, 1923 – Landmark legislation
ensuring compensation for workplace injuries.
● Employees’ State Insurance Act, 1948 – Medical and social security
cover.
● Employees’ Provident Fund Act, 1952 – Provident fund and
retirement benefits.
● Maternity Benefit Act, 1961 – Maternity leave and benefits for
women workers.

Labour-Management Relations:

● Trade Unions Act, 1926 – Legalised and regulated trade unions.

● Industrial Disputes Act, 1947 – Mechanism for resolving industrial
disputes.
● Industrial Employment (Standing Orders) Act, 1946 – Required
employers to define service conditions.

Welfare & Minimum Standards:

● Factories Act, 1948 – Comprehensive regulation on working hours,

health, safety.
● Minimum Wages Act, 1948 – Guaranteed minimum wage standards.
● Payment of Wages Act, 1936 – Ensured timely and fair payment of
wages.
● Payment of Bonus Act, 1965 – Regulated bonus payments linked to
company profits.

5. Post-Independence Developments

● Shift in Policy:
○ Labour law became aligned with the goals of industrial
regeneration and economic planning.
○ Emphasis on protecting labour rights while encouraging
industrial peace and productivity.
● Role of Public Opinion:
○ Increased public awareness and legislative intervention
improved working conditions.

6. Responsibilities of Employers
 ● Lack of Employer Initiative:
○ Many employers remained reluctant to accept reforms.
○ Continued with acquisitive capitalist tendencies.
● Need for Mindset Shift:
○ Employers must accept labour as co-partners in industry.
○ Should offer fair wages, humane conditions, and include
workers in decision-making.
● Shared Responsibility for Growth:
○ Workers’ welfare leads to higher productivity and benefits all
– employers, workers, and the community.

7. Role of Workers and Trade Unions

● Duty of Workers:
○ Focus on responsibility and discipline.
○ Avoid violence, sabotage, and exploitation of rights.
● Ideal Industrial Democracy:
○ Workers must understand their duties and not confuse liberty
with licence.
○ Co-operation between workers and management is essential
for sustainable growth.

8. Vision for the Future

● A socialist democracy in India requires:

○ Mutual respect and co-operation.
○ Equitable profit-sharing.
○ A commitment to industrial peace and social justice.
● Industry cannot thrive on machinery alone – human involvement
and morale are key to success.

Conclusion

Labour legislation in India has evolved from colonial exploitation to

becoming a pillar of the welfare state. For continued progress, a
collaborative industrial ecosystem is essential, where both employers and
workers recognize their shared responsibilities in nation-building.

Industrial Adjudication – Meaning and Purpose

1. Definition: Industrial adjudication refers to the legal process of

resolving industrial disputes between employers and employees
through judicial or quasi-judicial authorities like Labour Courts,
Industrial Tribunals, and National Tribunals.
2. Objective:
 ○ To uphold social and economic justice as per the
Constitution.
○ To assist the State in resolving industrial disputes.
○ To promote industrial peace and economic justice.

Twin Goals of Industrial Adjudication

3. Industrial Peace:
○ Restoring harmony between labour and capital.
○ Boosting productivity and economic development.
4. Economic Justice:
○ Ensuring fair wages and working conditions.
○ Preventing exploitation and promoting equitable wealth
distribution.

Constitutional and Social Basis

5. Guided by Directive Principles of State Policy (Art. 38, 39, etc.).

6. Democratic Socialism:
○ Emphasis on planning and social welfare.
○ Industrial adjudication must align with the social and
economic policies of the State.
7. Rejection of Laissez-Faire:
○ Theories like "hire and fire" and "supply and demand" are no
longer valid.
○ Modern adjudication considers fairness and social
conscience.

Principles Guiding Industrial Adjudication

8. Public Interest:
○ Industrial adjudication must serve the interests of society as
a whole.
○ Public interest includes economic stability, social justice, and
peace.
9. Industrial Harmony:
○ Promotes mutual trust and cooperation.
○ Recognizes the role of trade unions and fair working
conditions.
10. Development of Industrial Justice:
○ Seeks to remove root causes of conflict.
○ Advocates equitable distribution of profits and recognition of
workers’ rights.
11. Equality:
○ Equal pay for equal work.
 ○ Equality in opportunity and treatment.

Adjudication Process and Legal Considerations

12. Balancing Claims:

○ Adjudication must balance freedom of contract with demands
of social justice.
13. Case-by-Case Basis:
○ Broad principles must be avoided.
○ Every case must be decided on its unique facts and
circumstances.
14. Judicial Manner:
○ Tribunal must ensure:
■ Proper evidence.
■ Opportunity for cross-examination.
■ Reasoned and objective conclusions.
15. Expert Assistance:
○ Tribunal may seek help of technical experts when needed.
○ Ensures informed and fair decisions.
16. Socio-Economic Effects:
○ Awards must consider their wider impact on economy and
industry.
17. Expediency is No Excuse:
○ Awards must be just, not merely convenient.
○ Decisions should not be influenced by what might satisfy the
parties temporarily.
18. Acceptability of Decisions:
○ Awards should be workable and enforceable.
○ Efforts should be made to reach compromise if possible.
19. Natural Justice:
○ Right to reasons is part of sound justice.
○ Tribunals must give reasoned orders.

Important Case Law

20. State of Mysore v. Workers of Gold Mines (AIR 1958 SC 923):

○ Industrial adjudication must balance competing interests
fairly and justly.
21. UCO Bank v. Sushil Kumar Saha (2012 IV LLJ 593 SC):
○ AGMs were empowered to initiate disciplinary proceedings
per internal regulations.
○ Supreme Court upheld validity of disciplinary action despite
HC quashing it.
 22. Associated Cement Companies Ltd. v. Their Workmen (AIR
1959 SC 967):
○ Tribunals must act judicially with objective and well-reasoned
decisions.

Conclusion

23. Role of Industrial Adjudication:

○ Ensures that labour disputes are resolved fairly, keeping in
mind social justice.
○ It is a key mechanism to maintain industrial peace, boost
productivity, and uphold the welfare of the working class.
24. Need for Rational Labour Policy:
○ Must aim for maximum national income, equitable
distribution, and economic stability.
25. In Summary:
○ Industrial adjudication is not merely a legal exercise but a
tool for achieving social transformation, economic equity, and
harmonious labour relations in line with constitutional goals.

ILO (REFER ADDITIONAL NOTES)