IR and Labour Laws

Unit-I, Basic Concepts

The topics covered here are: Industrial Relations and Human Resource Development Royal Commission on Labour,1928 First National Commission on Labour,1966 Main Recommendations of the Second National Commission On the Labour, 1999.

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Royal Commission on Labour,1928

The Government of India during the pre-Independence period pursued a policy of reform and repression inthe matters related to labour conditions in the colonial days. The Government appointed in 1928 the RoyalCommission on Labour with H. H. Whitley as the chairman and N. M. Joshi and Dewan Chaman Lal asmembers. The terms of reference of the commission were: To enquire into and report on the existing oflabour in industrial undertakings and plantations in British India on the health, efficiency, and the standardof living of the workers and on the relations between employers and to make recommendations. The reportof the Royal Commission on Labour came out in 1931. It is considered a monumental work. The RoyalCommission on Labour pointed out the need for systematic collection of labour statistics and observed thatthe policy must be built on facts as the uncertainty of facts would lead to confusion and conflict regardingits aim. The recommendations of the Royal Commission were generally progressive. One of therecommendations of the Royal Commission was to make the appointment of the Labour Officers in orderto establish liaison with employers and to ensure that they followed sound recruitment practices. Theseofficers were expected to ensure that employees were provided good working conditions, canteen facilitiesfor meals, fair price shops, recreation, medical, and housing facilities etc. It was as early as 1931 that theReport of the Royal Commission on Labour recommended the provision of a canteen facility to theindustrial workers.

The Commission recommended the adoption of suitable legislation enabling the Competent Authority tocollect and collate information regarding the living, working and socio-economic conditions of industriallabour.

First National Commission on Labour,1966

The first National Labour Commission was established on 24th December, 1966 under the Chairmanshipof Dr. Gajendragadkar, to study the industrial relations situation in the country and to makerecommendations for improvement. The objective was to study and review the living conditions of labourand the labour legislations since 1947. In pursuance of this legacy which involves industrial relations andeconomy, the Second National Labour Commission was brought into existence after a long gap of 33 yearsbased on the recommendation of Indian labour Conference held in September, 1992. It consisted of tenmembers.

While developing the framework for its recommendation, the Commission took into account, the emergingeconomic environment involving rapid technological change, globalization of economy, liberalization oftrade and industry, need for bringing existing laws in tune with future labour market needs and demands.Study groups were formed for detailed study and review of various laws, umbrella legislation forunorganized sector workers, globalization and its impact, social security, women and child labour, skilldevelopment training and workers education.

The report came out in 1969. The recommendations include the categorization by NCL of industries asessential and non-essential for the purpose of strikes and lockouts. The NCL recommended the constitutionof Industrial Relations Commission on permanent basis both at the state level and the centre for adjudicationin industrial disputes, conciliation, and certification of unions. It laid down the procedure for the settlementof disputes and for the recognition of trade unions. The strengthening of trade unions, the strengthening ofcollective bargaining, statutory formulation of grievance procedure are the other major recommendationsof the first National Commission on Labour. The first National commission on labour was constituted on24 – 12 – 1966 which sublimated its report in August 1969 after a detailed examination of all aspects oflabour problems both in the organized and unorganized sectors.

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The Commission recommended new labour laws on labour management relation, wages, occupationalsafety and health, small enterprise, hours of work, leave and other working condition of work place, childlabour and unorganized sector etc.

The Commission suggested that there is no need for any wage board for fixing wage rates for workers inany industry. It opined that each state or union territory should have the authority to fix minimum rates ofwage not less than national level. It also recommended linking of child labour with education by enactmentof Child Labour (Prevention and Education) Act.

The Commission recommended that there should be a policy framework in the unorganized sector thatensures the generation and protection of jobs, access to jobs, protection against the exploitation of povertyand lack of organization, protection against arbitrary or whimsical dismissal and denial of minimum wages.It also suggested that a system of welfare should include access to compensation for injuries suffered whileengaged in work, provident fund, medical care, pension benefit, maternity benefits, child care shelter andold age support.

1. Compulsory adjudication of disputes should be used only as a last resort.2. Both organizationally and financially, trade unions need to be strengthened.3. Workers’ education should be intensified for building up internal union leaderships and making

workers more knowledgeable and conscious about their rights and obligations.4. Popularized should be the idea of one plant or one industry.5. Government should encourage the parties to settle their industrial disputes by negotiation and

bipartite consultation.

The Second National Commission on Labour, 1999

The initiation of several economic reforms during the 1990s, necessitated a review of industrial relationsscenario, labour laws and other related matters and bring the desired changes to deal with the challenges offuture. Therefore, need for setting up of the Second National Commission on Labour was felt. During theperiod of three decades since the setting up of the first National Commission on Labour there has been anincrease in the number of workforce and other factors due to the growing pace of industrialization. Afterthe implementation of new economic policy in 1991, changes have taken place in the economicenvironment of the country which have in turn brought about radical changes in the domestic industrialclimate and labour market. Changes have occurred at the work places like character of employment,changes in hours of work, and overall change in the scenario of industrial relations. These changes haveresulted in uncertainties in the labour market requiring a new look to the labour laws.

In the light of the above position, the government resolved on 15 -10-1999 to set up the second NationalCommission on Labour so that a high powered body could dispassionately look into these aspects andsuggest appropriate changes in the labour legislation and labour policy. With this background the centralGovernment set up the second National Commission on Labour in 1999 under the chairmanship of RavindraVarma. The commission was entrusted to suggest, among other things, rationalization of the existing labourlaws in the organized sector so as to make them more relevant in the changing economic conditions underthe impact of globalization.

The second National Commission on Labour was expected to formulate an umbrella law to ensureprotection to workers in the unorganized sector which in the absence of growth in job opportunities in theorganized sector, is expanding at a rapid pace, absorbing school dropouts, women, and children. It is of theutmost importance to look after the welfare and interests of the workers in the unorganized sector becausethey are often made to suffer silently. They are not always paid minimum wages and even their low salariesare not paid on time besides being subject to deduction by way of commissions to middlemen.

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The terms of reference of the second National Commission on Labour are-

(a) to suggest rationalization of existing laws relating to labour in the organized sector and(b) to suggest an umbrella legislation for ensuring a minimum level of protection to the workers in theunorganized sector.

The commission took into account-

(i) follow up implications of its recommendations

(ii) The emerging economic environment involving rapid technological changes requiring response in termsof change in methods, timing and conditions of work in industry, trade and services, globalization ofeconomy, liberalization of trade and industry and emphasis on international competitiveness and the needfor bringing the existing laws in tune with the future labour market needs and demands

(iii) The minimum level of Labour protection and welfare measure and the basic institutional frame workfor ensuring the same and

(iv) improving the effectiveness of measures relating to social security, occupational health and safety,minimum wages and linkage of wages with productivity, and in particular the safeguards and facilitiesrequired for women and handicapped persons in employment.

The second National Commission on Labour submitted its report to the Government in July 2002.