Evolution of Labour Law & the Four Labour Codes — Labour Law I Notes

Evolution of Labour Law & the New Labour Codes

In the mills of 19th-century Bombay a child of ten could be kept at a machine for thirteen hours a day, and if he was maimed the law offered him nothing — he had “freely agreed” to the job. That single injustice, repeated a million times, is why labour law exists. The State stopped pretending the worker and the mill-owner were equals bargaining over tea.

Why labour law exists — from laissez-faire to industrial jurisprudence

For a plain-English start: think of an ordinary contract as a fair deal between two people of equal strength. Labour law exists because the employer–worker “deal” is never between equals — the worker has only his labour to sell and must eat tomorrow, so he takes whatever is offered.

Under 19th-century laissez-faire [French: “let it be” — the State stays out of the market] the employment relationship was treated as an ordinary contract, so courts enforced whatever wages and hours the employer set. The Industrial Revolution massed workers into factories and made their helplessness visible: long hours, child labour, unsafe machinery, starvation wages. Out of that grew industrial jurisprudence — the idea that because the two sides are unequal, the law must lean in favour of labour to make the bargain fair. This is the single idea behind every rule in this subject.

The international perspective — the impact of the ILO

Labour law is not a purely domestic story; it grew alongside an international movement. The International Labour Organisation (ILO) was created in 1919 (under the Treaty of Versailles, first as part of the League of Nations, later a specialised agency of the United Nations) on the conviction that lasting peace must rest on social justice. India has been a founding member of the ILO since 1919. Three features explain its influence on Indian labour law:

Tripartite structure. Uniquely, the ILO seats governments, employers and workers together, so labour standards are framed by all three sides of industry rather than by States alone. This tripartism is mirrored in India’s own tripartite labour bodies and in the way the Codes were framed after consulting employers and unions.
Its instruments — Conventions and Recommendations. A Convention is a treaty that binds a member State once it ratifies it; a Recommendation is non-binding guidance setting a standard to aim at. Through these the ILO framed norms on wages, hours of work, freedom of association, social security and equal remuneration.
Influence on Indian law. These international norms shaped India’s single-issue labour statutes and are reflected in the Directive Principles (Articles 39, 41, 43): ILO norms on equal pay underlie the Equal Remuneration Act 1976, and freedom-of-association norms underlie the Trade Unions Act 1926.

India answered this international lead with a series of single-issue Acts — Trade Unions Act 1926, Payment of Wages Act 1936, Industrial Disputes Act 1947, Minimum Wages Act 1948, Payment of Bonus Act 1965, Equal Remuneration Act 1976 — each solving one problem, and now consolidated into the four Codes.

The constitutional framework

Labour law is not free-floating; it is rooted in the Constitution. Labour is in the Concurrent List (Entries 22–24 of List III), so both Parliament and the States legislate on it — which is why the Codes are Central laws that still need State rules and notifications to run.

The Fundamental Rights engaged are:

Article 14 — equality before law; the basis of “equal pay for equal work”.
Article 19(1)(c) — the right to form associations or unions (the root of trade-union law).
Article 21 — life and personal liberty, read to include livelihood and humane conditions of work.
Article 23 — prohibition of forced labour and begar.
Article 24 — prohibition of employment of children below fourteen years in any factory, mine or other hazardous work.

Article 19(1)(c): “All citizens shall have the right … to form associations or unions or co-operative societies.”

Article 23(1): “Traffic in human beings and begar and other similar forms of forced labour are prohibited and any contravention of this provision shall be an offence punishable in accordance with law.”

The Directive Principles set the social-justice goals the statutes carry out:

Article 39(a) & (d): the State shall direct its policy towards securing “that the citizens, men and women equally, have the right to an adequate means of livelihood” and “that there is equal pay for equal work for both men and women”.

Article 41: “The State shall … make effective provision for securing the right to work, to education and to public assistance in cases of unemployment, old age, sickness and disablement…”

Article 43: “The State shall endeavour to secure … to all workers … a living wage, conditions of work ensuring a decent standard of life…”

Article 43A: “The State shall take steps, by suitable legislation or in any other way, to secure the participation of workers in the management of undertakings…” (inserted by the 42nd Amendment, 1976).

In Simple Terms: the Fundamental Rights protect the worker’s freedom to organise and to be treated equally; the Directive Principles tell the State to guarantee a living wage and humane conditions. The labour statutes are how those promises are kept.

The transition to the New Labour Codes (the new bit — learn this well)

Between 2019 and 2020 Parliament consolidated 29 central labour laws into four Codes:

Code on Wages, 2019 — subsumes the Minimum Wages, Payment of Wages, Payment of Bonus and Equal Remuneration Acts.
Industrial Relations Code, 2020 — subsumes the Industrial Disputes Act 1947, Trade Unions Act 1926, and Industrial Employment (Standing Orders) Act 1946.
Code on Social Security, 2020 — subsumes ESI, EPF, Maternity, Gratuity, Employees’ Compensation, etc.
Occupational Safety, Health and Working Conditions Code, 2020 — subsumes the Factories, Contract Labour, Migrant Workmen Acts, etc.

LL-I studies the first two Codes (Industrial Relations Code + Code on Wages).

🔑 Enforcement status — state this in the exam. All four Codes have been passed by Parliament and received the President’s assent, but most operative provisions are not yet in force — they await a notified common commencement date and the framing of rules by the Centre and States. So on the ground the old Acts still largely govern. Write the Code position as the law, and add one line noting that full enforcement is pending.

🧩 WORKED EXAMPLE — old Act to new Code

Facts. A worker is dismissed and wants to raise a dispute in 2024.

Rule. The Industrial Disputes Act, 1947 is being replaced by the Industrial Relations Code, 2020, but the Code’s dispute provisions are not yet notified.

Apply. He still proceeds under the ID Act 1947; once the IR Code is notified, the same right sits in the IR Code (e.g. individual dispute under s.2(q) proviso).

Conclusion. The concept is unchanged; only the statute’s name and section numbers move. Answer the Code, note the transition.

The arena of interaction — the three participants

Industrial relations is the web of dealings between three actors, with the State as a fourth supplying the machinery:

Industry — the undertaking or establishment where the work happens.
Worker — the person employed for wages, who combines into trade unions.
Employer — the person who owns or controls the undertaking.

Knowing who each participant is matters because the Code applies only when a real industry, a real worker and a real employer–employee relationship exist — the next three topics draw exactly those boundaries.

flowchart TD
    ROOT["Old single-issue Acts (1926-1976)"]:::root
    ROOT --> A["Code on Wages 2019<br/>(LL-I)"]:::leaf
    ROOT --> B["Industrial Relations Code 2020<br/>(LL-I)"]:::leaf
    ROOT --> C["Social Security Code 2020<br/>(LL-II)"]:::leaf
    ROOT --> D["OSH & Working Conditions Code 2020<br/>(LL-II)"]:::leaf
    classDef root fill:#FFF8DC,stroke:#000,stroke-width:1px,color:#000;
    classDef leaf fill:#E6F3FF,stroke:#1E3A8A,color:#000;
    linkStyle default stroke:#888,stroke-width:1px;

Case Laws

People’s Union for Democratic Rights v Union of India (1982) — non-payment of minimum wage is “forced labour” under Article 23; labour rights are constitutional.
Randhir Singh v Union of India (1982) — “equal pay for equal work” is a constitutional goal read from Articles 14, 16 and 39(d).

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