Unit I — Introduction to Industrial Relations

“Universal and lasting peace can be established only if it is based upon social justice.” — Preamble, ILO Constitution, 1919

Evolution of Labour Law — A Timeline

flowchart LR
    A["1800s — Industrial Revolution\nChildren in mills, no rights"]:::old
    A --> B["1919 — ILO created\nTreaty of Versailles"]:::milestone
    B --> C["1926 — Trade Unions Act\nProtection from conspiracy suits"]:::milestone
    C --> D["1947 — Industrial Disputes Act\nSettlement machinery"]:::milestone
    D --> E["1948 — Factories Act\nMinimum Wages Act"]:::milestone
    E --> F["2002 — Second NCL\nRecommends consolidation"]:::modern
    F --> G["2019–2020 — Four Labour Codes\n29 old Acts → 4 Codes"]:::current

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    classDef milestone fill:#ADD8E6,stroke:#1E3A8A,color:#000;
    classDef modern fill:#D8F0D8,stroke:#1B5E20,color:#000;
    classDef current fill:#FFF8DC,stroke:#000,stroke-width:2px,color:#000;
    linkStyle default stroke:#888,stroke-width:1px;

Key shift: From master–servant (employer commands, worker obeys) → employer–employee (both governed by statute). The worker is no longer a mere contracting party; he has a defined legal status.

The Four Labour Codes

Second National Commission on Labour (2002) — chaired by Ravindra Varma — recommended merging 40+ central labour laws into broad Codes. Parliament enacted all four between 2019 and 2020.

flowchart TD
    NCL["Second NCL 2002 — Merge 40+ laws into Codes"]:::root
    NCL --> C1["Code on Wages 2019\nReplaces: MWA 1948, PWA 1936,\nPBA 1965, ERA 1976"]:::code
    NCL --> C2["Industrial Relations Code 2020\nReplaces: IDA 1947, TUA 1926,\nIESO Act 1946"]:::code
    NCL --> C3["Code on Social Security 2020\nReplaces: EPF, ESI, Gratuity,\nMaternity Benefit + 5 more"]:::code
    NCL --> C4["Occupational Safety Code 2020\nReplaces: Factories Act 1948\n+ 12 others"]:::code

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For Labour Law I — only two Codes matter: The IR Code 2020 (Units I–IV) and the Code on Wages 2019 (Unit V).

Definition of ‘Industry’ — Sec. 2(p) IR Code 2020

Old test: Bangalore Water Supply v. Rajappa (1978) — Supreme Court (7-judge bench) gave a broad three-part test. The IR Code 2020 has now codified and narrowed it.

flowchart TD
    IND["INDUSTRY — Sec. 2(p) IR Code 2020"]:::root
    IND --> Y["Systematic activity\n+ Cooperation between employer and worker\n+ For production of goods or services"]:::yes
    IND --> N["Excluded Categories"]:::no
    N --> E1["Sovereign functions — courts, legislature, police"]:::excl
    N --> E2["Charitable / religious activity without commercial character"]:::excl
    N --> E3["Khadi and village industries"]:::excl
    N --> E4["Activity of hospitals / educational institutions\nif run without commercial motive"]:::excl

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Bangalore Water Supply Test (Still Cited)

Bangalore Water Supply v. Rajappa (1978) — held that municipalities, hospitals, and even charitable organisations could be “industry” if they carried on systematic activity with employer–worker cooperation. The IR Code 2020 partly overrides this by expressly excluding sovereign and charitable functions.

Industrial Dispute vs Individual Dispute

Conversion rule: An individual dispute can become an industrial dispute if a union or a substantial number of workmen make it their cause — Workmen of Dimakuchi Tea Estate v. Management (1958).

Key Definitions — IR Code 2020

The Tripartite Framework

flowchart TD
    T["Tripartite Framework of Industrial Relations"]:::root
    T --> G["Government\nMakes law, sets minimum standards,\nadjudicates disputes"]:::party
    T --> E["Employers\nManage enterprise, negotiate,\npay wages, ensure safety"]:::party
    T --> W["Workers / Trade Unions\nCollective bargaining,\ngrievance redressal, strike action"]:::party
    G --> ILO["ILO — International Model\nGovernment + Employers + Workers\nat every decision-making table"]:::intl

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Constitutional Framework for Labour

Schedule VII — Labour is a Concurrent subject — both Centre and States can legislate. Where there is a conflict, the Central law prevails (Art. 254).

✏️ Sample Solved Problem (IRAC Method)

Problem: A hospital run by a charitable trust employs 300 doctors, nurses and administrative staff. The nurses go on strike demanding a wage revision. The trust argues it is not an “industry” and no industrial dispute can exist. Is the trust correct?

I — Issue

Whether a hospital run by a charitable trust qualifies as an “industry” under the IR Code 2020, and if so, whether the nurses’ wage demand constitutes an industrial dispute.

R — Rule

• Sec. 2(p) IR Code 2020 — Industry means systematic activity organised by cooperation between employer and workers for production of goods or services
• Excluded: Charitable or religious activities carried on without commercial motive — but the exclusion applies to the activity, not the establishment
• Bangalore Water Supply v. Rajappa (1978) — hospitals are industries where services are rendered systematically with employer–worker cooperation, even if no profit is made
• Sec. 2(q) — Industrial dispute includes any dispute connected with terms of employment

A — Analysis

The trust runs a hospital with 300 employees on a regular, systematic basis. Patients pay for services; staff are paid wages. The activity is systematic and involves organised cooperation between the trust (employer) and staff (workers). The mere label “charitable trust” does not exempt it if a commercial-type organised service is provided. Under the Bangalore Water Supply test (still persuasive), hospitals are industries. The IR Code’s charitable exclusion is narrow — it applies to genuinely non-commercial charitable work, not to a full-scale hospital charging fees. The nurses’ wage demand is a classic industrial dispute under Sec. 2(q).

C — Conclusion

The trust is incorrect. The hospital qualifies as an industry. The wage demand by nurses is an industrial dispute. The nurses can invoke the dispute-settlement machinery under the IR Code — starting with the Works Committee/Grievance Committee, then conciliation, and if necessary the Industrial Tribunal.

📄 The full PDF bundle has 6 more problems for Unit I — including the Four Labour Codes analysis, Appropriate Government identification, definition of Worker under IR Code, and the master–servant to welfare State transition. Get the bundle — ₹149