Labour Laws and their Relevance in India

The author in this article discusses the Labour laws, the objects, aims and challenges being posed at them. The article also discusses the relevance of labour laws in India.


Labour laws are the legislations concerning the protection of employers and workmen’s rights. The trajectory of labour laws can be traced from the International Labour organization way back from the year 1919. India has been the permanent member of the governing body of ILO since 1922 which is the reason why Indian Labour laws possess the features of progressive labour legislation in the country, yet there has been inconsistency on the application of laws with the changes in the industrial sector.[1]

The industry has been crying hoarse for the government only to fall on deaf ears to amend the labour laws as they are a hindrance to the growth. The labour laws in India have an imprint of the British Era on them. They aren’t exactly what we call 21st-century laws that might cater to the needs of the 21st-century Industry.

Purpose and Objective of the Acts

Industrial Disputes Act 1947

The main purpose of the Industrial Disputes Act, 1947 is to ensure fair terms between employers and employees, workmen and workmen as well as workmen and employers. The objective of the act is to maintain the industrial peace and harmony between the employer and the employees, as the act provides the mechanism of the dispute resolution and provision related to layoff, retrenchment and closures.[2]

Trade Union Acts 1926

Trade Union is an association formed by the workers in order to put forward their interest collectively to the organization. The primary objective of the act is to formally give recognition to the trade union and protect their rights. The act lays down the provision of registration and working mechanism of trade union.  

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Challenges to the Act

However the provisions of the aforementioned acts have loopholes while implementations. The Industrial Disputes Act, 1947 and the Trade Unions Act, 1926 are the best example of the same. The provisions of the ID Act are not exactly employer-friendly. The constant threat of inspector raj looms over the employer. The provisions of retrenching the workers or a close down without prior government approval can cause a serious problem for the employers. The demand is for flexibility and freedom to hire contract labour. Although the new Insolvency and Bankruptcy Code of 2016 takes care of some issues, yet there is a dire need to look at some provisions of the Act that make it mandatory to resolve a dispute through tribunals which take too long to settle and brings the employer almost to his misery. The 21st century is all about technology and due to fear of causing less employment and fearing the wrath of labour laws; the industry is at risk of introducing tech and innovation. Such is the power of the archaic and old laws that New India has to suffer at the cost of it.

Much of it is because of the Trade Unions. It is perfectly fine that workers are the most used and suppressed class in any economy and there is a need to protect their rights and interests. But what the Trade Unions Act, 1926 has managed to do is create a centralized group of few in the name of trade unions who enjoy the might and politicize the whole cause of labour justice thus marginalizing the real worker. Initially, the requirement of 7 members to form a union made a multiplicity of unions active in an industry causing a problem for both the employers and employees resulting in constant conflict. There was an era when the trade unions and their leaders caused nothing but heavy damage to the employers.

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What both, the employers by not adhering to the laws and employees by forcing their employers to remain true to them have achieved is keeping the chaos constant. Lock Downs, Lockouts, strikes, gheraos etc all have resulted in nothing but damage – financial as well as physical. Both had a chance of creating amazing legal machinery through collective bargaining and creating an effective working environment but it’s a wasted opportunity. Employers are equally at blame. As the Minimum Wages Act mentions, a minimum wage as prescribed has to be paid to the worker. But what it seems is the practice is pay as minimum as possible to the worker and mint money of the rest is the formula that is worked on even today!


Some serious interventions are needed and labour codes reformed. The proper execution of these laws is on an absolute mandatory list and their needs proper machinery in place to look after such issues. More importantly, the existing provisions are also not being implemented, and there is a need to check the proper implementations of the law. With the changing dynamics of working conditions, the requirements and the process has to be upgraded and old laws are causing a halt in the situation. These laws have managed to entangle within itself a web instead of cleaning the system up. Reforms are the need of the hour.

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[1] Saumya Sinha, An Overview of Labour Laws in India, Ipleaders, (July 10, 2020, 10:33PM), 

[2] Akshay Batheja, Industrial Disputes Act 1947, Legal Service India, (July 10, 2020, 11:31 PM),