You are on page 1of 6


* The concept of workers participation in India dates back to 1920 .

Mahatma Gandhi had suggested that both the workers and
management should share in the prosperity of the business.
Employer should not regards sole owner of mills and factory of
which they may trustees.
There should be a perfect relationship of friendship and
cooperation among them.
Capital and labour should be supplementary to each other.
Textile industry first adopted this joint consultation model
Committees were also set up by Printing Presses of the Govt., Some
Railway companies etc
Delhi cloth and general mill ltd accepted an elected representative
of the workers in its Board of Directors.
However, the Royal Commission in 1923 found the results of these
works committees to be disappointing for several reasons.

The Royal commissioner of labour (1929-31) recommended that for
achieving the intended goals, strong trade unions and specific
labour officers were also a must along with these Works
However, the first major step in this regard was taken only in 1947
when the Industrial Disputes Act was enacted.
The First 5-Year plan called for constitution of joint committees at
all levels.
The Second 5-Year plan tried to elaborate on the workermanagement relationship philosophy following which the scheme
for Joint-management councils was formulated in 1957.
The Govt. of Indias Industrial Policy Resolution of 1956 also laid
emphasis on workers participation in management in its endeavour
to create a socialist society.

A Study Group was set-up in 1956, consisting members of the

Govt., Employers and Workers to examine the workers
participation in management in foreign countries like UK, France,
Sweden etc. They submitted their report in May 1957.
Some of the recommendations of this committee were:
1) Having some permissive legislation empowering the Govt. to
set up Joint Management Councils.
2) Setting up strong trade-unions with clear set of functions.
3) Councils of management being entrusted with responsibilities
like administration of welfare measures, supervision of safety
measures etc.
4) Joint Management Council functions should include things like
improving the working and living conditions, implementing safety
measures, improving productivity, encouraging to give suggestions

These recommendations were accepted by the 15th Indian
Labour Conference in July 1957.
A committee appointed by them to analyze those
recommendations further suggested that joint council size
should not exceed 12 members, that they should meet during
working hours, employees representatives should be
nominated by the trade union concerned etc.
The 3rd 5-Year plan tried to further strengthen this policy of
workers participation in management.

The 4th 5-Year plan urged the extension of this policy to

public-sector undertakings as well.

Sachar Committee on Workers Participation

In June 1977, Govt. of India, set up an Expert Committee on
Companies and MRTP Acts, under the chairmanship of
Rajinder Sachar.
The terms of reference were:
i) To consider the provisions of Companies and MRTP Acts.
ii) To suggest measures by which workers participation in the
share capital and management of companies can be brought
The recommendations regarding representation of workers on
Board of Directors were as follows:

1) Participation being limited to companies with 1000 or more employees.
2) Definition of workmen to be applied as per Industrial Disputes Act,

3) Participation policy should be introduced only if at least 51% of the

workers vote in favour of this.
4) The worker director should be from the workers employed by the
company, to be elected by all workers through voting.
5)Presence of worker director should not lead to any breach in
However, despite all these recommendations, the committee failed
to give any mutually agreeable solution regarding workers participation in
share capital.