GLOBALIZATION AND LEGAL PROTECTION OF LABOUR IN INDIA

Author(s): Rajendra Prasad Pandey

Source: The Indian Journal of Political Science , JAN. - MAR., 2010, Vol. 71, No. 1 (JAN.
- MAR., 2010), pp. 133-144
Published by: Indian Political Science Association

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The Indian Journal of Political Science
Vol. LXXI, No. 1, Jan.-Mar., 2010, pp. 133-144

GLOBALIZATION AND LEGAL PROTECTION OF LABOUR IN INDIA

Rajendra Prasad Pandey

The gradual consolidation of the process of globalization in India appears to have impacted
upon the life of labourers in such a way that they seem poised to lose more than they
might gain . The most significant dent which the process of globalization seems to have
made on the life and work of labourers happens to be the systematic erosion of the legal
protection available to labourers to save them from the vagaries of their profit-maximising
employers. Apparently , such a situation is in total contrast to the situation when the law-
makers of the country ; over the years, enacted a number of labour legislations aimed at
protecting and promoting the cause of labourers. The paper attempts to analyse the
system of legal protection of labour in India and the potential dangers it faces in the wake
of the process of globalization.

INTRODUCTION

Emerging as one of the most powerful forces shaping the life of people in present tim
the processes and products of globalization arguably impact the life of different people differ
Indeed, of various sections of society being affected by the process of globalization, the wo
class people stand out prominently. As globalization, in the main, is understood as a p
of greater economic integration amongst various countries of the world, the first and fore
target of globalization process seems to be the dismantling of the comprehensive na
framework of legal protection provided for the safety, security and welfare of workers in
face of any exploitative policy or action on the part of the industrialists or the capitali
various countries. Thus, by striking at the root of the whole body of labour laws, the proce
globalization reduces the workers as the hapless lot remaining on the mercy of the capi
to hire or fire them, with adverse terms of contract being thrust on them.

Historically, with the dawn of industrial revolution in Europe, the texture of hu

civilization underwent a subtle transformation, as a result of which the feudal mod
production in society gave way to the capitalist mode of production. Over the years, d
by capital, industry came to occupy the pivotal position in the overall socio-econ
development of the people. The most glaring feature of the capitalist society was the u
relations between the capital and the labour, in which the former ruled over the lat
compelling the labourers to resort to protest and collective bargaining to protect their inte
given that the idea of cooperatives and other labour-friendly forms of economic sy
were alien to such a society. (Patibandle et al, 2004) They not only sought protection f
the state against the exploitation but also advanced the argument that a state which proclaim
to be democratic and welfarist, was expected to take protective and ameliorative me
in favour of the labourers. Moreover, owing to the compelling need, on the part of the capita
to ensure the smooth functioning of industries through the cooperation between capit
labour, the enactment of a large number of industrial and labour laws became imperat
all the societies, including India. The paper seeks to unravel the subtle erosion taking

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The Indian Journal of Political Science 134

in the legal protection of labour in India in

globalization.

CONSTITUTIONAL VISION ON LABOUR ISSUES

The Constitution of India envisages a comprehensive framework in which the issu

pertaining to labour have been dealt with at both general and specific levels. At general
taking a labourer as an individual in society, elaborate provisions have been made to se
a decent, just and dignified life for him. The fundamental premise of such outlook is found
the preamble of the constitution which strives to secure to the people, among others, 'justic
social, economic and political

opportunity

The niceties of the guiding philosophy enshr

in the various provisions made in Part III of the c
rights of the people. Thus, Article 14, by guar
establishment of an order under which the
discrimination by the laws themselves or in their
expression of the citizens' rights are available
freedoms out of which three form the basis of the entire edifice on which the modern

democratic labour legislation has been formulated. These three rights are- right to freedom
of speech and expression (Article 1 9(i)), right to assemble peaceably (Article 1 9(ii)) and right
to form associations and unions (Article 19(iii)).

While the various freedoms given under Article 19 prove to be the cornerstone of the
labour legislation in the country, the operational dynamics of these laws have been laid down
under the provisions of the fundamental rights against exploitation. In other words, the right
against exploitation given under Articles 23 and 24 of the constitution is essential in prohibiting
the uncivilized and inhuman labour practices. Thus, Article 23, by prohibiting traffic in human
beings and begar along with similar forms of forced labour, wipes out the age-old scourge of
bonded labour and slavery, and makes labourers free to exercise the supreme independence
on their body and mind in so far as choosing their profession or work of their volition is
concerned. Supplementing this, Article 24 provides that no child below the age of 14 years
shall be employed in any factory or mine or engaged in any hazardous employment. This
provision has a great value, keeping in mind the prevalence of wide spread practice of child
labour in various economic activities in different parts of the country, owing to the poor socio-
economic conditions of their parents.

If the Preamble and Part III of the constitution provide a general perspective on the
issues pertaining to labourer, the Directive Principles of State Policy (DPSP) particularizes
the specific aspects of the labour law. Enumerated in Part IV of the constitution, the DPSP

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 Globalization and Legal Protection of Labour in India 135

define the positive obligations of the state towards its citizens by directi
operationalize a framework of rights which the individual ought to enjoy
capacity by virtue of being a member of an evolving welfare society.

The underlying phrase used in Article 38- justice, social, economic and poit
the clue to the understanding of the nature and significance of the Directive Pr
basis of which the entire structure of the Part IV of the Constitution has been built. Thus

Article 38 lays down that the state shall endeavour to promote the well-being of the masses
by scrupulously securing and safeguarding a social order in which social, economic and
political justice shall permeate all the institutions of public life. Article 39 particularizes and
puts in black and white certain objectives critical in protection and promotion of the cause of
labour in India.

Carrying forward the responsibilities of the state in the socio-economic field, Article
41 provides that the state, within the constraints of its economic capabilities and resources,
ought to arrange for the effective provision for securing the right to work, to education and to
public assistance in case of unemployment, old age, sickness and disablement and in other
cases of undeserved want. More importantly from the worker's point of view, Article 42
directs the state to make provisions for just and humane conditions of work and maternity
. relief. Above all, Article 43 stipulates that the state should try to secure to all workers by
legislation or in any other way, a living wage, conditions of work ensuring a decent standard
of life, and the full enjoyment of leisure. Furthering the cause of the constitutional mandate
for the worker's betterment, a new article 43A was added through the Forty-Second
Constitutional amendment in 1 976 to ensure through legislation the participation of the workers
in the- management of the enterprises. The singular contribution of the constitutional provisions
ê

regarding the labour issues has been that the governments have not only been prodded
from time to time to initiate and consolidate the measures aimed at ensuring a decent life for
the labourers but also are taken to be the greatest bulwark against the anti-labour moves
getting initiated in the wake of processes of liberalization and globalization in recent times.

NATURE OF LABOUR LAWS IN INDIA

The body of labour law in India consists of both a diverse set of legislations w
have been enacted at different points of time to serve a particular purpose in hand as
numerous judicial pronouncements on the vital issues such as employment etc. (Sin
2003) Hence, the nature of the existing volume of labour laws is not a uniform one o
the variations in the thrust laid on the issues to be addressed at various times. Presen
prevalent body of labour laws covers most of the industrial matters, albeit with v
emphasis on the nature of the problem to resolve which they have been enacted or ju
ordained. It is therefore, pertinent to have a bird's eye view of the nature of the labo
as they evolved over a period of time.

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The Indian Journal of Political Science 136

The earliest stock of labour legislations in t

measures taken to curb the excesses of the ea
factory workers groaning under the inhuman
genesis of labour laws in India may be traced
century when factories were established in the p
the export of finished goods to the markets in E
the colonial government did not attempt to re
conditions in the factories. However, the spo
and pressures by social activists led the gove
between 1881and 1914 which provided for the
of wages untouched.

The growth of labour legislation in Indi

international events which also necessitated a subtle transformation in the nature of the

labour legislations in the country. The First World War (1914-1918) brought about two
substantive changes in the scenario of Indian working class. Firstly, it not only resulted in the
rapid growth of industrialization and consequently, in the number of working class but also
the nature of the composition of the working class changed as the majority of the workers
consisted of skilled ones in place of the unskilled workers being in the majority previously.
Secondly, the dynamics of the war led to food shortages and inflation resulting in the misery
of the poor including the low paid factory workers. In the meantime, the Bolshevik Revolution
in Russia in 1917 provided a new impetus to the burgeoning movement of the workers
seeking a just and fair wages and service conditions. Further, the ongoing Swadeshi
Movement, the repressive policies of the government and the setting up of the International
Labour Organization (ILO) combined together to force the British Indian government to initiate
the passage of labour legislations aimed at ameliorating the pathetic conditions of the workers.

The intense pressure on the government, both from within and outside the country,
resulted in the passage'of a number of significant legislations targeted at stifling the formidable
workers movement going on in the country. By passing the Fourth Factories Act in 1 922, the
government sought to regulate the working hours in the factories in accordance with the
norms of physical fitness and comfort of the workers. However, the more important piece of
legislation was the Workman's Compensation Act of 1923 which transcended the usual
issues of wage and remuneration to address the problems of compensation to workers in
accidental cases. Defining the vexed concepts of dependent, partial and total disablement
and employer's liabilities-both tortuous and statutory-the act provided for the fair compensation
to workers involved in accident during work and made provision for compensation for three
years in case of death or total disablement of the worker. The other notable labour legislation
in the nature of ameliorative measures, enacted by the British Indian government included

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Globalization and Legal Protection of Labour in India 137
the Payment of Wages Act, 1936. The Act specified the regularity and responsi
payment of wages in the enterprises. It also stipulated the composition of wages by
for the components of emoluments as well as the authorized deductions from
The labour legislations, thus, passed during the decades of twenties and thirt
twentieth century appeared to be ameliorative in nature with the inclusion of welfa
aimed at ensuring for the workers the minimum standards of life.

Finally, an important set of legislations exist in the nature of co-operative

which has started evolving during the twenties of the nineteenth century in or
and demarcate the nature and scope of the industrial relations in the country. The f
of the cooperative legislation was laid with the passage of the Trade Unions Act
born out of the compulsive realization of the government to recognize the indispen
trade unions for the better coordination and co-existence of labour and capital
society. However, the path-breaking move in this direction came with the enac
Industrial Disputes Act, 1947 which afforded the workers job protection again
dismissal and provided for the worker's councils in factories with over hundre
addition to recognizing trade unions as an essential feature of the industrial r

In nutshell, a glance at the evolution and growth of labour legislation in I

demonstrates the nature of the laws passed at various points of time with certa
trends. To begin with, the focus seemed to be on looking at the worker as an isolate
who needed protection as a result of which various factory acts were enacted t
workers from the inhuman conditions of work. Gradually, the scope of labour
expanded to treat the workers as the members of a group for the upliftment and b
of whom a number of ameliorative legislations were enacted relating to the imp
working and welfare conditions of these people. Finally, the labour legislations
the field of industrial relations, the major objective of which was to work as a
force to correct the inequality of bargaining power inherent in the employment re
(Parulekar, 1993)

BODY OF LABOUR LAWS IN INDIA

The volume of labour laws in the country is so vast and varied that india is being
viewed as a society where labour is overprotected through law and nothing has been left
the discretion of the management in regard to the issues relating to labour. Over a period
time, the government has enacted much labour legislation to regulate the conditions o
employment of labour, to extend certain amenities and facilities to them and to provide
machineries to safeguard the interests of the workers in their relations with the management
It is a different story that despite these legislations, the incidents of labour law violations are
so much so that often when one sees the working conditions of the unorganized laboure
it appears as if no labour law exists for them. (Saini, 1999)

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The Indian Journal of Political Science 138

In the constitution of India, labour has be

Consequently, both union and state governme
time to time which combindly add up to more t
onus of responsibility to implement these en
However, for the sake of better appreciation and
in the country, may be classified into four categ
conditions of work, wages, social security an

The legislations aimed at improving the con

be the earliest pieces of legislations on the is
in 1881, subsequently a series of factories act
the difficulties experienced at the particular tim
to the conditions of work consists of the Fac
minor legislations like The Industrial Employm
Labour (Regulation and Abolition) Act, 1970, M
1 938, etc. The Factories Act, 1 948, along wit
now in force in the country and supplement
along with judicial pronouncements on these,
the conditions of work of the workers.

On wages, the important legislations in f

Payment of Wages Act, 1936, The Minimum
Act, 1965. These acts have been enacted to ad
aspects of the wages and ancillary subjects. T
passed in the backdrop of the report of the Roy
highlighting the various unfair practices in
regulate the payment of wages to certain cla
an eye on removing all malpractices by layin
payments in addition to regulating the impo
from the wages. Since its implementation fr
more than a dozen times to make it relevant
Act, 1948 was enacted to fix statutorily the m
with a view to remove under payment of wa
Bonus Act, 1965 lays down the provisions fo
maximum bonus to the employees employed
on its rolls.

The labour legislations falling in the cate

enactments aiming at providing certain benefits
employment injury, retirement etc. These benef

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Globalization and Legal Protection of Labour in India 139

benefits, gratuity, provident fund and pension benefits. To regulate thes

mechanisms, a number of acts have been passed from time to time
amendments afterwards. Thus, the Employees' State Insurance Act, 19
benefits to employees in certain contingencies. Similarly, the Employees'
and Miscellaneous Provisions Act, 1952 provides for the institution of prov
employees in factories and other establishments with provisions for compu
of employees under the Provident Fund Scheme. Likewise, the Payment o
1972 lays down a statutory scheme providing for payment of gratuity to
certain contingencies.

Labour relations law constitutes the most critical component of the la

empowers the labour to organize and fight for their rightful share in the organ
On this count, two important legislations stand out to define and regulate the i
in the country. The Trade Unions Act, (TUA) 1926 is the basic legal documen
providing for the establishment of unions in the industries. The other f
regulating the labour relations in the country is the Industrial Disputes Act, (ID
a colonial legislation passed by the British Indian government in April 19
objective of the Act has been to ensure industrial peace by recourse to a
procedure and machinery for investigation and settlement of industrial dis

CRITIQUE OF WORKING OF LABOUR LAWS IN INDIA

The theory and practice of labour laws in India have betrayed a variety of shortcomings
at the levels of their nature, conceptual framework and functional dynamics. The bulk of
labour laws in the country are colonial in nature whose basic purpose seems to augment the
industrial production by ensuring an enduring peace at whatever social cost. More importantly,
the fundamental character of the labour laws has been professed to be protective of the
labour interests. Some scholars have gone to the extent of branding Indian workers as over-
protected one. However, the hidden fact behind the façade of protection is really pernicious
for the overall good and well-being of the workers. In fact, by providing the stipulations to
regulate the broader aspects of the workers' conditions of work, rights, duties and industrial
relations, the laws not only fix the maximum required from the industrialist beyond which
they are free to manipulate the situation to their utter advantages but also takes the initiative
out of the hands of the workers to take any action on their own to get their grievances
redressed. Moreover, as most of the steps regarding the redressai of various grievances of
labour can be activated by the government, the workers are at loss most of the times in their

tug of y^r with the industrialists as the latter are generally able to use their clout and money
power with the government establishment in order to get a favourable action by it. It, thus
appears pathetic that the apparent notion of the over-protection of workers becomes in
reality a tool to browbeat the interests of the workers, both the ways.

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The Indian Journal of Political Science 140

On conceptual frame, labour laws in India h

about key concepts like 'wage', 'employee' etc
depending on the nature and purpose of the
increased scope of conflicting interpretations
about the rights and obligations of the employ
etc. have become key features in the applicati
laws', asserts Basu, 'have two particularly impo
remain small and in the informal sector. Mand
insurance or other physical amenities like re
all waived for firms below 50 employees. Sma
exclusive rights to produce a certain list of good
they remain small in size. Secondly, the governm
of labour laws. For example, labour laws do n
forum (civil courts or labour tribunals) where
rights.' (Basu, 2004) Such structural lacunae in
probability of being exploited by the foreign com
thereby placing the workers in a highly unte
decent work for them is concerned.

The Indian labour law system projects the rhetoric that these laws will work as important
instrument for empowering the powerless and the downtrodden so as to realize the cherished
goals of the constitution. A large numberof labour laws were enacted in independent India
to operationalize the constitutional vision and labour bureaucracy was entrusted the role of
ensuring compliance of these laws. The Indian system, however, reflects a centrifugal labour-
justice model and it so works that it does not command enough political power to obviate the
commission of numerous unfair labour practices by the employers against the labourers.
Moreover, in India, the legalized framework has promoted bureaucratization and has enabled
the government to prevent labour to unite and struggle for industrial equity and democracy.
(Saini, 1999) The situation takes alarming proportions in the cases where the government
takes upon itself the role of the protector of the interests of the industrialists in the name of
maintaining law and order around the establishment.

The most sordid scenario has, however, been produced by the paternalistic functioning
of the Industrial Disputes Act, 1 947. Many provisions of the Act have either been manipulated
by the industrialists themselves and/or state on their behalf, or have proved counter productive
for the welfare of, both the workers and the employers. As Saini observes, more than half
century of working of the Act has promoted and perpetuated state paternalism leaving unions
weak and susceptible to bureaucratic inertia and manipulations. For instance, the IDA prohibits
the representation of parties at conciliation through practicing lawyers, though lawyers can
appear before the adjudicatory bodies with the consent of the parties and the leave of the

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Globalization and Legal Protection of Labour in India 141

labour court/tribunal. In actuality, a large number of labour lawyers, un

management consultants represent parties before adjudicatory forums. T
promoted legalism, consultationism and government unions. Due to wides
of the IDA in the dispute process, a large number of trade union leade
consultancy services for workers by representing them before these bod
they have become brief-case union leaders and hardly involve themselves
organization process. The IDA model in India has enabled employers to effe
political power through the structural contradiction of the IDA framework,
their own dominance. They used it as a legitimator of the practice of authoritar
and even tyranny on workers seeking redefinition of labour relations. It also en
forge alliances for legitimation of structures and processes of power disp
1999) Moreover, in the contemporary times, a lot of production of goods a
taking place in quite unorganized sectors which remain outside the domain
relations thereby placing such employees totally on the mercy their employ
terms of employment to them.

LABOUR LAWS IN THE CONTEXT OF GLOBALIZATION

The contemporary phase of the political and economic interactions among the vari
countries of the world is marked by the move towards globalization resulting into b
apprehensions and expectations in the minds of the common people in general and th
vulnerable sections of the society in particular. As has been referred to earlier, the wh
edifice of labour laws has been erected to provide for the protective, ameliorative an
cooperative measures to guarantee an ambience of what International Labour Organiz
(ILO) calls as 'decent work' for the workers. However, 'the economic restructuring as a
of the process of the present phase of globalization has far reaching impact on the wor
work and worker's world. The market driven flexible model of organizing production
work has been aggravating inequalities, unemployment and insecurity all over the gl
The 'hollowing out of state' has been at the root of work becoming less decent.' ( Red
2005) Hence, the notion of decent work has arguably been getting increasingly comprom
with the strengthening of the processes of globalization.

In regard to its effect on the labour, globalization is characterized by both apprehensio

and expectations, with the former outweighing the latter quite often. As an observer p
out succinctly, 'while dislocation, unemployment and reduced social protection
apprehended to be the short term consequences, the widening and diversification
employment opportunities, rising real earnings and betterment in the working conditio
the labourers are considered to be the advantages which may accrue from globalizatio
the medium and long term. However,, there have been widespread perceptions that t
labour would be the most important loser, at least in the initial phase of the current m

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The Indian Journal of Political Science 142

towards globalization. The apprehensions of b

harboured by the workers and their organization
In developed countries, concerns have been ex
countries through outsourcing and shifts of
unemployment, which is already high in mos
possibility of what is often described as 'socia
the sub-standard labour conditions from develop
of a 'race to the bottom' resulting from the c
and developing countries to lower labour sta
the other hand, globalizations is often seen to
as the competition from imported goods wo
redundancies or even closure of the relatively
adjust to changing market conditions and also
foreign direct investment, would lead to press
and utilization of labour, resulting in reduction
and an overall deterioration in quality of employ
dislocation brought about by globalization is
protection getting eroded in a systematic man

While in general, it has been argued that th

lead to certain undesirable dislocations in the
perspective of it also emerges in the form
opportunities for the hitherto marginalized sect
For instance, talking in terms of the implication
observer notes uncharacteristically, "From the s
in the third world, the anti-globalisation ag
them of considerable employment opportu
employment conditions through global solida
objective would be concerted action to shape
agenda. This would in the first instance mea
international law, and for democratic instit
Interestingly, therefore, certain sections of
some sort of turnaround in their fortunes in th

Despite such optimism on the part of few, th

to impact negatively on the sanctity and soundn
mechanism to provide legal protection to labour
globalization getting penetrated in various par
idea of institutional symmetry amongst the v

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Globalization and Legal Protection of Labour in India 143

measures for the workers, apart from the issues of employment and decent wor
2003) The proponents of globalization calls for the dismantling of the alleg
measures such as the offices of the labour commissioner, provident fund or
which appear to create hurdles in the way of the business being run as freely an
it has been run in the developed countries. As a result, the labour institutions ar
increasing strain on their standing as the formidable structures aimed at provid
support to the legal protection of labour in the countries like India.

Finally, an unconventional challenge presented by the wave of global

workers in India is in terms of the skill biases which ordinarily go against the i
semi-skilled and unskilled workers, particularly in the developing countries
et al, 2008) As a matter of fact, the process of globalization in its wake f
introduction of a number of newer technologies having serious repercussion
and dynamics of the processes of production and services. In such a si
specific skills turn out to be preferred ones and the entire industry begins
having those particular skills to the exclusion of those who do not posses
instance, with the opening up of the call centres in India as the off-shoot
process outsourcing (BPO) by the foreign multi national corporations, the
English language as well as computers has emerged as the preferred skill
prospective employees of such companies. In such a scenario, the vast maj
belonging to the rural areas happen o be the natural losers as they are pres
well-versed the English language nor do they have refined skills in comput

CONCLUDING OBSERVATIONS

The growth and development of labor legislation in India reflects the ordeal of wor
in their quest for a reasonable remuneration and dignified life which seems to h
placed under severe constraints with the consolidation of the process of globaliza
India. Historically, under the pressure of the relentless efforts of the more enlight
liberal sections of society, the basic or protective legislation was enacted to ensur
conditions of work for labour at the level of the workshop. Subsequently, the ame
and cooperative legislations came in the wake of the prolonged struggle waged by the wo
At the time of independence, the body of labour laws in the country was quite compreh
covering most of the industrial matters. Still, the constitution makers ingrained a wide
set of provisions aimed at providing a vision for the future rulers to work for the betterm
the lot of the workers. As if the highly improper, legalized and subversive functioning
structure of labor laws was not sufficient, that the wave of Liberalization, Privatiz
Globalization (LPG) during the past few years, threaten to unsettle again, the
parameters of labour laws in India. The numerous anti-labour moves in the name of
reforms clearly demonstrâte the vulnerability of the state in India to buckle down unde

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The Indian Journal of Political Science 144

pressure of the powerful forces working behind

therefore, of reinforcing the constitutionally an
in the country apparently rests on the labour
is likely to entice most, if not all, sections of soc
spectator to the dismantling of protective mec
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