AFTERMATH OF THE INDUSTRIAL RELATIONS BILL, 2015

INTRODUCTION:

The prosperity of any economy depends on its industry to a large extent. The Labour Law
covers a spectrum of activities like manufacturing, trading, transporting, exporting, importing, storing,

Published in Articles section of www.manupatra.com

etc. Two element of labour legislation are that it aims at the establishment of a harmonious
relationship between a worker and employer to emphasize the need for healthy participation in the
production of goods and provision of services and thereby constitute measures for strengthening the
economy of the nation. Also, it emphasizes that both, management and labour belong to a single
family and should endeavor to improve the standard of living of the workers, giving room for labour
harmony.1

There are many labour laws to administer industries but still there is industrial unrest the world
over. The reasons for unrest may be the inadequate enforcement of labour laws leading to unfair
practices like irregular payments, arbitrary deductions from wages, adverse working conditions, unfair
recruitment practices, inadequate social security etc. The demonstrations, strikes and lockouts are
commonly seen world over. The fact is that the outdated and static labour laws are not able to cope
with the changing market scenario and thus adversely affect the process of modernization. 2 This
Article emphasizes the need for modern and simpler labour laws in India and what outcomes the
Draft Labour Code on Industrial Relations Bill, 2015 could bring in if it is implemented. The Article will
also provide suggestions to the labour legal system by analyzing the main features of other countries.

NEED FOR LABOUR LAW REFORMS IN INDIA:

In India, there is a multiplicity of labour laws. The country has had numerous labour legislations
right from the 19 th century. After Independence also, there were many labour legislations enacted to
protect the labour force from exploitation. Under the Constitution of India, labour is a subject in the
concurrent list where both the Central and State Governments are competent to enact legislation. As
a result, a number of labour laws have been enacted in India catering to different aspects of labour,
including industrial relations, wages, social security, health and safety, welfare and working
conditions. There are over 200 labour legislations in India out of which 44 are Central legislations.
Majority of these laws govern only the workers in the organized sector in India. The workforce in the
unorganized sector do not have trade unions, no written job contracts, no paid leave, no social
security, no collective bargaining and no fair dispute settlement methods. In a dynamic context, laws
need to be reviewed from time to time. To bring the labour laws in tune with the emerging needs of
the economy and the labour force, it is very essential to revise and update the labour laws in India. A
holistic and multidisciplinary approach is required to solve the problem relating to labor reforms.

Labour reforms not merely mean changing some laws but they should cover modification in
labour policies and programmes for the welfare of labour and enforcement of labour provisions. We
are at the threshold of a new era of industrial relations in which labour reforms should provide further
impetus to promoting the new work culture wherein workers feel economically secure and employers
not burdened. The core issues of labour reforms can be solved by liberalizing existing labour
legislation, enacting a flexible exit policy, right sizing, reforming trade unions, continuously retraining
and updating workforce skills, worker participation in management and by good and clean corporate
governance. Keeping all this in mind changes need to be undertaken in the present labour
legislations and at the same time bring new legislations.3

The labour laws must ensure good working conditions for workers and industrial peace with the
changing scenario of the economy. After the implementation of New Economic Policy in 1991 that
focuses on liberalization and privatization, most of the Indian labour laws have become outdated
because modeled on English provisions they were formulated decades back and unable to cope with
changing situation.4 Moreover, due to inadequate enforcement of labour laws, unfair practices like
irregular payments, arbitrary deductions from wages, unsafe working conditions, long working hours,
unfair recruitment practices, no adequate security against old age, denying compensation for
accident etc. are commonly seen against labour.

1
Institute of Company Secretaries of India, National Seminar on Corporate Compliance Management-Backgrounder, 51-61,
(March 29, 2007).
2
J P Sharma, Labour law reforms in china and India: Is the china model an answer?, 1, (Institute of Company Secretaries of
India), http://knowledge.icsi.edu/download/aruna_nagendran/200708020901.pdf (last visited Oct 16, 2019)
3
T Damu, It is time to liberalise labour legislation, June 2002, http://tata.com/article/inside/4LlgWfIyB9s=/TLYVr3YPkMU= (last
visited Oct, 2019)
4
Bipin Kumar, Industrial Relations Theory and Practice, 18, New Delhi: Regal Publications, (First Edition, 2013).
 Workers non-cooperation and frequent strikes are the other commonly faced problems.
Employers do not feel comfortable with complex labour laws. Moreover, there is unnecessary
confusion regarding simple common definitions making the laws difficult to interpret. Terms like
worker, wages, establishment, appropriate government, etc. have different meaning under different
labour laws. There is no need for different definitions of these terms. All these shortcomings and flaws
demand Labour reforms to rationalize and simplify the existing laws. The existing laws as has been
stated earlier are outdated, complicated resulting in ineffective implementation and negligible
compliance which needs reformulation. A country like India that is on the verge of taking its place on
the world-stage, as a major economy has no option but to design its labour laws that favor global
market.5 It is time to treat labour as an asset and not as a liability in India.

PREVIOUS ATTEMPTS TO REFORM LABOUR LAWS IN INDIA:

In order to encourage compliance and to make it easier to do business, there have been
various suggestions in the past to separate the large number of labour statutes into different aspects
of labour law. The First National Law Commission on Labour in its 1969 report had suggested
cosmetic changes, which include changing the name of the Industrial Dispute Act to Industrial
Relations Act so that it would not sound a discordant note and encourage smooth industrial relations.
Secondly the consolidation of the Trade Unions Act (1923), the Industrial Employment (Standing
Orders) Act (1946), and the Industrial Disputes Act (1947) was recommended. But despite the NCL
recommendation report, no attempts were made to consolidate and simplify laws. After a decade the
newly formed Janata Party government introduced the Industrial Relations Bill (IR Bill) (1978) in
parliament, but it was later dropped. In 1982, the Congress government introduced another IR Bill.
But due to no clarity on the attendant legislations to be brought in for the categories excluded from
the IDA, that move also failed. As early as in 2002 also, the Second National Commission on Labour
had suggested the formulation of labour codes similar to those in Germany, Hungary: Poland and
Canada. One of the key tasks of the Second NLC was to rationalize the existing labour laws.6

THE LABOUR CODE ON INDUSTRIAL RELATIONS BILL, 2015:

After many past failed attempts, recently the NDA Government proposed to merge the 44
central labour legislations into five codes, relating to Industrial Relations, Wages, Social Security,
Health and Safety, Welfare and Working Conditions. As one such initiative, the Ministry of Labour and
Employment recently introduced the draft ‘Labour Code on Industrial Relations Bill 2015’ (Draft Code)
which proposes to amalgamate three important central labour laws dealing with industrial relations:

 The Trade Unions Act, 1926, which seeks to provide for the registration of trade unions and to
define the law relating to registered trade unions.
 The Industrial Employment (Standing Orders) Act, 1946, which was enacted to require
employers in industrial establishments to formally define conditions of employment under
them.
 The Industrial Disputes Act, 1947, which provides for the investigation and settlement of
industrial disputes and regulates matters relating to retrenchments, lay-offs, site closure,
transfers of undertakings and changes in service conditions.

The present form of the Draft Code contains 107 sections and 3 schedules, dealing with
various industrial relations issues, including registering trade unions, standing orders, notice of
change of terms of employment, strikes, lockouts, lay-offs, redundancy and site closures. The labour
ministry has set up a tripartite committee (a Joint bargaining council) with representatives from
employer and trade unions and state government officials to look into all concerns to review the draft
code. The ministry is planning to introduce the bill in the upcoming winter session of Parliament.

KEY PROVISIONS OF THE DRAFT CODE:

The Draft Code presently includes 13 Chapters, 107 Sections and Three Schedules.

5
Supra note 2 at 8.
6
See generally C Venkata S Ratnam, Second NLC: Labour in an economy in transition, 35 (32) Economic and Political Weekly
2812–2814 (2000), http://www.jstor.org/stable/4409582 (last visited Oct4, 2019)
I. DEFINITIONS:

The Draft Code has proposed certain changes to certain important words. The definitions of
appropriate government and industrial disputes have been largely retained from the Industrial
Disputes Act, 1947. The first part of the definition of “industrial disputes” in the Draft Code
corresponds to the definition contained in § 2(k) of the Industrial Disputes Act. 7 However, the Draft
Code makes an addition and broadens the scope of the provision. It states that “in the case of
termination of individual worker by way of discharge, dismissal, retrenchment will also be termed as
industrial dispute”.

The word “workman” has been changed into gender neutral term “worker” in accordance with
the recommendation of the Second National Commission on Labour. 8 One more change the definition
of worker brings in is that it excludes the apprentices from the scope of worker. Previously,
apprentices were also included within the scope of workman in the Industrial Disputes Act, 1947.
(IDA) Further, while the definition of workman 9 under IDA specified that “workman” does not include
those who employed in a supervisory capacity, draw wages exceeding ten thousand rupees per
mensem, the Draft Code removes the specified amount to wages as notified by the central
government from time to time.

This may be viewed in relation to the Second National Commission on Labour’s suggestion
that “highly paid jobs” should be excluded from the purview of laws relating to workmen, and included
in a proposed law for the protection of non-workmen. As an alternative, the Commission
recommended that the Government may fix a sufficiently high cut-off limit of remuneration, beyond
which employees would not be treated on the same footing as ordinary workmen. 10 However, the
Draft Code only creates this condition for employees employed in a supervisory capacity. The new
definition of worker leaves certain questions about the nature of some professions ambiguous. The
Draft Code should explicitly clarify that the mere fact that a person is a professional shall not exclude
him from the definition of worker.

The ambit of “industry” 11 under the Draft Code has not been substantially altered. The Draft
Code incorporates the Bangalore Water Supply 12 definition of industry. In this celebrated case, the
Court laid down the following definition of “industry”:

'Industry', as denned in Section 2(j) and explained in Banerji 13, has a wide import. (a) Where (i)
systematic activity, (ii) organized by co-operation between employer and employee, (the direct and
substantial element is chimerical) (iii) for the production and/or distribution of goods and services
calculated to satisfy human wants and wishes (not spiritual or religious but inclusive of material things
or services geared to celestial bliss e.g. making, on a large scale, Prasad or food), prima facie, there
is an 'industry' in that enterprise.14

While the provision goes against the Supreme Court’s opinion in Coir Board, Ernakulam v.
Indira Devi15 (The court refused to accept that ‘such a sweeping test was contemplated by the IDA’ or
‘every organization does useful service and employs people may be labeled as industry’) and State of
U.P. v. Jai bir Singh16 (The Supreme Court expressed its concern regarding the excessive pro-
workmen interpretation given in the Bangalore case as it inadvertently overlooked the interests of the
employer and ignored the main object of the Act, 1947. Therefore, the Court observed that there was
dire need to re-examine such a sweeping definition of industry and allow legislature to draft a more
comprehensive definition that adheres to the demands of employers and employees in the public and

7
§ 2 (k) of Industrial Disputes Act, 1947 states that "industrial dispute" means any dispute or difference between employers and
employers, or between employers and workmen, or between workmen and workmen, which is connected with the employment
or non-employment or the terms of employment or with the conditions of labor, of any person.
8
§ 2 (1) (zf) of the Draft Code.
9
§ 2 (s) of Industrial Disputes Act, 1947.
10
See Report of the Second National Commission On Labour, 321 (Ministry of Labour, Government of India) (2002),
http://www.prsindia.org/uploads/media/1237548159/NLCII-report.pdf (last visited Oct26, 2019)
11
§ 2 (1) (l) of the Draft Code.
12
Bangalore Water Supply and Sewerage Board v. A. Rajappa, AIR 1978 SC 548.
13
D. N. Banerji v. P. R. Mukherjee, 1953 AIR 58: 1953 SCR 302
14
Supra note 12.
15
Coir Board, Ernakulam v. Indira Devi, AIR 1998 SC 2801.
16
State of U.P. v. Jai bir Singh, (2005) 5 SCC 1.
private sectors.), the widening of industry under the Draft Code is apt to protect workers excluded by
a narrower definition till the time such alternative statutory regimes are created. The Draft Code
states that wages are payable to “a person employed in respect of his employment or of work done in
such employment”. The IDA on the other hand specified that wages are payable to a workman. 17
Thus, the Draft Code broadens the scope of whom wages may be paid to. Further, while value of
house accommodation, supply of light, water, medical attendance and travelling concessions were
included in the definition of wages under IDA, the Draft Code specifically excludes them.18

The Draft Code states that wages specifically include remuneration payable under any award
or settlement, overtime wages, additional remuneration payable under terms of employment, sum
payable on termination of employment and sum to which employee is entitled under any scheme
framed.19 The Draft Code could incorporate the recommendation of the Second National Labour
Commission that ‘wages’ and ‘remuneration’ be separately defined, the former to include only basic
wages and dearness allowance, and the latter to include other allowances, overtime payment, bonus,
gratuity and social security contributions along with wages. This may make the process of calculating
additional payments such as bonuses less problematic.20

The provision on lay-off in the Draft Code corresponds to the first part of § 2(kkk) of the IDA. 21
However, the Draft Code omits the “Explanation” and “Proviso” which were present in the Act. Due to
these omissions, § 2(1)(n) of the Draft Code leaves certain contingencies ambiguous. At what point of
a working day can a worker said to be “laid-off”? How many hours should lapse from the time the
worker presents himself at work? What happens if the worker is made to work only one shift in a day?
What happens if the worker is not given employment even after being asked to present himself during
the second half of the shift for the day? The IDA mandated that the workman be paid full basic wages
and dearness allowance for that part of the day. With the omission of this guarantee, workmen’s
rights may be diluted. These issues should be clarified.22

II. DISPUTE RESOLUTION:

The Draft Code removes the Court of Inquiry, Labour Court and the Board of Conciliation (§
5, 6 and 7 of the IDA). This is a comfortable change given that the multiplicity of forums and
difference in disputes that could be referred to each forum made it difficult for the parties to resolve
disputes in an expeditious manner. The Draft Code has done away with the reference of any
industrial dispute by the Appropriate Government (§ 10 of the IDA). Under the IDA, adjudication of
disputes can start, apart from a narrow set of exceptional cases, only after reference by the
Appropriate Government. This scheme vests inordinate power in hands of the political executive and
this has smothered the autonomy of trade unions. Now, the aggrieved person can file a suit directly
before the Tribunal/National Tribunal. 23 This is a welcome move given that it would free the remedy of
adjudication from being hostage to executive discretion. § 53 of the Draft Code now imposes a formal
time frame of 3 years within which any industrial dispute has to be brought up before the Tribunal.
Such a time frame would actually provide quicker remedies by eliminating a large number of cases on
archaic matters. § 57 (10) of the Draft Code is a new provision, which allows the execution of the
award of a Tribunal/National Tribunal by a Civil Court within 6 months from the date when it receives
the order, award or settlement. Such a provision necessitates that the government should also
include a provision making it mandatory for the Tribunal to send the award within a specified time
period so as to ensure the timely performance of such award, order or settlement.

17
§ 2 (rr) of Industrial Disputes Act, 1947.
18
§ 2 (1) (ze) of the Draft Code.
19
Id.
20
See Report of the Second National Commission On Labour, 331 (Ministry of Labour, Government of India) (2002),
http://www.prsindia.org/uploads/media/1237548159/NLCII-report.pdf (last visited Oct26, 2019)
21
The first part of § 2(kkk) of the Industrial Disputes Act, 1947 provides that "lay-off" (with its grammatical variations and
cognate expressions) means the failure, refusal or inability of an employer on account of shortage of coal, power or raw
materials or the accumulation of stocks or the break-down of machinery 39[or natural calamity or for any other connected
reason] to give employment to a workman whose name is borne on the muster rolls of his industrial establishment and who has
not been retrenched.
22
Ayani Srivastava and Arpita Sengupta, Analysis of the Labour Code on Industrial Relations Bill – Part IV, Journal of Indian
Law and Society, (Oct 1, 2019), https://jilsblognujs.wordpress.com/2015/08/01/analysis-of-the-labour-code-on-industrial-
relations-bill-part-iv/ (last visited Oct21, 2019)
23
Id.
III. STRIKES AND LOCKOUTS:

The definition of strike corresponds to the previous definition contained in § 2(q) of the
IDA24, except for one addition. The Draft Code adds that strike includes “the casual leave on a given
day by the fifty per cent or more workers employed in an industry”. 25 This is an improvement for the
new definition embraces cases where the substance of strike is present though the form may be
different.
§ 71 (1)(a) and (b) of the Draft Code, needs to be clarified. There is confusion as to whether a strike
cannot commence within 6 weeks of the notice or within 14 days. Clause (d), (e) and (f) of § 71(1)
and
§ 71(2) prohibits strikes and lock-outs irrespective of the subject matter of the dispute pending. This is
uncalled for given that it restricts the right to strike in an unrelated matter, which is the major weapon
for collective bargaining. The provision allows complete subversion of the statutory freedom to strike
through filing of applications that may have no nexus with the subject-matter of strike. Therefore, it is
recommended that the provision should prohibit a strike only on matters connected with the subject-
matter. The penalties for participating in or instigating or aiding an illegal strike are very steep,
ranging from ₹ 20,000 to ₹ 50,000 with possible imprisonment.26

One major modification the Draft code is bringing in is that there will be no distinction
between Public Utility Services and other industries. § 71(1) of the Draft Code seeks to eliminate the
distinction between public utility services and other industries by imposing uniform restrictions. It
makes submission of prior notice for strikes and lock-outs mandatory for all industries and not just
public utility services. Such universalization would reduce the impact of disruption caused by coercive
actions since the concerned parties would have the time to prepare and adapt. The Second National
Commission on Labour and the International Labour Organization for the Committee on Freedom of
Association advocated the requirement of prior notice. Also, as has been held in Vidyasagar Institute
of Mental Health Neuro Sciences v. Vidyasagar Hospital Employees Union 27, a strike should not be
done by causing disadvantage to the people who are not willing to get involved in it. Hence the
inclusion of industrial establishments as a whole under the provisions of § 71 is a desirable move.28

IV. LAYOFF, RETRENCHMENT AND CLOSURE:

The Draft Code imposes a requirement of prior governmental approval for any lay-off,
retrenchment and closure for establishments covered by it. A company with less than 300 workers
can take decisions on any layoff, retrenchment and closure without the government permission. The
present limit is 100 employees. The objective is to meet the fluctuation in demand arising from ebbs
and flows of business cycles. The provision relating to continuous service 29 suffers from certain
ambiguities. For instance, the burden of proof of continuous service has been put on the worker
through a long series of judicial pronouncements. 30 Although the fundamental rule of evidence follows
that one making the positive assertion is expected to prove the same, in light of the far greater
difficulty of the worker in asserting his attendance as opposed to the employer who keeps a record of
the same, the burden of proof should be shifted from the worker to the employer.

V. TRADE UNIONS:

As per the Code, the erstwhile Trade Union Act, 1926 would stand repealed, and would
instead be replaced by the provisions of the Code. The provision relating to requirement for
registration makes several changes from the corresponding provision in the Trade Union Act, 1926 31.
From a reading of the new Draft Code (§ 5(1)), it appears that at least 10% of the members of the
establishment or industry must be members of the Trade Union seeking registration. The draft code
mandates that all the office-bearers of a registered trade union be persons actually engaged or
employed in the establishment/industry with which the trade union is concerned. It also prohibits a

24
§ 2 (q) of the Industrial Disputes Act, 1947 provides that " strike" means a cessation of work by a body of persons employed
in any industry acting in combination or a concerted refusal, or a refusal under a common understanding, of any number of
persons who are or have been so employed to continue to work or to accept employment.
25
§ 2 (1) (za) of the Draft Code.
26
§ 103 of the Draft Code.
27
Vidyasagar Institute of Mental Health Neuro Sciences v. Vidyasagar Hospital Employees Union, 124 (2005) DLT 640.
28
Supra note 22.
29
§ 75 of the Draft Code.
30
See Range Forest Officer v. S T Hadimani, (2002) 3 SCC 25; See also Surendranagar District Panchayat v. Gangaben
Laljibhai, 2006 (9) SCC 132.
31
§ 4 of the Trade Union Act, 1926.
person holding office in more than 10 unions. 32 The registration of a trade union may be cancelled if it
fails to hold bi-annual elections 33 and fails to submit annual returns. 34 Workers who are not members
of any trade union have to pay subscription to a workers’ welfare fund established by the government
or the employer.35 It encourages workers to join trade unions. Only a single trade union with 51% or
more votes to be the sole negotiating agent with management.36

VI. STANDING ORDERS:

The Draft Code greatly increases the ambit of applicability of standing orders, which is a
welcome step given that clearly defined contingencies in employment contracts have the potential to
reduce unnecessary litigation. In line with the Bill’s proposed aim of reducing executive discretion to
notify standing orders and allowing for greater predictability and transparency, a noteworthy change
proposed by the Draft Code is that the provisions of this chapter cannot be made applicable to
industrial establishments employing less than 100 workers as they can do now. At the same time, the
Draft Code ensures that if such an establishment has already been notified, it will continue to stay in
force.37

§ 35 of the Draft Code sets out a list of matters to be covered by Model Standing Orders
drafted by the Central Government allowing the scope for inclusion of unspecified matters under its
ambit. It is a welcome step because the Draft Code envisages a far more expansive list of specified
matters than before and it is especially commendable that it spells out certain acts which are
decidedly considered to be acts of misconduct. For instance, in line with the Vishaka judgement 38
(The Supreme Court of India defined sexual harassment and set guidelines for employers.), sexual
harassment has now been classified as misconduct under the Model Orders. Further, contractual
uncertainty and scope for disputes leading to judicial intervention are both reduced by the inclusion of
matters such as medical aid in case of accidents in the standing orders.39

CRITICISM OF THE DRAFT CODE:

Though the draft bill aims to create greater labour market flexibility and discipline in labour, it is
criticized on various fronts:

 Trade unions argue that the draft code has been prepared keeping in mind only employer
demands for greater labour market flexibility and labour discipline and it ignored the
longstanding demands of trade unions. Especially the bank trade unions are not satisfied with
the proposed changes to trade union laws. They term these reforms as “anti-people policies”
of Modi government and labour reforms. Banks all over India have been going on a strike for
so long to express their frustration towards the same. The trade unions also accuse that the
reforms are unilateral and anti-worker policies.40
 The limit of more than 300 employees to get permission from government for layoff will
reduce the accountability of employers and exposing a much larger number of workers to
arbitrary closures and en masse termination. According to the unions, 85% of the companies
will be thrown out of the ambit of the Act and thus enable employers to hire and fire
employees.41 To them, allowing hire and fire make it tougher to form labour unions and dilute
existing social security available to workers at different fora. In any case, constitutional
principles of security of employment and right to livelihood must remain paramount in our
legislative design and cannot be compromised for the sake of economic efficiency.

32
§ 25 (iii) of the Draft Code.
33
§ 12 (e) of the Draft Code.
34
§ 12 (c) of the Draft Code.
35
§ 24 (3) of the Draft Code.
36
General Knowledge Today, Draft Labour Code, December 29, 2015,
http://www.gktoday.in/blog/draft-labour-code (last visited Oct21, 2019).
37
Raktima Roy and Arpita Sengupta, Analysis of the labour code on industrial relations bill – part II (standing orders and
negotiating agent), Journal of Indian Law and Society, https://jilsblognujs.wordpress.com/2015/07/09/analysis-of-the-labour-
code-on-industrial-relations-bill-part-ii-standing-orders-and-negotiating-agent/ (last visited Oct21, 2019)
38
Vishaka v. State of Rajasthan, AIR 1997 SC 3011.
39
Id.
40
See Bank unions decide to join national strike on Oct2, Times of India, http://timesofindia.indiatimes.com/toi-
features/business/Bank-unions-decide-to-join-national-strike-on-Sep-2/articleshow/53756106.cms, (last visited Oct 15, 2019).
41
Supra note 36.
  The increased penalty will reduce the capacity of the workers to go on strike. Moreover, these
reforms can make it more difficult to resolve disputes by exercising their right to strike. This
kind of a problem was faced by Russia also when it introduced its labour code.42
 The restriction of not to hold office in more than 10 unions is contrary to the principles of
freedom of association embedded in Article 19 (c) of the Constitution of India. The
constitution declares that all citizens will have the right to form associations and unions.
 The mandate of registration in a trade union to become office-bearer is against the standards
contained in the ILO Convention of Freedom of Association and Protection of the Right to
Organize (Convention No.87) as it interferes with and limits the ability of workers to choose
the persons they think best to be their leaders implied under Article 2 43 and 344 of the
Convention.
 The code has not mentioned about collective bargaining and it is against the principles
contained in ILO Convention No. 98 (Right to Organise and Collective Bargaining
Convention, 1949) requiring the promotion of collective bargaining.

EFFECTS OF IMPLEMENTATION OF THE DRAFT CODE:

The Labour Code on Industrial Relations Bill, 2015 could have varied effects if implemented,
but mostly positive. The Code provides more clarity to certain definitions but still there are certain
questions are left hanging by the Code. The Code certainly has brought in provisions which would
reduce the quantum of cases filed before various fora. With respect to strike, it is a good thing that
both public utility services and other industries have not been differentiated. But from the perspective
of the employees, the strike provisions would refrain them from going to strike when injustice has
been done to them. The general implementation effects of the Draft Code would be positive but the
only group which would be affected is the trade unions which the Government and the Trade Union
could jointly bargain before its implementation. Another significant effect would be that the multiplicity
of labour laws in India could be eminently reduced. The implementation of the Draft Code is the need
of the hour with respect to the labour legal system of India. The Government of India should approve
the Code when it is presented during the upcoming winter session of Parliament.

SUGGESTIONS:

By analyzing various positions of labour legislations in countries such as Hungary, Russia,

Poland, Germany, China we can also incorporate the virtuous provisions in our labour code. For
example, the Hungarian Labour Code, 1967 follows the concept of "economic mechanism" for
remuneration of work and provides that workers participate not only in the form of wages but also in
the profits of the enterprise. The workers are divided into three quota categories according to the type
of duty. In accordance with these their claims over and above their assured wages depend on what
size the enterprise's profit is, and the extent of the worker's contribution to achieving it. 45 This would
incentivize the worker to contribute more towards his duties and result in industrial success thereby
promoting the economy of the country.

The recent revolt of young workers in France should alert us to the possibility of such social
unrest anywhere in the name of promoting labour flexibility if "free hire and fire" sanction is given to
employers.46 This problem can only be tackled if the state intervenes to ensure the security of income
to all workers. India is among those countries that spend least on social services and social security.
China, whose example is often cited in the context of labour flexibility, adopted a wide range of
security of workers before introducing reforms in the labour market. At the same time the Chinese

42
See Tom Sibley, Russia's new labour code, 24, 9 (1) International Union Rights, Focus on Africa (2002),
http://www.jstor.org/stable/41937251.
43
Article 2 of Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87) provides that “Workers
and employers, without distinction whatsoever, shall have the right to establish and, subject only to the rules of the organisation
concerned, to join organisations of their own choosing without previous authorisation.”
44
Article 3 of Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87) provides that “1.
Workers' and employers' organisations shall have the right to draw up their constitutions and rules, to elect their representatives
in full freedom, to organise their administration and activities and to formulate their programmes.
2. The public authorities shall refrain from any interference which would restrict this right or impede the lawful exercise thereof.”
45
See Andor Weltner, The 1967 Hungarian Labour Code, 17 (2) The International and Comparative Law Quarterly 513-516,
(Apr., 1968), http://www.jstor.org/stable/757117 (last visited Oct15, 2019).
46
See Vandita, France in Chaos – Biggest and longest protests & riots since French Revolution, We are Anonymous,
http://anonhq.com/violent-protests-labor-strikes-halt-france-hollande-attempts-slay-workers-rights-investigative/ (last visited Oct
25, 2019).

Published in Articles section of www.manupatra.com

economy was able to generate much more jobs than are being generated in India. Though the
Chinese workers suffered, but state actively intervened. The China model can also be an answer to
the problems faced in the Indian labour legal system. 47

Under Polish law, employers can enter into employment contracts for a probationary period
not exceeding three months in order to verify an employee’s qualifications and whether he/she can
satisfactorily carry out the work assigned. They are called trial contracts. 48 This kind of contracts can
be a solution to the sudden dismissal of workers without any reason, especially in the private sector
so that the employer can know beforehand the employee’s qualifications and renew the contract after
the probationary period. The German Labor and Employment Law is also vast like the present labour
laws of India but they are more employee- friendly. In Germany, there is no such thing as
“employment at will”. By law, German employees must have written employment contracts that reflect
the key aspects of the employment relationship (e.g., parties to the contract, work to be performed,
gross salary and benefits, vacation, starting date of employment, place of performance, notice
periods).49 The laws are well constructed that the employee would work happily resulting in profits for
the employer. Similarly, India could also incorporate such good provisions from other countries. It
could also be beneficial to the industrial sector of our country as well as lead to less quantum of
disputes.

CONCLUSION:

The test of an industrial relations system lies in the effectiveness and the finesse with which
it can harmonize the interests of economic growth and generation of productive employment with the
well-being of workers. A good industrial relations system should facilitate "change" because change is
the instrumentality of growth. Instead of permitting or promoting "change", Indian labour law restraints
enterprises from making any "change”.50

India’s labor laws are a mess. It is practically impossible to comply with 100% of them
without violating 10% of them. More than 100 developing countries have reformed their labour laws in
response to competitiveness in the era of globalization, but India remains among a select few
countries with a rigid system of labour protection. It goes without saying that labour laws are too
voluminous and ambiguous to be effective from the point of view of either labour or capital. This only
promotes costly litigation and corruption in the labour departments of state governments. While taking
an objective and holistic view, there is an urgent need to simplify, rationalize and consolidate different
labour laws. Most Indian employers are not against the labor laws but they make the same case that
renaissance physician Paracelsus did: The dose makes the poison. Anything powerful enough to help
has the power to hurt. Today’s labor laws hurt the very people they pretend to protect.

Fewer laws mean better monitoring, easy compliance and benefit to both industries and
workers. In India the entire system of labour laws should be made simplified by clubbing together
wherever possible and made less cumbersome to make the environment more employment friendly.
The main objective of these reform in labour laws is required to make India a more attractive country
for investments, and to enable manufacturing here to become globally competitive; which is a
necessary condition for Make in India. However, amendments to the labour laws do require
consultations with the trade unions, and the government cannot bypass this process. 51 Provided the
current scenario, it is high time that the Labour Code on Industrial Relations, 2015 be implemented
but definitely after improving certain aspects like collective bargaining and trade union rights. The
Code can have many positive effects when implemented in the appropriate manner.

47
See generally J P Sharma, Labour law reforms in china and India: Is the china model an answer?, 1, (Institute of Company
Secretaries of India), http://knowledge.icsi.edu/download/aruna_nagendran/200708020901.pdf (last visited Oct26, 2019).
48
See 2019 Amendments to the Polish Labour Code, Squire Patton Boggs, (2019),
http://www.squirepattonboggs.com/~/media/files/insights/publications/2019/10/2019-amendments-to-the-polish-labour-
code/2019-amendments-to-the-polish-labour-code--handout-v2.pdf (last visited Oct24, 2019).
49
See Features of German Labor and employment law, Wilmer Hale,
https://www.wilmerhale.com/pages/publicationsandNewsDetail.aspx?NewsPubId=90463 (last visited Oct26, 2019).
50
Surendra Nath, Developing New Perspective on Industrial Relations: Role of Government, 31 (2) IJIR, 178-192 (Oct., 1995),
http://www.jstor.org/stable/27767408, (last visited Oct 16, 2019).
51
Ankita Gehlot, Labour law reforms: Labour code on industrial relations act, (Manupatra) (2015),
http://www.manupatra.co.in/newsline/articles/Upload/FFDEA9F7-D723-471C-9547-ED24D9941248.pdf (last visited Oct 16,
2019).

Published in Articles section of www.manupatra.com

 BIBLIOGRAPHY

I. PRIMARY SOURCES:
 Labour Code on Industrial Relations Bill, 2015.
 Report of the Second National Commission on Labour, 2002.
 ILO Convention 87, Freedom of Association and Protection of the Right to Organise
Convention, 1948.

II. SECONDARY SOURCES:

A. BOOKS:
 Bipin Kumar, Industrial Relations Theory and Practice, 3-253, (First Edition, 2013), New
Delhi: Regal Publications.
 DR. E.M. Rao, Industrial Jurisprudence A Critical Commentary, 1-13, (Second Edition,
2015), Gurgaon: Lexis Nexis.
 S.N. Misra, Labor & Industrial Laws, 1-18, (27th Edition, 2013), Allahabad: Central Law
Publications.
 Dr. V. G. Goswami, Labour & Industrial Laws, 1008-1039, (Tenth Edition, 2015),
Allahabad: Central Law Agency.
 Reports of the National Commission on Labour, 2002-1991-1967, (2003), India:
Academic Foundation.
 Labour Sector Reforms in India, (First Edition, 2007) Sarup & Sons.

B. ARTICLES:
 J P Sharma, Labour law reforms in china and India: Is the china model an answer?, 1,
(Institute of Company Secretaries of India),
http://knowledge.icsi.edu/download/aruna_nagendran/200708020901.pdf
 Ankita Gehlot, Labour law reforms: Labour code on industrial relations act, (Manupatra)
(2015), http://www.manupatra.co.in/newsline/articles/Upload/FFDEA9F7-D723-471C-9547-
ED24D9941248.pdf
 Andor Weltner, The 1967 Hungarian Labour Code, 17 (2) The International and
Comparative Law Quarterly 513-516, (Apr., 1968), http://www.jstor.org/stable/757117
 P. S. Narasimhan, Labour Reforms in Contemporary India, 44-58, Pacific Affairs, Vol. 26,
No. 1 (Mar., 1953).
 C Venkata S Ratnam, Second NLC: Labour in an economy in transition, 35 (32) Economic
and Political Weekly 2812–2814 (2000), http://www.jstor.org/stable/4409582
 Surendra Nath, Developing New Perspective on Industrial Relations: Role of Government,
31 (2) IJIR, 178-192 (Oct., 1995), http://www.jstor.org/stable/27767408
 T Damu, It is time to liberalise labour legislation, June 2002,
http://tata.com/article/inside/4LlgWfIyB9s=/TLYVr3YPkMU=
 Features of German Labor and employment law, Wilmer Hale,
https://www.wilmerhale.com/pages/publicationsandNewsDetail.aspx?NewsPubId=90463
 2019 Amendments to the Polish Labour Code, Squire Patton Boggs, (2019),
http://www.squirepattonboggs.com/~/media/files/insights/publications/2019/02/2019-
amendments-to-the-polish-labour-code/2019-amendments-to-the-polish-labour-code--
handout-v2.pdf
 Vandita, France in Chaos – Biggest and longest protests & riots since French Revolution,
We are Anonymous, http://anonhq.com/violent-protests-labor-strikes-halt-france-hollande-
attempts-slay-workers-rights-investigative/
 Tom Sibley, Russia's new labour code, 24, 9 (1) International Union Rights, Focus on Africa
(2002), http://www.jstor.org/stable/41937251.
 Bank unions decide to join national strike on Oct2, Times of India,
http://timesofindia.indiatimes.com/toi-features/business/Bank-unions-decide-to-join-national-
strike-on-Sep-2/articleshow/53756106.cms
 General Knowledge Today, Draft Labour Code, December 29, 2015,
http://www.gktoday.in/blog/draft-labour-code.
 Raktima Roy and Arpita Sengupta, Analysis of the Labour Code on Industrial Relations Bill
– Part II (standing orders and negotiating agent), Journal of Indian Law and Society,
 https://jilsblognujs.wordpress.com/2015/07/09/analysis-of-the-labour-code-on-industrial-
relations-bill-part-ii-standing-orders-and-negotiating-agent/
 Ayani Srivastava and Arpita Sengupta, Analysis of the Labour Code on Industrial Relations
Bill – Part IV, Journal of Indian Law and Society, (August 1, 2015),
https://jilsblognujs.wordpress.com/2019/10/17/analysis-of-the-labour-code-on-industrial-
relations-bill-part-iv/