Evolution of labour law and the constitutional framework - Labour and Industrial Law I

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1. The Industrial Revolution and the laissez-faire State
2. The international dimension: the ILO
3. Evolution of Indian labour law
4. The constitutional framework
5. The four Labour Codes
How this is examined

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The story in one line. Labour law exists because freedom of contract between an employer and a single worker is not real freedom. The State first stayed out (laissez-faire), then stepped in with protective statutes, then wrote labour welfare into the Constitution, and finally, on 21 November 2025, replaced 29 central labour Acts with four Codes. An answer on this topic should move through those four stages in order.

1. The Industrial Revolution and the laissez-faire State

The factory system of eighteenth- and nineteenth-century England brought workers off the land and into mills and mines, where hours were long, wages low and child labour common. The prevailing economic theory, associated with Adam Smith, held that the State should confine itself to defence, police and justice and leave the terms of employment to the market. The law treated the contract of employment like any other contract, and combinations of workers were treated as criminal conspiracies in restraint of trade.

The results forced a change. England's Factory Acts, beginning in 1802 and expanding through the nineteenth century, limited working hours for women and children and introduced inspection. Trade unions were decriminalised (Trade Union Act 1871) and given immunity from actions in tort (Trade Disputes Act 1906). The idea that replaced laissez-faire is that of the welfare State: the State must correct the inequality of bargaining power between capital and labour.

2. The international dimension: the ILO

The International Labour Organisation was set up in 1919 under the Treaty of Versailles, on the premise that universal peace can be established only if it is based on social justice. India was a founding member.
Its structure is tripartite: governments, employers and workers are all represented in the International Labour Conference, which adopts Conventions (binding on a State that ratifies them) and Recommendations (guidance only).
The Declaration of Philadelphia (1944) declared that labour is not a commodity and that freedom of expression and association are essential to sustained progress.
The ILO's influence on Indian law is direct: hours of work, minimum wages, freedom of association, abolition of forced labour and child labour all track ILO standards. Indian courts have also used ratified conventions to interpret domestic law.

3. Evolution of Indian labour law

Colonial phase. The earliest laws protected employers rather than workers: the Workmen's Breach of Contract Act, 1859 made breach of contract by a worker a criminal offence. The Factories Act, 1881 was the first protective law, prompted partly by Lancashire mill-owners who feared cheap Indian competition. The Royal Commission on Labour (the Whitley Commission, 1929–31) surveyed working conditions and shaped later legislation. The Trade Unions Act, 1926 followed the Madras Labour Union episode of 1918, when the Madras High Court restrained union leaders by injunction because union activity had no legal protection. The Trade Disputes Act, 1929 introduced courts of inquiry and boards of conciliation.

Post-Independence phase. The Industrial Disputes Act, 1947, the Minimum Wages Act, 1948, the Factories Act, 1948, the Employees' State Insurance Act, 1948 and the Employees' Provident Funds Act, 1952 built the core. Later came the Payment of Bonus Act, 1965, the Contract Labour (Regulation and Abolition) Act, 1970, the Payment of Gratuity Act, 1972 and the Equal Remuneration Act, 1976. The First National Commission on Labour (1969) and the Second National Commission on Labour (2002) both reviewed this body of law; the second recommended grouping the central laws into a small number of codes.

4. The constitutional framework

Fundamental Rights.

Article 14 — equality; read with Article 39(d) it supports equal pay for equal work: Randhir Singh v. Union of India, 1982 INSC 24, (1982) 1 SCC 618.
Article 19(1)(c) — the right to form associations or unions. It does not carry with it a fundamental right to strike or to bargain collectively: All India Bank Employees' Association v. National Industrial Tribunal, 1961 INSC 248, AIR 1962 SC 171.
Article 21 — the right to life includes the right to livelihood: Olga Tellis v. Bombay Municipal Corporation, 1985 INSC 151, (1985) 3 SCC 545.
Article 23 — prohibits traffic in human beings, begar and other forced labour. Paying less than the minimum wage is forced labour: People's Union for Democratic Rights v. Union of India (the Asiad workers' case), 1982 INSC 67, (1982) 3 SCC 235; Sanjit Roy v. State of Rajasthan, 1983 INSC 5, (1983) 1 SCC 525. Bonded labour was addressed in Bandhua Mukti Morcha v. Union of India, 1983 INSC 203, (1984) 3 SCC 161.
Article 24 — no child below fourteen to be employed in a factory, mine or other hazardous employment. In M.C. Mehta v. State of Tamil Nadu, 1996 INSC 1454, (1996) 6 SCC 756, the Court directed offending employers to pay Rs 20,000 for every child employed in contravention of the law.

Directive Principles. Article 38 (social order based on justice); Article 39 (adequate means of livelihood, equal pay for equal work in clause (d), protection of the health and strength of workers and of children in clause (e)); Article 41 (right to work, to education and to public assistance in unemployment, old age and sickness); Article 42 (just and humane conditions of work and maternity relief); Article 43 (living wage and a decent standard of life); Article 43A, inserted by the Forty-second Amendment, 1976 (participation of workers in the management of industries). In National Textile Workers' Union v. P.R. Ramakrishnan, 1982 INSC 94, (1983) 1 SCC 228, the Court relied on Article 43A to hold that workers are entitled to be heard on a petition to wind up the company that employs them.

Legislative competence. Labour is mainly a Concurrent List subject: Entry 22 (trade unions; industrial and labour disputes), Entry 23 (social security and social insurance; employment and unemployment) and Entry 24 (welfare of labour, including conditions of work, provident funds, employers' liability, workmen's compensation, invalidity and old age pensions and maternity benefits) of List III. The Union List has Entry 55 (regulation of labour and safety in mines and oilfields) and Entry 61 (industrial disputes concerning Union employees). Both Parliament and the States can therefore legislate, which is why the Codes leave many matters to the “appropriate Government”.

5. The four Labour Codes

The Central Government brought all four Codes into force on 21 November 2025. For the Industrial Relations Code the notification is S.O. 5320(E) of that date, issued under section 1(3) of the Code; the Ministry of Labour's announcement the same day described the Codes as rationalising 29 existing labour laws.

Code on Wages, 2019 — replaces the Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965 and the Equal Remuneration Act, 1976 (four Acts). It introduces a national floor wage fixed by the Central Government.
Industrial Relations Code, 2020 — replaces the Trade Unions Act, 1926, the Industrial Employment (Standing Orders) Act, 1946 and the Industrial Disputes Act, 1947 (three Acts). Section 104, as substituted by the Industrial Relations Code (Amendment) Act, 2026 with effect from 21 November 2025, repeals the three Acts and keeps the existing tribunals and authorities working until the new ones are functional.
Code on Social Security, 2020 — nine Acts, including the Employees' Compensation Act, 1923, the ESI Act, 1948, the EPF Act, 1952, the Maternity Benefit Act, 1961 and the Payment of Gratuity Act, 1972. It brings gig and platform workers within social security schemes.
Occupational Safety, Health and Working Conditions Code, 2020 — thirteen Acts, including the Factories Act, 1948, the Mines Act, 1952, the Plantations Labour Act, 1951, the Contract Labour Act, 1970 and the Inter-State Migrant Workmen Act, 1979.

Trap. KSLU papers up to January 2026 were set on the old Acts. Answer under the Code and give the old section in brackets, for example “section 2(zr) of the IR Code (old section 2(s) of the ID Act)”. Old judgments still explain most of the Code, because much of its text was carried over word for word.

How this is examined

As an essay: “Trace the evolution of labour legislation in India” or “Discuss the constitutional provisions relating to labour.” The order is laissez-faire and its failure, the ILO, colonial and post-Independence legislation, the Articles (Fundamental Rights first, then Directive Principles, then the legislative entries), and a closing paragraph on the four Codes. As a short note: the ILO, Article 43A, or Article 23 and forced labour with PUDR.