National Commission on Labour (1967)||
The concern of the State in labour matters emanates as much
from its obligations to safeguard the interests of workers and employers as to ensure to
the community the availability of their joint product/service at a reasonable price. The
extent of its involvement in the process is determined by the level of social and economic
advancement, while the mode of intervention gets patterned in conformity with the
political system obtaining in the country and the social and cultural traditions of its
people. The role of the State in regulating labour conditions will be different in a
democratic set-up from that in a society which has a different philosophy for the
governance of its people. In the former the approach of the State will be consistent with
what the will of the people demands; in the latter, the extent to which such will is
allowed to prevail will be different. The degree of State intervention is also determined
by the stage of economic development. In a developed economy, work stoppages to settle
claims may not have as serious consequences as in a developing economy. Like wise, a free
market economy may leave the pan ties free to settle their relations through strikes and
lock-outs. But in other systems, varying degrees of State participation will be required
in the building-up of industrial relations. In all countries, however, the State has
assumed powers to regulate labour relations. In some, it has taken the form of laying down
bare rules for observance by employers and workers; in others, the rules cover a wider
area of relationship and there is equally greater supervision over the enforcement of
these rules. To illustrate the extent and nature of State intervention, we cite below some
22.1 In the USA, the State has confined itself to enacting legislation for ensuring the workers' right to organise and bargain collectively, and has constituted an independent authority to administer and interpret legal provisions and decide on complaints regarding unfair labour practices. Intervention of the State in industrial disputes is limited to actual or threatened work stoppages which could imperil the national economy, health or safety. But even within this area of State intervention, a wide latitude is given to the parties for settling their differences. In regard to disputes which have an economic bearing, the Government does not envisage any direct interference in the process of collective bargaining, beyond issuing statements of its economic policy from time to time.
22.2 In the U.K., the industrial relations system has been marked by the primacy of free collective bargaining between the parties. Disputes relating to jurisdiction are mainly an internal matter for the British Trade Union Congress. The Donovan Commission has recently recommended that disputes relating to union recognition should be dealt with by the Industrial Relations Commission. The Government has refrained from defining unfair labour practices and from prescribing rules for promotion of collective bargaining. The collective bargaining agreements, before they are enforced, have to go through the National Board for Prices and Incomes set up by Government. A further change seems to be in the offing as may be inferred from the following observations in the U.K. Government's White Paper, "In Place of Strife":
"But from the very beginning of this debate there was an alternative view; namely, that while the periodical "readjustment" of bargaining power between the two sides was an essential part of the Government's role, it was not in itself sufficient. The State also had to act at times to contain the disruptive consequences of the struggle for those not immediately affected—especially if non-intervention was likely to result in widespread damage to the interests of the community at large. Linked with this argument to an increasing extent was a related one: that Governments should intervene still further if it could be shown that certain important economic or social objectives were not sufficiently furthered or were frustrated by collective bargaining.
In short the doctrine of non-intervention is not, and never has been, consistently preached. The need for State intervention and involvement, in association with both sides of industry, is now admitted by almost everyone.
The question that remains is, what form should it take at the present time?"1
22.3 The Australian system has had a long tradition of State regulation. The Government intervenes through the Commonwealth Conciliation and Arbitration Commission for the settlement of 'interest' disputes and through the Industrial Court to settle differences about interpretation. But even within the Australian structure, it has been claimed that there is fair scope for collective bargaining. Parties can approach the above-mentioned authorities direct. Once the Commission is seized of a dispute and the Government feels that the decision of the Commission can have repercussions on the community, all it can do is to place its case before the Commission and hope for the best. However, experience has shown that not many such occasions have arisen.
22.4 In Japan, the right to collective bargaining is guaranteed under the Constitution and the State has enacted legislation to promote collective bargaining. Direct State intervention is permissible in strikes which might jeopardise the national economy and public life. The Prime Minister can restrain such a strike for fifty days through court injunction obtained with the consent of the Central Labour Relations Commission, which is to try settling the dispute within this fifty-day cooling-off period by methods other than compulsory arbitration. The rights of unions are prescribed according to the type of employment in which they are to function. In particular, differential provisions are made in regard to the right to strike and the right to bargain. In her industrially advanced democratic systems so, direct State intervention in industrial disputes is generally the exception rather than the rule. Intervention by judicial authorities for settling the disputes over rights, however, does prevail. Creation of new rights by and large is left to the parties concerned.
22.5 In the USSR, three important factors regulate the industrial relations system. The first is the formation of a socialist society which has replaced private ownership of basic means of production by public ownership. The building up of a workers' State, according to this proposition, makes the interests of labour and management non-antagonistic; occasion for active conflict in industrial relations is thus eliminated. Secondly, the operation of a centrally planned and controlled economy introduces its own constraints on labour and management. Recently, however, increasing powers are being given to local trade unions and individual enterprises to take decisions on matters of employment, wages and productivity. Lastly, the influence of a single political party in running the Government and in organising unions makes it necessary for the unions to have to perform a double role. They have to help in carrying out party policy and look after production interests, and at the same time, assume the traditional role of unions in furthering the interests of labour.
22.6 In three developing countries in Asia viz., Burma and Malaysia, and for a long time in the Phillippines, the concern of the State in industrial relations has been more marked. Besides laying down rules and procedures for the settlement of disputes, the State has provided arbitration machinery. In the last resort, Government has reserved to itself the right of making a reference to such machinery in cases where the public interest so demands, or where a joint request is made by the parties.
22.7 In the sphere of industrial relations, the State has to watch and understand the attitudes of unions and employers in regulating their mutual relations in so far as they concern collective bargaining and the consequent direct action which either party may resort to for the realisation of its claims. This understanding is necessary to chalk out the course the State should adopt, which in turn is determined by the short-term and long-term welfare goals it sets for itself. The State's anxiety about work stoppages arises because of two factors: (i) the impact on the community by way of inconveniences inflicted by interruption in supply of essential goods/services, and (ii) the social cost to the parties themselves in the form of loss of wages/production. It has, there-tore, a special interest in the methods chosen by the parties for regulation of their mutual relations. For instance, adoption of collective bargaining will require well organised unions and employers' associations. The State, when it moves towards this goal, takes upon itself the task of formulation of such rules and procedures as may be conducive to improving the organisational strength of the parties as it cannot allow either to remain weak. In the process, it will have to define its own relationship with
1 In place of Strife—A Policy for Industrial Relations (January, 1969) pp 6-7, London, Her Majesty's Stationery Office, Cmnd 388. There seems to be some rethinking within Government on the approach as set out in the White Paper.
trade unions and employers' organisations. There is also an added consideration i.e., the frustrations caused to either side as a result of direct action may lead to situations in which the well recognised obligation of the State to enforce orderly social conduct can attract State intervention. This is a universally recognised function of the State, irrespective of its ideology.
22.8 On many occasions, the State has to frame substantive work rules. This function acquires special significance in developing countries, particularly in those characterised by labour surpluses. It is here that the demands of a developing economy on the one hand and considerations of social justice on the other are to be reconciled in the best interests of the community. We have already referred, elsewhere, to the State's concern for achieving a reasonable growth rate for the economy, while simultaneously weaving into the process considerations of equitable distribution. These constraints fall heavier on a democratic Government which has the added obligation of ensuring fundamental individual freedoms to its citizens. The State, therefore, concerns itself not only with the content of work rules, but also with the framing of rules relating to industrial discipline, training, employment, and adoption of modern technology often substituting machinery for men. Thus, industrial relations affect not merely the interests of the two participants—labour and management—but also the social and economic goals to which the State addresses itself. To regulate these relations in socially desirable channels is a function which the State is in the best position to perform. Such regulation has to be within limits.
22.9 Besides economic interests, the State, irrespective of its political ideology, strives to propogate a social system through the content of its industrial relations policy. Conferment of a particular social status on unions and employers' organisations, influencing the pattern of distribution of the industrial output, profit sharing by workers, and workers' participation in industry are all directed to implement a social goal. The instruments used by the State for the purpose could involve direct intervention or be merely educative, depending upon the circumstances.
22.10 As a corollary to its role in maintaining peace, the State at times has to provide for an arbitration machinery to settle industrial disputes. This can be best performed either by creating conditions in which arbitration would succeed in preference to strife or by compelling the parties to accept direct intervention of the State, in the interest of public good. In either case, better results are achieved where the existence of the third party is not overtly felt. The creation of the independent authorities which we have proposed is in consonance with this principle.
22.11 State intervention in India has assumed a more direct form. The State has enacted procedural as also substantive laws to regulate industrial relations. We have referred to them in the different chapters. Without going into detail, we propose to examine here the basis of the authority of the State in regulating industrial disputes and the form it has assumed in the country. In the distant past. State intervention in labour matters was for protecting the commercial interests of the British rulers. Later, pressures from the public to guard the interests of workers in the face of difficulties created by the operation of the economic system prevailed. More recently, and particularly since Independence, State intervention in labour matters has been necessitated by the larger need for regulation of the economy with the focus on rapid overall growth. Apart from planned development, the requirements of the Welfare State envisaged in our Constitution have been another important reason for State intervention.
22. 12 Apart from the different roles played by the State as mentioned earlier, there are others which have a special significance in our context. The first is that of the State as an employer, which has two aspects, i.e., direct employment of labour by the State and employment in industrial corporations constituted by the State. Handling of industrial relations in the case of its own employees, to whom all legislation framed for industry is applicable, falls in this category. This function of the State as an employer has been there over a very long period; it has been there even prior to Independence. To this was added another when, as a matter of policy, it was decided to operate a mixed economy wherein industries were to be run by both private entrepreneurs and the State. The role of the State in these matters has been watched with great interest in recent years. The policy statements in this regard show that as an employer the State binds itself to the rules which it frames for private employers. Where standards of good employment are disparate, the State seeks to set standards with a view to influencing the employers in the private sector. While this is
the policy, in practice, it so happens that there is a fair amount of interaction between what the employers do for their employees in the two sectors. And this inter-action is influenced by the new consciousness among the workers and ease of communication within the working class.
22.13 The second and an equally significant role which the State has to play in our context is the outcome of its Federal Constitution and the fact that "labour" is a subject in the Concurrent List for the purpose of legislation. It has been a tradition in the country for long that the Central Government assumes the responsibility of enacting legislation on many aspects affecting labour, whereas the State Governments look after implementation, though they can legislate on their own also. In either case, a considerable measure of consultation has been the rule; and yet there have been cases of disparities in conditions of work because of differences or inadequacies in administrative arrangements to implement the legislation. As a result, cases have been reported where industries which do not involve heavy capital investment favour operating in States where implementation of labour legislation is relatively less onerous on the employer. And this may create problems of inter-State coordination which the Central Government has to sort out. In the years to come, when the Central and State Governments may have different political ideologies, this question is likely to assume an added significance.
22.14 It is obvious, therefore, that the State cannot be a silent spectator in the development of healthy labour practices. It has to play a role which the parties to a dispute find acceptable. In what follows, we propose to assess the efficacy of the institutional arrangements developed in India for evolving and implementing labour policies and see how the shortcomings in these arrangements could be minimised. We also propose to review the Centre/ State relationship in the field of labour and evolve recommendations to put the same on a sounder footing. The concept of a common labour code and its role in this context will also be examined.
22.15 Industrial relations in India have been shaped largely by principles and policies evolved through tripartite consultative machinery at the industry and national levels. The process or consultation was itself the outcome of a realisation of the futility of directing the relations between employers and workers without their participation. To sum up the role of the tripartite bodies, we need only quote from the Third Plan:
"Labour policy in India has been evolving in response to the specific needs of the situation in relation to industry and the working class and has to suit the requirements of a planned economy. A body of principles and practices has grown up as a product of joint consultation in which representatives of Government, the working class and employers have been participating at various levels. The legislative and other measures adopted by Government in this field represent the consensus of opinion of the parties vitally concerned and thus acquire the strength and character of a national policy, operating on a voluntary basis. Joint committees have been set up to assist in the formulation of policies as well as their implementation." 1
In view of the importance of the role of the tripartite bodies, we trace briefly their evolution, assess their working and examine how they can be made more effective.
22.16 Constitution: The need for tripartite consultation on labour matters on the pattern set by the International Labour Organisation (ILO) was recommended by the Whitley Commission. It envisaged a statutory organisation "which should be sufficiently large to ensure the adequate representation of the various interests involved but it (the organisation) should not be too large to prevent members from making individual contributions to the discussions".2 This recommendation did not come up for implementation during the first ten years after it was made. And when in 1942, the plenary Labour Conference (later named as the Indian Labour Conference—ILC) and the Standing Labour Advisory Committee (which subsequently dropped the word 'Advisory' from its title—SLC) were instituted, they were not made statutory. Initially the ILC consisted of 44 members, whereas the SLC was about half the size of the ILC. The pattern
1Third Five Year Plan, p. 250. 2Report of the Royal Commission on Labour in India, 1931, p. 467.
of representation was governed by that obtaining in the International Labour Conference.1 It ensured (i) equality of representation between the Government and non-Government representatives, (ii) parity between employers and workers, (ii) nomination of representatives of organised employer and labour being left to the concerned organisations, and (iv) representation of certain interests (unorganised employers and unorganised workers), where necessary, on an ad hoc basis through nomination by Government. The delegates are free to bring one official and one non-official adviser with them. These advisers do not participate in the discussions except when required by their principals to do so and permitted by the Chairman. No qualifications are prescribed to entitle a central organisation for representation at these forums, though a convention has grown over the years that a central organisation having a minimum membership of 100,000 spread all over the country and over a large number of industries should be entitled to representation in proportion to its strength.
22.17 The composition of the two bodies has undergone a series of changes in the course of their long existence. Representation to the unorganised sector was given up in 1952-53 in response to the demands of other organisations represented at the ILC/SLC. The major Reorganisation of States in 1956 introduced another change, but only in the composition of the Government group. Parity between Government and non-Government representation was disturbed at the SLC due to this change and at the ILC as a result of representation given to the employing Ministries at the Centre since 1959. In more recent years, the need has been felt for enlarging the employers' wing to accommodate public sector corporations. Central organisations of workers not included in the tripartite have been demanding suitable representation for some time. We refer to this aspect later. These disparities in representation have not caused difficulties in tripartite deliberations so tar, since no voting is involved in reaching conclusions, though a provision exists in the rules drawn up for the ILC/SLC for taking decisions by a two-third majority. It is the consensus emerging in the discussions which matters for providing a basis for action by the constituents of the tripartite.
22.18 Functions: The ILC was instituted to advise the Government of India on matters brought to its notice by the Government. In the earlier phase of the tripartite, the SLC used to deliberate on its own or over matters sent to it by the ILC and the latter made the final recommendations. In due course, both the ILC and the SLC have become deliberative bodies, the former being more representative. The objectives set before these two tripartite bodies at the time of their inception in 1942 were
"(i) promotion of uniformity in labour legislation;
(ii) laying down of a procedure for the settlement of industrial disputes; and
(iii) discussion of all matters of all-India importance as between employers and employees".
The purposes indicated in the ILO Recommendation No. 113 (1960) on tripartite consultation and cooperation are more general in nature to suit the varying national conditions. These are: promotion of 'mutual understanding and good relations between public authorities and employers' and workers' organisations as well as between these organisations with a view to developing the economy as a whole or individual branches thereof, improving conditions of work and raising standards of living.' In addition, such consultation and cooperation was expected to ensure that employers' and workers' organisations were consulted by the public authorities in the formulation and implementation of laws affecting their interests and in the establishment and working of suitable national bodies. In India, the scope of the ILC-SLC is confined to labour matters only, though other consultative forums on which representatives of employers and workers find a place along with those of the Government and other social groups have been constituted for advising Government in wider aspects of social, economic and industrial policies. In the State sphere also, similar arrangements exist for consultation on labour matters. The State Labour Advisory Boards, as these tripartite bodies are rightly called, function more or less in the same manner.
22.19 The agenda for the ILC/SLC meetings is settled by the Labour Ministry after taking into consideration suggestions sent to it by
1 A tripartite system, parallel to ours. is not Found elsewhere except in Pakistan, Ceylon, Malaysia and Burma where it originated from the Indian experience. Tripartite advisory bodies in countries such as Netherlands, France and Canada are functioning in the wider social and economic sphere; Some of these bodies have on them other social groups, besides labour and management. Experts are invariably represented on these committees.
member organisations. The demand that the conference should frame its own agenda has not been accepted by Government; nor the other one that there should be an independent secretariat for the ILC/SLC. The ILC/SLC work with minimum procedural rules to facilitate tree and fuller discussions among the members. The ILC was expected to meet once a year; the SLC met as and when necessary.
22.20 It may be mentioned here that the flexibility and informality of rules and procedures which characterise the Indian tripartite consultative system is largely in keeping with what was later recommended by the ILO Committee on Consultation and Cooperation for formulation of the ILO Recommendation No. 113. The following guidelines were recommended, inter alia, in this connection: (i) use of flexible procedures; (ii) calling meetings only when necessary with adequate notice of meeting and agenda; (ii) reference of certain items to working parties if necessary; (iv) dispensing with voting procedures in arriving at conclusions to facilitate consultation; (v) maintaining records of discussions in appropriate details and circulation of conclusions reached to all participants; (vi) documentation for reference;
(vii) provision of an effective secretariat and a small and representative steering group in case of a more formal consultative machinery.
Contribution of ILC/SLC
22.21 Achievements: The contribution of the ILC/SLC can be assessed in terms of the objectives set before them and other functions performed by them in the process of achieving these objectives. The ILC/SLC have facilitated enactment of central legislation on various subjects to be made applicable to all the States of the Indian Union in order to promote uniformity in labour legislation which was an important objective to be served by these tripartite bodies. Tripartite deliberations helped to reach a consensus, inter alia, on statutory minimum wage fixation (1944), introduction of a health insurance scheme (1945), and a provident fund scheme (1950), leading to the passing of three important central labour laws, namely, the Minimum Wages Act, 1948, the Employees' State Insurance Act, 1948, and the Employees' Provident Fund Act, 1952. The tripartite deliberations during 1942-46 on the revision of the Trade Disputes Act, 1929 helped the Union Government in enacting the Industrial Disputes Act, 1947, which laid down a comprehensive disputes settlement procedure to be applicable to all States. However, a few States e.g., Maharashtra and Gujarat (formerly Bombay), Madhya Pradesh, Uttar Pradesh and Rajasthan enacted their own legislation which was operative within the Slate boundaries along with the Central legislation. This duality of labour administration could not be mitigated by the ILC due to obvious limitations set on it by the inclusion of 'labour' in the 'Concurrent List' of the Constitution.
22.22 The second objective, namely, formulation of a dispute settlement procedure, was of special significance to the Government, since the ILC/SLC were instituted during the Second World War, when the Government's prime interest was peaceful settlement of industrial disputes. As mentioned above, the tripartite deliberations facilitated the formulation of a comprehensive procedure for disputes settlement under the Industrial Disputes Act, 1947. Both the inception of she Labour Appellate Tribunal in 1950 and its abolition in 1956 were in the light of the tripartite deliberations at the ILC/SLC. The popular criticism against third party intervention came up for pointed discussion more than once in the tripartite, but the consensus continued to be in favour of adjudication.
22.23 The third objective of discussion on all matters of national importance has been well served by the ILC/SLC. The range of subjects discussed at these forums bears testimony to this. Various social, economic and administrative matters concerning labour policy are brought before this forum. In fact, on many occasions, these discussions acquired so much significance that the items on the agenda could not even be taken up. Since the Government started taking initiative for planning, and labour is a part of over-all planning, many plan proposals have come up for debate before the ILC. The persons consulted by the Planning Commission for labour policies and programmes are again those who take a leading part in the tripartite. On occasions, the SLC, under a different label and with some outsiders added, was made the agency to advise on plans for labour.
22.24 Shortcomings: In stating these achievements, we recognise that there are also debit entries to the ILC/SLC ledger. Their contribution to some labour maters has suffered, because certain far reaching decisions were taken by them apparently without adequate internal consultation within the groups forming the tripartite. The recommendation on the 'need-based minimum' could be cited as an instance of insufficient discussion within Government as a group. The distance between the spokesmen of employers' and workers' organisations at these forums on the one hand and
their members on the other and even the lack of control of the central organisations over their affiliates could illustrate the failure on the part of the other constituents of the tripartite. It is admitted by the employers' and workers' representatives that they can do very little to make their unwilling constituents accept obligations.
22.25 There is also a measure of dissatisfaction over the nature of consensus arrived at in these bodies. Increasing absence of unanimity in tripartite conclusions in recent years has been a cause for concern. The workers' organisations have criticised the procedure in reaching consensus as an exercise in semantics, leaving the basic contradictions unresolved. The employers have similarly held the view that the usefulness of tripartite bodies will be enhanced if official conclusions are based not merely on the views summed up by the Chairman, hut on the points emphasised by all the parties.
22.26 The decision to constitute industrial committees was the outcome of tripartite deliberations at the ILC in 1944 over demarcation of general subjects discussed at the ILC and their relevance to different industries. A Labour Welfare Committee for some industries was proposed, but ultimately it was decided to set up tripartite industrial committees on the pattern of the ILO Committees to consider the special problems of the industries concerned. The first industrial committee was constituted in 1947 for the plantation industry, composed of representatives of Central and State Governments besides equal representatives of workers and employers. Industrial committees have so far been set up for plantations, cotton textiles, jute, coal mining, mines other than coal, cement, tanneries and leather goods manufactories, iron and steel, building and construction industry, chemical industries, road transport, engineering industries, metal trades, electricity, gas and power, and banking. These industrial committees do not meet regularly; meetings are convened as and when required. The composition of these committees is considered afresh each time a session is called.
22.27 In a way, discussions in industrial committees have a better focus. Problems of an industry are specific and there is scope for adequate debate and for reaching practicable conclusions. Some of the generalities which have characterised the debates in the ILC/SLC are fortunately absent. The record of the industrial committees which have met frequently has been definitely encouraging, if judged in the light of collective agreements reached in the committees and their implementation. The unfortunate part has been that the committees meet too infrequently. A large number of those mentioned in the last paragraph have been constituted more recently. The more active among them are the committees for (i) plantations, (ii) coal, (ii) jute textiles, (iv) cement, and (v) iron and steel.
Analysis of Evidence
22.28 Tripartite meetings provide a useful forum of communication between the parties represented on them. They help in narrowing clown differences among the three groups in reaching consensus over matters of common interest, in providing a forum for communication among the parties and in sharing the responsibility of Government in maintaining industrial harmony. The State Governments and employers' organisations endorse these views. The majority of the employers' organisations feel that such bodies will have a useful role, particularly with the formation of State Governments of different political shades. They add further that tripartite consultations could be more effective it each group represented at the tripartite had a better system of internal communication. According to them, part of the utility of such consultations is lost if they are used to pressurise one group or the other on matters which prove of disadvantage to the other. It happens that at times even the economy cannot sustain such pressurised agreements. Some public sector corporations have complained that the 'norms' settled in these meetings are agreed to in a casual manner. This view is to an extent supported by some of our Study Groups. Workers' representatives have pointed out difficulties in the implementation of tripartite conclusions. Several have even gone to the extent of stating that these conclusions have had no impact on workers' life. They have further suggested that discussions in the ILC/ SLC will not acquire seriousness of purpose, unless a special secretariat is set up to look after the implementation of tripartite recommendations and to collect and publish relevant information bearing on the concerned subject. To restore the faith of workers in the decisions of the tripartite, they have suggested that the recommendations should be given the force of law or at least treated as conventions which should be well publicised and accepted outside these bodies. This demand from workers has emerged out of the assurance given by the Government to employers' and workers' organisations at the inception of these bodies that the
Central Government would consider every suggestion made by the tripartite bodies, and that out of the decisions specifically taken by the ILC/SLC, unanimous conclusions and agreed recommendations should be binding on the parties.
22.29 Since third party intervention will continue for several years, the ILC/SLC, along with other tripartite consultative bodies, have an important role to play. Tripartite consultation has its value for setting uniform 'norms' to guide industrial relations. The ILC/SLC industrial committees which have been set up in recognition of this fact must remain advisory in character. The conclusions/recommendations reached by them should he treated as deserving every consideration for implementation. To give to all tripartite recommendations a statutory force will have serious difficulties, apart from marling the spirit of tripartite deliberations.
22.30 While the Government's desire to operate through a tripartite consensus is logical, in order to make the process of reaching consensus more consultative, the Government should restrict its influence on tripartite deliberations where it is likely to be considered as over-persuasive. It will certainly have valid reason, as Government, for reserving to itself decisions on strategic matters. Similarly, the workers' and employers' representatives have to continue their cautious attitude in reaching agreements. In this context, we suggest that tripartite decisions could be taken in two stages. There should be a preliminary but detailed discussion on any subject brought to the forum. The conclusions recorded at this preliminary discussion should he widely publicised and free comments on them encouraged. On the basis of these comments, the tripartite, in the second round of discussions, should frame its recommendations. What applies to the International Labour Conference can well have a parallel here.
22.31 It would he fair to concede that over the last 15 years, agreements in the more active industrial committees have reached even greater benefits to workers than the decisions of the ILC. It is also true that discussions at the ILC/SLC are influenced more by what happens in traditional industries and that too of a limited range. On the basis of this assessment of the achievements of the ILC/SLC and industrial committees, we suggest that the industrial committees should meet more often to examine specific issues connected with the concerned industries. Such general decisions as are taken in the ILC/SLC should be tested for their applicability in industrial committees and difficulties in implementation brought back to the general forum.
22.32 The present arrangement by which over hundred representatives gather for two days at a time for discussion of labour problems, whether in the ILC or SLC, does not seem to be conducive to reaching conclusions, 1 particularly when a major portion of the time is spent on a general discussion. The discussions should last longer and should be supported by a good deal of spade work in the Committees of the Conference. Specifically, the SLC should meet more often, and the ILC less frequently but for longer duration. Meetings should be called only when there are adequate agenda items to be discussed. A general discussion over economic issues has its place. Some time should be specially reserved for the purpose. But, such general debate should not he allowed to overshadow the main items.
22.33 It has been alleged that the tripartite has become less representative, particularly in regard to the labour representation on it. This inadequacy was sought to be met by giving special representation to groups which normally did not form part of the tripartite, but were brought in for discussion of specific issues. Even otherwise, the federations having the bask qualifications for entry into the tripartite are increasing in number. Labour representation on these bodies has to be thought out afresh. We go on the assumption that trade unions in the country have to be unified. On this assumption, giving representation to a large number of unions having different ideologies is likely to come in the way of attempts at unification. Representation at the ILC does give prestige to a federation and this prestige in effect may keep the federation away from reconciling its views with other federations represented in the tripartite. If a conscious attempt has to be made on all sides for a united trade union movement, the first step in the process would be a reduction in the number of federations. No one has suggested that the labour wing of the tripartite has not effectively brought to the forum the live problems of labour in the country as a whole. Reduction in the number of federations to he represented in the labour wing of the tripartite may raise eyebrows, but
1 Whiteley Commission's Recommendations, para 22 •16 above.
will not undermine the efficacy of conclusions. It can be achieved by progressively raising the minimum membership required to give representation to a federation at the ILC/SLC, say every three years. The membership of each of the federations can be scrutinised at the end of every three years in a manner acceptable to the federations and the representation renewed/ cancelled as permitted by the minimum membership conditions. As a first step, we suggest that representation at the tripartite should be restricted to those central organisations only which have a membership of at least 10 per cent of the unionised labour force in the country. There should be a review every throe years to accord representation to organisations on this basis, but with the object of weeding out weaker federations to promote organisational solidarity.
22.34 The employers' representation at the tripartite forums too will have to be modified accordingly to maintain parity. Two of the three central organisations of employers represented at the ILC/SLC have already confederated for certain purposes into the Council of Indian Employers though they are still separately represented at the ILC/SLC. If the remaining organisation also gets affiliated to the Council, the latter can be represented at the ILC/SLC as the sole spokesman of employers. Alternatively, a similar method as proposed by us for representation of labour can be adopted for employers' representation as well.
22.35 The method of representation as suggested above will require a more elaborate communication system within the organisations representing the two sides at the ILC/SLC. That alone will help them to be increasingly representative of workers and employers and improve the effectiveness of the tripartite forums.
22.36 The work of the ILC/SLC, particularly because of the desire of employers and workers to be associated with supervising implementation, will acquire a complexity. To deal with it as a part of normal administration in the Labour Ministry has its disadvantages. There is at present a separate cell in the Labour Ministry for the purpose, but doubts have been expressed about its effectiveness in coordinating the information required for these forums. We recommend that a fairly senior officer of the Labour Ministry should be designated as Secretary to the Conference. He should have adequate staff support; his functions will be to project and meet the informational needs of the ILC/SLC and industrial committees as well as to coordinate the information available.
Labour—A Concurrent Subject:
22.37 We now discuss the position emerging out of the inclusion of 'labour' in the 'Concurrent List' in our Constitution and the consequences thereof both in the framing of labour policy and in its administration. In the process, we propose to discover the basis, if any, for a common labour code. In the years since Independence, various legislative measures have been enacted both by the Centre and the States. In cases where the beneficiaries are distinct and the benefits are new, no difficulties can arise. The State legislation merely supplements the Central Acts. However, if for the same class of beneficiaries, neighbouring States provide different benefits, avoidable difficulties can arise.
22.38 The current dichotomy between laying down policy and its administration has not been without difficulties. Equally serious has been the States' desire to have new legislation. On occasions, there have been debates over the responsibilities of administering specific pieces of legislation as between the Centre and the States, as also over defining the 'appropriate Government' for certain industries under the I.D. Act. For a long time since Independence, questions of this type were sorted out in the Labour Ministers' Conference or in the tripartite. There have been instances when, on the advice of the Central Government, a State had stayed its proposed action in the field of labour legislation. In some other States, in the light of criticism or advice emerging out of the ILC/ SLC, the State law is made more acceptable in the All-India forum. Similar amity has prevailed in the matter of administration. This situation is likely to be affected by political developments leading to the formation of governments at the Centre and in the States by different and even opposing political parties. Recently, when the Centre proposed to accept responsibility in a particular instance in the matter of industrial relations in certain industries, the States showed resistance. Though this fact was a reiteration of a stand taken by the States some fifteen years ago, in the current situation, such differences acquire a new meaning.
22.39 If this is going to be the pattern for the future, the tripartite will have its limitations in promoting uniformity as explained in the previous section. What then is the way out? This was the point of our special inquiry during the course of seeking evidence. We sought help from the parties appearing before us on
the specific question whether they favoured a common labour code. In seeking a response on this issue, we started from the premise that since labour legislation had emerged over a period, the concepts/definitions and standards, as indeed the basic philosophy in some of the pieces of legislation, would have necessarily differed. Difficulties in administration consequent on it were to be considered as natural. In the new context, there is a possibility that such differences will be greater, bringing in their own administrative implications. In recognition of these difficulties, the response to the question on 'Common Labour Code' was affirmative wherever it was sought, though some discordant strains were also heard. Some even raised the basic question of labour being in the 'Concurrent List'. While the overwhelming argument was in favour of status quo, a very small section preferred to see it transferred to the 'Union List' and a still smaller section to the 'State List'. In this matter, we are of the opinion that labour should continue to be on the 'Concurrent List'. This brings us back to the question of uniformity in definitions and standards.
22.40 Our Study Group on Labour Legislation examined the whole gamut of labour legislation in the country and the possibility of introducing a measure of uniformity in definitions and standards. In February 1968, when the interim report of the Group was presented to us with its tentative findings that the code was possible, we suggested to the Group that it should frame a draft code for our consideration, on the basis of the observations in its Interim Report, reproduced below:
"There are on the statute book about 108 enactments, both Central and State. Inevitably the necessity to legislate with speed, both in the Centre and State, has led to prolixity and repetitiveness in legislation. However, out of this mosaic pattern of Indian legislation, uniform standards must be evolved and incorporated into an all-India Code Without detriment, either to the national interest or the interests of the working class, and at the same time safeguarding the gains made by labour and also standardising terms and conditions of service in the interest of production and economic growth.
"Any social law to be effective should not only be broad based and pervasive but should be simple and direct so that it could be understood and respected and, therefore, accepted by the masses it seeks to govern. Its implementation should be easy so that the benefits could flow speedily and the access to the law should be inexpensive so that to the person denied or aggrieved the law is a reality as well as a true instrument of relief."1
22.41 The Study Group, after some detailed work, helped us with a draft of the code along with its Final Report. As the term 'code' itself suggests, it means integration of different laws into a comprehensive statute having a common set of basic definitions and substantive rights and responsibilities to apply uniformly to all labour employed in the country. The objectives expected to be achieved by this unified labour code are: (i) a single set of definitions of the basic terms such as workman, employer, industry and wages and other significant terms; (ii) uniformity in the application of procedures and in the accrual of benefits to labour; and (ii) reduction in the multiplicity of administrative authorities and procedures now operating with little co-ordination, resulting at times in duplication of effort. We circulated the draft code to State Governments and central organisations of employers and workers and also invited public comments on it. The code, as drafted, has evoked considerable interest in many quarters, though its content has attracted an equal measure of criticism.
Summary of Evidence
22.42 The employers think that the framers of the code have gone beyond suggesting uniformity in those matters where such uniformity is desirable and feasible. The Study Group has brought in new laws or expanded the scope of existing legislation in the guise of evolving uniform standards. According to them, "the Group would have better served all the interests concerned if after analysing the existing Acts it had recommended realistic definitions and standards of service, appropriate division of area between the Centre and State, and uniform sanctions for breaches". Having said this and pointed out difficulties created by the application of different laws covering the same benefits in the same unit, they have made a suggestion that not more than one Act dealing with working and service conditions should apply to workers in the same work-place. The employers have further suggested the areas where codification is possible viz., in laws relating to social security and settlement of industrial
1 Interim Report of the Study Group on Labour Legislation, p. 18
disputes. They have added that the Study Group has laboured to evolve the code to bring about uniformity in labour legislation and identity of outlook as between Centre and State and that though this is a laudable objective, one cannot ignore the current debate on Centre-State relations. Unless the wider constitutional and other issues are first resolved, a mere acceptance of an all-India labour code, whatever its form, cannot lead to meaningful results.
22.43 Workers feel that with so much advance made in enacting Central legislation on many important subjects such as trade union registration, settlement of disputes, working conditions, minimum wages, social security, and bonus, it will be a futile exercise to re-write the law into a consistent piece. But apart from this futility, labour apprehends that in some cases the attempt to introduce uniformity through the code will adversely affect the privileges it has acquired. Though the Study Group made it its basic tenet to safeguard the existing benefits of labour, according to the workers, in translating the same into the code, this principle has been compromised to secure uniformity. Labour is organised in varying degrees in different States, and where as a result of State legislation it has acquired better conditions than envisaged under the Central Act, the operation of the code will disturb workers' privileges. Workers feel that it would be more desirable to cover the aspects not so far legislated upon, such as trade union recognition, gratuity and the like under a Central legislation and make it applicable throughout the country.
22.44 The reaction of the Governments to the code has also been mixed. The general view seems to be that though definitions and standards differ, for good reasons, too much of difference would be inimical to the interests of all concerned, including labour administration. At the same time, acceptance of a code would mean putting an important aspect of relations between man and man in a strait-jacket. What the code should do, according to them, is to prepare a model which both the Central and State Governments should keep in mind in enacting new pieces legislation or even in amending the existing ones. Many State Governments and the Union Labour Ministry would favour a via media which could mean a partial acceptance of the idea of the code, ensuring norms on certain crucial matters, and minimum benefits and common procedures on basic issues affecting labour. Another feeling largely shared about the code among different sections is its special plea for uniformity. On this point it is felt that definitions under different enactments are framed to suit the objectives behind specific Acts. To have uniform definitions for all laws will defeat this purpose. While supervisory and managerial classes drawing a prescribed maximum salary are covered under the Bonus Act, the same if covered under the Industrial Disputes Act, will lead to serious problems of discipline. While it is true that these different definitions make the laws less comprehensible to labour particularly and create administrative complications, it will prove to be impracticable to lay down uniform definitions to govern multifarious substantive benefits presently extended to labour under different enactments. The purpose behind different definitions is sometimes to cover less privileged labour under a particular enactment, which otherwise is likely to be refused even the bare minimum protection sought to be granted under that law. Extension of such a law to all labour may mean freezing the benefits at a level lower than what certain sectors might already be getting or bringing law into disrespect by large scale non enforcement. The Minimum Wages Act, 1948 may be cited as an example in this regard.
22.45 On the other hand, too ambitious an attempt to frame a common set of definitions may lead to an unrealistic extension of certain benefits to sections of labour hitherto not covered on grounds of economic impracticability or administrative difficulties. While a factory lay-out, conducive to workers' health and safety as prescribed under the Factories Act, 1948, may be enforced on small factories having a prescribed minimum labour force, the same may not find it economical to provide benefits envisaged in the Employees' State Insurance Act, 1948. Extension of these benefits to the more dispersed and unorganised labour is likely to prove all the more impracticable. An attempt towards bringing extensive uniformity in definitions will either deprive certain sections of labour some minimum protection and benefits they are already getting or will seek to confer certain additional benefits on them which will go beyond the capacity of their employers. But while recognising the dangers of a uniform set of definitions for all labour laws, there is general agreement that such uniformity which or is in keeping with the objectives of certain statutory provisions or which does not drastically add to the scope of certain benefits will be desirable on consideration of simplicity of understanding and convenience of administra318
22.46 A practical drawback experienced in administering some of the statutory provisions under separate enactments is an avoidable multiplicity of certain procedures and authorities, generally causing delays and inconveniences to administrators as well as to beneficiaries, and in certain cases it means avoidable costs to all concerned. Filling of a large number of forms and their processing by authorities under numerous laws are commonly recognised hardships. While a simple stringing together of all laws into one may not really offer a solution because of certain inevitable details relating to the huge compass of the present labour legislation, an integration of laws relating to subjects having much in common can be a practicable solution.
22.47 On the subject of the code we refer to the view at the other extreme as expressed before us. Many employers who run shops or commercial establishments mentioned to us their difficulty in equipping themselves to meet the requirements of various labour laws. The solution, they suggested, was a separate but complete Act to govern shops and commercial establishments in place of the present Shops and Commercial Establishments Act, a State law. The comprehensive Act for the purpose, according to them, should cover the present legislation on shops and commercial establishments, some elements of the Standing Orders Act, 1946, the Industrial Disputes Act, 1947, and provisions for social security. A similar view was put forward by several small establishments concerned with manufacturing, plantations, mines, etc. We do not countenance this suggestion since it would mean differential legislation, merely on grounds of the nature of the work being different, in spheres where it does not seem to have justification.
22.48 Considering the variety of subjects, procedural as well as substantive, presently covered under labour legislation, we do not think it will be practicable to formulate a single Common Labour Code having uniform definitions all through and applying to all categories of industrial labour employed all over the country without any distinction. Having accepted the position that 'Labour' should continue in the Concurrent List, adjustments to suit local conditions in different States will have to be allowed which in some cases may not necessarily conform to the letter of a common code.
22.49 In order to bring about a feasible degree of simplification, and uniformity in definitions, we consider it should be possible to integrate those enactments which cover subjects having a common objective. For instance, the present Industrial Employment (Standing Orders) Act, 1946, the Industrial Disputes Act, 1947, and the Trade Unions, Act, 1926, can be combined into a single law. There can be a single law on Social Security integrating the present Workmen's Compensation Act, 1923. Employees' State Insurance Act, 1948, Provident Fund Act, 1952 and Maternity Benefits Act, 1961. Laws on working conditions could be brought together, but in doing so, the differences in the place of work should be duly taken into account. These together will mean a desirable simplification of the existing framework of labour laws.