Labour Law 2 (Class Notes)

MODULE 1 (9 classes) Jist:

Labour: started out as how labour needs to be seen as something bigger than how it has been
defined in the statutes
Legislations Rights
Right based approach
Labour reform: Extending protections?
State-labour-control-protection
ILO-HRs-Constitutional Rights.
There seems to be a divergence with what is accepted as a solution and what is being brought as
solution.(What India is doing to dealing with issues regarding labour is not in consonance with what
it has accepted internationally through ILO).

Objective: Not what the legislation says and how its provisions are interpreted, but the model of the
statute, what it aims at, what are the other alternatives etc.
Idea of Informal Sector (1. how it came into being; 2. how can you now extend protections to it):
Unorganised sector (Is it called so because they have no Organisation i.e. Freedom of association?)
Are they unprotected because legislations dont contemplate them (apply to them) or because they
are not able to enforce them?
Looking at definition of workers to understand how the definition creates distinction between
formal and informal sector:
What is the definition of Workers? Trade union and ID act does cover these workers in the organised
sector.
The new legislation (NREGA) is allegedly transforming them from workers to beneficiaries. They just
have the right to employment, it does not contemplate them as people who have rights. So if its a
labour statute at all is debatable. Focus of statute is changing to social security.
Informal sector: Term used only after 1980s. Before that the legislations did not even recognise it.
Settlement or adjudication mechanism you have in TU and ID act does not give primacy to unions, it
just says that any group of people can enter into an agreement with their employers.
Before TU (1926): The crux of the TU act is registration of Trade Unions and in certain respects to
define the law relating to registered Trade Unions (mostly rights and liabilities of TU).
ID act (1947): focus: minimise dispute for industrial peace Preamble: An Act to make provision for
the investigation and settlement of industrial disputes, (Imp. headings of the act: Dismissals of ind.
Workers to be considered ID, Disputes referred to board, courts or tribunals, Prohibits strikes and
lock outs, provisions regarding layoffs and retrenchment and unfair labour practices; penalties).

(Relationship of law with labour: a huge debate about whether labour would be better off if left
alone. ID act is based on the premise that there is no peace in the industries. If there were no
statutes, maybe they could bargain for much more that what they can now under the bounds of law)
TU: very broad definition of TU across sectors. (Closed shop unions: no democracy within the union,
lack of 2 or more unions in organisations. But these evolved later). Therefore this distinction
between formal and informal does not make sense. (Therefore everyone is entitled to the same
protection as anyone else in countries like US, but in India the protections do not apply to informal
sector because that industry is not counted as an industry in the law, they are excluded by
definition) Baxi: Informal sector is a creation of the statute, prior to that the distinction did not exist.
Entire self determination that the labour was capable of was taken away by the statute.
Informal sector are created by many processes.
Deliberate Exclusion by law: (which give minimum no.)
Complete absence of regulation: Even if you try, its impossible to include some (street
vendors) (even ID act which does not give a no. says you need employment relationship).
Casualisation: Sectors deliberately moving away from formal to informal. (eg: textile mills
employing lot of workers. Mills closed down but the brand exists, they dont employ
anymore, they just buy it from hundreds of people. Should you stretch the law to say there
is still in the formal sector? It depends on the policy of the state, it decided to keep it in
informal sector (Factories Act (applies to manufacturing premises that use electricity and
employ 10 or more workers and to non powered premises that employ more than 20
people): because if you have less than 10 people in factories then you dont have to provide
protection). This is happening even in a global sense, where manufacturing happens over the
world but they dont have enough control and knowledge to bargain with people who give
them employment.
Should the state rise to the reality and provide them the protections required? Also, now that
the state has recognised this sector, why has the solution become only social security and not
the protections that the organised sector fought for all the time. (connect it to NREGA) Just
because there is no organisation and the workers do not know what is happening in the sector,
how does that make the protections
Legal definition of a worker: (employed) (How do you define employment: relationship of master
servant between X and Y). Therefore hawkers etc do not have such a relationship with any such one
person) (Bidi Workers case: some people can be included by a broad interpretation of the statute
but even then you cant include hawkers) We need a paradigm change: completely different
approach because if you stretch this too much, after a point it becomes ridiculous. Labourers
(theoretically and normatively): People who do not have access to capital and need their labour to
generate it so as to fulfil their survival needs.
One of the new paradigms: Unorganised Workers Act (Beneficiary mode, does not recognise any
rights for the workers): Recognises that whoever does not fall within the other acts can fall here.
Citizenship right: Saying even if they do not get right as employed but they get rights as citizens.

Problem with this paradigm: But then the paradigm shift might just incentivise the employers to say
they dont have any obligation and the state should provide all rights. Should there nit be a a set of
rights that the employers should be obliged to provide?
Question: Can there be some minimum level of rights? Where will we source them from?
Evolution of labour law in India:
Evolution of Labour law:
Phase 1: Unions were criminalised, decriminalising it. 2nd
Phase 2: 1st set of intervention: labour moment lead to a lot of things among them being labour law
where they (labour) give away their right to self determination and Union will then provide
protection to workers.
Phase 3: Then the phase of welfare state where it was not only the duty of unions to protect the
workers but also the state has that obligation eg. gratutity, bonus etc, here the criticism is that state
has become an intermidiatery and taken up the agency of the union, now the worker and employer
cannot solve the dispute without the stamp of the state.
Phase 4: Liberalisation: State should set back its regulation.

1. Labour control (Does not give any new rights, regulates the already existing right of forming
unions, giving them some of their demands): 1920s
W.C. Act 1923: compensation v. Damages (1st: when you cant resituate, you try to compensate as
much as possible, while 2nd: there is an element of punitive measure)
How do you calculate the compensation? Multiplier factor where you look at the capacity of the
worker to work, his past work etc.
Is there a ceiling? 4(*)/ Rs. 1,20,000. But calculation is multiplier into salary. There is a rough and
ready way to calculate the the compensation through a schedule. Why is it so? Legislation comes in
between to establish a via media between tortuous liability (where the employees would get higher
compensation) and contractual liability (where they would get nothing due to the clause of volinti
non fit injuria) by removing the concept of negligence of the employer. (We need to remember that
we are talking about a time when there was no factories act and there was no statute or law
enforcing an duty of care ensuring the safety and security of the workers. He just had an ordinary
duty.)
This act mentions accident (could have 2 meanings: when there are no safety measures for any
safety, they its just an event waiting to happen, why call it an accident? Only when the worker has
deliberately evaded a safety measure, you could call it an accident) If you call it a compensation act,
then you should have provided a no fault liability against the employer. But this liability is given on
the proviso saying if there is an accident, then there would be no investigation regarding what is the
cause, now this could benefit both: (refer to the 2 meanings). It just fixes some arbitrary amount for
all accidents, hence its a trade off between the employers negligence and his power to prevent the
worker from getting a compensation.

This was still dangerous because the employers dint have to provide safety measures, they just had
to pay off the damages and do nothing about the safety measure.
Employees State Insurance Act: Hence as against the model of compensation (which was a model of
tort/no fault/ employer model), it created a model of insurance, hence rather than a lump sum
amount, it created a system where they would get money throughout the period of disability. Its an
insurance model, but along with that its a contributory model. Where the employer would create a
fund where the money would go and then get used. The compensation would then not depend. It is
a better model all over the world, but it can be enforced only in establishment when there are more
than 10 workers, and hence it clearly excludes the informal sector.
TU Act 1926
2. Payment of wages Act. 1950s
(Minimum wages, Payment, Bonus)
ID Act 1947: Before this act there was no idea of formal sector or informal. But this model is
something that is not at all applicable for the informal sector because it talks about an ongoing
sector.
Minimum wages Act: (wages were always something that the employer and employee negotiated.
Bijoy Cotton Mills: Minimum wages act says that the minimum wage that the board decides has to
be paid by all the employers. Now this is something that the employer can pay nor something the
workers want, they are willing to work below that. The court says if you cant pay, shut down.
Section 3 of the minimum wages act: (Heights of administrative discreation: giving freedom to the
state govt. There is no way you can compel the state to notify an employment into the schedule, no
onligation to review after 5 years, it could choose not to do so). Process to notify minimum wage:
advisory board which is a tripartite party, consists of representatives from all 3 parties. Good system
borrowed from I law but do the representatives represent everyone in the industry? Exactly the
problem in Bujoy cotton mills. Is it taking away the right of everyone to bargain? Is this waiving of
FR? (sec. 7).
Minimum wage: how much? Art 21: what can it be interpreted as? If the SC had interpreted it
constitutionally, it should have fixed it as living rate. But what if the workers want to work at a rate
below it? Thats why SC does not want to interpret minimum wage as living wage. Another reason is
because it thinks that that would take away the right of the workers to negotiate for more than that
wage.
(Standard vaccum refinery ltd. V. its workers) Thats why SC in one of the cases it distinguished
between minimum wage , fair wage (Includes wage enough to survive and also provides for health
benefits too) and living wage (looking at living wage as something aspirational does not just include
money enough to sustain the household today but also includes pension, gratutity etc. ). Intention of
the court was laudable. But this negotiating power given by the court only works in the context of a
strong union, formal sector etc. But what about informal sector? Most of them only get minimum
wages.
Again should it be a need based minimum wage or a paying capacity of the employer based
minimum wage (the act is silent). Should there be allowed a negotiation going above or below once
the wage is fixed by the state. The Courts have decided it to be need based. (What happened in Bijoy
Cotton mills). But is there a proper mechanism for calculating how much they need?
Should we see minimum wages as something to control the collective bargaining power of the
workers to get a wage they want or is it more protective trying to protect them from employers.

Although the labour regime has moved away from control, but does this protective legislation come
with a measure of control?
Welfare state? Right based? Is there a right to minimum wage in the constitution? The Courts have
only said that not paying a minimum wage fixed by the state is violative. Is there is a difference? Yes,
what about employment where there are no minimum wages. Also, whatever the wage fixed by the
state is not questionalble. Therefore, minimum wages are not something that is universal. In this
context would you say that minimum wages act is also something that controls the bargaining power
of the workers.
Also minimum wages act does not give the worker a right to minimum wage, it just says that if an
industry cannot pay minimum wage, then they have to shut down.
Absences in the legislation which makes one wonder whether it really is a protective legislation: No
parameter for fixing the minimum wage, clearly saying that even after this wage being fixed, the
labour unions are allowed to freely bargain above that depending on the industry, paying capacity of
employers etc.
Models for enforcement: Should we allow for collective bargaining model to substitute the state
model of enforcement. We are using the latter now, but we see it not to be working, but is the
other realistic?
This act is the most relevant for the informal sector. (Domestic workers were never notified
minimum wages, happened 1st in 2000 in Kerela). This becomes the single most relevant act for the
informal sector because it gives them some protection for wages.
How should this minimum wage in this sector be interpreted? Should it be need based in a sector
where a need based wage is only inspirational or should we interpret it like we did for formal sector
(with living wage being the inspirational wage). There is no interpretation in the informal sector like
in the formal sector where the SC talks about the 3 kinds of wage. This sector is one where
exploitation is minimum, there is an assumption of presence of trade unions. But in the informal
sector where workers cant bargain, should we look at the minimum wage as living wage??
Can we use the mechanism used in the formal sector in the informal sector? There is a lot of
difference between how these work, one of them being ease and constant supply of labour in the
informal sector.
Preface of the convention on the domestic workers: (the movement was to secure dignity, and how
do you quantify it? Recognise them as workers. First time it recognised the difference between the
informal and formal sector. Significance: gives them the same rights that organised workers have
fought for and received. If those protections are valid for one sector, why is it not being extended to
the informal sector.
St. Vaccum Ref. Co. (AIR 61 SC 826): Workers asking for a share in the profit as bonus
irrespective of how much their wages are.
Workmen v. Reptakvoss Bvett labIC 289.
LAST PHASE: Shift of paradigm from obligations that employers have towards workers which was
won through labour moments towards obligation of the state to provide for the workers. Problem?
Workers not anymore recognised as stakeholders in the nation building but being a beneficiary. Also,
this shift would be the fall of labour law as it would be giving up the fight for labour law.
Discriminatory mechanism of legislation where labour law would take care of formal sector whereas
the informal sector would be left to the welfare legislation.

Analysis: Trying to create a framework through which you can look at the wide range of legislations
in labour law. One of the framework could be to look at the through the lense of International core
convention. (applicable to formal and informal).
4 ILO Core convention: (clearly political rights, rather than
Freedom of association
Right against discrimination (India very far clearly discriminating between 2 sectors)
Worst forms of labour (steps to be taken for eradication of these)
Forced labour
A lot of activists are rejecting this classification saying that these are not at all applicable in a country
like India where it should be minimum wage, right not to terminate employment etc. (Look at the
difference in the approach)
3. SS: ESI/EPF/ factories act:
(Purely protective)
Realised that even after constitutional and statutory protection, there are certain pockets which are
still left outside. Therefore the state here has to take the additional step of rehabilation which was
not spoken about in the traditional labour law (which talks about keeping state out). It is not enough
to just give them protections, they need to be rehabilated into the society. This is due to the
intervention of welfare legislation. Eg. protection against Bonded labour, NREGA. With this you are
expectine the state a sustainence rather than the state taking steps to rehabilitate those people
(which is a bigger role for the state).
Alternate model: The role of the state is to ensure that the workers get minimum wages, good
conditions etc. rather than providing for it and making the people more and more dependent on
itself for protection (that would be cheaper to the state too). Eg: National code of minimum
conditions of work which will be applied to all sectors across, rather than the model now where the
state is providing separate protections to separate sectors and claiming to protect them when it
actually is not (eg. of bonded labour and how state failed to both apply it financially as well as failed
to look at the newer models of bonded labour still focussing on the traditional model which mostly
ceases to exist now).
Gratuity
Bonus
4. Labour protection (CLRA, CL, BL)
5. SH law, PWD and Street vendors Act
Purposes for these legislations:
Legislations that were pre independence, post independence and post liberalisation are quite
different in their context. But what we need to see is not just what they were intended to achieve
(design) and what we did achieved i.e. what their effect has been.
Looking at legislations in terms of those legislations aiming to:
1. Control: Both the ID act and WC (eg. ID act acknowledging the conflict and the fact that its
difficult to resolve, so the state comes in as the employee and tries creating a condition
which it says is beneficial to both)

Strike: why does the question of legal or illegal strike arise? Illegal strike only arises when it
is in the context of contractual law where the employer has the right to enforce the contract
under which the employee agreed to work. But law enforcing contract of person service
does not apply anymore. Hence labour law came in, did it come to help them or to control
them? It gives them certain rights but takes away their right to go on strike.
It basically took away the right of free bargaining of the trade union (before that TU could go
on strike and try negotiating for any demand at any point in time), and in return agreed to
give them the major demands that they were seeking. But at the same time it also defines
what industries are, what workers are and gives it only to the, So, now although they dont
have to go fight for their rights like (bonus) all the time but it also takes away the right to
strike from the excluded section. Is this giving right or taking it away? This is why its doubtful
to talk about it as something under the protective regime, although they do provide certain
protections.
2. Protect: (State providing protection) The others talk about the protections . These
legislations are more inclusive and even the interpretations that they get is broad.
Gratutity act: Basis: Both wages not being adequate share in the profit, rather just
something allowing him to come to work the next day.
Factories Act:
ESI: Creating a national fund for the welfare of health of workers and their dependents.
Minimum wages act
15/01/2014
Assignment:
The article maps the evolution of labour law by classifying the legislations in this field of law into
laws which were passed with the objective of taking control of the rights vested in the labour unions
till then, although they do provide the labourers with some basic rights in return. These include the
ID Act and the WC Act. The article talks about how the effect of such legislations was to take away
the collective bargaining power of the unions and increased the role of the state in the labour
dispute. The article then moves on to talk about the later legislations which it classifies as
legislations whose aim and effect was to provide these labourers with certain protections which
earlier they could only demand for depending on the relative bargaining power they had. The
evolution of these laws has been in such a way that the labourer is no longer seen as a worker who
has a role to play in the nation building and thus is entitled to his rights, rather he is reduced to
being a benefactor
Last labour Act: Construction Workers Act. Recently: Sexual harassment at workplace: Places a clear
obligation on the employer.
When you examine evolution: Has there been an acceptance of state of certain entitlements. What
about the right to collectively bargain and enter into a settlement with his employer.
Look at evolution: The rights that were fought for by the labrouers, has the state atlease accepted it.
Next step: the mechanism that it uses to enforce them.
Framework: ILO convention: Are these rights enforced by the Indian state.
Freedom of association: Right to collective bargaining.
NREGA: transfer of worker to household. Is this in consonance with IHR: IHR as a framework that is
evolved as one for individuals, then is this a good framework for labour laws?
Next framework: HR framework: Are the principles recognized by ILO a base of the IHR?

Right to dignity: (ILO) worst forms of labour

Right to minimum wages: (Right to dignity): but not accepted as core by ILO.
Is it useful to use an approach that links labour law to International law: would it enhance the status
of labour standard or would it dilute the discourse around it by making it just a human right issue??
Nicholas Valticos (ILO member: 2000): it is useful to acknowledge that demand for labour law
preceeds discourse of IHR. And that labour standards are actually basic HR, although looking at it
from IHR would also be dangerous in the sense that IHR could be divisive.
Eg. Sexual harresment against women in workplace: Invokation for labour laws for labourers makes
it much stronger. (which got carried through because of the womens movement rather than the
labour movement).
Labour law approach: If you look at it as separate legislations, you wont get a sense of it. You need
to look at it through a framework (HR). Eg: talking right to bonus-right to dignity; equal pay-right to
equality.
Labour/employee/worker:
Legislations in 1950s started using employee instead of workman :
using more of a gender neutral term. (change from workaman)
ESI: much broader definition: you could be both directly or incidently connected to the
establishment. (from labour). The word employee is the beginning of creation of employee
relationship for entitlement of rights, rest are left out of the umbrella.
Term labour: catch all phase to make sure there isnt a category left out. (A term recently being used
eg. Organized workers act). And this category is the most vulnerable. (Basically, it covers everyone
who has to put in labor). Best way of identifying informal labour: people left out from the protection
of law.
Problem of protection to informal labor: How do you rephrase the already accepted rights in formal
sector so that they make sense to them. What can be the framework used to rephrase it.

16/01/2014
Last legislation on formal labour: Right of construction workers. After that focus on informal sector.
Make a distinction between the legislation on paper and that in effect. This is how the article also
concludes.
Perhaps, labour hasnt received the kind of civil political appeal. Because rights which are based on
on indivdulas seem to fare better in the Indian constitution.
2 ways of leveraging labour law: Through constituial law or by strengthening tradititonal contract
law
Central Inland Water transport: 1986 AIR 1571: Govt co. entered into contract with employees
saying it can be terminated in 3 months notice. Should you be reading into this reasons for such
notice, reading into right to be heard before terminating, saying that notwithstanding that he signed
it, he has a right to continue unless proper reasons are given (Without looking at the consti, the
court could say that it is a contract that 2 people entered into, so enough). But the Court held that
the framers wanted it to go beyond the mere contract because contract law is not enough to protect
the employees and hence Art 21 is invoked. Her argument: Why do you need to invoke Art21, even if

you strictly interpret traditional contract law, you could say that there are provisions which curtail
contracts against public policy or principles of natural justice.
Note: Constitutional argument would work only for public spheres (state employers). Then why not
use traditional contract law which could apply to both public and private. Also, requiring to look out
the contract law to invoke fairness and non arbitrariness gives an assumption that contract law itself
is not fair. The courts of common law did look at fairness and non arbitrariness even in the absence
of a constitution mandating it.
Why not? Personal service contract are exception to traditional contract law, these are not
enforceable. You can ask for damages of breach.
Also, since employee contracts are between 2 different parties, therefore they have to be examined
from the lens of fairness.
Recognition of collective bargaining power: When they realised that although contract did give the
workers bargaining power, but this happens when the 2 parties are at unequal positions. Hence
allowing the Trade unions to bargain kind of brings them to equal status.
*Most labour rights precede Constitution rights. Since under the already industrial law, all
termination of employment are deemed to be industrial dispute whoch has to be referred to a
tribunal. Not to have the same right to public employees is unfair under Art 14. Court borrowing
from a labour right and reading it into the constitutional law.
Analysis: Although its a good thing that in India the constitution is being used to leverage the status
of the workers but at the same time, its rendering traditional contract law weaker continuing to
interpret it unfairly, which will be damaging to workers not govered either under public sphere or ID
Act. It might be better to have a single legislation to protect all employees from unfair dismissal.
Workers in ID Act: Process given for employees to challenge the dismissal. The workers to whom the
ID act does not apply (but work in the public sphere) could go to the Court 226 and seek 14 and 21
protection.
Critisicm of using Constitutional framework: It will be applicable only to public employees.
Regarding Disability: Anand Bihari v. Rajasthan State transport corp.: AIR 1991 SC 1403? Using consti
to enforce traditional labour: From the day they joined, within 10 years, their eyesight was
diminishing and could not carry out the work they were originally recruited for. They were covered
by ID Act, but it also says that an employee can be dismissed for continous illness. This is not the
traditional unfair dismissal case. Can we invoke 14 21. An employee recruited in public sector
expects to work till retirement, it is a legitimate expectiation (contract law). The Court says that they
do not have remedies under the labour statutes (eg. WC Act: compensation for accident, could you
not extend the protection of WC Act and say that the intention of the Act was to provide protection
for disability arising out of employment, neither ESI. Does it becaome necessary to drag in consti
because of narrow intrerpretation of the statutes. 3rd leg: ID Act, could have said that this was not an
exception to retrenchment, because it is a disability arising out of employment).
Regarding Sex Discrimination (Airhostesses cases) Nargesh mirza, yashishwini merchant and (3rd
one). The statute in question: ID Act. Problematic about the Courts
Nargesh Mirza: 3 clauses challenged: no marriage, termination on 1st (challenges to equal
remuneration Act: which does not only talk about the pay, but even the conditionas and age of
employing, promoting and terminating) Equal remuneration act: Same or similar work : Their work
was similar to the men and the different conditions are violative, But the Act says that there could

be different condition when this difference was due to things other the age if the central govt gives
such notification. The court did not go tot eh Act, why couldnt it just say that the notification is
invalid. The Court went on the lines of Art 15. The Court said the pregnancy clause is discriminatory
but the marriage clause is not.
This jurisprudence was challenged in Merchant case: Said the contract was entred through collective
bargaining and hence has to be unheld. And since the collective bargaining is the highest labour
right, and so when an agreement is achieved through it, it cannot be examined under Art 14. (To
invoke collective bargaining in this case where there is patent discrimination is disappointing. Setting
up freedom to collective bargaining agains right not to be discriminated against. Is it really
leveraging labour?).
3rd case: employee made a single cadre, challenged by the male cabin crew. Court dismissed the
challenge, it was a good opportunity to examine the jurisprudence under the previous 2 cases and
set them aside, but the Court dint.
Official liquidator v. Dayanand
Ranveer singh v. UoI
State of Haryana v. Piara Singh
21/01/2014:
INVOKING THE CONSTITUTION: (In light of the above 3 cases where constitution was invoked rather
than expanding traditional labour laws). This legislation is seen as a great development (an
extremely good example of how invoking constitutional law helped), a law solely based on
constitution rather than being a labour law in todays scenario when labour legislation is seen as anti
development. But then there is a flip side too: i.e. shifting onus from the employer to solely the
aggrieved party, and not bringing in the trade union.
Right against sexual harassment; explicitly endows a right to the employeses, also the application of
this is wider.
This legislation is used to enforce these particular rights. Hence invoking a constitutional right, an
international right in the labour law.
Nature of this legislation: Not a control legislation as it does not take any agency away from anyone.
It is a protective legislation, but is it the same as before, in the earlier protective legislations the
state is the one providing the protection. But in case of this act; the state has put the protection
obligation on the employer.
It is also not a typical labour legislation as it does not talk about the role of labour unions. Why is this
not categorised as an industrial dispute which can be negotiated and conciliated. Why so? Sexual
harassment law has not come from the labour law movement due to many reasons one of the imp.
One being the marginalisation of womens issue within the unions. Second, the industrial forum is
not seen as a proper tribunal where these issues can be taken up because the procedure is so
different.
Sexual harassment is a departure from the traditional laws which have failed to deliver. Hence the
basic principle is neutrality hence the law requires a majority of woman and is headed by woman.
Usually an internal committee but if it is the employer being accused against then the committee
requires to be a completely external committee. The committee records evidence and submits the
finding and makes a recommendation as to what action needs to be taken.

Going back to the prior question, what is the reason for such a significant departure from the
traditional industrial law as if to say that it never existed before?
Speculation: invoking HR and Constitutional rights has a particular advantage but at the same time it
undermines collective right. Although it would be better maybe if the women could go through the
union (if it was an industrial dispute) because it is difficult to go complain individually. Although it is
true that this act did not come up earlier because of marginalised treatment of woman, but is the
opposite of that saying that the union will have no role at all? Why havent we able to harmonise
these 2 frameworks i.e. individual right and collective right.
*Important shift from Vishakha: Vishakha put the onus on the employer to report the offense and
initiate proceedings, but The law gives puts the onus on the employee. Her point: You took the
principle from a framework of collective right where the offence was seen as one committed against
woman in that post and then while making the law, made it in an individualistic framework.
Some rights are such that they have to be given as a collective and not to an individual?
Equal pay for equal work: Act: Does the act say that it is a constitutional right? If it doesnt then does
it mean that it does not have the facets of Art. 14?
22/01/2014:
Through the set of cases where invoking constitutional law was a bad idea:
1. Equal remuneration Act says that everyone doing similar work have to be paid equally but in
public service, courts have held that if the mode of employment is different, they can be
paid differently.
Randhir Singh: Driver working for the railways, said that he should be paid equal to what drivers
under other departments are paid. Court upheld the proposition saying Art 14 have to be read in
the DPSP. Hence equal pay is a facet of Art 14
But the Court does not agree to this in all cases, its not that accommodating.
Official liquidator. Notwithstanding Randhir singh, equal pay is not always a facet of Article 14. It
also depends on the exigencies of the employer, how much he can pay.
2. Service law: brach of law developed to interpret service laws. Can the interpretation of
service law invoke Art 14. (Another question: Does Art 311 violate the principles of natural
justice? It does have principles of natural justice- says termination has to be after inquiry.
(unless the employer can give a reason in writing why it is not possible). Tulsiram.
But in traditional labour law all dismissals are appelable/ under review. What is an established
practice in labour law can be overwritten through the interpretation of the constitution.
3. Regularisation (of the employment of the contract labourers who are not taken on a regular
basis) cases: Most govt servants especially in the lower ranks have been employed through
contracts. Are there any principles of natural justice which they have to follow or can they
be appointed and removed arbitrarily. Do those people have the right to appeal. There are a
lot of cases under Art 14 where principles have been applied to say that the contractor
cannot make use of his own mistake, because they did not give proper advertisementthey

now cannot remove them saying they arent qualified and then appoint other people under
different qualification.
Difference between people employed through a contract and through a contractor (which is
governed by Contract labour Act: contract labour). Is there a difference between the states
obligation towards these 2 categories. ID Act, all people taken through a contract to work in
state dept. are workers (direct relationship established). Prior to contract labour act, the
question of hiring people through a contractor could be reviewed by the courts under the ID
act while looking at the employment practices. Standard vaccum case: (before contract
labour act) Held that contract labour and their regularisation could be taken up by the trade
union as an industrial dispute as there is commonality of interest between people
employment through contractor and otherwise and go to the tribunal asking if their removal
is fair. But after contract labour act, the courts have interpreted it to mean that since there
is specialized legislation, ID act wont apply to it. (Eg, of how specialized labour could actually
take away rights). The contract labour act does not talk about minimum wages etc. The only
thing that contract labour act can do is allow the state to abolish contract labour in
particular work areas. SAIL case : The govt has to put its mind before abolishing contract
labour.
Analysis: They have taken what could have gone to the industrial dispute to the higher
courts i.e. HC through the writ petition, the claim is the same fair conditions of recruitment
and guaranteeing fair amount of security at work.
Piara Case: One of the examples of an int. of the SC that balances out 2 extreeme views: One
being, since the state appointed arbitrarily, therefore even if they are not qualified they
cant be removed. The second being that the court shold not interfeare in administrative
manners and since the person voluntarily entered into a contract whereby he could be
removed whenever the employer wanted, therefore he cannot ask for regularisation (Uma
Devi). The Court read Art 14 to say, that the state should improve process, i.e. advertise or
notified and then say since I dint get any application, I recruited them. The court says that
where the state has made some effort to keep the process a bit trabsperent by notifying it,
and then recruit people through contract, then its fine, such people could be absorbed. If
you havent done that you need to advertise again. This strikes a balance because it does
give o flexibility by saying that its enough if the process was a fair one.
Because even if you think of how to rehabilate the people terminated: The court has said
that there has to be advertisement for the employment: hence they can apply for it. (Before
this, the principal of contract labour was just to change the contractor and arbitrarily take
any other set of workers).
Because if you say that it should rather be rectified by giving the people some time to gain
the qualification or to keep only those people who are qualified. How do you rectify the fact
that you dint give opportunity of employment and allowed backdoor entry. (This also
violates Art 16 which says there has to be reservation: you have taken people without
reservation, is it fair to absorb them by directing regularisation? How do you get across
that?) Because what is rooted in illegality, it can never be rectified. Because if you dint do
that, you incentify them to violate in the future.

23/01/2014:
Constitution Rights for labour: (14-19-21)
I.

II.

III.

IV.

V.

Minimum wages:
Bijoy cotton mills: Role played by the state and invoking constitution for
guaranteeing minimum wages, but the constitution only talks about a living
wage.
Is invoking constitution a good idea? Yes, individual rights guaranteed for an
individual but takes away collective bargaining rights, also the state can fix any
arbitrary wage and you cannot challenge the fixation and non fixation.
We also spoke about Bonus making up the gap between MW and LW but we
should only use LW for informal sector because their organisation does not
allow them to bargain for bonus.
Dignity/ Life: Delhi Jal Board: Deaths of workers during sewage cleaning. PIL filed:
Municipality said not my workers but the contractors. Court held that they are your
workers and you need to give them safety measure, not enough to pay compensation
after death, the Court as such does not invoke any particular right.
Airhostess cases (*Jurisprudence: Collective bargaining is way beyong FR and can
triumph FR sometimes, but it is still not a FR).
Securtiy of Employment:
Anand Bihari
Central Inland
Equal Pay: Not absolute, only in certain cases where you can demonstrate that the jobs
are similar, courts usually invoke differentiaon/ classification tool. Hence this tool is not
a good one for this right.
ID Act: Notwithstading the contract labour Act, if the workers can maintain that there is
a clear employee employment relationship, there is a window for regularisation.
But for State employees: there have been 2 approaches (as discussed yesterday and a
balance was stuck down in Piara Singh)
Collective Bargaining-unfair dismissal Doctrine of Pleasure.
Collective right not to be understood as a FR. The Court said that it is a FR that if we give
it to one section, then we also shpuld give it to co operatives which they can use to
attain their profit earning right, and that Art. 19 is an individual right and refused to keep
a collective right there, they said a collective right is as much as the individual right is.
Instances of Doctrine of Pleasure being invoked in case of strikes and all (Art 311 need
not follow principles of natural justice if the employee can give a reason)
Unfair dismissal: Niranjan Singh v. Railway Board: (A case the Court hasnt been able to
get away with). A meeting called on the railway premises, and the Railway board issued
notice that such a meeting should not happen, and the employees violated this and
were removed from services. Is this fair and non arbitrary? They havent even spoken
about the consequences that could disrupt public services. The Court held that the
premises are not something that the employees have a right on, but something that only
the employer has a right on, hence they could be dismissed. (Low point of constitution

VI.

law not withstanding Yashashwini merchant where court held collective right as
something bigger than FR)
Kameshwar Prasad v. : The govt. employees were put under a restriction from going on
strike etc. Is it a complete ban on freedom of association? Can you classify them as a
separate category and say they wont have a FR? The Court held that there cannot be a
blanket ban on all kinds of protests, but some kinds of protests could be restricted. (A
good constitutional case)
Employer restricted the employees from being a member of a political party. You have
both rights, but you have to choose. You have to either be a govt employee or a member
of a political party.
There have been cases where the employees are restricted about talking about the
employment, criticising it or bringing out irregularities and if they did and the the
employer dismissed them. The court upheld it.
He nce these are cases showing the bad side of govt employment, where on one side
you get benefiots from it, you also have to give up these rights.
Security Woman in informal sector:
This all originated from Vishakha. How did it provide the platform to start this
discussion, The reading of 14, 15 and 21 in the context of empoloyment, and saying tat
what id being comprised is not just her security but also her right to livelihood. This link
between security and livelihood was brought up here. (Because the statutes have
spoken about security only in the physical sense, we need to go ahead and look at it
comprehensively and look at security IN employment rather than security AT
employment.
Anuj Garg: Tension between autonomy and right to security. Right to security is more
funsdamnetal than right to employment opportunities, but the significance of the state
is that it should provide that security. Says the employee should also act with the state
to protect the security (but does not give as strong a liability that Vishakha had left)
Vasantha case: Probision of Factories Act restricting woman from night shift.
(State of Maharashtra v. Hotel Association) Bar dancers case: The relationship between
vulnerability and livelihood.
Vulnerability after banning dance bars as they are forced into prostitution, state argued
that the vulnerability is also during the profession (state was putting up protective
discrimination). The court held that you cant trade between that. And that the state has
to provide the security rather than compromising their livelihood to provide that
security.
*Test used for protective discrimination laws (as laid down in Anuj Garg): First is
proportionality (the protection should be justified in context of what rights it is taking
away eg. American judgement, where they had evidence that during a particular time,
crimes increased and the police could not do anything, this satisfied strict scrutiny; and
the Court could hold that woman should not be out in the street at that particular time
till the police force is enhanced).

28/01/2014:
MODULE II:
Informal Sector:

Created by certain process:

Exclusion by law (Factories act: less than 10: the whole establishment becomes informal
sector. There is a diff between informal sector and unorganised labour. Informal sectors are
activities which are outside the protection given by the state. Whereas
informal/unorganised labour is something that can exist in both formal and informal sector.
Eg. contract workers. Statute for them: Unorganised workers social security act; this act also
defines unorganised workers).
Complete absence of regulation
Question: why does informal service still exist in absence of regulation?. 4 theories:
ILO studies:
It is not worthy of state consideration or regulation as it is not something people do for
livelihood but only for survival.
These are countries in transitional phase wherin people are moving from traditional sector
to conventional industrial labour, and hence informal labour would then vanish as soon as
the transition happens. (They could not be more wrong: informal sector constitutes 90% of
India).
Globalisation: Has created unbound and unregulated capital. With that there would be
greater growth and would lead to greater employment. Hence in a way they wanted
informal sector to exist. They needed workforce that did not ask for any rights. Casic idea of
capitalists, I put money where I get returns, tomorrow I lose, I want mu money out. I dont
care how it would affect the labor. This is also pressurising the states to relax labour
regulations (relaxation in practical life). This creates smaller informal sector which feeds into
the formal. i.e. formal survives on the informal. This theory takes away the gap between the
2 by saying that both of them are very highly related. And due to globalisation this
outsourcing is not conficed to within a state. This has lead to a kind of irrelevance of national
regulation. We need an entirely different approach to hold people liable who dont even
belong to the state.
Flexibility: Considers Informal sector to be a good thing. Leave people free to not only run
their business but also believe that they will act honourably (theory of self regulation).
Drawing from how even before state exists, contracts existed. Each ind. Worker can
negotiate for their condition of worker; this would create incentives for people to work
better. This does make sense in terms of certain activities eg. IT sector. It is coming from a
rights based approach saying everyone should have the right to earn their living according to
themselves.
Theory reacting to the 3rd theory: A theory talking about the black economy: They are
saying that informal sector is functioning deliberately (people are placing themselves in the
informal sector) so as to evade the regulation/law. It says that informal sector is bad
because its affecting the state by taking away state resources and cornering profits
themselves (like corruption, hoarding etc). Informal sector actually creates these institutions
which are stronger than anythingthe state can hope to become (eg. ,minig mafias).
According to her, you cannot have one theory that explains the whole picture. Because informal
sector includes both people employed in informal sector and those self employed. This
divergence is another reason why in India we need various labour statutes each with different
objective and different application.

Eg. RSBY (Rashtriya swasthya bima yojna): Insurance trying to cover people in all the states (its
contributory) for health services upto a certain extent. This is the movement from ESI (which
was a huge benefit for people employed in formal sector) which needed employer, employee
and states whioch had to contribute. Hence it would cover people who dont have employers.
This is being criticised on the fact that why are you letting a bunch of employers out (including
police which is taking licensing fee eg. for street vendors). Why not create a Board for each
sector which would then act as a quasi employer. Then this board will be made of local bodies,
police etc. This board would then be liable for implementing it, and the people will know where
to go to get these benefits. Rather than something this big on a national level using the tax
payers money which you know is deemed to fail.
30/01/2014:
Informal sector viz a viz Informal workers. In case of some informal workers, you cannot isolate
their problem from the issue of that sector. Eg. street vendors vs. child labourers. Eg. the
problem of street vendors needs the issue of the sector of street vending to be dealt with.
Wheras the problem of child labour is not the problem of the sectors which they are employed
in (eg. hotels, shops, fireworks, glass, carpet etc.), here we need to deal with other issues that
lead to children being employed in these sectors.
Contract labour:
The state is the largest employer of contract labour. Hence it is a significant issue. It is also imp.
due to its location; its located within the formal sector.
Stadard vaccum refinery: (Reading: cases 12, 13, 14 and 15 are cases of contract labour). This
was a pre legislation case where the court held that the disputes in contract labour could be
covered under ID Act. Then why did we need the legislation? IF this wasnt there, there would be
no differentiation between formal and informal sector. (ID Act and TU Act are 2 legislations
whioch do not talk about the no. of employees that need to be in the establishment, hence ID
act in scope does not restrict its application to any sector. What it gives though is the definition
of continuous employee. Hence it provides certain benefits which accrue to all workers in all
sectors and also provides certain additional benefits to a section too). Why the new act? We can
understand that by looking at the framework we started with i.e. state taking over the functions
of trade union. The contract labour abolition act says that the obligation of abolishing contract
labour is on the state, but the state is not obliged to abolish it everywhere, it arbitrarily abolish it
in some sectors. This is so capable of misuse that there is arbitrary abolishion hence the
contract labourers stand even outside the benefits provided by the ID Act, but the solution is not
to take away the role of regulatory from the state altogether too. Is the exclusion of benefit to
contract labourers in ID act through interpretation or through the statute (CLRA itself)? Its both
the statute and the interpretation of the court which says that once a special legislation, then
the general does not apply. CLRA is a very good eg. of how the protection statute has rendered
the contract workers helpless unless the state abolishes it in that sector.
SAIL: (4 years after the Air India Judgement): Air India judgement:
SAIL: CLRA has exclusive jurisdiction over Contract labour and reading of the statute clearly
states that the legislators did not want automatic regularisation.
Piyara Singh: (above).

But problem in this judgement: privelages state to such an extent that the state tomorrow it can
abolish contract labour and say that the existing workers now are regularised.
(Dint understand this point).
*Problem of contract labour act: does not even bring them on par with the regular employees
on the grounds of equal pay for equal work. Because the obligation to pay equally is on the
contractors who engage them (and not the employee). Also the question; if the contractor has a
liability, does it bestow a right on the employer ehoch he can enforce on the plrincipal
employer? No it does not, the only thing is the licens of the contractor is recinded and the
contractor changes.
Approaches:
1. Adjudication-St. Vaccum (Saying if you can establish direct relationship then you get
protection under ID act, otherwise they do not have any remedy
2. CLRA: abolition by state
3. Air India: Plublic law reading of the statute (saying the intent of the legislature cannot be to
leave them destitute
4. SAIL: a very statute based reading
5. (back to square 1.).
This model seems to have failed badly. What is the alternative available? Workers invoking ESI, EPF
and gratuity. These look at the principal employer who is under the obligation and they say since the
contractor is an instrumentality of the state, he is seen as the principal employer. But this also does
not work in sectors where there is a lot of intermittent labour where the employer keeps changing.
(eg. construction labour)
Hussain Bhai v. Alak Factory : Workers were terminated because employer had no work, contractor
was only an intermidiatory therefore they were asking for retrenchment compensation. Court used
the economic means test (borrowed from American jurisprudence). If the labourers can get some
other work through the contractor if the first employer has no work, then they are not empoloyees
but otherwise they are.
Bhimwada v. Vinod Kumar Sharma: If workers can prove direct employement relationship, then the
ID act can be applied (back to pre contract labour position). To nullify the state amendment saying ID
act would apply to contract labour. The court says that after contract labour act is in place; the state
amendment will stand nullified.
Looking at 33 and 33 C of the ID Act (remedies under the ID Act)
Contract labour is a bridge between formal and informal (moving towars informal sector better).
It has received a lot of attention due to cases filed under ID Act.
Def. of workers under ID Act v. EPF: ID act does not envision contract labour. In design it is not
meant for the informal sector (it is a formal design).
Criticism: Why twist it them to cover contract labour. But then it is important to do so, so as to
accommodate a lot more people.
The definition in ID talks about not only express employment but also implied employment. The law
nowhere says that there needs to be a direct relationship; why cant we imply it to say whoever is on
your premises or works for you; then he is a worker.

ESI act (requires state to come in): although only 1 year after but a huge change in the way it defines
employee. It includes people who are doing any work in or in connection with. In addition to this; it
includes 3 categories of employees: people employed, employed by an intermediary; and people
employed on a hire basis.
When this legislation is a broader one; but then if you can have such a broad interpretation here;
then why not have such a broad interpretation in case of the ID Act?
ESI is a contributory model where both employee and employer share; whereas ID act is a employer
liability based model.
What made the judiciary say that once contract labour act which is a specific legislation; nothing in
ID act would apply. There is nothing like this said in the contract labour act itself. The contract labour
act contains no provision of dispute resolution; still ID act is not being applied.
Courts: say ID act applied but between contract labours and the contractor notwithstanding the ID
Act (it does not provide rights against principle employer). The people then try fitting into the
definition of direct employment so as to demand rights against the principle employer.
This legislative interpretation by the judicialry is discriminatory according to her because these are 2
people doing the same work but just because of the way they are employeed, the court thinks its
legal to classify them as such.
ID Act by interpretation excludes contract labour and ESI by def, includes it.
One good provisoin of the ID act: 33 C.
What is an industrial dispute? What it the understanding of its scope?
What is to prevent an issue of contract labour from becoming an ID?
Bhilwada: equal wages between people employed through contractors and the ones employed
otherwise. Why cant this be under section 10 of the ID act when the provision clearly says it
includes workers or employees not direct workers. Then why such exclusion? Is this exclusion by
silence? But is that valid?
Just by interpreting workers in the narrow manner you exclude so many people from getting justice.its interpretation: needs 3 things: dispute, industry and worker (that too direct employees).
Acc to her the statute is not narrow, its the judicial interpretation rendering it so.
Last legislation to be seen under the light of contract labour:
WC Act: if there have been accidents on the premises of the principle employer- then the liability to
make good is on the employer.
Sec 20 and 21 of the contract labour Act: liability in cases of accident on the premises:
Notwithstanding anything; you have to go to the ID act for the recovery mechanism. Why do this
only for a particular right and create exemptions for all others?
Sec 12 of the employees compensation act: specific proviosion providing compensation even to
contract labourers. This then has to be read with the contract labour act.
Contract labour: looks like the easiest form of organised labour that can be regulated. But within CL:

Pure form: They dont perform an activity which is integral for the establishement. But acc. To
her this distinction is not good because it is very disputable as to what service is integral and
which is incidental. However form certain forms of CL this distinction is important.
Another distinction is between work that is seasonal and work that is perennial. When we talk
about
What is it that regular workers get that others dont?
In state of AP; they give 30 activities; in which contract labour is allowed (i.e. the Act wont
abolish these). This has completely changed the form of CRA by giving assurance that in certain
industries, CL will never be abolished.
The problem is the extension of different benefits flowing from various legislations. Since the CL
has been interpreted as an exclusionary legislation to exclude CL from the oppression under
other acts. But is this happeneing? No. (As we saw the absence of mechanism of giving
maoney). Similarly it does not give them compensation for accident on workplace. For such
protection to be given, we need to go back to the 1923 WCA. Again this proves how the CRA is
not exclusionary. (Because if we consider it exclusionary and superceeding the general
legislations; then the WCA has to be refused to be applied just like it refused to apply ID act to
contract labour act. Couldmt they clarify that this CRA does not exclude CL from benefits
flowing from other legislations. Because in practice a lot of cases under WCA has been with
regard to CL; she thinks therefore that WCA would therefore be applicable even after CLRA.
What about the ESI Act which includes CL within the definiiion of worker: If we call it
exclusionary; will we use the same logis that we used in case of rajhasthan amendment and say
that even if the act includes CL in the definition of worker; CLR Act being a special legislation
overrides and repeals the wider definition of worker under the amendment and therefore ID act
does not apply to it?
Acc to her; for certain purposes the interpretation is wide and for some it is very narrow.
Seeing other legislations in context of the CLRA and how the courts have interpreted them;
whether excluding CLRA from them or linking it.
ID (Sec 33): (Excludes application where CLRA applies
WC Act (Sec 12):
In the rest of the legislations: there are 2 models:
Legislations whose definition follows the definition of worker will follow all its interpretations
too and hence CL would be treated exclusionary unless CLRA is linked to it specifically through
an amendment.
And the other model which follows the definition of ESI Act and hence is interpreted by the
Courts to be applicable with the CLRA.
Payment of Wages Act: (Check not just def. of worker but places where the act applies eg.
factory or establishment and how then the act defines such factory or establishment).
This act does not have a def. of workmen but covers establishments. And says all employees in
these establishmnents, hence this act applies to CLRA
M.W. Act: defines employee: talks about outworkers; i.e. it does include CL; and so has been
interpreted by the SC. Therefore this act does apply in parallel to the CLRA.
ESI/EPF: 2 cases : Silver jubilee
R

11/02/2014
Examining special legislation for the informal sector vis avis legislations considered proper labour law
legislations and see the extent of protection offered in general.
Unorganised Labour:
CLRA

Bidi Workers
Protection for unorganised labour:
IDA: Different from other legislations in the sense it is a framework legislation as it defines
people who fall under it and then these people are covered in all the other legislations. Prior
to the CLRA, contract labour was covered under ID Act.
Analysis: Object of the CLRA was to increase protection to CL however if effect the
protection has reduced due to their exclusion from protection under ID Act. And are pushed
out to be covered by acts which do not have teeth like ID act does.
Delhi Cloth & General Mills v. State of Rajasthan (Raj HC): Rajasthan Court referring to all the
previous SC courts and says: CLRA has been intended to be an exclusionary legislation and should
not be interpreted reading other legislations.
Hindustan Steel Works Case (SC): rendered through its int. CLRA to be a toothless act. Officer filed a
case against the contractor for not paying minimum wages. He asked the court to interpret CLRA to
give them a right to Minimum wages whereby this obligation would shift to the principle employer.
SC: cannot interpret CLRA in this way, under that act violation only gives you fine as a remedy.
Liability of principle employer under sec 21 of ID Act cannot be read into this case, only CLRA applies
in this case and this act does not impose such
But Bom HC said that Sec 33 of ID act could be applied to CLRA notwithstanding the previous cases.
Therefore it can be said that CLRA does not give a comprehensive protection to the employees, we
need to look at it vis a vis other legislations.
WC:
MWA: MWA could be interpreted with CLRA to provide them with Minimum wages.
ESI: Can CLRA be read with ESI?
Silver Jubilee: (Look at the various ways of establishing control.) (p. 114 of the reading material):
Facts: Inspector of shops and establishments said that all the shopkeepers must be deemed to be
regular employees, therefore the court was examining how to test the relationship?
Court: Control test cannot be seen as a stand-alone test.
Contrast the decision with the decision in DC Works v. State of Maharashtra: here the Court is
drawing from the HoL decision: 4 criteria that are specified: these 4 are the traditional parameters
for testing the control. What are the other criterias that are imp? This decision tries to expand the
criteria of control-holds that mere territorial consensus, employee providing equipment, employers
decision to reject the final good are criterias too and more importantly the court broke the
traditional understanding by holding that you can have multiple employer and can still satisfy the
control test, i.e. multiple employer does not necessarily mean that you are not a employee.
Look at the ESI Act:- Are these parameters implied in the legislation?
ESI: if the worker is on the premise or works in connection to and who is employed for any work
even preliminary or incidental to the work.
TESTS FLOWING OUT OF THE ESI: (definition of employee broadly and even the Court has
interpreted it broadly unlike the case of ID act)

Economic test: People whose sustenance depends only at that work. (hence includes out workers
e.g. bidi & Cigar workers where what would have been wages is portrayed as something that is cost
of the product: which happens at a lot of times; hence one does not want to interpret the term
wages so strictly so as to exclude this deviation. This is to fight the urge of looking at the device and
to deny a relationship).
Mangalore Bidi Workers case: where the producers went to court saying that interpreting wages so
broadly would bring unfair restrictions to their trade. (But what is
Integration test: including people whose work is preliminary and incidental, so as to broaden the
scope of who can be an employee.
Coming back to Silver Jubilee case: Most of the concepts flow out of ESI act and use it to understand
the tests other than the traditional test. It therefore includes Contract labour. (one interpretation)
But since its an older act, it could be said special legislation would over rule it (second
interpretation).
Which one is followed by the Courts? Royal Talkies Act (p. 192 of reading material):
When you look at the def. of worker in either ESI or ID Act:- do you read it as one provision or
different clauses?
ID act def: 2 parts: not only do you have to be employed but also you need to do certain kinds of
work. Courts have read it to be 2 exclusive conditions making it a much narrower definition.
ESI act: One broad head and then different clauses; the Court has then read all these to be exclusive
tests and to be satisfied rather than as exemplification. This is what was held in Royal talkies . Acc.
To her this led to a very broad definition (legislative effort to broaden the definition) interpreted in a
narrow manner.
EPF
Gratutity
12/02/2014
Silver Jubilee: A tailoring shop where the employer would provide machines but the people would
also take some work home.
Act invoked: Payment of wages Act. Why? Under which act was the employer employee relationship
proved? If you prove the relationship in one, do you have to prove it under any other act? If it can be
proved that they are employees under Telangana Shopkeepers act, is it necessary to prove the
relationship under Payment of Wages Act? Nope, it is a legislation which is read with other acts.
Assuming that the Telangana Act does not have a mechanism of recovery of wages and hence we are
invoking payment of wages Act.
Sec 15 of the PoW Act: The test that were used in this case was different from previous tests. The
previous cases relied on the control test which included (DC Works): 1. Power of recruitment and
removal. 2. Power to direct manner of work. 3 Payment of wages. 4. Supervision. However the test
was expanded here to include: Physical link, in connection to the work of the establishment, right to
reject the products, the amount of time of work does not matter under this test.
Act like ESI and ID act are exclusive. Being self contained they cannot be read with any other
legislations. So if you choose to be under ESI, you have to give up claim under Payment of wages act.
Royal Talkies: Theatre. Management of the theatre was given to the contractor who hired people in
the canteen, there was a cycle stand along with it but wasnt exclusive and public could use it. The
question was whether they were employees and are covered by the def under ESI 2(9). The Court
said although its contract labour, but it has to be read with ESI and they are covered under the
definition of workers there.

Another category of workers given the manner of their work: Beedi workers. Problem is: you cant
tell if you are self employed or worker. (Rather than trying to include them in the def of workers, Its
better to assume that they are self employed and still try to protect them.
Mangalore Ganesh Bidi works:
Sri Bridhi Chand Sharma v. First civil judge. Invoking factories act, def of workers under factories Act
Anybody including people employed by contractors given that its on the premises or in connection
with the work of the establishment. Would a person employed to roll Beedi fall under this def? The
employer could say: there is no concept of hiring or firing, they just offer and the factory owners buy
it. There is lack of formal establishment wherein a certain no. of people who come every day and
work for some amount of time.
Claim here was for annual leave with wages from employer.
Dilema: Should we try helping the unorganised work by extending the model used to provide
protection to organised workers (We just have one framework which caters to people who go to
work at a particular time in a day to the same person and works only for them). This is what has
been done in case of contract labour. Is it better to frame a legislation dedicated to them. Also if you
do make a legislation: what protections would it provide?
The Court said why not extend the protection: And so the worker should be given annual leave with
wages because you can establish master servant relationship.
But there are a lot of cases which have held that this relationship cannot be established here. The
employer is not providing raw material, everyone doesnt report on a regular basis, they can sell it to
anyone else.
(Look at Minimum wages Act: Is there any concept of wages for piece meal? Also does it take into
account only piece meal on the premises or also outside it? Minimum wages act does talk about
paying work which just does not depend upon the amount of time the worker worked for. It
assumes some workers who dont have regular time works or those who work from home.
But these workers would not be considered as workers under Factories Act.)
Therefore, a special legislation fort Bidi And Cigar workers Act 1966 (before CLRA)was passed.
Therefore sector specific acts started being made.
Its better because: It borrows from Payment of wages (includes all 3 kinds of workers), Factories Act
(provides for better conditions for the workers), explicitly provides for the application of ID act (the
absence of which was the biggest problem in the CLRA which actually came 3 years after this act).
2 different models: One identifying workers and the other identifying a sector: CLRA (for
unorganised workers) v. Bidi workers act (for the sector itself)
The CLRA which does not talk about these or incorporporate it and is still called the 1st exclusive
legislation.
Question: Will ESI apply to BW act? Because the legislation does lay down other acts which have to
be read with it. Can you say any legislations not invoked in BW Act would not apply? Is the BCW an
exclusive Act? (usually a legislation which deals with a particular group is exclusive)
It can be said that the workers are entitled to other legislations other than this special legislations if
the general act is wide enough to include them. The test should be subjective with respect
specifically to the general act which we are testing applies notwithstanding the special legislation.

*ID Act: Mostly broadly interpreted other than the definition of workmen. V. ESI , EFF and Factories
Act have a broader interpretation. Legislations which follow the model of the former get the
narrower definition and the legislations which follow the latter model, they also borrow with it the
broader definition of workmen.
13/12/2014:
We have spoken about how there are 2 models of legislations, one which follow the ID act and
another which follows the EXI/EPF model.
The courts have considered ESI/EFPF acts to be social security legislations and hence have to
interpreted broadly.
Payment of gratuity Act: No def. of gratutity, we have to assume the general meaning. Its given as a
terminal benefit. ID act also has terminal benefits like retrenchment compensation.
Would ESI be closer a retrenchment compensation or Provident fund (a fund from which workers
can withdraw in case of emergencies; i.e. its a social safety net)?
What it is closer to will decide which model PGA follows.
Is it an exclusive legislation? Yes, the only act which covers payment of gratuity.
Wage consists of many components (Payment of wages Act) Def: 2(6) includes bonus and
termination benefits along with salary, allowance etc. (This aspect was there even before gratuity
act, bonus act etc.
Now that we have special legislations for it, does it take these out of the general legislations. Is it
taking away the collective bargaining scheme which was available before say the bonus act?
[Bonus Act: If you say this act is exclusive; then it means that its exhaustive and workers have
nothing over and above it (takes away collective bargaining right). Also, the minimum then becomes
just subsistence wage.]
The court but said that once this legislation has been passed and the state has taken over the power,
the unions cannot take up this dispute as an ID. Hence its been a bar on adjudication
Fortunately, there also has been interpretation which says that the act does not include ordinary,
customary bonus. It only includes profit based bonus (which was excluded specifically by the def. of
wages under PWA). And therefore those customary aspects can still be brought up by the employees
as IDs.
(One can say that if the aspect was existing even before the special legislation still has to act out)
Gratuity act: is it exclusive (does it have a mechanism for its implementation like ID act?)
Section 3: controlling authority. Therefore PGA does have its own mechanism. It need not go to ID
Act. Therefore its exclusive.
Does the BCW act have a provision for gratuity? No def. of wages in the act, but the state govt. can
notify and extend the provisions of PWA to this act.
Now that we have seen that the def. of wages under PWA does not include gratuity. Then can we
still say that gratuity act applies to this case?
This act was before special legislations before bonus act or gratuity act.
PWA Act talks about 2 kinds of bonus. One that is not part of wage and one which is. (The bomus
which is given out of the magnanimity of the employer should not be included as a wage but the

bonus which the worker is entitled to should be a wage; he is entitled to it because you cant really
determine the wage)
Gratuity: the term itself is very similar to bonus. Has an element of ex gracia, but although it started
there; it has moved to a status of entitlement as you can never really determine how much he is
entitled to, therefore he has to provide him with this entitlement when his employment was
terminated. (Hence under the def. of wages, gratuity must be included). Only the part which is given
when the employer feels magnimous wont be a part of wages).
Fact situation: Persons covered by BCW terminated from work, were not given gratuity, under which
act can they demand for it? PGA or PWA: both have mechanisms?
You could argue that PWA is applicable to BW and the def. of wage includes gratuity.
You could not invoke PGA. But if you say that notwithstanding the exclusive nature of legislations; if
you read all 3 together and say that the intention was to look at all 3 together. And say that the BWA
gives a broad definition of employer. And since the gratuity act is a social security measure (This is
what the madras HC said)
Can you invoke CLRA if they are employed through a contractor?
The def. of employee also includes employees employed by a principle employer. Hence you could
also read it with CLRA and PGA whereby the principle employer would be liable to pay gratuity which
he can then demand from the contractor. (sec. 21(4))
Beneficial interpretation: We therefore see a much broader interpretation of gratuity and PWA act
and CLRA which they said could be read with BCW act.
Thos goes in a completely opposite direction compared to the CLRA as we saw before.
Management Siadu Bidi co. v. Appelate authority under PGA Act: Read the 3 statues i.e. PWA, PGA
and BCWA together.
Madras Fertilizer Ltd. V. Controlling authority: (2003) Invokes 21(4) to say that the principle
employer can be held liable for pay gratuity even through he was employed through a contractor.
Superindenting engineer v. Appelate authority (2011): Contract labour who was later regularised.
The employer said in calculating grauity he wont include the time he worked as a contract labour.
But the court held that even a contract worker is entitled to gratuity and hence that time he was
employed as such, he would be entitled to gratuity.
Different view : Cal HC: Sialen Seth v. Deputy labour commissioner: June 2010. Uses the authorities
as mentioned earlier but reaches a completely diff. interpretation. Same set of worlers who would
ework under different contractors but the principle employer is the same. Would they be considered
contract labour. Wuld the contractor is liable for payment of gratuity (if we follow the above cases; it
should have been placed on the princiople employer). But the court said that the principle employer
is only liable to the extent he can recover from the contractor. His liability is not the primary liability.
(Seems like we are going back to the previous position, when we have have already held that a
person would be considered an employee even if he works under different contractors..)
Module 2 (summary): informal sector v. informal workers.
Then we looked at legislations particularly for these.

Are contract labourers all that is there in informal labour? No. But we start looking at these people
because it is the easiest way to understand legal protection that the state is trying to extend to the
unorganised sector. Because the framework in which unorganised labour works is very diff. from the
framework of organised workers that we are familiar with.
Is there a def. anywhere of an unorganised workers?
Unorganised workers SS Act: home based/ self employed/ wage based worker in the unorganised
sector/ worker in organised sector not included in any act in schedule 2.
But even today there is a lot of conflict regarding who is a worker protected by ID act? Also, just
because you are under the definition of worker under ID act; are you really protected (what the act
intended to do v. what it is doing on the ground).
Half the population of labour will be left out if we only talk about employment law. When we
looked at unorganised sector only with regard to who is employed and who is not; the universe was
much smaller (included only contract labour). However later we started looking at this large amount
of labour who cannot be included in employment law; rather they were a vast population of labour.
The concentration also started moving towards women engaged in labour in their own house.
(Sarvshakti report). This is when they realised that they have to examine the unorganised worker
from the lens of work, not from the lens of employment.
The models that we have today (based on legislations with colonial roots); are these good enough or
do we need a completely different framework.
How was work construed then and how that influences labour law even today. What were the
motivations of making the law that were made then: The motive seems to be not protecting labour
here rather protecting labour in England. It was more suitable to a more industrialised economy
rather than the agricultural economy in India.
What would be the most imp. labour legislations in that context: bonded labour act. Bit how long
after independence did we get that? If the British were really motivated to protect Indian labour,
then why dint they enact something like that.
Look at the def. of bonded labour in that statute: mentions some kind of contract labour.
Ques. When the Contract labour act was being made, was it being made in the context of bonded
labour?
CHOICE: if youre saying that you can distinguish bonded labour because there is no choice. The
difficulty then is: Is there any choice anyway?
What is the def. of slavery? How is it different from bonded labour? Conceptually is there really a
difference?
Why dint India have an anti slavery law? Why did we wait till 30 years do abolish bonded labour?
Why did we accept the social practice of bonded labour as a form of employment?
British benefitted from this socially accepted practice which gave them unhindered supply of labour.
SAIL Judgement: Contract labour: trace the evolution to the British form of employment when they
could not understand their language; they employed someone to supply and control labour. (Going
back to that era. Perhaps neo colonialism: Does bonded labour continued to remain today?).
(Distinction between contract labour and bonded labour is very thin and even then the contract
labour act does not acknowledge it; only when you look at the def. of bonded labour in the bonded
labour act we see that it could be reflected in contract labour.)
Also, how has the bonded labour act acted out in practice: Is it enforced? How frequently is it
invoked.

Point of all this discussion: When you look at contract labour, it does not include bonded labour; and
thereby does not recognise that form of employment. The only legislative protection they then get is
to get rehabilated.
Very many labour which will never fit in the framework of labour law which we have because we
derive this framework from the British model which was never intended for us.
And if you define work in terms of the relationship[ between the employer and employee and not in
terms of the work we do: you will definitely miss out a large population of Indias labour.
Therefore when ESI and EPF talk abour work carried out in an establishment you see that shift
towards the work that is done to include you into employment law rather than your relationship
with someone else.
This perception of labour is so ingrained in our culture now that when you look at NREGA which is a
work based legislation; you fail to see it as a labour legislation and rather you look at it as a
welfare legislation.
19/02/2014
Different terms: bonded labour v/ forced labour v. slave labour: the connotations
Author in that article: Inspite of demand for anti slavery laws in England, why werent they being
demanded in India.
Why did we get Bonded labour act only in 1970s:
He talks about: bonded labour v/ forced labour v. slave labour. (Pre Independence)
What is a consent to a contract.
In legislations: Free person was left undefined. Perople were assumed to be free and legal recourse
could be taken when you were forced.
Even a slave was left behind
Incidence of slavery: treating people as property and trading them. In these terms it could be
differentiated from bonded labour.
3rd category: Bondsmen was defined. (Hence the idea of bonded labour did exist, it existed with
slavery). But how we dealt with it was influenced by the customery acceptane of the practice.
He was defined as a former free person who if an adult entered into a contract to serve a person for
a certain no. of years or if he was an apprentice (a slave just below a certain age) into service by a
parent for a period no longer than majority. It could not be hereditary, not be transferred and void in
case of prostitution. So they defined it not in the actual practice of bondage as it existed in india. It
intended to favbour the slave holders than the people bonded itself. The act intended to protect the
interests of the slave holders by the way it defined a bondsman. It did not take into account the
existing practice.
Why? A lot of work about how an Indian labourer was different from an African slave. (Maintaned
that bonded labour was different from slavery: which meant that inspite of having anti slavery law
we still have bonded labour). Indian labourer was not to be liberated because it would cause
unnecessary interference into the organic bond accepted by the people and was very communally
sensitive practice. (So they did agree it to be slavery but endorsed it as something else).
Comment on the Khobragede incidence: The servant should not have gone against the employer
because there is a tremendous difference between the idea of house keeper in India and in India.
(Considering her to be a part of family in India whereby her work wont be recognised as work
anymore, they woulnt be paid). (What kind of labour is this: Where the other peoson is willing to be
bound by you- will you be a free person. Compare it to a slave you is not traded; does he stop being
a slave? Do you not need a wider understanding?).

In case of Sangeeta Richard case: which laws would protect her? Or people who work like her? There
was no debt, so you cant call it bonded labour. (what is the alternative? Interpreting forced labour
and slavery in a broader way? Why is there a relectance to talk about slavery in this context? Baligas
point: we shouldt just have 2 choices of either binding them all together or seeing them all as
distinct issue. Why not see both similarity and differences.
Profs point: She is not presenting us with a binary. She wants one to flow into each other. By
reading legislations into each other. Eg. amending bonded labour to include contract labourers who
work in a certain way; her problem is why not do it from the other side too: why not include bonded
labour also as something that happens through contract labour)
Bonded labour system: Till you die you are a responsibitlity of the owner, so they talk about how you
are given much more by the owner. Then from this system you move to a system where although
you can enter into a contract for wages, but what you get os not enough in that area to lead a good
life.
What are the ingredients of the 3 terms and why would they apply or not apply to this situation:
We have been talking about it in the sense that the 1st law comisison which abolished slavery but
failed to see bonded labour as slavery or did not address it as a fundamental violation of Human
dignity (which is common to the 3).
Similarly today we fail to differentiate between contract labour, bonded labour and migrant labour
and go to different legislations for the 3 of them. People who work on the ground fail to see these
differences because they keep flowing into each other.
And even in 1975: when you were addressing bonded labour, you were only talking about the most
serious aspect of bonded labour. Only in 1985 you brought in the
Unfree labour today: talks about people migrating from one place to another, is it the new form of
bonded labour Act. Even the interstate migrant workers act only talks about labour forced against
their consent by a contractor. But what about labourers who were compelled due to other
circumstances. They do not get the advantage of these Acts.
Contract labour act does not talk about discrimination: it does not acknowledge bonded labour. For
that you have to go to another legislation.
What was the intention behind Contract labour: Only legislate against the concept that you canot
employ peple and chuck them out flexibily.
These people who are compelled to migrate fall through the cracks of both bonded labour (as there
is no debt in these cases) and interstate migrant workers act.
The same problem that happened pre independence with slavery v. bonded labour is happening
now with out understanding of free labour as something being different from bonded labour or
forced labour. (What is conceptually free labour is not very different from bonded and forced
labour)
Problem with Minimum wages act: State with regard to its responsibility towards forced or bonded
labour:- is their responsibility only liberating people in the physical way? What about freedom in the
economic way? In todays framework of minimum labour:- do people really have a choice of moving
from one kind of labour to another. In todays framework people still are economically forced to
enter into the contract of work and work in the conditions that is not good enough?
If you want such a framework of freedom of labour: it is necessary that you make sure that
livelihood does not just depend on wages. This is where the next step is taken: social security
welfare.

Comparision between poor laws in England to NREGA: anyone who did not have work could come to
the state and work for it to work. What then happens to the states responsibility towards children
and people who cant work.
You need a framework where people have a basic minimum, only then can we talk about anything
like freedom of contract to work.

X.X.Mid Sems..X.X.X..X..X..
Module 3: