Origin Of Labour Law – Notes


Labour law is a product of the industrial revolution. The policy of hire and fire, terms of employment, the tendency of employers to exploit workers and inhuman conditions were the various reasons for the origin of labour law.

Industrial Revolution

At the beginning of the 20th century, a new revolution was started known as ‘Industrial Revolution’. Industrial revolution means the use of machines for the first time for the production of goods and services. Industrial revolution provides an opportunity for the employer to exploit workers. Industrial revolution for the first time will take place in the textile sector (Cloth making) through family members, production was better in use and cheaper in cost through a machine made goods. So, workers become unemployed and they rushed into factories. But unemployment was in abundance so, owner of factories became more powerful, they became dominant and started exploiting unemployed workers because workers who initially engaged in domestic production were in need of work for their survival. Employers started exploiting in two manners:

  • By adopting the policy of hire and fire:- Employers were hiring people at very low cost and when they object then they would be fired without any reasonable ground or basis. Employees work at very low wages without any job security.
  • Keeping the worst working conditions and inhuman treatment:- They treated workers badly, no good environment at the workplace was provided, lots of noise pollution, no drinking water facilities and injustice to the workers. They maximize their profit at the cost of others.

Hence, the industrial revolution affects directly a considerable population of our country consisting of industrialists, workmen and their families.

This branch of labour law modified the traditional law relating to master and servant and had cut down the old theory of laissez-faire based upon the ‘Freedom of Contract’ in the larger interest of the society because the theory was found wanting for the development of harmonious and amicable relations between the employer and employees. There is a change in the concept of a master and servant relationship. One who invests a capital is no more a master and one who puts in labour is no more a servant. They are employer and employees. The former may hire the latter but he can no more fire them at his will.

Hire means to employ a person and fire means throwing out the person. Man has a tendency or nature to exploit the labour law.

Factors responsible for Exploitation of Workers:-

  1. Economic Factors:- It was an era of “Laissez Faire” i.e. self-regulating mechanism. The concept of demand and supply was introduced. The economy was operated by market forces. Labour was more but demand was less, therefore employers started following the policy of hire and fire.
  2. Political Factors:- At that time state had limited functions. The political system was a police state i.e. state has nothing to do with the welfare of the labour. The main function of the police state was to protect society, to maintain peace and harmony and nothing to do with economic and social matters. Hence, when a state has nothing to do, therefore, there is full freedom to take or follow any policy to maximise their profit at the cost of others.
  3. Psychological Factors:- It is a tendency of man to exploit poor workers class and human beings have a tendency to exploit the poor. So, employers have an opportunity to exploit labour.
  4. Legal Factors:- Because of legal factors, it was feasible for employers to exploit the poor. The relationship between the employer and employee was guided by the Contractualism. If there was any dispute, the court relied upon the contract and if even if the person was innocent, he had no relief. Employers were not liable to compensate. So, in the era of contractualism, employers were dominant because they were bread givers and hence, they would do any injustice.
  5. Social Factors:- If we do good at the micro-level, it will result good at the macro level.

Result:- All these factors have led to a situation where the rich becomes richer and the poor become more poorer. The gap between rich and poor ultimately grows into two distinct classes in any industrial society- “haves and have not”. This economic disparity led to a struggle between both classes and the latter were exploited. There was a socio-economic disparity.    

In 1920, goods and services were produced more but people did not have purchasing power or didn’t have the income to purchase it. It resulted in economic instability and people started to oppose. Bentham said that “to enjoy individual liberty, there must be restrictions. Otherwise, there will be political injustice or there will be chaos”.

The situation of anarchy and disequilibrium was there to solve this problem, in 1929 at the time of great depression, President Roosevelt introduced a policy named, “New Deal Policy 1931” means non-interference policy. According to this policy, the state should come in rescue of those people who exploited in silence or for whom, who are not in a position to stand against injustice or for the poor citizen of society.

There were two main objectives of this policy:

  • To provide public utility services:- Means providing health education, food facilities to those persons who are unable to purchase the goods, provide income in the hands of people who have not purchased power. It provides convenience to the public and not a matter of profit. To run this system, it is necessary that there should be an equitable distribution of income. Public utility service is not installed by private services. In this policy, employment should be provided to unemployed workers otherwise economic development does not have any meaning.
  • Enacting welfare laws:- At that time, this policy provides welfare legislation- putting restrictions on extraordinary liberty. Workers can’t compel to work more than 70 hours/week. Employers want their profit; exploitation is inbuilt in human beings. So, this policy objected to putting restrictions on the freedom of employers by enacting welfare laws.

Labour Law Legislations:

At the working place, there was no basic facilities for workers, no first aid or medical facilities, no washing and drinking water facilities, etc. so, labour legislation provides all these policies and facilities.

  • It provides the Workmen Compensation Act: If the worker gets injury then compensation will be paid. At that time, employees follow the principle of Volenti non-fit iniuria (voluntary undertaking the risk). Employer look at the contention that employee knowingly entering into factories that there may be a risk, so, no compensation was provided. Therefore, labour law was introduced.
  • Right to form trade union:- Earlier, there was special machinery for settlement of disputes but there was contractualism.

The main focus of Labour Legislation:-

  • To promote industrial growth-only when was provided sufficient opportunity to maximise profit.
  • To protect the workers from the exploitation and injustice- to provide accurate wages, money spends on working conditions, transportation, education of their children, minimum bonus, compensation, working hours, etc.
  • For this prominent role, the government must be there, the government should solve the problem of the workers as well as also enhances the industrial growth.
  • It is a very-very challenging task of labour legislation to fulfil both the motives. Hence, we have to make a balance to achieve both motives.

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Afak Hussain advocate
Afak Hussain advocate

I am labour law p.g diploma one year regular course,it is scope of the jobs ,and other work