16 – Labour Administration – Employee Relations Management

Chapter Sixteen

Labour Administration

Labour administration means public-administration activities to translate national labour policy into action.


After reading this chapter, you will be able to:

  • Understand the meaning of labour administration

  • Trace the evolution of labour administration in India

  • Form an overall understanding of the forces that have helped shape the labour policy in India

  • Have a clear idea of the labour administrative machinery, subordinate organizations and voluntary arrangements

  • Appreciate the role that ILO has played in setting standards for labour administration

  • Know the recommendations made by the National Commission on Labour

The Central Industrial Relations Machinery

There are approximately 150,000 establishments in the central sphere. The inspecting officers of CIRM (Central Industrial Relations Machinery) inspect these establishments under different labour enactments through routine inspections and special drives for inspections under the crash-inspection programmes and taskforce inspections to secure benefits of the beneficial legislations to workers. Special emphasis is given to the enforcement of beneficial enactments such as Contract Labour (Regulation and Abolition) Act and Minimum Wages Act and Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 in the unorganized sector. Prosecutions are launched against persistent defaulters and in respect of major violations. During the year 2001–2002, CIRM officers carried out 34,968 inspections, rectified 3,60,712 irregularities, launched 16,040 prosecutions and secured 7,475 convictions of defaulting employers.

Another important function of the CIRM is the enforcement of labour laws in the establishments for which the central government is the appropriate government. The machinery enforces the following labour laws and rules framed thereunder:

  1. Payment of Wages Act, 1936 and rules made thereunder for mines, railways, air transport services and docks, wharves and jetties

  2. Minimum Wages Act, 1948 and rules

  3. Contract Labour (Regulation and Abolition) Act, 1970 and rules

  4. Equal Remuneration Act, 1976 and rules

  5. Inter-State Migrant Workmen (RE&CS) Act, 1979 and rules

  6. Child Labour (Prohibition and Regulation) Act, 1986 and rules

  7. Payment of Gratuity Act, 1972 and rules

  8. Labour laws (Exemption from Furnishing Returns and Maintaining Registers by Certain Establishments) Act 1988

  9. Building and Other Constructions Workers (RE&CS) Act, 1996 and rules

  10. Chapter VI-A of the Indian Railway Act; Hours of Employment Regulations for Railways Employees

  11. Industrial Employment (Standing Orders) Act, 1946 and rules

  12. Maternity Benefit Act, 1961 (Mines and Circus Rules, 1963); and rules

  13. Payment of Bonus Act, 1965

The Central Industrial Relations Machinery (also known as the Office of Chief Labour Commissioner—Central) is one of the many agencies of the government that ensures that some of the policies concerning labour are implemented. There are many such agencies, each charged with specific responsibilities for ensuring compliance of the labour policies. In this chapter, we will try to understand the contours of the policies and the myriad network of organizations that help put these policies into action.

16.1 An Introduction to Labour Administration

Labour administration is primarily concerned with the affairs of labour and administration of social policy. The meeting of experts on labour administration held in Geneva in October 1973 felt that to effectively deal with the vital aspects related to labour administration, there should be central, specialized units for each of the following:

  1. Labour protection (working conditions, terms of employment and service, wages, safety, etc.)
  2. Labour inspection
  3. Labour relations
  4. Employment of manpower, including training
  5. Social security

Labour administration is not simply the responsibility of the Department of Labour. Many agencies and government departments such as Chambers of Commerce, Factory and Mines Inspectorate, Social Insurance Directorate and the Department of Human Resource Development and Education are involved in it. In some countries, the organizations of employers and workers are also involved in the administration of labour matters. But it is primarily the responsibility of the Department of Labour to lay down, develop and apply sound labour policies, coordinate various recommendations received from various departments, which have a bearing on labour affairs. The formulation of policy decisions are based on consultation with other interests (particularly of employers’ and workers’ organizations) and of research and field investigation. Most of the labour-policy proposals may emanate from the Minister of Labour himself or from his department. The Department of Labour is the body that receives most such proposals and initiates the preparatory process. In some cases, Labour Courts, arbitration bodies and different ad hoc commissions can be regarded as forming part of the labour-administration machinery, although they are usually outside the Department of Labour. These bodies are either bipartite or tripartite in character.

16.1.1 The Concept of Labour Administration

The Labour Administration Convention No.150, 1978 of ILO defines “labour administration” as “public administration activities in the field of labour policy”. According to the same Convention, the term “system of labour administration” covers “all public administration bodies responsible for and/or engaged in labour administration—whether they are ministerial departments or public agencies, including parastatal and regional or local agencies, and any other form of decentralized administration—and any institutional framework for the coordination of the activities of such bodies and for consultation with and participation by employers and workers and their organizations”.1

In brief, labour administration involves the entire range of activities from preparing ground work, actual preparation, networking, cooperating and coordinating, facilitating dialogue, checking, reviewing and monitoring labour policies and programmes, the preparation and enforcement of labour laws and regulations, and establishment and enforcement of standards in the field of labour. An important feature of labour administration is the involvement of employers’ and workers’ organizations in various areas and at various levels of labour administration.


Labour administration concerns itself with translating the labour policy into action. Effective labour administration machinery must be able to address the following:

  • Labour protection (working conditions, terms of employment and service, wages, safety, etc.)

  • Labour inspection

  • Labour relations

  • Employment of manpower, including training

  • Social security

A robust system of labour administration would:

  • Be capable of responding to changing economic and social conditions
  • Justify the confidence of both employers and workers
  • Make a vital contribution to the improvement of working conditions and at the same time to national development
  • Develop participation through social dialogue and tripartism
  • Acquire credibility on account of the fairness of labour policies
  • Make known and apply uniformly the laws and regulations
  • Demonstrate elements of transparency through openness in decision-making
  • Make available the services in labour administration without discrimination

In brief, labour administration contributes to the creation of an environment in the realm of employment that has elements of “participation”, “credibility”, “transparency” and “responsibility”.


“System of labour administration” covers “all public administration bodies responsible for and/or engaged in labour administration—whether they are ministerial departments or public agencies, including parastatal and regional or local agencies, and any other form of decentralized administration—and any institutional framework for the coordination of the activities of such bodies and for consultation with and participation by employers and workers and their organizations –ILO Convention on LA (1978)

16.2 Scope of Labour Administration

The scope or fields of activities under labour administration have expanded during the course of time. Initially confined to the enforcement of a few labour laws or regulations, labour administration has come to cover within its fold a wide variety of subjects. Substantial enlargement of the number and contents of labour laws and regulations all the more necessitated the establishment of a network of labour-administration agencies. State regulation of labour matters became necessary also from many other considerations. The broad areas covered under labour administration today, whether statutory or non-statutory, include—contracts and terms of employment, wages, working conditions, industrial relations, social security, employment and unemployment, training, employment of children and women, organizations of workers and employers, information and research, and industrial disputes and work stoppages. The specific fields of labour-administration activities include—quantum of wages including minimum wages, protection of wages, fringe-benefits, bonus, hours of work, holidays, leave, physical working conditions, occupational safety and health, maternity protection, workmen’s compensation, provident fund and pension, gratuity, sickness benefit, medical benefit, unemployment benefit, employment policy, employment exchange, training, vocational guidance, labour-welfare measures, collective bargaining, industrial actions including strikes and lockouts, workers’ participation in management, trade unions, employers’ organizations, unfair labour practices, tripartite forums, employment of children and women, collection and dissemination of information relating to labour, labour surveys, and so on. The degree of emphasis, activities undertaken and the extent of intervention vary from country to country.


The broad areas covered under labour administration today, whether statutory or non-statutory, include—contracts and terms of employment, wages, working conditions, industrial relations, social security, employment and unemployment, training, employment of children and women, organizations of workers and employers, information and research, and industrial disputes and work stoppages.

Labour administration is confined not only to the national ministerial departments or departments of state or local government. It also covers the role of other agencies including workers’ and employers’ organizations and non-governmental agencies, including workers’ and employers’ organizations and non-governmental (parastatal) agencies at various levels. The fields of labour-administration activities essentially depend on the nature of labour policy, labour laws and regulations and practices operating in particular countries at particular times.

Of the agencies involved in labour administration, the national ministerial labour department has to play the most significant role. The International Labour Conference suggests the following main functions of such a department:

  1. It should be required to provide the government with all useful information or to advise it with regard to the elaboration of the government’s labour policy and, where necessary, the preparation of laws and regulations.

  2. It should be entrusted with the administration of labour laws and regulations, the implementation of the government’s labour policy and the handling of labour questions.

  3. It should participate at the highest level and on an accepted and reciprocal basis with other government departments in elaboration of policies concerning such objectives as eradication of unemployment, industrial peace and other questions relating to labour.

  4. It should have at its disposal competent and adequate staff and administrative resources such as will enable it to perform its functions efficiently and impartially.

Of the agencies involved in labour administration, the national ministerial labour department has to play the most significant role. The Department of Labour should:

  • Provide the government. with relevant information to aid policy formulation

  • Administer the Labour Laws and labour policy

  • Participate at the highest level on the elaboration of policies and handling of labour questions

  • Be staffed with competent personnel for effective and impartial functioning

16.3 The Evolution of Labour Administration in India

The sole administration of matters pertaining to labour administration, during the late nineteenth century, was enforcement through magistrates. There were just a handful of laws in existence then (e.g. Fatal Accidents, 1855; Workmen’s Breach of Contract Act, 1859; Employers and Workmen (Disputes) Act, 1860, etc.) and no “policy” on other aspects of labour prior to 1919. In general, labour administration during the period was piecemeal and ad hoc with the primary responsibility vesting with the local magistrate. There was a general lack of coordination between the central and provincial governments in matters relating to labour administration.

For the first time, the Government of India Act, 1919 defined in some detail the distribution of legislative and administrative powers between the central and provincial governments. Generally, the central government could enact labour laws relating to mines, railways, major ports, seamen and international and inter-provincial emigration and the provincial governments could deliberate on labour matters pertaining to factories, plantations, public works, inland vessels, labour disputes, labour welfare and housing, but under the control of the central government.

Between and at a time when the Whitley Commission submitted its report to the Government of India in 1931, the matters pertaining to labour were handled by the Department of Industries and Labour. This department, however, dealt with many issues, labour being just one of them. The Department was headed by a Member of Executive Council. In the year 1920, few positions of Labour Commissioners were created in the industrially active provinces of Madras and Bengal and a labour office in Mumbai. Subsequently, a labour office was set up in Bombay in 1921.

The Government of India Act, 1935 laid emphasis on provincial autonomy, thereby expanding the role of provincial government’s role in matters pertaining to labour. Labour Commissioners were appointed in almost all the provinces under the popular governments. This gave a fillip to labour administration and a number of labour laws were enacted (Factories Act, 1934; Payment of Wages Act, 1936; Mines Act, 1935). These enactments required the creation of suitable enforcement machinery, both at central as well as provincial levels. The Second World War and the Defence of India Rules led to the creation of elaborate machinery for handling industrial disputes and conflicts, which later came to be incorporated under the ID Act, 1947.

Labour administration came to be further strengthened following the recommendations of the Investigation Committee. There was a spate of labour laws enacted prior to or after the attainment of Independence. In 1949, the Government of India ratified ILO’s Labour Inspection Convention (No.81), 1947 and ensured the incorporation of its provisions in labour laws of the country. The run up to the current state is covered elsewhere in this chapter.

16.4 Labour Policy in India

The term “labour policy” conjures up different things to different people. It is not a formal document put together by an agency of the State. It is not a ready reckoner, which one might look up for a quick recap. Neither does it originate from one source, nor can a date be mentioned when the “labour policy” was finally put in place. Partly, these relate to goals of policy and in part to the means and instruments of implementation. There are, however, constraints in setting goals as well as on means and instruments. The term “labour policy” includes the treatment of labour under constitutional, legislative and administrative Acts, rules and practices, and various precepts laid down in the successive Five Year Plans. The labour policy derives its philosophy and content from the Directive Principles of State Policy as laid down in the Constitution and has been evolving in response to the specific needs of the situation and to suit the requirements of planned economic development and social justice.

Labour Policy

The term “labour policy” includes the treatment of labour under constitutional, legislative and administrative Acts, rules and practices, and various precepts laid down in the successive Five Year Plans. The labour policy derives its philosophy and content from the Directive Principles of State Policy as laid down in the Constitution and has been evolving in response to the specific needs of the situation and to suit the requirements of planned economic development and social justice.

“Labour policy in India draws inspiration and strength partly from the ideas and declarations of important national leaders during the Freedom struggle, partly from the debates in the Constituent Assembly, partly from the provisions of the Constitution, and partly from International Conventions and Recommendations. It has also been significantly influenced by the deliberations of the various sessions of the Indian Labour Conference and the recommendations of various National Committees and Commissions, such as, the Royal Commission on Labour; the National Commission on Labour, 1969; the National Commission on Rural Labour, 1991, and the like”2.

According to the Constitution of India, the enactment and administration of labour laws is the responsibility of both the union and state governments, which means that on the subject of Labour, both the state government and the central government can legislate. Matters relating to labour are distributed amongst three lists contained in one of the Schedules to the Constitution. The distribution of subjects in the three lists is as follows:

  1. Union List
    1. Participation in international conferences, associations and other bodies and implementing decisions made thereat

    2. Port quarantine, including hospitals connected therewith, seamen's and marine hospitals

    3. Regulation of labour and safety in mines and oilfields

    4. Industrial disputes concerning union employees

    5. Union agencies and institutions for:

      1. Professional, vocational or technical training; and
      2. The promotion of special studies or research;
    6. Enquiries, surveys and statistics for the purpose of any of the matters in this list


    In India, 94 per cent workers out of the total workforce of 457.5 million belong to the unorganized/informal sector. These workers work as agricultural labourers, landless labourers, factory workers, domestic help, construction workers, etc. Currently the number of scheduled employments in the central sphere is around 45, whereas the number is approximately 1200 in the state sphere. The labour administration machinery is largely geared towards administration and enforcement of standards and laws in the organized sector. The unorganized sector has largely been neglected which has seen all kinds of NGOs stepping in. Discuss alternatives or some other models of cooperation between the public and the administration to promote a more meaningful administration of the labour laws and labour standards.

  2. Concurrent List
    1. Economic and social planning

    2. Trade unions, industrial and labour disputes

    3. Social security and social insurance; employment and unemployment

    4. Welfare of labour, including conditions of work, provident fund, employers’ liability, workmen's compensation, invalidity and old-age pensions, and maternity benefits

    5. Vocational and technical training of labour

    6. Factories

    7. Inquiries and statistics for purposes of any of the matters specified in the Concurrent and the State List

  3. State List
    1. Public order

    2. Public health and sanitation, hospitals and dispensaries

    3. Relief of the disabled and unemployable

According to the Constitution of India, the enactment and administration of Labour Laws is the responsibility of both the union and state governments, which means that on the subject of labour, both the state government and the central government can legislate.

The first comprehensive approach to a labour policy was spelled out by the interim government in 1946, when a host of issues were set out on which reforms were to be brought about through legislations and other measures over a period of time. A few of these issues were:

  • Minimum wages in industry, plantations and agriculture
  • Determination and agreements on fair wages
  • Regulating hours of work, weekly rest periods, spread-over, holidays, privileged leave or earned leave for workers in unorganized sectors like shops and establishments and other sectors not yet brought under legislative protection
  • Improvement of working conditions in factory with special emphasis on health and safety. Similar provisions to be brought in for other sectors.
  • Training and apprenticeship schemes on a large scale to increase productivity on the one hand and earning capacity and promotional avenues on the other
  • Adequate housing for workers subject to the availability of resources
  • Medical and health insurance schemes for the working class
  • Revision of the Workmen's Compensation Act
  • A central law for maternity benefits to secure benefits for those other than factory workers the extended scale of benefits provided under the Health Insurance Scheme
  • Extension to other classes of workers of the right, within specified limits, to leave with allowance during periods of sickness
  • Provision of crèches and canteens
  • Welfare of the coal-mining labour and welfare of the mica-mining labour
  • Strengthening of the inspection staff and the inspectorate of mines

Initial Approach to a Comprehensive Policy

  • Minimum wage

  • Fair wage

  • Regulating working conditions in all sectors

  • Training and apprenticeship

  • Housing

  • Health, accident, sickness insurance

  • Coverage of Workmen's Compensation Act

  • Central law for maternity benefit with wider coverage

  • Increasing coverage of leave with wages in case of sickness

  • Creches and canteens

  • Welfare of coal and mica workers

  • Strengthening of labour inspectorates

The National Commission on Labour (2002) has tried to trace the making of the National Labour Policy and has summarized in its report the main elements of labour policy operating in the country especially with respect to industry during the last 20 years:

  1. Recognition of the State, the custodian of the interests of the community, as the catalyst of “change” and welfare programmes
  2. Recognition of the right of workers to peaceful, direct action if justice is denied to them
  3. Encouragement to mutual settlement, collective bargaining and voluntary arbitration
  4. Intervention by the State in favour of the weaker party to ensure fair treatment to all concerned
  5. Primacy to the maintenance of industrial peace
  6. Evolving partnership between the employer and the employees in a constructive endeavour to promote the satisfaction of economic needs of the community in the best possible manner
  7. Ensuring fair wage standards and provisions of social security
  8. Cooperation for augmenting production and increasing productivity
  9. Adequate enforcement of legislation
  10. Enhancing the status of the worker in industry
  11. Tripartite consultation

The thrust of the recent labour policy is more towards creating a climate of healthy industrial relations and promoting an industrial culture conducive to the improvement in efficiency productivity and real wages.


Elements of the Current Labour Policy

  • State as catalyst of “change” and welfare programmes.

  • Recognition of the right to peaceful direct action

  • Mutual settlement, collective bargaining and voluntary arbitration

  • Intervention by the State in favour of the weaker party to ensure fair treatment to all concerned

  • Primacy to the maintenance of industrial peace

  • Evolving partnership between the employer and employees in a constructive endeavour

  • Ensuring fair wage standards and provisions of social security

  • Cooperation for augmenting production and increasing productivity

  • Adequate enforcement of legislation

  • Enhancing the status of the worker in industry

  • Tripartite consultation

16.5 Labour Laws

Under the Constitution, the legislative powers in diiferent fields of government activity are shared by the central and state governments, in accordance with the lists, which form a part of the Constitution—the Union List, the Concurrent List and the State List. The parliament has exclusive powers to make laws on matters enumerated in the Union List. The state legislatures have powers to legislate for the state, or any part thereof on any matter enumerated in the State List. Both the parliament and the state legislatures have powers to make laws with respect to matters enumerated in the Concurrent List. To avoid a possible conflict, certain safeguards are provided for subjects on which both the centre and the state can legislate. Labour is a subject that is included in the Concurrent List.

At the time of Independence, only a handful of laws existed concerning labour. Post-Independence, legislative support for matters relating to labour as the weaker section of the society was given partly by:

  1. Strengthening the then existing legislation through suitable amendments
  2. Overhauling a few of them
  3. Supplementing it by new statutes where none had existed before

Important labour legislations that evolved through all these processes since Independence could be divided into the following main groups:

(i) Legislation about employment and training such as the Dock Workers Regulation of Employment Act, 1948; the Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959; the Apprentices Act, 1961; the Tea District Emigrant Labour Act, 1932, and so on

(ii) Legislation on working conditions: This covers the Factories Act, 1948; the Plantations Labour Act, 1951; the Mines Act, 1952; the Motor Transport Workers’ Act, 1961; and legislation relating to safety of workers, like the Indian Dock Labourers’ Act, 1934. There have been Acts like the Children (Pledging of Labour) Act, 1933; the Employment of Children Act, 1938; the Madras Bidi Industrial Premises (Regulation of Conditions of Work) Act, 1958; the Kerala Bidi and Cigar Industrial Premises (Regulation of Conditions of Work) Act, 1961, and so on

(iii) Legislation on labour management relations such as the Trade Unions Act, 1926; the Industrial Employment (Standing Orders) Act, 1946; the Industrial Disputes Act, 1947; and legislation enacted in some states like the Bombay Industrial Relations Act, 1946; the UP Industrial Disputes Act, 1947; the Madhya Pradesh Industrial Relations Act, 1960, and so on

(iv) Legislation on wages, earning and social security, which covers the Payment of Wages Act, 1935; the Employees’ State Insurance Act, 1948; the Coal Mines Provident Fund and Bonus Act, 1948; the Minimum Wages Act, 1948; the Employees’ Provident Fund Act, 1952; the Assam Tea Plantations Service and Miscellaneous Provisions Act; the Payment of Bonus Act, 1965; the Workmen's Compensation Act, 1923; and the Maternity Benefit Acts (central and states)

(v) Legislation on welfare like the Mica Mines Labour Welfare Fund Act, 1946; the Coal Mines Labour Welfare Fund Act, 1947; the UP Sugar and Power Alcohol Industries Labour Welfare and Development Fund Act, 1950; the Bombay Labour Welfare Fund Act, 1953; the Assam Tea Plantation Employees’ Welfare Fund Act, 1959; the Iron Ore Mines Labour Welfare Cess Act, 1961

(vi) Miscellaneous Legislation—The Industrial Statistics Act, 1942; the Collection of Statistics Act, 1953; the Industrial Development and Regulation Act, 1951; the Companies Act, 1954 and so on.

The list of legislations mentioned above is illustrative and not exhaustive.

The enforcement and implementation of these laws required the creation of elaborate administrative machinery, both at the central as well as the state level.

Classification of Labour Legislations

  1. Employment and training

  2. Working conditions

  3. Labour management relations

  4. Welfare

  5. Wages, earnings and social security

  6. Other miscellaneous

16.6 Voluntary Arrangements

Voluntary arrangements that are evolved in tripartite discussions have added to the benefits, which are expected to accrue to labour. In this category fall the recommendations of the Indian Labour Conference, the Standing Labour Committee and Industrial Committees. The benefits that workers got out of the Wage Board awards so far are also a result of tripartite discussions. Unanimous recommendations of Wage Board translate into a decision to implement them. The Code of Discipline, which provides for the recognition of unions and setting up of a grievance procedure, has also been the result of a tripartite discussion. The arrangements for housing in plantations were evolved out of an agreement in the Industrial Committee on Plantations. The introduction of the workers’ education scheme, the setting up of fair-price shops in industrial establishments and the agreement on guidelines for the introduction of rationalization are some other important matters, which have emerged out of tripartite agreements.

The evolution of labour policy, during the Five Year Plans, has been based upon and is linked with the programme of the over-all economic development of the country. The Planning Commission sought to give a concrete shape to the legitimate needs and aspirations of the working classes, which included fair wages, suitable working and living conditions, social security, etc. With the acceptance of a socialistic pattern of society as the legitimate goal of economic development, there was a corresponding shift in the labour policy. This was reflected in the experiment of workers’ participation in management through the machinery of joint consultation. Another important shift in the labour policy was the emphasis on collective bargaining in the promotion of healthy industrial relations. The plans also laid stress on the administrative aspects of the enforcement and implementation machinery. Emphasis was also laid on voluntary approach to the solution of labour problems as witnessed by the promulgation of the Code of Discipline in Industry, Code of Conduct, Industrial Truce Resolution and the various recommendations of the tripartite bodies like the Indian Labour Conference, and the Standing Labour Committee.

16.7 Labour Administrative Machinery of the Government

“The main responsibility for labour administration of the Government of India vests in the Ministry of Labour. The Ministry presently consists of the main Ministry (Secretariat), and four attached offices, ten subordinate offices, four autonomous organizations, a number of adjudication bodies and one arbitration body. Labour administration in India is mostly rooted in labour laws. There are only a few activities that are not based on laws. They are mostly in the field of workers’ education and craftsmen training other than apprenticeship training, etc.”3

16.7.1 Ministry of Labour

The main Ministry of Labour (Secretariat) is the centre for consideration and decision of all questions relating to labour so far as the Government of India is concerned. It is the central administrative machinery “for the formulation of labour policy, enforcement of labour laws and for the promotion of labour welfare4.” It guides, controls and coordinates the activities of all organizations and agencies involved in labour administration at the centre or in the states. The main subjects include:

  1. Labour policy (including wage policy) and legislation
  2. Safety, health and welfare of labour
  3. Social security for labour
  4. Policy relating to special target groups such as women and child labour
  5. Industrial relations and the enforcement of labour laws in the central sphere
  6. Adjudication of industrial disputes through central government, Industrial Tribunals, Labour Courts and National Industrial Tribunals
  7. Workers’ education
  8. Labour and employment statistics
  9. Emigration of labour for employment abroad
  10. Employment services and vocational training
  11. Administration of central labour and employment services
  12. International cooperation in matters relating to labour and employment

16.7.2 Attached Offices

The offices attached to the Ministry of Labour are:

Office of Chief Labour Commissioner (Central), Also Known as the Central Industrial Relations Machinery (CIRM): The CIRM came into being in the year 1945 on recommendations of the Royal Commission on Labour. All of its tasks can be categorized under three major heads namely, enforcement, conciliation and quasi-judicial. It is responsible for:

  1. Prevention, investigation and settlement of industrial disputes in the central sphere
  2. Implementation of labour laws in industries and establishments in respect of which the central government is the appropriate government (please refer to the list provided in the chapter vignette for the list of labour laws for which CIRM is responsible).
  3. Enforcement of settlements and awards
  4. Verification of the membership of trade unions affiliated to the central organizations of workers for the purposes of giving them representation in national and international conferences and committees, and determining their representative character for recognition under the Code of Discipline
  5. Investigation into breaches of Code of Discipline

Directorate General, Factory Advice Service and Labour Institutes: This functions as a technical arm of the Ministry in regard to matters concerned with safety, health and welfare of workers in factories and ports and docks. It assists the central government in the formulation and reviews of policy and legislation on occupational safety and health in factories and ports. Labour Bureau: This is responsible for

  1. Collection, compilation and dissemination of labour statistics
  2. Construction and maintenance of Working Class Consumer Price Index Numbers for selected centres and all-India basis for industrial workers
  3. Construction of CPI numbers for agricultural and rural workers
  4. Maintenance of up-to-date data relating to working conditions of industrial workers
  5. Undertaking research into specific problems concerning labour with a view to supplying data and information needed for the formulation of labour policy
  6. Publishing reports, pamphlets and brochures on various aspects of labour
  7. Bringing out regular publications of Indian Labour Journal (monthly), Indian Labour Year Book and Pocket Book of Labour Statistics.

Directorate General, Employment and Training: This is responsible for “laying down the policies, standards, norms and guidelines in the area of vocational training throughout the country and also for coordinating employment services5”. Employment service and vocational training are operated through a countrywide network of employment exchanges, industrial training institutes and a number of other specialized institutions both at the central and in the states/union territories.

16.7.3 Subordinate Offices

The Subordinate Offices under the Ministry of Labour are—The Directorate General of Mines Safety and nine offices of Welfare Commissioners. The Directorate General of Mines Safety is located in Dhanbad. It is entrusted with the responsibility of enforcing the Mines Act, 1952 and the Rules and Regulations framed under it. The organization also enforces the Indian Electricity Act, 1910 as applicable to mines and oil-fields, and Maternity Benefit Act, 1961 in mines.

16.7.4 The Autonomous Organizations

The Autonomous Organizations are:

  1. Employees’ State Insurance Corporation
  2. Employees’ Provident Fund Organization
  3. Central Board for Workers’ Education
  4. V. V. Giri National Labour Institute

Employees’ State Insurance Corporation: The organization administers various benefits under the Act, for instance, sickness benefit, maternity benefit, disablement benefit, dependants’ expenses, funeral benefit, which are cash benefits, and medical benefit. The medical benefit has been made available to the family members of the insured employees and also to superannuated employees.

Employees’ Provident Fund Organization: This is responsible for the enforcement of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 and the schemes framed under it. The schemes framed and in operation under the Act are: (i) Employees' Provident Funds Scheme, 1952, (ii) Employees’ Deposit lined Insurance Scheme, 1976, and (iii) Employees’ Pension Scheme, 1995. The Employees’ Family Pension Scheme, 1971 has been merged in the Employees’ Pension Scheme, 1995.

V. V. Giri National Labour Institute: This institute was established in 1974 with the objectives of undertaking training, education and research, either on its own or through collaboration.

The Central Board of Workers’ Education: Established in 1958, the objective of the Board was to help make the workers aware of their rights and responsibilities through constant training and education. CBWE is a tripartite body with representations from employers, workers and academics. The headquarter of the CBWE is in Nagpur. The Board has Education Officers, whose job is to design and deliver courses for the workers.

16.7.5 Adjudication Bodies

Seventeen Central Government Industrial Tribunal-cum-Labour Courts (CGIT) set up under the Industrial Disputes Act, 1947 were functioning in the country. Of these, two are located in Mumbai and Dhanbad, and one each in Asansol, Bengaluru, Bhubaneshwar, Chandigarh, Chennai, Hyderabad, Kolkata, Kanpur, Lucknow, Jabalpur, Jaipur, New Delhi and Nagpur.

16.7.6 Labour Administration Machinery of the State Government

Labour administration of the state governments is on a pattern similar to central labour administration with slight variations relating to implementing agencies and the requirements of state enactments and non-statutory labour programmes. The main organizations for labour administration in the states comprise:

  1. Department of Labour and Employment (Secretariat)
  2. Office of Labour Commissioner
  3. Chief Inspectorate of Factories
  4. Chief Inspectorate of Boilers
  5. Office of Chief Inspector, Shops and Establishments
  6. Directorate, Employment and Training
  7. Directorate, Medical Services (ESI Scheme)
  8. Social Security Directorate
  9. Adjudication Authorities

16.8 The Role of ILO in Labour Administration

From its very inception, ILO has given attention to the subject of labour inspection and labour administration. It assists countries in the formulation and development of labour administration and improvement of labour inspection and employment services.

Many conventions and recommendations of ILO deal with labour inspection and labour administration. A particular mention may be made of Labour Inspection Convention (No.81), 1947; Labour Inspection (Agriculture) Convention (No.129), 1969 and Labour Administration Convention (No.150), 1978. The relevant recommendations are: Labour Inspection Recommendation (No.81), 1947; Labour Inspection (Mining and Transport) Recommendation (No.82), 1947; Labour Inspection (Agriculture) Recommendation (No.133) and Labour Administration Recommendation (No.158), 1978. Besides, many other conventions and recommendations also contain provisions relating to labour inspection and administration.

Other contributions of ILO in the field of labour administration and inspection include:

  1. Helping Member States in the establishment of efficient labour inspectorates to ensure the implementation and enforcement of labour laws
  2. Identifying gaps in such laws and proposing remedial measures
  3. Advising employers and workers on compliance with relevant laws and regulations
  4. Rendering help to associate employers and workers and their organizations with the efforts of labour inspection services
  5. Strengthening the links between labour inspectorates and the various competent bodies concerned with the prevention of occupational accidents and diseases

16.9 Recommendations of the Second National Commission on Labour, 2002

The National Commission on Labour, in the year 2002, submitted its report to the government. The Commission devoted an entire chapter to labour administration (Chapter XI). This chapter details the current status of labour administration in the country and has put forth recommendations for toning up the same. A few of the recommendations pertaining to law, industrial relations and labour administration organization are listed below. Readers are advised to refer to the NCL report6 to get a thorough understanding of the state of labour administration.

Labour Laws:

  • It is necessary to have a clear and unambiguous definition of the “appropriate government”.
  • There is a need to have uniformity in the definition of the term “workman”, which appears in many labour laws.
  • Labour laws (Exemption from Furnishing Returns and Maintaining Registers by Certain Establishments) Act, 1988 should be made applicable to all establishments, and the penalty prescribed under the respective laws should be enhanced to make it at par with the labour laws (Exemption from Furnishing Returns and Maintaining Registers by Certain Establishments) Act, 1988.
  • The employer should be required to maintain registers and display notices at the work-spot and not elsewhere.
  • The procedure for prosecution for non-payment of wages and payment of less than minimum rates of wages should be simplified.
  • To make enforcement effective, there should be commensurately deterrent punishment under all enactments.
  • Laws like Payment of Wages Act and Minimum Wages Act should contain a provision for recovery officers to be appointed by the labour department.
  • Provisions to grant exemptions from various laws, in case of extreme emergency or hardship, should vest with the appropriate government, and should be exercised by officers not below the rank of the Joint Secretary.
  • Minimum Wages Act should apply to all establishments and not be confined only to certain scheduled employments.
  • Criminal cases under labour laws should be tried by Labour Courts, as is being done in Madhya Pradesh.

Dispute Resolution:

  • In rights disputes over dismissal, denial of regularization, promotion, etc., conciliation should be optional. The party should have the right to approach Labour Courts and the Labour Relations Commission straightaway. However, conciliation should be compulsory in case of industrial disputes related to interests—disputes involving wages, allowances, fringe benefits, etc. Conciliation proceedings should also be compulsory in the case of strikes and lockouts over any issue.
  • Industrial disputes not settled in conciliation should go for either voluntary arbitration or mediation by arbitrators maintained by the Labour Relations Commission or adjudication. In the case of essential services, the dispute should go for compulsory arbitration. In other cases, it should go for adjudication. Arbitrators should be chosen from eminent persons in industry, conciliators, trade unionists and labour judiciary.
  • All employing ministries should be advised to implement awards or sanction prosecution within one month of the matter being referred to them, failing which it should be deemed that the sanction has been given.

Qualification of Presiding Officers:

  • Qualifications for the appointment of presiding officers of Labour Courts should be relaxed to enable conciliation officers to be considered for the appointment.
  • Labour Courts should be given powers to issue decrees or initiate contempt proceedings for non-implementation or non-compliance of awards.

Labour Relations Commission:

  • A central labour relations commission should be set up for central-sphere establishments, and state labour relations commission should be set up for establishments in the state sphere. Above the central and state labour relations commissions, there will be the national labour relations commission to hear appeals against the decisions of the two other commissions. The national LRC, central LRC and the state LRCs will be autonomous and independent. These commissions will function as appellate tribunals over the Labour Courts. They will be charged with the responsibility of superintendence of the work of Labour Courts.

Voluntary Resolution of Disputes:

  • Voluntary resolution of disputes should be encouraged over legalistic approach of settlement of disputes through adjudication.
  • There should be a legislative framework for voluntary dispute settlement. A basic prerequisite is to place a system of recognition of negotiating agency on the statute.
  • The responsibility of conducting verification of trade-union membership for the recognition of trade unions should be vested in the central labour relations commission and the state labour relations commission.
  • The works committee required to be constituted under Section 3 of the Industrial Disputes Act should be substituted by an industrial relations committee to promote in-house dispute settlement.


  • The Indian Labour Conference should be an effective forum for review, consultation and formulation or evolution of perspectives and policies. It must be made as representative as possible. Some means must be found to include representatives from the unorganized sector and from central organizations that are not affiliated to central trade-union federations. The ILC can be used as a sounding board for proposals of legislations. Suggested functions of the Indian Labour Conference would include review of labour situation, consideration of conventions and recommendations of the ILO for adoption, sounding board for legislative proposals, etc. The Standing Labour Committee should prepare the agenda for ILC. There should be a Director General of the ILC having specific functions. The ILC should set up tripartite Standing Committees to consider and review problems, legislations and implementation into main areas.

There are many other recommendations relating to areas such as safety and occupational health, unorganized sector, infrastructure and competence and cadre-building of central and state labour departments.

  • Labour administration refers to those parts of the government machinery, to those public authorities, which are directly concerned with the social and labour policy of a country. It also includes certain boards, institutes, centres or other bodies that are not an integral part of government machinery but to which the government has delegated certain specific areas of labour and social policy.

  • What used to be a government tool mainly for the preparation and implementation of labour legislation and for the settlement of labour disputes is gradually evolved into something much broader, extending its concern to employment policy, training, special problems of the unorganized, the expansion of social-security schemes, and other matters.

  • Labour policy of the government is forever evolving. The National Labour Policy is the outcome of deliberation of many bodies—the Vision of Founding Fathers conveyed through the Constitution, judicial pronouncements, plan documents, ILO conventions ratified by the country and many other sources.

  • The labour policy finds expression by way of legislation and execution of the same through administrative machinery.

  • The National Commission on Labour (2002) has recommended many actions for strengthening the labour administration in the country.


  • Labour Administration

  • Labour Legislation

  • Labour Policy


  1. Discuss the scope and limitations of labour administration.
  2. What is the role of labour administration in the formulation of labour policy?
  3. What role does labour administration play in enforcing labour laws?
  4. Discuss the role and functions of government machinery in labour administration.
  5. What role does ILO play in labour administration?
  6. Discuss the practicality of implementing the recommendations of NCL on labour administration. Why do you think the government has not been able to implement any of the major recommendations?


  1. What, in your opinion, have been the substantive changes in the labour policy today as compared to the period just after Independence?
  2. The existing framework of labour administration is grossly inadequate to meet the challenges of today, considering that the business and industry have transformed completely. Discuss.


  1. Legislative provisions with regard to labour have been ineffective on account of weak labour administration machinery.



In the year 2002, the Government of Kerala asked the IT companies operating in the state to file self-certified returns to the labour machinery in respect of compliances under various labour-related legislations, and vouchsafing that they are complying with the law applicable to industrial establishments. This facility for self-certification would free the information technology companies from routine inspections by the departments concerned. Only in the event of any complaint about the flouting of the laws and regulations would an information technology company be inspected by the officials for verification.


  1. Discuss the pros and cons of this move by the Kerala government. Examine it from the points of view of the employer and the employees.
  2. Why has the IT sector been singled out for this treatment? Do you think this measure could be extended to the other sectors?

Undue Favours

The Swastik Foundries Private Limited is a medium-sized steel foundry on the Delhi–Mathura Road, a few kilometres away from Faridabad (Haryana). It employs around 350 workmen and the foundry has been operating profitably ever since there was a boom in the steel industry since 2003–04. The employees had been putting pressure on the management for a wage increase and an understanding had been reached on a number of issues after a series of discussions with the representatives of the employees. A few issues still remained which the management thought could be settled with the help of the Assistant Labour Commissioner who was also the designated Conciliation Officer for the area. A few employees, however, were opposed to the general understanding reached in the discussions and were determined to oppose it. The management had not recognized any union but was discussing the issues with employees who claimed to represent majority. The general practice in the past was that after settling most of the issues in-house, the management and the representatives of the employees (with a letter of authority signed by a majority of workmen) would approach the ALC only for signing the settlement in his presence so that the settlement became binding on all. The ALC would normally accept the list in good faith and help both the parties sign the settlement.

From time to time the factory management also kept the office of the ALC in good humour whenever they needed transportation, office supplies or other help. The ALC had a very large number of industries within his jurisdiction and the office had limited resources. It was always a tall ask for his office to maintain a regular inspection visits to all these industries. Often, even though it was improper, he was forced to depend on the management of these industries for resources.

After signing the settlement, the disgruntled employees lodged a complaint with the Labour Commissioner alleging that the ALC had signed the settlement without proper verification of the “representation” of the employees. They alleged that the ALC had accepted undue “favours” from the management in signing the settlement.


  1. Is the complaint justified?
  2. What precautions could the ALC have taken here?


1. Khan, Muinuddin (Ed.), Labour Administration: Profile on India (Bangkok: International Labour Organisation, Asian and Pacific Regional Centre for Labour Administration, June 1992)

2. Report of Second National Commission on Labour, 2002, Government of India.

3. Saini, D. S., Labour Administration: An Introduction (New Delhi: Oxford University, 1994).

4. Venkatratnam, C. S., Industrial Relations (New Delhi: Oxford University Press, 2006).