What Is Labour Law For? Power, Work, and the Foundations of Indian Labour Law

Every employment contract is signed by two parties described as equals. The employer offers. The employee accepts. Both are free to walk away. Law treats the transaction as a voluntary exchange between autonomous agents — offer, acceptance, consideration, mutual obligation.

This description is formally accurate and substantively false. The individual worker — unless she possesses some exceptional skill the employer cannot replace — has almost no bargaining power. The employer is a bearer of power: economic power rooted in ownership of the means of production, in the accumulated resources of the enterprise, in the ability to hire or not hire, discipline or dismiss. The employment relationship is not a negotiation between equals. It is a structured inequality dressed in the language of contract.

Labour law exists because law recognised this — slowly, incompletely, always under pressure from organised workers — and attempted to do something about it. Whether it has succeeded, how far it can succeed, and what it cannot change regardless of how well it is drafted: these are the questions this article addresses through the foundational theoretical frameworks of Kahn Freund and Marxism, and through the specific history and statutory architecture of Indian labour law.

The stakes are not merely academic. As of 2025, approximately 90% of India’s workforce remains in the informal economy — outside the formal protective framework of the statutes this course examines.¹ Understanding why the law was built the way it was, and why it reaches so few, requires the philosophical foundations that Topic 1 is designed to install.

Law as a Technique for Regulating Power: Kahn Freund’s Framework

Kahn Freund opens his Labour and the Law (Hamlyn Lectures, 1983) with a claim that sounds deceptively simple: “Law is a technique for the regulation of social power.”²

Every word carries weight. Law is a technique — an instrument, a method, a tool. Not a source of social power. Not an autonomous force that creates the social relationships it governs. Law operates on power that already exists and did not need law to create it. An employer’s power over employees does not derive from any statute. It derives from ownership, from economic necessity, from the structural fact that most workers cannot survive without wages and cannot find alternative employment without real cost and delay.

Law can regulate this power — restrain it, channel it, limit its most extreme expressions, compel minimum standards. But law did not create employer power and cannot abolish it. This is why Kahn Freund insists that law is a secondary force in labour relations. The labour market — supply and demand — and the organised power of workers are primary. Law intervenes to shape the exercise of power that already exists.

The practical implication is immediate: a statute that sets a minimum wage achieves nothing if workers are too economically vulnerable to complain when it is violated, and if employers know this. The statute is necessary but not sufficient. “Even the most efficient inspectors can do but little if the workers dare not complain to them about infringements of the legislation they are seeking to enforce.”³ Legal norms in labour relations cannot often be effective unless backed by social sanctions — by the collective power of organised workers. This insight carries particular force in India, where enforcement agencies remain chronically under-resourced and the informal sector accounts for close to 90% of total employment.

Power — the capacity to effectively direct the behaviour of others — is unequally distributed in all societies. For Kahn Freund, this inequality in the employment relationship is not accidental. It is structural.

The employer is a “collective power” in the sociological sense. The enterprise is an accumulation of material and human resources under unified direction. Capital resources cannot be utilised without “exercising a command power over human beings.” This is a description of industrial organisation, not a moral judgment. It applies equally to private and public employers. The state — as Kahn Freund notes — is “that largest of all managers.”

The individual worker, standing alone against this collective power, has almost none. Kahn Freund acknowledges exceptions: those whom Alan Fox calls “occupants of high discretion roles” — the highly skilled craftsman the employer cannot easily replace, the senior executive with specialised expertise, the top-rank scientist.⁴ But these are exceptional cases. For the typical worker — the factory operative, the clerical employee, the construction labourer — individual bargaining power is negligible. She must “accept the conditions which the employer offers.” There is no negotiation in any meaningful sense.

This structural inequality creates a fundamental tension for law. Liberal democratic legal systems are built on the premise of autonomous individual agency — people enter contracts freely, as equals, and the law enforces what they agreed. But the employment relationship is not an agreement between equals.

Kahn Freund describes the employment relationship as “in its inception an act of submission, in its operation a condition of subordination, however much the submission and the subordination may be concealed by that indispensable figment of the legal mind known as the ‘contract of employment.’”⁵

Three phrases in that sentence deserve separate attention.

“In its inception an act of submission” — the worker does not negotiate the employment contract. She presents herself to a labour market and accepts what is offered or goes without. The initial entry into employment is, for the typical worker, submission to terms set by the employer.

“In its operation a condition of subordination” — the ongoing employment relationship is characterised by command and obedience. The “when” and “where” of work is determined by management, not negotiated daily. The employer’s managerial authority runs continuously through the employment relationship. Subordination is its defining feature.

“The indispensable figment of the legal mind known as the ‘contract of employment’” — Kahn Freund does not say the contract is dishonest. He says it is “indispensable.” The legal system cannot function without some notion of contractual consent. But the contract of employment presents the relationship in terms — voluntary agreement between equals — that conceal its actual character. Law “does and to some extent must conceal the realities of subordination behind the conceptual screen of contracts considered as concluded between equals.” This concealment, Kahn Freund suggests, partly explains “the propensity of lawyers to turn a blind eye to the realities of the distribution of power in society.”

This is a significant charge. Lawyers trained in contract doctrine — offer, acceptance, consideration, freedom of contract — have tools designed to process transactions, not to reveal power structures. Applied to the employment relationship without modification, contract doctrine legitimises the exercise of employer power under the cover of consensual agreement. Labour law is the discipline that forces the modification.

From this analysis, Kahn Freund derives his central formulation of labour law’s purpose — the sentence that should appear in every exam answer on this topic:

“The main object of labour law has always been, and we venture to say will always be, to be a countervailing force to counteract the inequality of bargaining power which is inherent and must be inherent in the employment relationship.”⁶

The most important word is “countervailing.” Not eliminating. Not equalising. Counterbalancing.

Kahn Freund is not claiming that labour law can make the employment relationship an equal one. The employer will always have more power than the individual worker, because power rests on ownership and organisation, not on legal status. What labour law can do is counterbalance — raise the floor, set limits on the exercise of employer power, create mechanisms through which workers can aggregate their individual powerlessness into collective power.

Every protective statute, every minimum standard, every collective bargaining right, every unfair dismissal protection is an attempt to give practical meaning to this countervailing purpose. The Trade Unions Act, 1926 grants criminal and civil immunity to trade union activity — not because trade unions are politically favoured but because without those immunities the exercise of collective power (strikes, picketing, collective negotiation) would constitute criminal conspiracy and tortious interference. The immunities remove legal obstacles to the exercise of countervailing power that workers had already begun to develop because they needed it.

Kahn Freund’s argument about collective power is fundamental to understanding why trade unions are a legal necessity and not merely a political preference.

“On the labour side, power is collective power.”⁷ The individual worker has no social power. Collectively, workers do — because collective organisation converts individual powerlessness into collective bargaining capacity. A trade union is the mechanism through which workers acquire the power necessary to enter into anything resembling genuine negotiation with employers.

When a collective of workers negotiates with an employer, it is a negotiation between collective entities, both of which are, or may at least be, bearers of power. This is qualitatively different from individual negotiation — not merely more workers asking together, but a structural change in the power relationship. The employer who can easily replace one worker cannot as easily replace an organised workforce that acts in concert.

This is why the immunities in Sections 17 and 18 of the Trade Unions Act, 1926 are not incidental provisions. Without criminal immunity under Section 17, strike action would constitute criminal conspiracy. Without civil immunity under Section 18, inducing workers to breach their employment contracts in furtherance of a trade dispute would be tortious interference.⁸ The immunities do not give unions power. They protect the exercise of the collective power that workers organised to acquire — and without which labour law’s countervailing purpose cannot be achieved.

A further implication, which becomes central in later topics, is that the legal definitions of “trade union,” “workman,” and “industry” are not matters of technical drafting alone. Each definition is a gatekeeping device that decides who is allowed to enter the terrain where collective power is legally recognised and protected. Changing the definition is, in substance, changing the reach of the countervailing force.

Kahn Freund’s is a reformist, not a revolutionary, position. He explicitly states that labour law seeks to “restrain the power of the unions” as well as the power of management. Whether it succeeds in restraining union power “depends on the attitude of the employers.” Countervailing force is bidirectional — law regulates both sides of the power relationship. He does not claim that law alone is sufficient. The statute is necessary but only effective when backed by social power. For the revolutionary critique of this position — the argument that law cannot genuinely counteract the inequality of the employment relationship while the means of production remain in private hands — one must turn to Marxism.

The Marxist Critique: What Labour Law Cannot Do

The Marxist reading — drawn from Hugh Collins’s Marxism and Law (Clarendon Press, Oxford, 1982) — is a critique of the reformist position, not a replacement for it. The Marxist account has genuine explanatory power for Indian labour law, particularly in the post-liberalisation era, and must be engaged seriously.

The general theory of Marxism is called historical materialism. Its central metaphor is base and superstructure.

The “base” is the relations of production — the economic relationships into which people enter in order to produce the material conditions of their existence. In a capitalist economy, the base consists of the relationship between those who own the means of production (capital, land, machinery, raw materials) — the bourgeoisie — and those who own only their own labour power — the proletariat. These classes are “determined by their position in the relations of production” and have “ever-conflicting interests.”⁹

The “superstructure” is everything built on this economic foundation — law, political institutions, state authority, ideology, culture. The key Marxist claim is that the superstructure is not autonomous. It is shaped by and serves the base. Law, on this analysis, is not neutral. It reflects and reinforces the economic relationships of production that constitute its foundation.

The direct implication for labour law: if the base of capitalist society is the extraction of surplus value from workers by the owners of capital, then the legal system sitting on top of this base will — however much it appears to protect workers — ultimately function to preserve the conditions under which that extraction can continue.

Collins sets out the “class instrumentalist theory of law”: law is used as an instrument not merely to advance the interests of the ruling class but “to control, suppress and crush any voice raised against the interests of the ruling class.”¹⁰

The historical examples are immediate and concrete. When English workers formed trade unions in the late eighteenth century and demanded higher wages, the capitalist class responded with the Combination Acts of 1799 and 1800 — which declared all trade unions to be criminal conspiracies.¹¹ The statutes are textbook examples of class instrumentalism: legal prohibitions of collective organisation enacted at the moment when that organisation became economically threatening to capital.

The Indian analogue is the Workmen’s Breach of Contract Act, 1859 (Act No. 13 of 1859).¹² It criminalised breach of employment contracts by workers — a worker who abandoned plantation or mine employment after receiving an advance could be imprisoned. An employer who breached the same contract faced only civil liability at most. The asymmetry enforced labour discipline and immobility — particularly for plantation workers in Assam and mine workers in Bengal, who were bound by advances and had no realistic ability to seek alternative employment. Through the colonial state, law was being used to immobilise labour and enforce compliance with terms set by colonial capital.

This points to Collins’s more sophisticated argument about ideology. Class domination does not require conscious conspiracy. The ruling class does not need to “deliberately set out to crush opposition.” Instead, its “perceptions of interests will appear to be the natural order of things since they are confirmed by everyday experience.” Laws are enacted pursuant to a dominant ideology that presents itself as common sense and universal interest. “A corollary of this is that laws enacted according to the dictates of a dominant ideology will appear to the members of that society as rules designed to preserve the natural social and economic order.”¹³

This is a more persuasive account of how class domination operates than crude conspiracy theory. It explains why well-intentioned legislators can enact law that serves the interests of capital while genuinely believing they are serving the public interest: because the dominant ideology structures what counts as common sense, what alternatives are imaginable, and what institutional forms seem natural and inevitable.

The most challenging problem for Marxist theory is the existence of welfare legislation — minimum wages, maternity benefits, provident funds, working hours limits, unfair dismissal protection. If law is an instrument of class domination, why does the capitalist state enact laws that benefit workers?

Collins gives a two-part answer worked out carefully in Marxism and Law.

First: welfare legislation represents concessions made to the working class under political pressure — through strikes, trade union organisation, and the implicit threat of more radical demands. These concessions are real. Marxists acknowledge that “subordinate classes can make real gains by securing beneficial legislation.” But these gains are described as “minor” — they marginally qualify the background control exercised by the dominant class without challenging its foundations.¹⁴

Second, and more philosophically interesting: welfare legislation performs an ideological function. It operates within the framework of bourgeois rights and thereby reinforces that framework. As Collins writes in Marxism and Law:

“Working class initiatives are founded upon bourgeois conceptions of rights. Their claims imitate established political values, and hence new laws serve to inculcate instruction in the dominant ideology. For example, many countries have laws which allow courts to test the fairness of managerial decisions to dismiss an employee. These laws are predicated upon an assumption of the natural right of the owners of capital to determine security of employment, and whilst they may constrain this freedom, they inevitably acknowledge the basic right. Thus an essential theme of bourgeois ideology is articulated by the law even whilst it is being slightly qualified.”¹⁵

Read this carefully in the Indian context. Section 25F of the Industrial Disputes Act, 1947 requires the payment of retrenchment compensation as a condition of valid retrenchment. Chapter VB — formerly applicable to establishments with 100 or more workers — required prior government permission for retrenchment and closure. The Industrial Relations Code, 2020 (in force 21 November 2025) raised this threshold to 300 workers. Both provisions protect workers against abrupt dismissal. Both simultaneously presuppose and reinforce the employer’s fundamental right to retrench, subject only to procedural compliance. The right to organise production — including the right to reduce the workforce — is not questioned. Its exercise is regulated. The framework within which the protection operates is itself a framework that legitimises managerial authority.

Collins’s most sophisticated concept is “relative autonomy.” The modern democratic state is not directly controlled by the capitalist class. Democratic institutions create genuine space for political struggle. The dominant class “does not overtly manipulate the politicians in democratic societies, but permit a degree of struggle within the state itself.”¹⁶

But this apparent autonomy is structurally limited. “The democratic process disguises the presence of class domination behind the mask of formal equality of access to power.”¹⁷ The state can enact welfare legislation. It cannot enact legislation that “challenges the mode of production” — that questions the fundamental organisation of capitalist production, the private ownership of the means of production, or the extraction of surplus value.

The concept of relative autonomy explains a phenomenon that bare class instrumentalism cannot: how states can enact genuinely protective labour legislation while remaining unable to use law to transform the fundamental employment relationship. The state has real but structurally limited independence.

In the Indian context, the First National Commission on Labour (1969) and the Second National Commission on Labour (2002) both recommended significant improvements in worker protection and the extension of formal labour law to the unorganised sector.¹⁸ These recommendations were, at best, partially implemented. The Labour Codes of 2019–2020, which came into force on 21 November 2025, raised the Chapter VB-type threshold from 100 to 300 workers and introduced fixed-term contracts without re-employment guarantees. Trade union critics described the Codes as shifting “the balance of power toward employers.”¹⁹

A Marxist analysis would predict exactly this: as capital gained political strength relative to organised labour in the post-liberalisation era, the state’s relative autonomy shifted. The welfare gains of the IDA era were being qualified — not by open class warfare but by legislative reform framed in the language of modernisation, flexibility, and ease of doing business. The dominant ideology changed its vocabulary. The structural result remained the same.

Both Kahn Freund and Marxism recognise the structural inequality of the employment relationship. Both acknowledge that the contract of employment conceals a reality of power. Both accept that collective organisation is the primary mechanism by which workers counterbalance employer power. They diverge fundamentally on what law can achieve. For Kahn Freund, law can be a genuine countervailing force — imperfect, incomplete, requiring social backing, but capable of real improvement in workers’ conditions. For the Marxist, law operates within structural constraints set by the mode of production. It can improve conditions at the margins — and these marginal improvements are real, not illusory — but it cannot alter the fundamental relationship of domination and subordination that is constitutive of capitalist employment.

A good exam answer presents both positions, identifies the convergence, articulates the divergence, and locates both within the Indian statutory framework. Marxism explains why protective legislation tends to retreat when capital is strong — the Labour Codes of 2025 being the most recent example. Kahn Freund explains how that retreat is experienced doctrinally — as changes in thresholds, definitions, and procedures that reduce the reach of the countervailing force without abolishing it entirely.

History and Development of Labour Law in India

British colonial labour legislation was not designed to protect workers. It was designed to manage and control labour supply for colonial enterprises.

The Workmen’s Breach of Contract Act, 1859 criminalised breach of employment contracts by workers. A worker who abandoned plantation or mine employment could face criminal prosecution and imprisonment. An employer who breached the same contract faced only civil liability. The asymmetry enforced labour discipline and immobility — particularly for plantation workers in Assam and mine workers in Bengal, who were often bound by advances and had no realistic ability to seek alternative employment. Through the Kahn Freund lens: the statute inverted the countervailing function. Instead of restraining employer power, it amplified it — giving employers the coercive power of criminal prosecution to enforce subordination.

The Factories Act, 1881 introduced the first minimum protections for factory workers — principally child labour regulations and basic safety norms in cotton, jute, and other large mills. The motivation was partly humanitarian but also reflected pressure from British industrialists who objected to the competitive advantage Indian mills derived from using child labour without restriction. Worker protection in colonial India was, in significant part, a byproduct of British industrial interests — a fact that fits the Marxist account precisely.

The Trade Unions Act, 1926 granted legal recognition to trade unions and immunities from criminal conspiracy and tortious liability. But recognition was not collective bargaining recognition — there was no obligation on employers to bargain with a registered union. The Act created the form of collective organisation (legal personality, immunity) without the substance of compulsory collective bargaining. Workers could organise. Employers could refuse to negotiate. This gap persisted throughout the colonial period and was only partially addressed by the Industrial Disputes Act, 1947.

The Constitution of India, 1950 transformed the normative framework for Indian labour law in three significant ways.

First, through the Directive Principles of State Policy in Part IV. These are not enforceable as fundamental rights — they do not give any individual a directly justiciable claim — but they impose obligations on the state in the formulation of policy, and courts have consistently used them to interpret labour statutes in a pro-worker direction. The relevant provisions: Article 38 requires the state to promote a social order in which justice — social, economic, and political — informs all institutions of national life; Article 39(a) provides for the right to an adequate means of livelihood; Article 39(d) mandates equal pay for equal work; Article 41 provides for the right to work in cases of unemployment and sickness; Article 42 calls for just and humane conditions of work and maternity relief; Article 43 provides for a living wage; and Article 43A, inserted by the 42nd Amendment in 1976, provides for the participation of workers in the management of industries.²⁰ Articles 23 and 24 give constitutional weight to the prohibition of forced labour and the employment of children in hazardous work — anchoring at the constitutional level what the Factories Acts and child labour statutes attempt at the statutory level.

Second, through Article 19(1)(c) — the fundamental right to form associations or unions. Courts have read this as including the right to form trade unions. However, they have consistently distinguished between the right to form a union (guaranteed) and the right to have that union recognised for collective bargaining (not guaranteed as a fundamental right). This distinction significantly limits the practical reach of the constitutional protection.

Third, through Article 21 — the right to life. The Supreme Court in Olga Tellis v. Bombay Municipal Corporation (1985) 3 SCC 545 expanded Article 21 to include the right to livelihood. Chandrachud CJ wrote: “The sweep of the right to life conferred by Article 21 is wide and far reaching… An equally important facet of that right is the right to livelihood because no person can live without the means of living.”²¹ This constitutional grounding gives Indian labour law a fundamental rights dimension that makes protective statutes judicially reviewable under Article 21.

Labour is placed on the Concurrent List (Seventh Schedule, Entries 22 and 24) under Article 246. Both Parliament and state legislatures can legislate on labour, with central legislation prevailing in case of conflict. This has produced a complex regulatory framework in which central statutes set minimum standards and state legislation adds to them — and in which states competing for industrial investment have sometimes chosen not to maximise worker protection.

Four statutes form the core of this course — and each can be read through the Kahn Freund lens as a specific mechanism for creating the countervailing force.

The Trade Unions Act, 1926 was retained at independence. Registration under Sections 3–13 gives trade unions legal personality. Section 15 specifies the objects on which the general fund may be spent. Section 17 (criminal immunity) and Section 18 (civil immunity) remove the legal obstacles that would otherwise make trade union activity tortious or criminal. These immunities are the legal infrastructure of collective power. Without them, the countervailing force cannot be exercised.

The Industrial Employment (Standing Orders) Act, 1946 requires employers in industrial establishments employing 100 or more workers to formally certify conditions of service. Standing orders must be submitted to a Certifying Officer and, once certified, become binding. Before the Act, conditions of service were whatever the employer decided — an almost pure expression of employer power. The Act requires codification, certification, and public display. This is a direct reduction of the employer’s unilateral power to define the conditions of subordination.

The Industrial Disputes Act, 1947 — enacted in the final months of colonial rule, coming into force on 1 April 1947 — created state-directed dispute resolution machinery: conciliation officers (Section 4), boards of conciliation (Section 5), courts of inquiry (Section 6), labour courts (Section 7), industrial tribunals (Section 7A), and national tribunals (Section 7B). Strikes and lockouts are regulated under Sections 22–28. Layoff (Section 2(kkk)), retrenchment (Section 2(oo)), and closure (Section 2(cc)) are defined and their financial consequences specified in Chapters VA and VB.²²

The IDA’s philosophy is state-directed adjudication, not voluntarism. The state positions itself as neutral arbiter between capital and labour, imposing mandatory dispute settlement rather than leaving parties to resolve disputes through collective bargaining backed by industrial action. A Marxist analysis would note that the state-as-arbiter functions, in practice, to prevent escalation of industrial conflict to a point that might threaten capital — while offering workers procedural protection that legitimises the system. Kahn Freund might observe: adjudication by the state creates the countervailing force institutionally where collective bargaining has not developed sufficiently to create it organically.

The Essential Services Maintenance Act, 1981 empowers the central government to prohibit strikes in essential services (defence establishments, railways, postal and telegraph services, government establishments, and certain notified industries) for specified periods.²³ The state, as Kahn Freund notes, is the “largest of all managers.” The ESMA reflects this: it restricts the exercise of collective power when the state’s own interests as employer and as provider of essential services are at stake — simultaneously a legitimate regulation of union power and, from a Marxist perspective, a specific example of the state using law to suppress the countervailing power of its own employees when that power becomes inconvenient.

The four Labour Codes — Code on Wages 2019, Industrial Relations Code 2020, Code on Social Security 2020, and Occupational Safety, Health and Working Conditions Code 2020 — came into force on 21 November 2025.²⁴ The 29 central labour statutes they consolidate, including the Trade Unions Act, the IDA, and the Standing Orders Act, are repealed in the central sphere. State-level implementation remains at varying stages of rule notification.

The Industrial Relations Code, 2020 raises the threshold for prior government permission for retrenchment and closure from 100 workers to 300 workers. It also introduces stricter strike regulations — mandatory 14-day notice before any strike, prohibition on strikes during conciliation proceedings — reducing the capacity of workers to exercise the collective power Kahn Freund identifies as the only genuine counterweight to employer power. The Code on Wages consolidates four wage statutes and extends minimum wage applicability more broadly — a genuine improvement in reach. The Code on Social Security extends coverage to gig and platform workers — also genuinely progressive in scope.

The Codes are not uniformly hostile to workers. They represent exactly what the Marxist framework predicts: real concessions on minor matters, combined with significant reductions in protection on the matters — retrenchment, closure, strikes — that most directly threaten the prerogatives of capital. For exam purposes, the old statutes remain the doctrinal framework for this paper. The Codes are contemporary context for the theoretical arguments, not the doctrinal focus of exam answers.

The Sociological Understanding: Rhetoric, Reality, and the Informal Economy

Saini’s “Labour Legislation and Social Justice: Rhetoric and Reality” (Economic and Political Weekly, 1999) makes an argument that, over two decades later, remains if anything more accurate.²⁵ Indian labour legislation has, in significant part, failed to achieve its stated objectives for the overwhelming majority of Indian workers.

The reason is structural. Formal labour protections operate reasonably well in the organised, formal sector — where workers are unionised, where employers are publicly visible, where enforcement agencies are relatively functional, and where workers are informed enough of their rights and secure enough in their positions to exercise them. But the formal sector accounts for only approximately 8–10% of India’s workforce. The remaining 90% — domestic workers, agricultural labourers, informal manufacturing, construction workers, home-based piece-rate workers, gig economy workers, platform workers — exist largely outside the formal protective framework.

The ILO World Employment and Social Outlook: Trends 2025 confirms this: approximately 82–90% of India’s workers are in informal employment.²⁶ These are not people excluded from the statute books. The Constitution’s Directive Principles apply to everyone. The minimum wage statutes nominally cover most sectors. The protections are legally available. They are practically inaccessible.

Kahn Freund’s insight — that law cannot be effective without the backing of social power — explains exactly this pattern. Protective legislation requires enforcement. Enforcement requires workers who are willing and able to complain. Workers are willing and able to complain when they have collective organisation that makes complaining safe, when they have awareness of their rights, and when they have economic alternatives that reduce their dependence on any particular employer. In the informal economy, almost all of these conditions are absent. Workers are economically desperate, individually employed, contractually precarious, and legally uninformed. The employer who violates minimum wage requirements knows, with near-certainty, that no complaint will be filed.

Saini puts it precisely: for unorganised workers it “appears as if no labour law exists.”²⁷ The statutes exist. The inspectors exist (in theory). The remedies exist. But without the social conditions that give law its teeth — collective organisation, awareness, economic alternatives — the law is inoperative for those it most needs to protect.

Only approximately 8–9% of India’s workforce is unionised — mostly in the public sector. At most 2–3% can realistically access collective bargaining. This is the social power deficit that makes the IDA’s protections notional for the majority.²⁸

The Marxist account adds a dimension that Kahn Freund’s framework does not fully explain: why the law was built this way, and why it has not been reformed to extend meaningful protection to the informal economy despite decades of official acknowledgment of the problem.

The answer, through the Marxist lens, is structural. Effective labour law protection for informal economy workers would significantly raise the cost of informal labour to the enterprises — large and small — that depend on it. Indian capital’s competitive advantage in labour-intensive sectors rests substantially on the availability of workers who cannot enforce labour standards. Extending effective protection to these workers would challenge the mode of production in a way that the dominant ideology — and the relative autonomy of the Indian state, constrained by its relationship with capital — cannot admit.

The Second National Commission on Labour (2002) recommended the extension of minimum labour standards to the unorganised sector. Its recommendations were acknowledged, discussed, and substantially unimplemented for over two decades. The Codes of 2019–2020 included the Code on Social Security with extended coverage for gig workers — a real improvement, but specifically in a sector where large platform companies had a business interest in formal recognition of their workers as “workers” with some entitlements, rather than as employees with full labour law protection.

The pattern is consistent: reforms happen in the direction capital can accommodate. They do not happen in the direction capital cannot.

The sociological reality does not invalidate the legal framework. It contextualises it. Labour law for the organised sector has achieved real protections for the minority of Indian workers it reaches. These protections are meaningful and should not be dismissed. But reading Indian labour law without acknowledging the 90% is reading the map without acknowledging the territory.

Reading the Statutes Through the Philosophical Lens

Every topic that follows in this course is an application of the central question: how does the law manage the power imbalance between employer and employee? The philosophical framework of Topic 1 is not background noise. It is the analytical lens through which the doctrine becomes intelligible.

The Trade Unions Act, 1926 grants registration, legal personality, and immunities. Section 17 (criminal immunity) and Section 18 (civil immunity) are the legal infrastructure of collective power. Without them, trade union activity constitutes criminal conspiracy and tortious interference. The gap in the Indian framework: a registered union does not automatically have collective bargaining recognition. The employer is not obliged to negotiate. Cases such as Rangaswami v. Registrar of Trade Unions (AIR 1962 Mad. 231) and Food Corporation of India Staff Union v. Food Corporation of India (AIR 1995 SC 1344) turn on who qualifies as a “workman” for the purposes of the Trade Unions Act and whether a particular body of workers can form a registrable union — precisely the kind of gatekeeping question that determines who can access the legal infrastructure of collective power.

Section 2(j) of the IDA defines “industry” and thereby determines who falls within the statute’s entire protective framework. Bangalore Water Supply and Sewerage Board v. A. Rajappa (1978) — a seven-judge Constitution Bench — expanded the definition broadly to include charitable organisations, educational institutions, hospitals, and government undertakings engaged in systematic activity.²⁹ Justice Krishna Iyer’s judgment is explicitly purposive: the statute should be read to maximise the number of workers who can access protection. This interpretive methodology is directly consistent with Kahn Freund’s countervailing force — the wider the statutory reach, the more effectively law performs its protective function.

State of U.P. v. Jai Bir Singh (2005) 5 SCC 1 — a five-judge Bench — questioned the breadth of Bangalore Water Supply, noting that Parliament had attempted (by a notification never brought into force) to narrow the definition of “industry,” and referred the definitional question to a larger bench.³⁰ As of 2026, the question of a nine-judge bench re-examination of the definition remains pending — confirming that this is not settled law.

Section 2(k) defines “industrial dispute” and Section 2A creates an exception allowing individual workers to approach certain forums directly. An individual grievance that does not become an “industrial dispute” — because no union takes it up, no co-workers support it — can leave a worker without access to the adjudicatory mechanism. This is Kahn Freund’s point applied doctrinally: the law’s effectiveness depends on collective organisation.

Section 2(s) of the IDA defines “workman” and thereby determines who can access the statute’s protections. The distinction between “contract of service” (employee — inside the Act) and “contract for service” (independent contractor — outside the Act) is a legal distinction with enormous practical consequences for power. Courts have developed tests — the “control test,” the “economic reality test,” the “predominant nature of duty test” applied in H.R. Adyanthaya v. Sandoz (India) Ltd. (1994) 5 SCC 737 — to identify the employment relationship beneath the contractual label.³¹ This interpretive activity reflects the Kahn Freund insight: form must not be allowed to entirely conceal substance. The employer who can dictate the terms of engagement can also dictate the label — “contractor” instead of “employee.” The courts’ role in looking behind the label is a direct application of the countervailing force principle.

The right to strike is the most direct expression of collective power — the exercise, in its most confrontational form, of the countervailing force Kahn Freund identifies as labour law’s object. T.K. Rangarajan v. Government of Tamil Nadu (2003) 6 SCC 581 — where the Supreme Court held that government employees have no fundamental, statutory, or moral right to strike — illustrates the Kahn Freund tension most sharply.³² The state as the “largest of all managers” uses its legislative and judicial power to restrain the collective power of its own employees. From a Marxist perspective: the dominant class using the state apparatus to suppress a challenge to the existing order. From a Kahn Freund perspective: a legitimate restraint of union power where the state has an obligation to provide essential services — but one that disproportionately limits the countervailing power of government workers without providing compensating protections.

Chapter VB of the IDA — formerly applicable to establishments with 100 or more workers — required prior government permission for retrenchment and closure. This was the most direct statutory counterweight to employer power in the entire framework. The Industrial Relations Code, 2020, in force from 21 November 2025, raises this threshold to 300 workers. Through a Kahn Freund lens: the countervailing force has been reduced. Through a Marxist lens: exactly as predicted — as capital’s relative political power increased, the state’s relative autonomy shifted, and the most protective provisions of the welfare legislation were qualified.

For exam purposes, use these topic-wise connections to show that you are not reading the syllabus as eight disconnected doctrinal topics. You are reading one continuous argument about how law manages — and sometimes fails to manage — the structural inequality of the employment relationship.

Where This Leaves Us

Labour law is not simply a collection of protective statutes. It is a response to a structural feature of industrial society — the inequality of power between those who employ and those who are employed — and its effectiveness depends on conditions the law itself cannot create.

Kahn Freund’s insight that law must function as a countervailing force explains both why the statutes were enacted and why their impact has been uneven. The Marxist critique adds the necessary corrective: that regulation operates within structural constraints set by the mode of production, and that welfare legislation simultaneously protects workers and legitimises the system that makes those protections necessary. The Labour Codes of 2025 are not a departure from this pattern. They are its latest expression.

In India, these theoretical tensions play out against a background in which approximately 90% of the workforce remains outside the formal protective framework. The question of what Indian labour law can achieve is simultaneously a question about the quality of the statute and about the social conditions — collective organisation, institutional capacity, enforcement mechanisms, political will — without which even the best-drafted provisions remain rhetorical rather than real.

Reading the statutes that follow in this course through this framework does not simplify them. It makes them more demanding — because it requires asking not just what the provision says but what it is for, who it actually reaches, and whether the structural conditions for its effectiveness exist. That is the analytical discipline Topic 1 is designed to install.

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The author is a law student at Law Centre-1, Faculty of Law, University of Delhi. Views are personal.

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