About a week ago, the Supreme Court dismissed a Public Interest Litigation (PIL) filed by 10 trade unions seeking directions the law on minimum wages be applied to domestic workers. The petition contended failure to pay minimum wages as defined in the 1948 Minimum Wages Act was not only a violation of Article 21 of the Constitution protecting the Right to Life, but also amounted to ‘forced labour’ forbidden by Article 23.
The apex court bench of Chief Justice Surya Kant and Joymalya Bagchi chose to look away. In their order the bench stated it was for the executive and legislative arms of government to consider and implement minimum wages, though it did advise state government to look into the grievances of domestic workers.
This has to be seen in the context of the non-binding National Floor-Level Minimum Wage remaining unchanged since 2017. Without factoring in inflation, even when implemented, real wages for millions of daily workers have eroded 5% every year.
To sidestep defining and enforcing the law to protect perhaps the most exploited and abused workers is indeed unfortunate. It is no secret domestic workers, most of them women, labour in the worst of conditions without any right to a living wage, leave or rest periods. The court did not stop there. It castigated trade unions for slowing down industrial growth and opposing structural changes and reforms, which in turn discourages investment.
Unions are disappearing
Blaming trade unions, rendered toothless in recent years, for slow industrial growth is indeed barking up the wrong tree. Predictably, it has let loose a barrage of criticism, especially from left wing and liberal quarters.
The CPM-affliated Centre of Indian Trade Unions (CITU) warned such remarks had “neither theoretical soundness nor empirical validity”. Made by the “custodian of the Constitution,” it could weaken public trust in constitutional guarantees and encourage employers and governments to further dilute labour rights.
First the facts. Are trade unions responsible for the slowdown and disruption of industrial production? Hard data points the other way. Labour unions are not getting any stronger; in fact their influence over the working class is declining. Collective bargaining and industrial action is fading out. When did we last hear of a prolonged strike by organized workers? Instead, employers have moved to a regime of hireand-fire contracts where individual employees have little protection.
Sample these facts. Data from the Labour Bureau on Industrial Disputes, Closures, Retrenchments, and Lay-offs points to a sharp fall in industrial disputes over the the last 2 decades. In 2006, India recorded 430 industrial disputes, the highest in this millennium. Between 2006 and 2014, the average annual number of disputes fell to 354. In the 2015--2023 period, the average dropped drastically to just 76 disputes per year. Since 2018, industrial disputes have stayed below 100 annually.
By September 2023, only 30 disputes were reported across the country, marking a 17-year low. In terms of mandays lost to industrial disputes too, there has been a drastic fall to just 0.5 million mandays lost in 2022 from a high of 12.2 million mandays in 2012.
Closure of industrial units and slowdown in production have been driven more by financial mismanagement, bad business decisions, or a sudden change in business environment. In recent days, events like the prolonged Covid-19 pandemic, or the levy of import tariffs by the US’ Trump administration have taken a huge toll on businesses.
Data shared in Parliament by the Ministry of Corporate Affairs showed 2,04,268 private companies shut down in the last 5 years due to amalgamation, dissolution, or being struck off under the Companies Act, 2013.
The foundation of India’s industry and employment are the lakhs of small and micro units, in which trade unions are more-or-less non-existent. Yet, based on data from the Ministry of Micro, Small and Medium Enterprises (MSME) and the Udyam registration portal, 75,082 to 98,990 MSMEs registered on the portal have shut down between July 2020, and mid-2025.
Constitutional protection? Far-reaching changes in labour laws have also made industrial action by trade unions more difficult. For instance, what was earlier a slew of 29 labour laws, have been dovetailed into just 4 overarching laws. The underlying aim is to make the business environment friendlier for investors and reduce red tape. Workers, on the other hand, see this move as an attempt to restrict labour rights. The new laws, for instance, have made the rules for declaring a strike by workers virtually impossible. Besides the mandatory 14-day notice, unions giving strike notice must launch their action within 60 days of such a notice. Moreover, if the dispute is referred for ‘conciliation’, unions are barred from going on strike.
There is also the question of constitutional propriety. Can the apex court, mandated to safeguard the Constitution, take aim at the right to form unions and engage in collective bargaining guaranteed under the right to association under Article 19(1)(c) of the Constitution?
Trade unions too must observe the law and cannot cross the line of peaceful protest. However, negative generalizations against legally constituted bodies of workmen should have been avoided. The Trade Union Act, 1926 (now subsumed into the new Industrial Relation Code, 2020) lays down the process of registration, and functioning of trade unions. TUs for decades have played an important role in representing workers interests and balancing relations with managements. These have to be respected, not belittled.