How independent is India’s labour law framework from the state’s changing economic policies?

Abstract

Judicial interpretation of statute law in common-law countries means that the judiciary may mediate the social impact of legislation. In the case of the protection of labour rights in India, this article examines the extent to which the judiciary acts independently from the government of the day, and the extent to which court judgements are swayed by prevailing administrative policies. Specifically, to what extent have economic liberalisation and labour market flexibility policies influenced court decisions in cases challenging worker dismissals? Drawing on a review of 270 judgements delivered by the Supreme Court of India and the state High Courts between 1950 and 2010, a relationship is traced between a shifting pattern of Courts’ judgements and policy changes initiated by the Indian government in response to economic conditions. The objective of the study is to understand the effect of a structural shift in the economy on the cases of consented and contested decrees related to dismissal of workers under the relevant laws in India. It is found that the specific statute has not greatly changed through legal reforms, but the judiciary’s interpretations of it have changed over six decades based on dominant socio-political currents, in tune with government economic policies. This raises profound questions about judicial independence in defence of labour rights.JEL Code: K31