The Curious Case of Judicial Interpretation and Labour Flexibility in India

Abstract

The economic liberalisation of the 1990s in India led to calls for increased labour flexibility. As achieving legislative reform proved difficult, the focus shifted to judicial interpretation of existing labour statutes. We present evidence that Indian courts changed their interpretations of labour laws over time, favouring flexibility at the expense of the protective purposes underlying the legislation. Our study is based on analysis of a sample of 196 judgments of senior appellate courts between 1999 and 2019 on protective provisions of the Contract Labour (Regulation and Abolition) Act 1970. The tendency of the Indian courts to support interpretations consistent with the goal of labour flexibility may be said to illustrate the role of the judiciary in promoting market-led economic development, but it also suggests a degree of bias in the courts’ approach to questions of labour law adjudication.