1

LABOUR LAW PROJECT REPORT ON:

EXPLOITATION OF LABOUR AND IT’S DIFFERENT
PATTERNS.

SUBMITTED BY:
Aayushi Saini
Roll. No. 02/16
Section A
Semester 9
B.A.LLB. (Hons.)
UILS,
Panjab University,
Chandigarh

SUBMITTED TO:
Sir Virender Negi
Prof. Labour Law
UILS,
Panjab University,
Chandigarh
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ACKNOWLEDGEMENT:

I would like to show my gratitude towards Sir Virender Negi for giving
this opportunity to prepare a project and increase my scope of
knowledge in these tough times of an ongoing pandemic. I would also
like to thank him for providing us with the necessary material which was
required for the completion of this project.

Thank you.
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INDEX:

S.NO. CONTENT PAGE NO.

1. Introduction 4
2. Karl Marx’s view on 5-6
exploitation
3. Exploitation in beginning 7-8
of industrialization
4. Patterns of exploitation 9-11
5. Conclusion 12
6. References 13
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INTRODUCTION:

Labour is an important segment of the general community. Being a ‘human factor’

labour is different from other factors of production.

History begins when men produce their means of production; at a minimum this
involves a production of food and shelter.

Marx argues that “the first historical act is therefore the production of material life.”

Production requires co-operation thus men work together to produce the goods and
services necessary for life.

At the dawn of human history, since each member of the society produced for him
and for the society as a whole, there were no conflicts of interests between
individuals and groups. However with the introduction of private ownership and
private property, fundamental contradictions of the human society were created. The
minority is able to control, command, and enjoy the fruits of production, and a
conflict of interest exists in which the majority performs the productive labour.

The labour was in a better situation during the ancient and agrarian times but in the
middle ages, due to emergence of feudal system, the condition of labour deteriorated.
Most of the agricultural land was owned by the feudal lords. Landless labourers
know as ‘serfs’ were forced to work for the land owning nobility in order to earn a
means of livelihood.

A feudal structure prevailed in many economies of the world including India in the
medieval period thus these economies were characterized by specific forms of
exploitation of the peasants, artisans, etc.

Exploitation of labour is the act of using power to systematically extract more value
from workers than is given to them. It is a social relationship based on an asymmetry
of power between workers and their employers.1

1
Meenu Paul, Labour and Industrial Laws, p.no.2
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KARL MARX’S VIEW OF EXPLOITATION:

Karl Marx is considered the most classical and influential theorist of exploitation. In
analyzing exploitation, economists are split on the explanation of the exploitation of
labour given by Marx and Adam Smith. Smith did not see exploitation as an inherent
systematic phenomenon in certain economic systems as Marx did, but rather as an
optional moral injustice.

Between 1861 and 1863, Karl Marx wrote the theory of surplus value, which is
central to his exposition of exploitation in capitalist production. This was based on
an engagement with classical political economy.
Marx's exploitation theory is one of the major elements analyzed in Marxian
economics and some social theorists consider it to be a cornerstone in Marxist
thought. In his Critique of the Gotha Program, Marx set principles that were to
govern the distribution of welfare under socialism and communism- these principles
saw distribution to each person according to their work and needs. Exploitation is
when these two principles are not met, when the agents are not receiving according
to their work or needs. This process of exploitation is a part of the redistribution of
labour, occurring during the process of separate agents exchanging their current
productive labour for social labour set in goods received. The labour put forth toward
production is embodied in the goods and exploitation occurs when someone
purchases a good, with their revenue or wages, for an amount unequal to the total
labour he or she has put forth. This labour performed by a population over a certain
time period is equal to the labour embodied to the goods that make up the net
national product (NNP). The NNP is then parceled out to the members of the
population in some way and this is what creates the two groups, or agents, involved
in the exchange of goods: exploiters and exploited.
The exploiters are the agents able to command goods, with revenue from their wages
that are embodied with more labour than the exploiters themselves have put forth-
based on the exploitative social relations of capitalist production. These agents often
have class status and ownership of productive assets that aid the optimization of
exploitation. The exploiters would typically be the bourgeoisie. Meanwhile, the
exploited are those who receive less than the average product he or she produces. If
workers receive an amount equivalent to their average product, there is no revenue
left over and therefore these workers cannot enjoy the fruits of their own labours and
the difference between what is made and what that can purchase cannot be justified
by redistribution according to need. The exploited are the proletariat. 2

2
researchgate.net
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Marxist Theory:

In Marx's major work Das Kapital, the concept of exploitation is not a moral
concept. Marx did not claim to make value judgments when he claimed that the
capitalist exploits the worker. In the preface to the first edition of the first volume, he
explicitly wrote that he did not want to make the individual “responsible for
conditions of which he remains the social creature.”In the context of factory
legislation, Marx explicitly stated that the capitalist had to exploit the worker as
much as possible in order to maintain himself as a capitalist in competition, and that
this was not due to the bad will of the capitalist.
Marx did not intend an idealistic critique that measured bourgeois relations against
the idea of justice. The fact that the capitalist exploits the worker is not an injustice.
According to Marx, it does not violate the law of value of commodity exchange.
Marx was also later very skeptical about the idea that in a communist society based
on co-operative production, the worker should simply receive his entire labour
product. In “Critique of the Gotha Programme” he criticized bourgeois as well as
socialist ideas of fair distribution. This concerned above all Ferdinand Lassalle's
demand for an unabridged labour yield.
Furthermore, Marx did not think that exploitation always had to mean that the
exploited had a low wage or standard of living. This could rise in times of increased
demand for labour.
As a central concept of Marx's critique of political economy and Marxist theory of
history and society, exploitation refers to a class relationship or the unremunerated
appropriation of other people's labour power and other people's labour products,
which goes beyond the work necessary to maintain labour power. Exploitation is
therefore the appropriation of surplus labour and the resulting surplus product. If, for
example, 6 hours of labour are necessary daily to maintain the worker and his labour
power, but he works 8 hours, he has done 2 hours of extra labour. If the product of
this surplus labour is extorted from another person, the worker has been exploited in
this sense.
In class societies, the members of the exploiting class have the labour power of the
exploited and the essential social means of production. In order for a class to form
whose members can permanently and securely appropriate the surplus product of
another class, a certain social productive power of labour must have been achieved;
otherwise the existence of the exploited is endangered. Depending on the
social mode of production, the relations of production through which the surplus
product is appropriated differ from "direct forced labour" as in slavery to "mediated
forced labour" as in wage labour. 3

3
researchgate.net
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EXPLOITATION OF WORKERS IN THE BEGINNING OF THE

INDUSTRIALZATION:
Exploitation of the workers in the beginning of industrialization may be summarized
under the following heads:

i. Loss of freedom to work independently

ii. Indifferent attitude of the employer
iii. Unfair contract of employment
iv. Inhumane conditions at the workplace

• Loss of freedom to work independently:

A great historic event that took place in Great Britain in 18th century was
advent of the ‘industrial revolution.’
It soon spread to its neighboring states and by the end of 19th century covered
most of the globe. Newly invented machines caused mass production of
goods in short period of time and provided mankind with material comforts
and brought within its wake a number of problems for the workers.
The independence of a labourer was lost as soon as the tool in his hand was
replaced by the machine; it was as if he was tied to it and became little more
than a cog in a big machine of production. The worker lost his tool and was
now tied to a machine and to the owner of the machine.

• Indifferent attitude of the employer:

The worker also had to suffer through the indifferent attitude of employer
who as the owner of the industry, was more concerned about profits rather
than labour welfare. Through industrialization, new class of employers
emerged whose main interests were to maximize their profits. The employer
belonging to the new class was different from the traditional employer.
Working under a traditional employer meant a traditional servant master
relationship between the worker and employer, but under the new employer,
the worker who worked in the industry seldom saw his employer for whom
he toiled day and night. Between the workers and the employers there stood
the supervisory managers who were appointed by the owner of the industry to
watch the work done by the workers. 4

4
Meenu Paul, Labour and Industrial Laws, p.no.3
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• Unfair contract of employment:

To maximize profits, the workers were forced to work for unduly long hours
without any interval, without any rest, and for extremely low wages. The
working conditions were also extremely unhygienic. It was as if the workers
were reduced to the status of a lifeless machine which had no fixed working
hours and functioned non-stop without any demand for wages. To make the
matters worse, the laissez-faire doctrine that prevailed in the state in the
beginning of the modern industrialization, advocated the non interference of
the State in the economic affairs of the state. This enabled the employers to
employ the workers on such terms of employment which favoured the
employers more than the workers. Thus the employers were free to draft
contracts of employment at their whims and fancies without any check from
the State. Therefore the workers could either accept these terms or starve to
death.

• Inhumane conditions at workplace:

The newly emerged class of employers, were only concerned about their
profits in the competitive market and completely ignored the value of the
human factor in the production of goods. The workers were suffering injuries
which were very damaging for example in the mines leading to an endless
toll of deaths.
Accidents at workplace without any insurance cover or compensation to the
worker from the employer added to the misery of the workers. In order to
recover insurance he had to prove that the accident occurred to employer’s
negligence rather than his own or a fellow worker’s. Child labouring was also
prevalent as they provided for cheap labour but were too young and
defenseless therefore would not raise their voice against their exploiters.
They worked for long hours, in bad conditions, and not even provided with
food until they returned back home. In this chain of industrialization the
worker lost his dignity as a human being.5

5
Meenu Paul, Labour and Industrial Laws, p.no.4-6
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PATTERNS OF EXPLOITATION OF WORKERS:

The factors that weaved the pattern of exploitation of the industrial worker may be
summarized under the following heads-

1. Doctrine of laissez-faire
2. Freedom of contract and Doctrine of hire and fire
3. Doctrine of Conspiracy and Combination Acts

• Doctrine of laissez-faire:
Modern industrialization occurred in the 18th century, the time when this
doctrine was prevailed in the State. According to this doctrine the State has to
perform only primary function, i.e., protection of its citizens from external
aggression and internal disturbances and maintain the law and order in the
society and not to interfere in the economic or other private affairs of its
citizens. The relation between the industrial workers and their employers was
considered to be a private economic affair. Due to the policy of non
intervention by state because of this doctrine, the industrialists as employers
were free to employ the workers on any terms of employment without any
interference by the state. This allowed the employers to draft any kind of
contract between the workers and them. This freedom of contract was
between two unequal parties, one being wealthy and powerful industrialists
who employed without any legislation or checks upon their undue freedom,
and on the other hand poor workers whose livelihood depended upon such
work. Industrial law in the 18th century was not created by the State; rather it
was created by the individual industrialist as an employer in regard to his
industry. Thus industrial law differed from industry to industry. Another
factor that had an influence on the contracts was the competitive market,
which never allowed even the kindest of the employers to draft fair contracts
which were not as harsh towards the workers.
Thus the doctrine of laissez-faire caused exploitation of the industrial
workers in the beginning of the modern industrialization as unrestricted
market economy helped the rich industrialists to become richer and the
workers to suffer in utter poverty. However it lost its significance in the 20th
century with emergence of welfare state which strives to achieve economic
and social justice in the society and also protects its citizens and maintain the
law.
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• Freedom of contract and Doctrine of hire and fire:

Due to the prevalence of the Doctrine of laissez-faire, the employers who

were the owner of the newly set up industries were driven by the urge to
maximize their profits and thus totally disregarded the interests of the
workers. Succumbing to their interest to maximize profits, the workers were
employed in those industries at extremely low wages with long working
hours, and without any intervals to rest.

In the name of freedom of contract these industrialists always reserved their

right to dismiss or discharger their workers at any time they liked and they
exercised this right without giving the workers any reason or any opportunity
to be heard. In the absence of social justice, even the law favoured the
employers because the employers claimed that they are exercising their rights
in accordance to the terms of the contract which the workers have entered
into with them, willingly. These contracts were traps for the workers which
bound them legally and thus the Courts were also bound to give effect to the
terms of these contracts.

However the situation now is very different because in a welfare State, the
freedom of an employer is curtailed by a number of legislations enacted by
the State to protect the interests of the socially and economically weak
workers. For example, The Factories Act, 1948 of India fixes the daily as
well as weekly working hours, intervals for adults, children and adolescents.
Any term of contract which imposes working hours more than what is
prescribed under Factories Act, 1948 is unlawful and is liable to be struck
down by the Court.

Thus the greatest loss that the industrial worker suffered in the name of
freedom of contract in the beginning of the modern industrialization period
was the ‘security of his job.’ In the name of freedom of contract, the
industrialists as employers employed the workers in their industries on such
terms and conditions of employment which suited them best, i.e., they always
reserved their right to dismiss or discharge the workmen they employed and
they exercise it as freely as they could. Because of this the only two options
availed to the suffering worker was either to accept the harsh terms of the
contract and work, or to starve to death without any work. 6

6
Meenu Paul, Labour and Industrial Laws, p.no.9-10
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• Doctrine of conspiracy (Combination Acts):

The condition of the industrial workers worsened further in the early phase of
industrialization, when doctrine of conspiracy started regulating the newly
emerged industrial relations.
According to the doctrine of conspiracy, two or more persons could not
combine to do what they could legally do as individuals.

Upholding this doctrine, King’s Bench in Rex v. Journeymen Tailors of

Cambridge case, in which Journeymen Tailor were indicted for conspiracy to
raise wages, held:
“a conspiracy of any kind is illegal although the matter about which they
conspired might have been lawful, or any of them to do, if they had not
conspired to do it.”

Similarly in 1786, five bookbinders were convicted of conspiracy leading to a

strike to reduce the hours of labour from twelve to eleven. Scared by the
French Revolution the governing class of Great Britain prohibited the
working class combinations in the textile industries and mining areas rigidly
by passing the Combination Acts, 1799 and 1800. These Acts forbade the
formation of unions.

Despite all the prohibitions the workmen formed unions and took collective
action. Eventually in 1824 with the efforts of Francis Place and Joseph
Hume, these discriminatory Combination Acts of 1799 and 1800 were
repealed by the Combination Act, 1824 which legitimized the combination of
employees. However this Act was repealed by the Combination Act, 1825
which imposed some restrictions on the liberties provided to the workmen in
the previous Act. It legalized union of workers but made such strikes illegal
which were done in order to oppress the employer. 7

7
Meenu Paul, Labour and Industrial Laws, p.no.11
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CONCLUSION:

We can find various accounts and instances of labour exploitation since the
beginning of history and we can still find them in today’s times. However the road of
transition from the prevalence of doctrine of laissez-faire State to welfare State was a
long and very significant one. It showed us the power that the workmen in the
society hold and that without them and their inputs the society and especially the
production systems and industry cannot function efficiently.

The doctrine of laissez-faire does not find any place in the Welfare State. The
doctrine of laissez-faire gave rise to an unrestrained economy as the State did not
interfere in the private affairs of the states. This only benefitted the rich and made
them richer and was of extreme disadvantage to the poor workers.

However a welfare State performs all the functions that a State should perform. This
includes not only maintaining the law and order in the society and protecting its
citizens from external aggression and internal disturbances, but also to ensure
welfare of its citizens. This includes taking care of health, education of its citizens
and functioning in order to achieve economic and social justice in the society.
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REFERENCES:

1. Meenu Paul, Labour and Industrial Laws, Allahabad Law

Agency, Faridabad, Haryana, 2018.

2. https://www.researchgate.net/publication/330627684_Exploitation
last accessed on 23rd December 2020 last accessed at 12:46 AM.