Freedom of

Contract
- MO NIC A RA NI
V IS IT ING FAC U LTY
As per the international labour standards the labour market and labour
utilisation need to be regulated and controlled, not only to attain
humane working conditions, but to achieve international economic
competitiveness, social and political stability, and sustainable
development.
Superior economic and social performance, political stability and peace
have been achieved by states which have followed the notions of ILO.
Conviction to ILO standards has benefitted countries like Northern
European countries.
Though, mainstream economics has tended to see collective
negotiations as either an impediment to the smooth functioning of
markets, or as ineffective.
They also state that proponents of the free, unhindered market would
lead to the real standardization of wages and working conditions. Some
representatives of the free market doctrine even went so far as to claim
that unemployment is a decision made by those affected, that the
workforce is always adequately remunerated according to marginal
productivity, or that workers performing dirty, dangerous, and
monotonous jobs are always fairly compensated with higher pay.
Economic growth does not ensure improvement in employment and
working conditions, the proactive regulation in the form of standards
and rights is needed as universal labour standards are necessary to
prevent unfair competitive disadvantages and exploitation.
Competition in the labour market must be restricted and channeled for
social justice.
Various measures like minimum wages; wage - setting through collective
bargaining and more general collective agreements; protection against
unlawful dismissal; wage replacement benefits for unemployment and
underemployment; and other forms of income protection and the
regulation of working hours are termed as anti-market, growth
inhibiting, and harmful to inefficiency by the advocates of free market
economy.
Whereas it has been held otherwise in India.
In the case of Hussainbhai v The Alath Factory Tezhilali Union,
Kozhikode AIR 1978 SC 1410 Justice Krishna Iyer stated a guideline that
the veil of legal appearance must be removed to avoid the mischief by
employers and to achieve purpose of law. He held that the veil should
be removed with help of Art. 38, 39, 42 and 43. These provisions deals
with rights of workers in general, just and humane conditions of work,
decent standard of life and full enjoyment of leisure and social and
cultural opportunities to the workers.