In August 1936 he founded the Independent Labour Party. The name is exact and it is usually passed over. It was a labour party rather than a caste party; it contested on tenancy, industrial conditions and wages; it ran non-Untouchable candidates and asked for non-Untouchable votes; and its programme was written in the language of class.

It did well in the 1937 Bombay provincial elections — the first held under a substantially widened franchise — and became a real opposition force in the province. In September 1937 he introduced a bill to abolish the khoti system, the form of landlord tenure that governed much of the Konkan, under which tenants held at will and paid whatever the holder of the village demanded. The tenants in question were mostly not Untouchables.

In November 1938 he did something that fits no summary of him at all. The Bombay government, run by Congress, brought forward an Industrial Disputes Bill that made certain strikes a criminal offence. Ambedkar opposed it in the legislature as an attack on the only weapon workers had, and then joined the communist-led unions — whose leaders he disagreed with about nearly everything else, and who disagreed with him about caste — in a one-day general strike against it. Something like a hundred thousand workers stopped.

In December 1940 he published Thoughts on Pakistan, later expanded as Pakistan or the Partition of India. The Muslim League had adopted the demand for a separate state that March, and almost no serious Indian writer would examine it on its own terms rather than denouncing it. Ambedkar did. He set out the case for the demand and the case against it at length, each as its own advocate would put it; argued that a state whose two largest communities did not consider themselves one people would be permanently unstable and would spend its strength on the fact; and concluded that if partition did happen it would have to be accompanied by a deliberate, organised, compensated exchange of populations, on the ground that the alternative was for it to happen anyway, in panic, with people walking.

In July 1942, at a conference in Nagpur, he wound up the Independent Labour Party and founded the Scheduled Castes Federation. Scheduled Castes was the new official term, introduced under the Government of India Act of 1935 for the communities listed in a schedule for the purposes of reservation; it is the term still used in Indian law today, and the schedule is still a schedule. The change of party was a change of strategy: the labour appeal had not produced a bloc large enough to bargain with, and he went back to organising the constituency that was unambiguously his.

That same month, by a warrant dated 20 July 1942, he was appointed Labour Member of the Viceroy's Executive Council, and he held the portfolio until the Council was reconstituted in 1946. It was the first executive office he had ever held. He was in it during a war, with the Quit India movement breaking out three weeks after he took office and most of the Congress leadership in jail for the duration — a fact that is held against him and that he never apologised for, on the grounds that he had a department to run and the war was going to be fought whatever he did.

What he did with the department has almost nothing to do with the story usually told about him, and it is the most durable administrative work of his life.

The bill was his own — the Viceroy reported to the Secretary of State in December 1945 that Ambedkar had submitted his labour proposals for the coming budget session and that the first of them was a bill to cut factory hours — and the cotton textile industry fought it. India was short of cloth, the mills argued, and what the moment called for was longer hours, not shorter ones. He answered with the record of the previous cut. When the week had come down from sixty hours to fifty-four in 1934, the number of mills, of looms, of hands employed and of bales of cotton consumed had all risen in the years immediately after, and he read the figures out. Then he did something a minister carrying a reform does not usually do: he made it smaller. Rather more than a quarter of perennial factories, he told the House, were already working a forty-eight-hour week, and something over a third of India's two and a half million factory hands were already in factories working between forty-eight and fifty-four — so the bill could not fairly be called the radical measure its critics were calling it. He spent part of his own speech shrinking his own achievement.

Alongside the department he kept writing. In 1945 he published What Congress and Gandhi Have Done to the Untouchables, a book-length indictment written thirteen years after Poona, and in 1946 Who Were the Shudras?, an argument about the origins of the fourth varna that set out to show the caste order had a history and therefore a beginning, and therefore was not eternal. In July 1945 he founded the People's Education Society, which opened Siddharth College in Bombay the following year. He was building the first of the three words while writing the second.