This paper explores the role of industrial welfare in industrial relations, internal labour markets, and the management thought at Cadbury in early twentieth-century England.Welfare provisions by British employers have been hitherto regarded as an expression of philanthropy or gentlemanship in nineteenth-century England, which despised the mammonism. It has been also said that there was no labour management because of craft regulations in British industries. Industrial welfare, therefore, has been considered the only managerial authority of the employers, who could not manage production processes directly.In this paper, industrial welfare is dealt with as a labour strategy. British employers intended to avoid industrial conflict and increase efficiency of work through the various labour policies, such as overseeing, deskilling, piece-wages, and welfare provisions. In these respects, industrial welfare was useful as one means to modify conflicts in employment relations that could not be solved by the cash nexus and to win the loyalty of employees.The case of Cadbury indicates that industrial welfare contributed to reconstructing industrial relations system in the new managerial structure; that the company provisions, including health care and education of employees, provided a solution to recruitment, training, and promotion problems at the company-level; and that industrial welfare contributed to the humanising of labour. The human factor of labour management was emphasised by the employer, who used industrial welfare as a labour strategy at a time, when Taylorism was discussed in England.Finally, industrial welfare at Cadbury was used as one means of labour management based on the physical and mental control of the employees by the employers, who retained traditional authority under a bureaucratic organisation.