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Disproportionate vulnerability of the poor and marginalized communities to environmental inequalities foregrounds the intersection of class and environmental grievances in contemporary societies. This is particularly so for workers in the informal sector in the Global South, where absence of social safety nets and heightened (natural) resource dependence puts everyday life and livelihood at risk. Though it is reasonable to imagine an alliance among labor and environmental movements to tackle these intersecting issues, extant research shows that conflicts between the two movements are far more common than coalitions. It is in this context that this paper explores one such conflict between a union collective and a working-class environmental movement against the backdrop of an issue of industrial pollution in Kerala, a south Indian state. Renowned for its unique model of development and labor struggles, Kerala offers a perfect setting to understand the relationship between labor, nature, and capitalism and how that manifests in labor-environmental relations. Using ethnographic methods, the paper argues that the shift in class politics (from class conflict to class compromise), opposing interests and the political economy of development work together to exacerbate the tensions between labor and green movements in the state. Importantly, the analysis highlights the need to conceptualize working-class as a heterogeneous category, fragmented along the lines of sectoral interests, ideologies, and consciousness. Furthermore, the paper demonstrates how the nexus between the state, institutionalized trade unions and industries influence the social movement landscape in postcolonial settings and repress movements that challenge the capitalist accumulationist project, thereby contributing to theory construction from below.