Labour laws and their implication in the modernbusiness perspective
collect the level of rigidity of hiring and firing rules in different nations-100 being the score of the highest conceivable rigidity. India is amongthe most rigid countries with a score of 48.It should be noted that some of the important acts have been lastamended as early as 2001. The business scenario today is very differentfrom the scenario that existed then.India’s labour laws rated by the World Bank as among the most rigid,place strict limits on the number of people that can be hired and how theycan be fired. Prolonged labour unrest in the 1970s and 80s virtually wipedout the cotton textile industry in Maharashtra and jute and heavyengineering in West Bengal.The industrial dispute laws allow for firing of employees on grounds of indiscipline or non-performance, but a strong culture of trade unionismmeans such provisions can rarely be applied.
Right to form a union and strike
Investors have despaired over India’s Trade Union Act of 1926, whichgrants the right to form a union and negotiate wages and fringe benefits,which analysts say raises costs and hurts competitiveness.Indian laws do not allow unions in sectors such as IT and export-processing zones that help earn foreign exchange. But even in sectorssuch as IT, where layoffs have ticked up in a slowing economy,employees have tried to form unions.Employees of public utilities and services such as hospitals, can go onstrike with prior notice to the management.