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Labour Laws Final

Labour Laws Final

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Published by supriyanair

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Published by: supriyanair on Nov 13, 2009
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Labour laws and their implication in themodern business perspective
Supriya S,3
rd
sem MBAAlliance business Academy.
 
Labour laws and their implication in the modernbusiness perspective
Indian labour law refers to laws regulating employment. There over fiftynational laws and many more state-level laws. Traditionally IndianGovernments at federal and state level have sought to ensure a highdegree of protection for workers through enforcement of labour laws.These labour enactments are divided into 5 broad categories.
Working Conditions
IndustrialRelations
Wages and salaries
Welfare
Social SecuritiesThe enactments are all based upon Constitution of India and theresolutions taken in ILO conventions from time to time. These labour lawsare applicable to organizations registered under both The Factories Actand Companies Act. The Industrial Employment (Standing Orders) Actrequires every organization to formulate a set of rules and codes of conduct which governs the employment of every employee in thatorganization. These standing orders are formulated in compliance withother labour laws as well. Any lacuna in any of the above mentionedareas would lead to unrest within the labour force. This is a cause forgreat concern for any management.However, one can clearly see that some of these labour laws are archaic(some dating back to 1926). Hence the modern day relevance of theselaws is a debatable issue. Globalization and Liberalization has forced thegovernment to give a serious thought to our anarchic labour law, whichmakes our companies uncompetitive globally and discourages foreigncompanies from investing in India. Indian labour laws are among themost rigid in the world. Some recent data compiled by the World Bank
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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.
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