It is easy to fire 94 per cent workers in India | business | Hindustan Times
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It is easy to fire 94 per cent workers in India

A large unorganised sector and weak labour contracts make it easier for company managements to lay off employees in India than advanced economies, experts said on Tuesday.

business Updated: Nov 18, 2008 22:11 IST
Gaurav Jha

A large unorganised sector and weak labour contracts make it easier for company managements to lay off employees in India than advanced economies, experts said on Tuesday. However, entrenched employees in the organised sector are well protected by law.

“In India, 94 percent employees are in the unorganised sector. It means they are on contract basis and not on regular payrolls of employers,” C.S. Venkata Ratnam, Secretary of the Indian Industrial Relations Association, a professional body, told a seminar on recession and industrial relations organised by the International Management Institute (IMI).

He said unclear policies also helped employers.

"In the absence of any firm hiring policy by employers, firing of employees will get unnoticed, making it very convenient for them to fire,” Ratnam said.

Seventeen years after kick-starting pro-market reforms, the country’s labour laws are largely unchanged from the previous decades but India is groping for a new policy regime as it embraces a globalised economy and welcomes multinationals.

Indian workers are increasingly affected by layoffs in multionationals, many of which have growing operations in India.

These include the likes of Citibank which on Monday announced plans to cut 53,000 jobs worldwide as it tries to slash costs amid mounting losses. Though Citi says there is no major impact expected in India, industry is trying to face new realities.

Temporary staffers or “temps” have been the worst hit.
Experts say there are more than 3,00,000 “temporary staff” employed in the organised industry in India performing tasks ranging between specialised engineering jobs on factory floors of major manufacturing companies to semi and unskilled jobs in office premises.

Close to 8 crore persons are working as temps in the unorganised sector.

“The legal process on firing in India is not very clear”, E.M.Rao of the Xavier's Labour Research Institute (XLRI), Jamshedpur, said.

Demanding reforms in labour laws, he said “Chapter V (B) relating to informing employees before prior lay off should be repealed”.

He also said major insurance companies should come forward with a new scheme of “job insurance” in case of sudden lay offs.