Why India needs labour law reform

There is a story of a prospective school canada goose teacher who was asked canada goose factory sale during an interview by the principal Canada Goose Outlet of a conservative religious school, « Is the earth flat or round? »

The hapless teacher looked around at the uk canada goose https://www.canadagoose-coats.ca outlet faces of the interviewers for hints canada goose uk black friday and, not finding any, settled for: « I canada goose black friday sale can teach it flat or round. »

Here is a minuscule sampler: Minimum Wages Act, 1948; Trade Unions Act, 1926; Contract Labour Act, 1970; Weekly Holidays Act, 1942; cheap Canada Goose Beedi and Cigar Workers Act, 1966.

These and much more form a crisscrossing network of chaotic, strangulating, overlapping and often contradictory laws that are crying out for overhaul.

The single most important labour law is arguably the Industrial Disputes Act (IDA), 1947.

This was enacted canada goose store a few Canada Goose Online months before India’s independence and guides the hiring and firing rules canada goose uk shop of the industrial sector and is a good example of a well meaning policy that is founded on antiquated economics and a handsome misunderstanding of the way markets function.

The IDA makes it very hard for firms to fire workers.

In fact an amendment made to the IDA in the mid 1980s requires that any firm employing more than 100 workers needs to get permission from the state government before retrenching workers (and in practice that permission is seldom given).

This law has probably done more to hold back the growth of India’s manufacturing sector than any other uk canada goose policy.

What is remarkable about this and so many other buy canada goose jacket Indian labour laws is that they leave no room for free contracting.

Suppose a firm wants to manufacture a product that has volatile demand like fashion garments.

This firm may want to offer workers higher wages but make it clear to them that they Canada Goose Parka could be canada goose clearance sale given a month’s notice and asked to leave.

Such a contract will have no legal standing because the IDA canada goose clearance specifies in advance how and when workers may and or may not be cheap canada goose uk retrenched. Hence we do not see such contracts.

At canada goose uk outlet first sight this law Canada Goose Jackets looks Canada Goose online canada goose outlet store locations like a kind piece of legislation that protects Canada Goose sale the jobs of poor workers.

What this popular view misses out on is the fact that this law also keeps hundreds of thousands of workers unemployed because firms, wary of the fact that they will not Canada Goose Coats On Sale be able to offload them, do not hire in the first place.

Also, in areas of volatile demand, many firms have not even come into existence because they realise canadian goose jacket that India’s current legal regime makes them non canada goose coats viable.

It is not surprising at all that labour data from the ’80s show that the number of people employed in firms of size greater than 100 workers has gone down.

This is the market’s natural response to the amendment buy canada goose jacket cheap in the mid ’80s.

What is needed is not freedom to firms to wantonly fire workers but a legal regime whereby firms can write different kinds of contracts with their workers depending on their needs.

One firm may canada goose coats on sale offer a low wage and life time guarantee of work and another a high wage and very short notice to quit.

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