Our employment market is preferred by overseas employers and customers because Indian Labour Laws do not protect the employees at the same levels as in the US or the UK. Talent is surplus; hiring and firing is mostly a non-complicated process, one which is not subject to judicial scrutiny.

Indian employment terms specifically in the IT and the services Industry are governed by the employment contracts that the employees have with their employers. The terms of such employment are not governed by the Industrial Disputes Act, 1947 (which, in all seriousness is not equipped to handle the new age employment terms). Recently several IT companies in India have terminated hundreds of jobs. Companies are well within their rights to hire and fire employees, that is not the issue…the issue here is they can virtually get away with firing because we do not have specific laws to protect the employees. These employees have to then take recourse to their employment contracts and file individual actions if they believe that they were wrongfully terminated.

This leaves employees vulnerable to large scale reductions in force (“RIFs”). Such RIFs are cited as “poor performance.” Employees terminated under large scale RIFs have no protection under the current Labour law regime. Bringing a change in the Labour laws in India at the same time keeping the services competitive is a difficult task, but not an impossible one. I think it is time for the legal minds in India to get-together and help bring about Labour law reforms in the country.

Categories: Labour Law

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