INDIA’S HUMAN RESOURCE POLICIES AND LAWS

MGT 6251Prof. Dr. Gary McLean

Prepared by: Afzal bin Mohd Rafeek (6) Mohamed Imran (7) Sirin Alsarmini (19)

Quick Facts about India (CIA,2014)

Location: Southern Asia- between Burma and Pakistan

Population: 1.236 billion

Main Religion: Hindu (80.5%), Muslim (13.4%), Christian (2.3%) Others (3.8%)

Child Labour: 26,965,074 (5.8% of Labour Force)

EMPLOYMENT FACTS

Employment in 2009-2010 − 465 million employees− 28 million (6%) in organized sectors− 437million (94%) in unorganized sectors

(Ministry of labour & employment, 2014)

Ranked 78th on Human Capital Index− Performed poorly for health & wellness of labour force

(The Economic Times, 2013)

MINISTRY OF HUMAN RESOURCE DEVELOPMENT (2014)

Development of Human Resources

Not related to employees in work place!

Focus on Education− Department of School Education & Literacy− Department of Higher Education

“To protect and safeguards the interests of workers in general and those who constitute the poor, [and ]deprived … of the society…”

“Create a healthy work environment for higher productions & productivity”

“Develop & coordinate vocational skills training & Employment Services” (Ministry of Labour & Employment, 2014- Para.1)

Ministry of Labour and Employment

History of Indian Labour Law Policies:

− Constitutional Provision − National Policy on HIV AIDS− National Policy on Skill Development − Safety, Health, Environment at the Work Place

Constitutional Provision

Description: “Under the Constitution of India, Labour is a subject in the Concurrent List where both the Central & State Governments are competent to enact legislation...”

Mainly covers: − Trade Unions− Social Security− Labour Welfare − Industrial Disputes concerning employees(Ministry of labour & employment, 2014- Para.1)

National Policy on HIV AIDS

Rationale– People with AIDS – 2.085million– Death due to AIDS- 135,000– 3rd Largest country with HIV AIDS

(CIA, 2014)

Objective: – “To reduce and manage the impact of AIDS in the

world of work” Protect from discrimination (Ministry of Labour & Employment, 2014)

National Policy on Skill Development

“Skills & knowledge are [regarded as] the driving forces of economic growth…” (Ministry of Employment & Labour, 2014- Para1)

Objective: – To develop high quality skilled workforce– Create opportunity to acquire skills– Get commitment from the stakeholders

(Ministry of Labour & Employment, 2014)

Safety, Health, Environment at the Work Place

Basic rights of the employees Government regulate the work places to

examine the working conditions Objective:

− To improve the safety, health & environment of the workplace

− Increase awareness and expectations− Reduce work related injuries and improve

coverage (Ministry of Labour & Employment, 2014)

Federal Employment Laws

• Ensured that employers compensate employees for work-related injuries.

• (Saxena,2012)

The Workers’ Compensation Act of 1923

• Gave formal recognition to trade unions.

• (Saxena,2012)

The Trade Union Act of 1926

• Led to the increased role of industrial relations (employees were distinguished by the work they did such as permanent, temporary, trainee etc.).

• (Saxena,2012)

The Industrial Disputes Act 1947

• Regulated the work environment in factories to ensure the safety of employees

• (Saxena,2012)

The FactoriesAct of 1948

Federal Employment Laws

Federal Employment Laws

• Required employers to provide contributions for retirement.

• (Saxena,2012)

The Employees Provident Funds & Miscellaneous Provisions : Act of 1952

• Established minimum wages that vary from state to state.

• (Sexena,2012)

The Minimum Wage Act of 1948

Federal Employment Laws

• provides for a minimum bonus of 8.33 % of salary, even if the organization is not making any profit.

• (Saxena,2012)

The Payment of Bonus Act of 1965

• was landmark legislation for disabled people in India.

• (Saxena,2012)

The persons with Disabilities (PWD) Act of 1995

Critique: Why Industrial Dispute Act?

Why IDA

Rigid ProvisionsPurpose and Application Problems

Many Regulating Bodies

Chapter Vb Sections 25M & 25N:Retrenchment & Lay-off:

– Written 3 months notice to employee– Dismissal subject to approval by the government

after consulting with the employee (OECD,2013) – Principle: last come, first go. It over looks

competency of employees.

Critique: Rigid provisions (Poddar, 2014)

Critique: Rigid provisions (Poddar, 2014)

Section 25O: Closing down a business – Get government’s permission 3 months before

closing down. – Compensate employees for an average of 15

days work.

Critique: Rigid provisions (Poddar, 2014)

Finding: adversely affect manufacturing – For five years (FY05-FY10) there was a net

decrease in 5 million jobs – Hampered employment and forgone growth

Rigid labour laws incentivize firms to remain small and stay in unorganized sector

Purpose of provisions– Focus on whether the strike or lockout is legal or

illegal and focus on designating penalties – Does not focus on preventing a strike or lockout

Critique Purpose and Application Problems

(Joseph, 2014)

Conciliation Arbitration Adjudication

Multi stage structure for resolution of disputes

Critique Purpose and Application Problems

(Joseph, 2014)

Procedures– When the government receives notification of strike or

lockout, it appoints a Conciliation Officer – If conciliation fails, government takes one of the following

actions:

Withholds further action leaving the parties to either reach agreement or engage in withdrawn strike or lockout

Refers the case to arbitration Refers the case to adjudication: jurisdiction only in

termination, prolonged, and high costs

Critique Purpose and Application Problems

(Joseph, 2014)

Finding: there is a pressing need to reconsider the purpose, procedures, and processes within a reasonable time frame

Critique Purpose and Application Problems

(Joseph, 2014)

Critique: Many Regulating Bodies

Central government, states and their agencies, and trade unions (Joseph, 2014)

Complexity: inspection visits by different officials under different laws increase costs and chances of bribe (Poddar, 2014)

– India’s corruption index – 36/100 (Transparency International, 2013)

Critique: Many Regulating Bodies

Finding: Many regulating bodies led to dis-integrated laws

In other words: optimizing parts of a system only leads to sub-optimizing the system (McLean, 2006)

Critique: What is a caste?

Great national leader: Mahatma Gandhi– Introduced the concept of non-violence protest

The Indian social system is dominated by a caste system

– Brahmins – Khastriyas– Vaishyas– Shudras

Critique: Castes (Ratnam,1994)

Federal jobs and admissions to colleges are

strongly influenced by quotas for caste

reservations.

State governments can set aside 50 percent of

jobs based on different castes. To get increased

support from the public, some states have 75

percent of job reserved.

Recommendation

To address the issue of hampered employment and foregone growth

– Companies should be given more autonomy in

retrenchment, lay-off, and closing down to encourage

efficiency, effectiveness, and eventually boost growth Success story of Gujarat state in India (Poddar, 2014)

– More flexibility in labour laws (abundance of young

labour force) Would attract more investment and create more jobs

(Rangarajan, 2006)

Recommendation

To address the problems of purpose and application (Joseph, 2014)

– Not only focus on containing strikes or lockouts but also prevent them Conciliation committee: develop the competencies of the

members Accreditation: offered by government and private sectors

– Adjudication: expand jurisdiction (not only termination)

Recommendation

To address the issue of dis-integrated laws

– Shift of mind set to track complexity Reduce excessive laws

Reduce number of enforcement bodies

Continuous monitoring and revisions of laws

and enforcement (quality not quantity)

Recommendation

To address the problems associated with castes

– Idealistically removing castes from applications will lead to more harmony among pupils of India

– Diversity training

Reference list

– CIA.(2014). The World Factbook-India. Retrieved from https://www.cia.gov/library/publications/the-world-factbook/geos/print/country/countrypdf_in.pdf

– Debroy, B. (2001). Why We Need Law Reform. Retrieved from http://www.semimar.com/2001/497/497%20bibek%debroy.htm

– Jospeh, J. (2014). Quo Vadis, Industrial Relations Disputes Resolution..? The Inidan Journal of Industrial Resolutions, Vol.50, No.1, 75-99

– Ministry of Human Resource Development (2014). About MHRD. Retrieved from http://mhrd.gov.in/

– Ministry of Labour & Employment (2014). About Ministry. Retrieved from http://labour.gov.in/content/aboutus/about-ministry.php

– Ministry of Labour & Employment (2014). Constitutional Provision. Retrieved from http://labour.gov.in/content/innerpage/constitutional-provision.php

– Ministry of Labour & Employment (2014). National Policy on HIV AIDS. Retrieved from http://labour.gov.in/upload/uploadfiles/files/Policies/NationalPolicyonHIVAIDS.pdf

– Ministry of Labour & Employment (2014).National Policy on Skills Development. Retrieved from http://labour.gov.in/upload/uploadfiles/files/Policies/NationalSkillDevelopmentPolicyMar09.pdf

Reference list

– Ministry of Labour & Employment (2014). Safety, Health and Environment on Workplace. Retrieved from http://labour.gov.in/upload/uploadfiles/files/Policies/SafetyHealthandEnvironmentatWorkPlace.pdf

– OECD (2013). OECD INDIA. Retrieved from http://www.oecd.org/els/emp/India.pdf

– Poddar, T. (2014). Reforming the Industria Dispute & Trade Union Acts. The Inidian Journal of Industrial Resolutions, Vol. 50, No.1, 89-99.

– Rangarajan, C. (2006, July 1). Improve Employability of Labour Force. The Hindu Business Line.

– The Economic Times (2013). India ranks 78th on human capital index; Switzerland on top. Retrieved from http://articles.economictimes.indiatimes.com/2013-10-01/news/42576511_1_wef-founder-labour-force-health-and-wellness

– Transparency International (2013). Corruption by Country/Territory-India. Retrieved from http://www.transparency.org/country#IND

Reference list

– Saxena, s. s. (2012). human resource management. chennai-55: thakur publishers.

– KOSHAL, M. K. (1971). RESEARCH NOTE. A MACRO ANALYSIS OF INDUSTRIAL INJURIES-SOME INDIAN EXPERIENCE, 135.

– Ratnam, H. C. (1994). International Journal of Manpower. Affirmative Action in Employment for the Scheduled Castes and the Scheduled Tribes in India, 6-25.

– ASHER, M. G. (2009). ASCI Journal of Management. Pension Plans, Provident Fund Schemes and Retirement Policies: India’s Social Security Reform Imperative , 1-18.