Labour laws are enacted to protect sweated labour. But at the same time many of these Acts or at least some of the provisions of many Acts are applicable only to those establishments which employ 10 or 20 or 50 or 100 employees. There is provision in the Industrial Disputes Act not to retrench employees. But such provision is not applicable to an establishment in which not more than 50 employees are working. The thing is that such an establishment is a tiny organisation which requires protection.
Financial loss is not at all a geneuine reason for retrenchment. There are provisions in the ID Act which says that financial loss cannot be treated as sufficient ground for closure under circumstancses beyond the control of the employer.
Recession shall be temporary but retrenchment is a permanent act of employer. When the recession is over and the employer is ready to resume work, shall they expect the same human resource? No, if the resource in human being is not retained, the same will be lost and the future employers will not find a suitable labour to do their work. It is defenitely with these views in mind that the Industrial Disputes Act and similar enactments are made. But during a couple of years when the economy boomed its maximum and employees got plenty of money, they forgot these Acts and their relevance. It is true mainly in the case of IT sector employees who assumed themselves as "Professionals and NOT LABOURERs". They reacted very negatively when a survey was conducted to study the relevance of labour laws to them. Now they have started forming trade unions!!
The initiative should come from the State- whether Central or state government. Those employers who retrench the employees without following the provisions of ID Act should be penalised. But how is it possible when the domocracy set up has a parallel business in which many of our own elected representatives are share holders? How is it possible when the Trade Unions are ruled by politicians who have share and pecuniary interest in the same company?
Regards,
Madhu.T.K