Labor laws are enacted to protect sweated labor. However, many of these Acts, or at least some provisions of many Acts, are applicable only to establishments employing 10, 20, 50, or 100 employees. There is a 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 issue is that such an establishment is a tiny organization that requires protection.
Financial loss is not a genuine reason for retrenchment. There are provisions in the ID Act that state financial loss cannot be considered a sufficient ground for closure under circumstances beyond the control of the employer.
Recession may be temporary, but retrenchment is a permanent action by the employer. When the recession ends and the employer is prepared to resume work, can they expect to retain the same human resources? No, if the human resource is not retained, it will be lost, and future employers will struggle to find suitable labor. It is with these considerations in mind that the Industrial Disputes Act and similar enactments are made. However, during a period when the economy boomed, and employees had substantial earnings, they seemed to forget about these Acts and their importance. This was particularly evident in the case of IT sector employees who viewed themselves as "professionals" rather than "laborers." They reacted negatively when a survey was conducted to analyze the relevance of labor laws to them. Now, they have begun forming trade unions.
The initiative should come from the State, whether Central or state government. Employers who retrench employees without following the provisions of the ID Act should face penalties. However, how is this possible when the democracy in place has a parallel business structure where many of our elected representatives are shareholders? Additionally, how is it feasible when trade unions are controlled by politicians who have shares and financial interests in the same companies?
Regards,
Madhu.T.K