Doctrine of Hire and Fire: Employment in India
The Public Sector Undertakings (PSUs), which are corporate entities under
government control, hire people from the private sector, government employees,
and other personnel fall into one of three primary groups according to Indian
labor and employment laws. The Indian Constitution contains provisions
pertaining to the rules and regulations that govern the employment of government
personnel. As a result, government workers benefit from statutory service
claims, tenure protection, and automatic pay raises every year. Employees in the
public sector are subject to their own service norms, which are either based on
statutory instructions or, in the case of statutory organizations, have
statutory effect. Employees in the private sector fall into two main categories:
management personnel and laborers.
Since there are no laws pertaining to their employment, management and
supervisory staff members' terms of employment are determined by their
individual employment contracts, and they can terminate their employment in
accordance with those contracts. Many workers are unaware of their legal rights
and the measures taken by Indian law to safeguard them. It is crucial for
workers in any company to understand their legal rights. Many people join
companies without knowing the laws governing hiring and firing, which leads to
many employers abusing their workforce.
Every law may apply when hiring someone, whether they are doing it on a
full-time basis, directly, permanently, for a certain term, or temporarily.
There are currently no rules in India that specify the process or method for
employing workers in the private sector. Employers can hire workers on a
contract or permanent basis. Job ads in newspapers, recruiting agencies,
internet job portals, and personal networks are some of the ways that employers
hire workers.
A permanent employee may only be fired for wrongdoing that has been
substantiated or for persistently missing work. A contract between the employer
and the employee would control the terms of the job, whether it be on a contract
basis or as a permanent employee. But the Local Shops and Establishments Act is
also crucial to these kinds of clauses.
Labor laws have changed over time in terms of their purpose and reach.
Employers' interests were protected when the first labor laws were passed. It
was ruled under the laissez-faire philosophy. Conversely, the goal of
contemporary labor laws is to shield employees from employer exploitation. The
idea of progressive social philosophy, which gave rise to the welfare state
concept, has made the previous laissez-faire theory outdated. The theories of
"supply and demand" and "hire and fire," which found wide application under the
previous laissez-faire ideology, are no longer relevant. India's labor market is
shaped by a multitude of laws and regulations that control hiring, firing, and
work conditions.
Companies claim that even while the policies are intended to improve worker
welfare, they frequently have the opposite effect, encouraging businesses to
remain small or use contract workers to get around legal requirements. Since 93%
of workers are employed in the unorganized sector and do not receive social
security or any other type of employment, the regulations only help a small
portion of the workforce.
The evaluation of a company's management quality now revolves around a number of
factors, including productivity, customer service, cost effectiveness, meeting
delivery deadlines, technological modernization, and technological advancement.
Increased competitiveness and investment flows in all of these areas are
dependent on labor reforms.
Social Justice and Labour Laws
Since the Constitution was enacted, the Supreme Court has really been
continuously legislating in the area of labor legislation. Despite the
ever-changing nature of industrial law, the Supreme Court has played a leading
role in developing the fundamental concepts that are still widely adhered to
today.
In the context of society's social and economic framework, social justice refers
to the equitable balancing of the many interests involved. Its ultimate goal is
to bring about peace in industry by fostering harmony in industrial relations on
an ethical and economic foundation. Thus, one goal of peace in industry is
social fairness. Social justice is therefore an implementation of the
fundamental principles of labor laws. Introduction to Labor Law Social Justice
aims to address the fact that employees have little leverage while negotiating
on behalf of their employers.
The Supreme Court made an observation in J.K. Cotton Spinning & Weaving Mills v.
Labour Appellate Tribunal. The relevance, validity, and significance of the
social justice theory have been highlighted by the evolution of industrial law
over the past ten years and by a number of this court's rulings pertaining to
industrial problems. Social justice is not a limited, dogmatic, or biased
concept. It covers a wide area. Its goal is to aid in the elimination of
socioeconomic inequities and is based on the fundamental ideal of socioeconomic
equality. However, it takes a realistic and pragmatic approach rather than a
dogmatic one when handling industrial concerns and refuses to submit to abstract
ideals out of blind faith.
The Industrial Court's decision-making process must adhere to industrial law and
be based on established standards. The Supreme Court has issued a warning,
stating that since increased productivity is urgently needed, the Tribunal
shouldn't be overly lenient when it comes to giving leave. Similarly, living
accommodations cannot be granted by an Industrial Court to employees because
doing so would place an excessive burden on the company.
The Supreme Court noted in Patna Electric Supply v. Workers Union that Social
Security for the underprivileged is extremely important. However, we are unable
to ignore the constraints that govern our lives. Although it is important to
remember our social objectives, failing to approach our challenges
pragmatistically could undermine our purpose. Therefore, the Industrial Courts
must reconcile the opposing demands of the employer and employee in order to
uphold social justice. The employer's basic right to manage his company must be
balanced with the employee's right to social justice. The former concerns the
domain of our Constitution's essential rights, while the latter is related to
the Directive Principles.
Hiring the Employees
Regarding the format of the contract There are no set legal criteria regarding
the required format of an employment agreement, with the exception of some
State-specific rules that require an employer to provide a letter outlining
specified areas of employment. Either the employer issues an appointment letter
outlining the terms and conditions of employment, which the employee signs, or
the employer and employee enter into a bilateral written agreement, is the
standard procedure. An oral employment agreement is possible. According to the
terms of the Indian Contract Act of 1872, acceptance of such a contract must be
expressed in a customary and reasonable manner and must be unconditional.
Nonetheless, in order to prevent disagreements down the road, a formal
employment contract is advised. When it came to blue-collar workers, appointment
letters were typically sent out rather than an employment contract between the
business and the worker. But formal employment agreements with the employees are
becoming more and more widespread.
Conclusion
In India, there are 51 laws pertaining to workers and employees that address
every facet of social security, pay, welfare, and working conditions. It is
necessary to inform factory workers on the firing laws because it is common for
them to be fired abruptly and without cause. The study's attempt to provide a
legal framework for hiring and firing practices was hindered by the paucity of
existing literature on the subject. Because they have the freedom to hire and
fire employees based on their business needs, the hypothesis has been proven
correct. The idea of progressive social philosophy, which gave rise to the
welfare state concept, has made the previous laissez-faire theory outdated.
Written By: Akanksha
Law Article in India
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