Sc Verdict May Keep Labour Laws Rigid

The labour ministry has been forced to reconsider its proposal for amending the Industrial Disputes Act and other labour laws to meet demands of domestic and foreign investors.

A careful analysis of a recent Supreme Court judgment has led to the realisation that it would not be possible to bring in industry-friendly changes in labour legislation on the issue of retrenchment and layoffs.

The Supreme Court had ruled that the service of employees in an organisation cannot be terminated arbitrarily and abruptly by giving a notice of one or three months or pay in lieu of notice.

The apex court also ruled that employers will have to provide sufficient justification for termination of service and the concerned employee should be given the opportunity to express his side of the case in a tripartite mechanism or in a court of law.

Employers' associations have been trying to persuade the government to skip the process of arbitration. According to them, the tripartite process involves undue delays and makes it nearly impossible for industry to get rid of even those employees who shirk work, indulge in indiscipline or are a bad influence in office.

According to Japanese investors, retrenching employees is one of the main problems in India. The government has been considering changes in the Industrial Disputes Act to meet this demand.

At a recent seminar organised by the Federation of Indian Industry and Commerce, Union labour minister Satyanarayan Jatia said a good part of labour laws had turned obsolete and rigid.

But the efforts have been stonewalled by central unions who used the tripartite forum of the Indian Labour Congress to prohibit the government from going ahead with the move.

Though the government usually does not go against the Indian Labour Commission's recommendations, it has been seriously considering a change in the Industrial Disputes Act to satisfy this demand from employers and investors.

However, a large number of employers have been resorting to abnormal means to retrench workers. on a large scale. A favourite method is to simply stop paying electricity and telephone bills and bring about a disconnection in these services.

Consequently, there is a reduction in the loss of mandays through strikes and lockouts. According to figures collected from different states by the Labour Bureau, loss of mandays on account of strikes fell from 7,818 in 1996 to 6,295 in 1997. Loss of mandays due to lockouts have also came down from 12,467 in 1996 to 10,738 in 1997.