Is it worth generating temporary employment by supporting hire and fire policies?

Cyber Journal 24, December 16, 2015

By Nitten Gokhaley 

Country’s extremely talented young population and Prime Minister Narendra Modi are factors attracting foreign investors towards India these days.

Reforms are necessary to make sure that both, employers as well as employees enjoy the benefits of foreign investments or overseas jobs that are coming in the Indian economy. The government is introducing reforms, but perhaps, these are not those that are necessary to benefit the working class.

Anti-labour policies

Trade unions have highlighted the point that almost all the labour reforms introduced by BJP led state governments are anti-people and pro-industrialists. They also claim that most of the states are interested in introducing reforms that would allow women to work in the night shifts, reduce compensation to employees in case if company shuts down, and stop people from forming unions. The question is- what good can temporary jobs generated by companies with support of hire & fire policies do to the economy?


Hunger strikes and agitation rallies organized by various unions these days do indicate that all is not well in various sectors. But both, state and local governments conveniently ignore all the signs.

Companies have found their way around

According to experts, termination of permanent workers (employees who have worked with organization for more than 240 days in a year) requires retrenchment. This process also requires government’s permission in case if it involves removal of more than 100 workers. But as former finance minister Mr. Chidambaram pointed out in one of his recent interviews, companies have managed to find their way around these laws. There are several cases that show how MNCs remove employees by simply tagging them as non-performers.

In November 2014, similar case involving 27-year-old employee and the US based IT company made it in the headlines. The concerned employee had joined the firm as a technical system analyst in July 2012 and she received a confirmation letter after clearing probation period of three months. The company presented her a certificate to appreciate her performance, and also gave her salary hike that was more than other colleagues in May 2013. But surprisingly, the company terminated her in October 2013 citing performance issues. When the employee asked the HR to explain reasons behind her termination she was thrown out of the premises by security guards. Later, the girl approached the Karnataka state women commission and labour department for justice. The department heard the case, studied all the facts, and asked the IT Company to pay 12.5 lakh as compensation to the girl for sacking her.  This is just one case out of thousands more that failed to get limelight.

What do experts believe?

Industrialists and political parties in power would probably support their plans to make labour policies more employer-friendly. But representatives from various industries seem to be divided as far as need to dilute labour laws is concerned.

HR partners and representatives from legal firms recently shared their opinion about labour laws during the 3rd IR Conclave organized in Bangalore by legal expertise firm Aparajitha and Economic Times.  The event that was organized to create awareness about existing labour laws, compliance concerns, and also about the reforms that the government plans to introduce.

HR 1

Most of the speakers pointed out that it is important to relook at labour laws, as some of them are even from pre-independence era. These laws are not allowing companies to make maximum use of human resources in the country.

Speakers also shared their opinion that companies are forced to hire contract labour because of existing labour laws.  Contract labour increases the operational cost of the company and also impacts quality of products.

Gurudas Bhat, the former additional commissioner (labour) was one of the speakers.  He batted for more labour friendly reforms, and suggested that the frame work should not support creation of hire and fire environment. Introducing reforms that support hire and fire policies would create picture of uncertainty.

Veena Gopalkrishnan, a senior member from Nishith Desai Associates also shared her opinion during the event. The points that she made were more inclined towards employers.  She stressed on the point that there are 44 central Legislations, 150 state laws, and these are too much to handle for companies. She believes that every industry needs different set of laws. Most of her points made during the event indirectly suggest that she is on employers’ side.

Veena Gopalkrishnan suggested that work flow is unpredictable in various industries as most of them work on project basis. So, reduction in force is reality. “Job security is a myth” she said, and companies should be allowed to reduce their work force at any point.

While criticizing Form D that needs to be filed under minimum wages act, she suggested that the government should not ask companies to share minute details like attendance register and number of holidays availed by employees.

Political opinion

Congress leader and country’s former finance minister Palaniappan Chidambaram recently interacted with senior journalist Karan Thapar.  On being asked about his opinion regarding softening labour laws, the former minister pointed out that the existing laws are not deterring foreign investors. He also pointed out that companies have found ways to get around labour laws.

In April this year, Madhya Pradesh government led by Shivraj Singh Chouhan attracted a lot of ire from labour unions when the NDA government at the centre rejected its request for amendment in 17 labour laws.

Weekly working hours for employee should not exceed 60 hours according to International Labour Organization. Research has already proved that working for more than 55 hours per week can cause severe health issues to individuals. It can raise chances of stroke by 33 percent. But Shivraj Singh Chouhan’s government wants people to work for as much as 72 hours every week. Fortunately, the NDA government at the centre rejected this proposal along with five others.

Lack of awareness about rights

Rules are in place, but no state government seems to be interested in checking if companies are offering the right pay packages and other benefits to employees in different sectors. States’ labour departments only look into cases that reach their door step or courts.

The country’s work force probably lacks knowledge about their rights. Plus, there is no foolproof government mechanism to check if each and every employer in the country is following existing regulations.

Forget about national holidays like August 15th and January 26th, some employers force their employees to report to full time work on Lok Sabha polls day in spite of government’s clear instructions about declaration of general holiday on the day of elections.  Out of thousands of companies that operated in each city during elections, government and the Election Commission of India took action against just four of them during 2014’s polls.

Now it is time for NDA government and their advisors to think and decide if the country can really benefit from hire & fire policies that some industrialists are expecting the government to introduce in the name of reforms.


Nitten is a consultant journalist, and has worked with renowned newspapers, news agency, SEO companies from India, the US, and the UK. If you are looking for desktop journalist or SEO content writer, you can email Nitten-

This content cannot be used as evidence against the writer and publisher to file case in any court of law around the world. Images used in the content belong to their respective owners. The aim of this site is to spread awareness without any financial gain. We do not wish to hurt anyone’s sentiments or cause financial loss to any individual or organization.

All rights reserved with- CJ24– Copyright 2015



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