Who Needs Reforms? ; Though Rigid Labour Laws Did Not Deter Large-Scale Lay-Offs Over the Last Few Months, the Case for Reforms Is Still Strong.

Summary

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In January, as the export sector was battling diminishing orders, and manufacturers were in a quandary about declining order books, a Delhi-based garment manufacturer, when asked how he was communicating the bad news to his employees, told BT: What communication? I just tell the contractor to send less people. He had just taken a decision to trim the workforce by 800.

The same ease is evident across other companies that are letting their white-collar workers go. But were not India's labour laws notoriously rigid, making it difficult to shed employees? Recently, a former Economic Advisor to the Finance Minister told BT that reforming labour laws is a red herring. Where are the labour laws biting? Nearly 93 per cent of the workforce is outside its ambit, he observed. So, do we need labour reforms? Why is it so necessary?

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Extract

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Who Needs Reforms? ; Though Rigid Labour Laws Did Not Deter Large-Scale Lay-Offs Over the Last Few Months, the Case for Reforms Is Still Strong.

The most inflexible part of the labour laws is Chapter V(B) of the Industrial Disputes Act, which requires factories, mining companies and plantations employing more than 100 pe...

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