“LABOUR LAW”

Doctrine of Hire and Fire

Submitted to : Submitted by :
Shree Durga Sneh Gupta
B.A. LLB (H)

A11911115034

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 ACKNOWLEDGEMENT

I would like to express my special thanks of gratitude to my

teacher (Shree Durga Ma’am) who gave me the golden
opportunity to do this wonderful project on the topic (Doctrine
of hire and fire), which also helped me in doing a lot of
Research and i came to know about so many new things I am
really thankful to them.

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Labour law in India : A View

The history of labour legislation in India is naturally interwoven with the

history of British colonialism. Considerations of British political economy were
naturally paramount in shaping some of these early laws. In the beginning it
was difficult to get enough regular Indian workers to run British establishments
and hence laws for indenturing workers became necessary. This was obviously
labour legislation in order to protect the interests of British employers.Then
came the Factories Act. It is well known that Indian textile goods offered stiff
competition to British textiles in the export market and hence in order to make
India labour costlier the Factories Act was first introduced in 1883 because of
the pressure brought on the British parliament by the textile magnates of
Manchester and Lancashire. Thus we received the first stipulation of eight
hours of work, the abolition of child labour, and the restriction of women in
night employment, and the introduction of overtime wages for work beyond
eight hours. While the impact of this measure was clearly welfarist the real
motivation was undoubtedly protectionist!To date, India has ratified 39
International Labour Organisation (ILO) conventions of which 37 are in force.
Of the ILO’s eight fundamental conventions, India has ratified four – Forced
Labour 1930, Abolition of Forced Labour 1957, Equal Remuneration 1951, and
Discrimination (employment and occupation) 1958.

The organised and the unorganised

An important distinction that is popularly made nowadays in all discussions
relating to labour legislation is between workers in the organised/formal sector
and those in the informal/informal sector. Many who make this distinction do
so with ulterior motives, yet we must reckon with it – especially because out of
the total workforce in the country, 92 percent work in the informal sector while
only eight percent work in the formal sector.
At the outset it must therefore be remembered that those who were unorganised
yesterday are organised today and those who are unorganised today aspire to
become the organised tomorrow. Moreover, many rights, benefits, and
practices, which are popularly recognised today as legitimate rights of the
workers, are those that have accrued as a result of the struggles carried out by
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the earlier generation of workers. The attempt, prevalent in some circles to pit
one section of workers against the others, must therefore be carefully
understood and deserves to be rejected outright.

DOCTRINE OF HIRE AND FIRE

Removal from service

A permanent worker can be removed from service only for proven misconduct
or for habitual absence – due to ill health, alcoholism and the like, or on
attaining retirement age. In other words the doctrine of ‘hire and fire’ is not
approved within the existing legal framework. In cases of misconduct the
worker is entitled to the protection of Standing Orders to be framed by a
certifying officer of the labour department after hearing management and
labour, through the trade union. Employers must follow principles of ‘natural
justice’, which again is an area that is governed by judge-made law. An order of
dismissal can be challenged in the labour court and if it is found to be flawed,
the court has the power to order reinstatement with continuity of service, back
wages, and consequential benefits. This again is identified as an area where
greater flexibility is considered desirable for being competitive.
 
 
Almost all pro-worker developments that accrued since independence are now
identified as areas of rigidity and in the name of flexibility there is pressure on
the government of India to repeal or amend all such laws. Interestingly, if such
a proposal is fully implemented, labour law, especially for the organised sector,
will go back to the colonial framework where state intervention was meant
primarily to discipline labour, not to give it protection.
GlobalisationThe most distinctly visible change from globalisation is the
increased tendency for offloading or subcontracting. Generally this is done
through the use of cheaper forms of contract labour, where there is no
unionisation, no welfare benefits, and quite often not even statutorily fixed
minimum wages. Occasionally the tendency to bring contract labour to the
mother plant itself is seen. This is very often preceded by downsizing, and since
there is statutory regulation of job losses, the system of voluntary retirement
with the ‘golden handshake’ is widely prevalent, both in public and private
sectors.

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Employment injury, health, and maternity benefit

The Workman’s Compensation Act 1923 is one of the earliest pieces of labour
legislation. It covers all cases of ‘accident arising out of and in the course of
employment’ and the rate of compensation to be paid in a lump sum, is
determined by a schedule proportionate to the extent of injury and the loss of
earning capacity. The younger the worker and the higher the wage, the greater
is the compensation subject to a limit. The injured person, or in case of death
the dependent, can claim the compensation. This law applies to the unorganised
sectors and to those in the organised sectors who are not covered by the
Employees State Insurance Scheme, which is conceptually considered to be
superior to the Workman’s Compensation Act.The Employees State Insurance
Act provides a scheme under which the employer and the employee must
contribute a certain percentage of the monthly wage to the Insurance
Corporation that runs dispensaries and hospitals in working class localities. It
facilitates both outpatient and in-patient care and freely dispenses medicines
and covers hospitalisation needs and costs. Leave certificates for health reasons
are forwarded to the employer who is obliged to honour them. Employment
injury, including occupational disease is compensated according to a schedule
of rates proportionate to the extent of injury and loss of earning capacity.
Payment, unlike in the Workmen’s Compensation Act, is monthly. Despite the
existence of tripartite bodies to supervise the running of the scheme, the entire
project has fallen into disrepute due to corruption and inefficiency. Workers in
need of genuine medical attention rarely approach this facility though they use
it quite liberally to obtain medical leave. There are interesting cases where
workers have gone to court seeking exemption from the scheme in order to
avail of better facilities available through collective bargaining.The Maternity
Benefit Act is applicable to notified establishments. Its coverage can therefore
extend to the unorganised sector also, though in practice it is rare. A woman
employee is entitled to 90 days of paid leave on delivery or on miscarriage.
Similar benefits, including hospitalisation facilities are available under the law
descibed in the paragraph above.

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Retirement benefit

There are two types of retirement benefit generally available to workers. One is
under the Payment of Gratuity Act and the other is under the Provident Fund
Act. In the first case a worker who has put in not less than five years of work is
entitled to a lump sum payment equal to 15 days’ wages for every completed
year of service. Every month the employer is expected to contribute the
required money into a separate fund to enable this payment on retirement or
termination of employment. In the latter scheme both the employee and the
employer make an equal contribution into a national fund. The current rate of
contribution is 12 percent of the wage including a small percentage towards
family pension. This contribution also attracts an interest, currently 9.5 percent
per annum, and the accumulated amount is paid on retirement to the employee
along with the interest that has accrued. Unfortunately the employee is allowed
to draw many types of loan from the fund such as for house construction,
marriage of children, and education etc. As a result very little is available at the
time of retirement. This is also a benefit, which is steadily being extended to
sections of the unorganised sector, especially where the employer is clearly
identifiable.