The instance of 900 employees being sacked over an office call by Better.com had reminded private sector employees across the world about the uncertain nature of their jobs. While the prospect of being sacked through an office call is a dreaded prospect for most employees, an ease in sacking of employees means companies will be less skeptical to hire when they know they’ll be able to lay them off whenever needed.
Rituparna Chakraborty, Co-Founder & EVP of TeamLease Services Limited, opines that letting go of employees is a flexibility that is needed for enterprises to take risks, create value and contribute to the GDP. However, she feels that the issue with Better.com is about an organisation losing the plot around empathy, sensitive and appreciation for humanity.
Indian labour laws also mandate government’s permission for layoff or retrenchment of employees by companies who employ over 100 individuals. While many companies try to skirt this provision by hiring more contract workers instead, laying them off also carries the threat of strikes by trade unions and disruptions, sometimes even with political support.
While plans of mass layoffs in India have often met with strikes, political intervention and even court cases, the legal position too favours interests of employees over employers. Former Additional Solicitor General of India, senior lawyer Sidharth Luthra points out that as per the Industrial Disputes Act, employees can’t be removed without following a due process, which involves giving them ample notice and a severance pay. While there has been a rise in contract employment instead of regular employment by companies for relative ease in sacking of employees, Luthra is of the view that the labour law provisions are often lop-sided and bent in favour of employees.
Though many companies often offer severance and VRS (Voluntary Retirement Schemes) proposals, they are voluntary in nature and don’t usually help companies get rid of non-performers. Also, change in market conditions and the demand-supply dynamic often prompt layoffs of even better performing employees. Even as the economy recovers from the effects of the pandemic, lopsided labour laws will only deter companies to hire freely if they know that any layoff proposal will be stuck in a bureaucratic quagmire or face opposition from trade unions. After all, a company forced to continue with a few employees it wanted to lay off may end up in bankruptcy, which will harm all those who were gainfully employed.
