Thursday, July 25, 2024

How differing employment laws in states impact India’s hiring landscape

Exploring the landscape of employment laws across Indian states reveals a nuanced tapestry that shapes hiring practices for private companies.

While a foundational similarity exists, divergences also emerge, influencing employer-employee dynamics.

From variations in notice periods to regional distinctions in dismissal grounds, these legal nuances impact decisions on workforce management and organisational strategies.

Edited excerpts from an interview with Advocate Minu Dwivedi on how employment laws vary across different states, and how this impacts hiring practices for private companies.

The scheme of local labour laws is generally the same in most states. However, there are some variations which affect hiring practices followed by private companies. Certain states like Maharashtra have done away with statutory notice period in commercial establishments thereby giving greater autonomy to employers to contractually negotiate the same with their employees.

On the other hand, in Uttar Pradesh, the grounds on which commercial establishments can dismiss an employee from service are statutorily prescribed which would restrict an employer’s ability to separate with his employees.

“In certain states, manufacturing companies that have 100 or more workmen need to obtain prior permission of the labour authorities to retrench even one workman whereas certain states like Rajasthan have increased this threshold to 300 workmen i.e., manufacturing companies in Rajasthan need to obtain prior permission of the labour authorities to retrench a workman only if their total workman headcount is 300 or more,” Dwivedi, Partner and Attorney, JSA Advocates and Solicitors, said.

He added that such considerations would impact the decision on total workmen headcount. Certain states like Telangana require employers of commercial establishments to submit appointment and termination orders of employees to the jurisdictional inspectors. Although these provisions are not strictly implemented or enforced, they can be perceived as undesirable.

IANS: In the absence of state-imposed restrictions, what factors do private companies typically prioritise when making hiring decisions?

Dwivedi: Private companies who are not subject to any state-imposed restrictions on hiring would prioritise hiring the best possible local talent at the most optimal cost who is a good culture fit for them. Further, they would focus on investing in and operating from those geographical locations which are a hub for their kind of business, have less operating cost, do not have active trade unionism, are not adversely impacted by geo-political activities or environment conditions.

IANS: Can the cancellation of the Haryana Employment Act lead to a more competitive job market in India, and how might this affect job seekers?

Dwivedi: Cancellation of the Haryana Employment Act will lead to a more competitive job market in India as the job seekers will not only need to upskill and prove their merit to land a job but will need to consistently maintain their performance to continue in employment and cater to the ever-evolving business needs.

In the absence of state-imposed constraints, private companies prioritise local talent acquisition, cost-effectiveness, and alignment with organisational culture. Yet, as seen in the potential repercussions of the Haryana Employment Act’s cancellation, the evolving regulatory environment continually reshapes the job market’s competitiveness.

Job seekers navigating this landscape must not only showcase their skills but also adapt to dynamic industry needs, heralding a future where resilience and constant upskilling become paramount for sustained success.



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