Periodic fluctuation in the rate of economic activity, as measured by levels of employment, prices, and production is the business cycle and downward trend in the business cycle characterized by a decline in production and employment can be called Recession. Recession may confine to one country or one region. Due to globalization, recession in one country will have substantial impacts on other countries. In economics, a major downswing in the business cycle characterized by sharply reduced industrial production, widespread unemployment, a serious decline or cessation of growth in construction, and great reductions in international trade and capital movements.
Recession becomes severe where there is a prolonged depression. If downswing is sustains for longer duration in the business cycle then the recovery will consume considerable amount of time. It is there in history too, it happened in U.S. soon after the New York Stock Market Crash of 1929 and lasted until about 1939. By late 1932 stock values had dropped to about 20% of their previous value, and by 1933 11,000 of the U.S.'s 25,000 banks had failed. These and other conditions, worsened by monetary policy mistakes and adherence to the gold standard, led to much-reduced levels of demand and hence of production, resulting in high unemployment (by 1932, 25–30%).
INDIAN SCENARIO
At any point of time, any person can have some advantage of economic slowdown? Apparently not, but there is a chance that employer can use the recession as a tool for sacking their employees. In every organisation the expenditure on salary is a bigger exchequer. Growth of the organisation demands the intellectual brains at the same time it increases the financial liabilities on salaries and allowances. It is true that the eminent and efficient personalities can bring the new and enhanced business but the consumption of time for desired results may vary as per the market conditions.
LEGAL ASPECTS
As per the Constitution, India is a welfare state. Constitution given validity to the existing laws which are not ultra virus to the any provision of Constitution and empowered Government to make welfare legislations. Industrial Dispute Act of 1947 is considered as welfare legislation which enumerates rights and remedies of the workers in the industries and liabilities of employer. The basic intention of legislatures to enact this law is to advise the employers to make a policy on retention strategies.
The application of said Act is limited to the industries defined by Sec 2(f). Industry means any systematic activity carried on by co-operation between an employer and his workmen (whether such workmen are employed by such employer directly or by or through any agency, including a contractor) for the production, supply or distribution of goods or services with a view to satisfy human wants or wishes (not being wants or wishes which are merely spiritual or religious in nature), whether or not,--
(i) any capital has been invested for the purpose of carrying on such activity; or
(ii) such activity is carried on with a motive to make any gain or profit, and includes—
a. Any activity of the Dock Labour Board established under section 5A of the Dock Workers (Regulation of Employment) Act, 1948 (9 of 1948);
b. Any activity relating to the promotion of sales or business or both carried on by an establishment. but does not include—
1. Any agricultural operation except where such agricultural operation is carried on in an integrated manner with any other activity (being any such activity as is referred to in the foregoing provisions of this clause) and such other activity is the predominant one. Explanation.--For the purposes of this sub-clause, "agricultural operation" does not include any activity carried on in a plantation as defined in clause (f) of section 2 of the Plantations Labour Act, 1951 (69 of 1951); or
2. Hospitals or dispensaries; or
3. Educational, scientific, research or training institutions; or
4. Institutions owned or managed by organisations wholly or substantially engaged in any charitable, social or philanthropic service; or
5. Khadi or village industries; or
6. Any activity of the Government relatable to the sovereign functions of the Government including all the activities carried on by the departments of the Central Government dealing with defence research, atomic energy and space; or
7. Any domestic service; or
8. Any activity, being a profession practiced by an individual or body or individuals, if the number of persons employed by the individual or body of individuals in relation to such profession is less than ten; or
9. Any activity, being an activity carried on by a co-operative society or a club or any other like body of individuals, if the number of persons employed by the co-operative society, club or other like body of individuals in relation to such activity is less than ten.
Workers are defined in the Industry means any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such person—
(i) Who is subject to the Air Force Act, 1950 (45 of 1950), or the Army Act, 1950 (46 of 1950), or the Navy Act, 1957 (62 of 1957); or
(ii) Who is employed in the police service or as an officer or other employee of a prison; or
(iii) Who is employed mainly in a managerial or administrative capacity; or
(iv) Who, being employed in a supervisory capacity, draws wages exceeding one thousand six hundred rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.
This Act applies to the workers those who wages less than Rs.1600/-. Strike is the weapon in the hands of workers, in the same way lay off is the weapon of the employer. But if there is an inability of providing work to the worker he has to go for retrenchment.
Retrenchment means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include—
(a) Voluntary retirement of the workman; or
(b) Retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or
(bb) Termination of the service of the workman as a result of the non-renewal of the contract of employment between the employer and the workman concerned on its expiry or of such contract being terminated under a stipulation in that behalf contained therein; or
(c) Termination of the service of a workman on the ground of continued ill-health.
The Act is enacted in 1947, when the industrialization was at its paramount. Intention of legislatures was to protect the workers from unfair labour practices from the employers. The object of the industrial dispute Act, 1947 is to make provision for the investigation and settlement of industrial disputes and for certain other purposes.The Act is primarily meant for regulating the relations of employers and workmen, past, present and future. The principle aim of this Act is to encourage collective bargaining and to maintain industrial peace by preventing illegal strike and lockouts and to provide lay-off and retrenchment compensation. Hence the worker’s rights are protected by an Act.
NEW ARENA
In the present business world, intellectual brains are hired by the business establishment after realizing the immense requirement through different brainstorming sessions and marathon interviews by eminent personalities from different field. When a person is absorbed by the organisation after copiousness exercise, it makes the employee and others to presume that he has some job security. But due to non professional approach of certain CEOs the employees in top and medium level gets unexpected sack for reducing the financial burden of the organisation in the form of salaries. This type of approaches is common in the organisations which are build and grown in short span of time.
GROUNDS
Companies are incorporated by registering the Company under The Companies Act of 1956. As the liability of the members of the company is limited by the share, for every business incorporation formation of the company is the best method. Till 1980s the concept of the general public about the company was, it may be a manufacturing or production establishment. To have production and manufacturing units it is expected that the establishment will have some immovable fixed assets besides their different securities. But in the present era due to advancement of technologies persons do not have wealth or better business knowledge and culture can establish a business organisation. To be entrepreneur, present technological advancement and different new segments of business allows people with less capital to embark on a business. The capacity of raising the funds, effective utilization of men, material and money, brand building strategies, welfare measures, employees accession ability, project development visions etc. will lag in this type of business establishments.
REMEDIES
The word ‘Employer’ has to be re-defined. New enactment is required which describes the quality of the person who can employ others. It should be as per the ability of the person in the areas of knowledge, business ethics, family backgrounds, educational qualifications and fund raising capacity. Policy of retaining the employees in every organisation in all levels of employment has to be drafted in Standing orders and it should be registered. The employer should strictly adhere the rules specified in that. Multi national companies enters into different segment of business, but Education, Health, Public Distribution System etc. should be governed with ethics than extraction of money.
EPILOGUE
India is a country believes in relations, to maintain relations in the world of business code of professional ethics has to be followed. To have professional ethics in a business, the person of same profession only should be allowed to start the business in that area. If there is any deficiency of such professionals in any particular branch of profession and there is an urgent requirement, Government should establish a public sector to cater the needs in that branch. Effect of economical slow down and industrial disputes can be tackled effectively for the business establishments which have sound support and vision. Newly formed organisations which have no sound backgrounds in industry will be instable in such economical disorder and which inturn affect the employees. It is the time which warrants to have effective legislation for new definition on ‘Employer’. An enactment like ID Act can be enacted in other areas of employment where employer is compatible to adhere the rules established by such Acts.
Sreerengan VR
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