PLIGHT OF UNEMPLOYMENT IN INDIA

The state of being without any work both for educated & uneducated people for earning one’s livelihood is meant by unemployment. India’s unemployment rate stood at 6.1% in the Financial year 2018. The year 2020 has let us see so much, be it a pandemic, floods, deaths of people, cruelty with animals, low points in the economy, and much more. But the most seen problem was that of unemployment of the skilled and unskilled persons.

At a time when the world is taken by the Covid-19 storm, the Indian Government, to contain the spread, morbidity, and mortality, had declared a nationwide lockdown. In this complete lockdown many manufacturing, trading, and other business have come to a standstill thereby leading to a failure in discharging of obligations from employer and employee both ends. Various employers contemplated the process of laying off or retrenching their employees.

The global financial meltdown is taking its toll on Indian Companies. The largest domestic private air carrier Jet Airways (India) Ltd, for instance, laid off 27 expatriate pilots recently. 

Currently, there are around 47 Central laws and 157 state regulations that directly affect the labor market. On 20 March, the Ministry of Labour & Employment of India issued an Advisory and on 29 March the Ministry of Home Affairs an order under Section 10 (2) Disaster Management Act to all employers, to make payments of wages on due date without any deductions for the duration of the lockdown period. The Advisory further prohibited the termination of employees, particularly casual or contractual workers. Still, many employee were terminated and laid off from services. 

REASONS FOR EDUCATED UNEMPLOYMENT-

1. Theoretical education- This chronic unemployment can be said for some reason because of the system of education prevailing in our country, which is too theoretical and less practical. 

The number of engineering institutes in India stood at 337 in 1990, which in 2017 stood at 6427.

2. Lack of full employment in industries- There are not many factories and even the factories that we have do not work to their maximum capacity either because the machines have taken the place of men or lack of adequate supply of materials. These have been the main reasons because of which people are being laid off nowadays.

3. Population- The population is humongous for meeting basic food supplies and medical treatments, let alone be jobs and placements. Talking about youth unemployment in India, the supply of graduates is more than the demand. 

4. Lack of right skills- The absence of relevant skills is one of the major reasons for unemployment. It is quite important to equip oneself with the necessary skill set and focus on competency.

5. Job opportunity and qualification mismatch- Low salary has been at the threshold of educated unemployment in India. The best colleges and institutes in India have failed to provide jobs that can pay decently. 

A report says that 48% of urban youth face the problem of getting a suitable job. Of the ones employed, 38% are dissatisfied. This also means a lack of a good working environment and conditions.

6. Decline in demand- The current lockdown has made things worse. There is enough evidence to show that the economic slowdown is a result of a decline in demand (investment and consumption).    

7. The disputes- Too many companies have started laying off people in this pandemic because they have been caught up in disputes and are not able to handle all the salaries because of it.  

REGULATORY FRAMEWORK AND POLICIES FOR SOCIAL PROTECTION OF LABOR-

The Constitution of India provides for an overreaching framework for regulations of the condition of work and promotion of livelihoods. The right to work is not a fundamental right but is included in the Directive principles that lay down the broad directions of state policy. Further, labor comes under the concurrent list (the central and state both can make laws on it) in the Constitution. 

In the context of giving social security benefits to workers, India led the developing countries by initiating old age, health care benefits with the central government enactment of the Employees State Insurance (ESI) Act, 1948, Employees Provident Funds (EPF) Act, 1952, and Gratuity Act, 1991. ESI Act enlarged the scope of the Workmen's Compensation Act and Maternity Benefit Act (WCA & MBA) enacted before the Independence of the country. All these make a provision for cash benefits and partial/total disability pension in case of industrial injury, besides provident fund and pensions.

There are a plethora of Central laws also that regulate conditions of work in the organized and unorganized sectors like Equal Remuneration Act, 1976 guaranteeing equal payment to men and women, Bonded Labour System (Abolition) Act, 1976 proscribing human trafficking and forced labor, Minimum Wages Act, 1948, Child Labour (Prohibition and Regulation) Act, 1986, Dangerous Machines (Regulation) Act, 1983, Maternity Benefit Act, 1961.

UNEMPLOYMENT BENEFITS FOR WORKERS AFFECTED BY CORONAVIRUS PANDEMIC-

The government’s ‘Atal Beema Vyakti Kalyan Yojana’, which provides unemployment insurance to workers who have subscribed to the Employees’ State Insurance (ESI) scheme, will cover such workers during the pandemic. The ESI is a self-financing health insurance scheme for formal sector workers in India managed by the Employees State Insurance Corporation (ESIC).

Under the scheme, which has been operational since July 2018, workers who become unemployed get compensation in the form of the cash up to three months of unemployment. But this can be availed only once in a lifetime. The worker should have been a subscriber of the ESIC for at least two years. 

The International Labour Organization (ILO) has estimated that up to 25 million people might become unemployed worldwide due to the impact of COVID-19. 

The sectors that saw an immediate impact range from travel and tourism to hospitality and retail. India’s import-dependent sectors such as automobiles and pharmaceuticals will also take a hit due to disruptions in global trade.

In such a scenario, experts pointed out that the Indian government’s move to provide unemployment insurance to the impacted workers may not be sufficient to cover a large section of the country’s workforce.

TERMINATION OF EMPLOYEES IN COVID-19-

In the case of workmen, retrenchment, as governed under the Industrial Disputes Act, shall be applicable wherein, the process must satisfy the following conditions.

A. The workman must be in continuous service for not less than one year. Continuous service would mean the workman was employed for at least twelve (12) calendar months and during those twelve (12) calendar months he had worked at least two hundred and forty (240) days. 

B. The workman has been given one-month' s notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice.

C. The workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof over six months; and

D. Notice to the Labour Commissioner has to be served by the employer informing him of such retrenchment and the reason behind the same.

In case the employee is terminated during Lockdown, irrespective of the process duly followed by the employer, the employee may challenge the termination. The termination can be challenged internally as well as before the appropriate labor officer/court. 

The employment contract is a way to ensure that termination is in accordance with the terms and conditions of the employment agreement and contract of employment.

CONCLUSION

Laying off is an easy option but the real challenge is to take care of your people in tough times as well as manage costs. When an employee is terminated he has some basic rights like Right to receive a notice of termination of employment, Right to be heard against termination, Right to sue because of illegal or unlawful termination, Right to receive severance pay, and Right to have an inquiry conducted.

We at The Legal Cartel are always happy to help. If you are an employee/ employer having inputs, comments, or queries with regards to the same kindly do reach us. This article is purely for educational purposes and shall not be mistaken as a piece of professional advice. 

About the author:

The author is an advocate practicing before the Hon'ble High Court of Madhya Pradesh Bench at Indore and the Lower Courts below. For further clarification, kindly consult the author.