__MAIN_TEXT__

Page 56

B Y A K S H AY K A N OR I A ( W ’ 13) A N D R A M N A R AYA N ( W ’ 13)

INDIA:

LABOR LAWS ttam Nakate was fired in 1984 for

U

of the colonialist era, many Indians felt that

sleeping on the job. Since this was

capitalism itself was the source of India’s

his fourth such offence, he was

sorrows, and laws were passed with the

brought to disciplinary proceedings by his

intent of restricting the perceived animalistic

employer, Bharat Forge, and was fired soon

instincts of the profiteering, rent-seeking

after. However, Nakate refused to relent. He

capitalists. As this socialist model began to

approached the Maharashtra State Labor

crumble in the 1990s, most of India’s “license-

After the rampant exploitation of the

Court and claimed that he was a victim

permit Raj” was rapidly dismantled. However,

colonialist era, many Indians felt that

of unfair labor practices at the hands of

India’s

capitalism itself was the source of

Bharat Forge. The State Labor Court ruled in

draconian socialist measures. Chief amongst

India’s sorrows.

Nakate’s favor, reinstating him to his former

these are India’s labor laws, which Nandan

position, and also awarding him 50% of his

Nilekani,

lost wages. An industrial tribunal then ruled in

Infosys, says are “fossilized and intact, a net

his employer’s favor and confirmed Nakate’s

of tripwires across the economy”.

56

111210 hq.indd 56

constitution

former

still

head

of

harbors

several

software

giant

dismissal. But Nakate persisted, appealing

India’s Constitution grants labor a special

to the State High Court, which ruled in

status, where both state governments and the

his favor. The case was then taken to the

Central Government have the right to legislate

Supreme Court, where after 17 long years of

on law. The lack of synergy between these

legal tussles, Nakate was finally pink-slipped.

equal levels of government has spawned a

Strangely enough, this case is an exception,

myriad of laws that oftentimes conflict with

not because it took so long to fire him, but

each other, leading to a state of legal entropy.

because Nakate was fired at all! The Uttam

The Central Government legislates on matters

Nakate case was a high-profile example of

as diverse as trade unions, labor disputes,

the difficulties facing employers in India,

insurance and wages, as well as specific

direct results of India’s archaic labor laws.

regulations on various industries. Absurdly

Article 39 of the Indian Constitution

enough, State Governments have their own

idealistically states: “the citizen, men and

laws concerning many of these same issues.

women equally, have the right to an adequate

It is hardly unreasonable to assume then, that

means of livelihood.” Unfortunately enough,

anyone looking to invest in India would feel

as seen with the case of Mr. Nakate, the very

threatened by a legal maze.

laws enacted by the Indian government to

To observe the failure of these laws, its

realize this lofty goal have in fact stymied its

best to look at India’s garment industry. While

development. After the rampant exploitation

the going rate for labor is only 33 cents an

I N T E R N AT I O N A L B U S I N E S S R E V I E W

FA L L 2 0 1 0

11/27/2010 3:13:21 PM

Profile for Daniel Hellwig

International Business Review - Fall 2015  

Fall edition of the IBR magazine at the Wharton School.

International Business Review - Fall 2015  

Fall edition of the IBR magazine at the Wharton School.

Advertisement