Both UK and India are in the final stages of reforms in the Employment Laws or Labour Laws. One necessitated by moving towards the future (with India becoming a growth hub because of its population dividend) (1) and the other necessitated by breaking from the past (with the Brexit, UK wants to be different from the EU; maybe not too different). (2)
Since my move to the UK and in my brief journey of working here, I have worked on understanding the employment law here. There have been some great pieces of legislation (influenced by the EU as I understand) in the last 25 years. With my 20 years’ experience in India in labour laws, I found it relevant to understand the laws here by trying to look for the improvement areas for both the countries.
Context for focus
The reforms are always intended to improve upon both the distributive and procedural justice of the system. However, the context of each country makes the differences essential and relevant for those countries. Therefore, the comparison is not about what is better, but are there things we can learn from each other relevant to our own context.
India’s population and demographics has made the supply of talent quite strong and the economy is at a certain maturity, hence the thrust of the legislations is on elements of flexibility, growth etc. In UK (3), the population distribution is such that there is a continuous need for talent, and hence including the ones on the boundary into the work force is an ongoing need. (You will notice in the statistics that below 14 years is close to 25% in India, while the above 65 years is around 19% in UK, though the 15-64 groups are similar across both the countries.) (4)
Some things that UK can get right.
The maternity pay (under the Work and Families Act 2006) is abysmally low as per the law. SMP covers 39 weeks. The first six weeks is paid at 90 per cent of weekly earnings, while the following 33 weeks are paid at a standard rate which is close to minimum wages (currently at 151 £). Though there are private firms which go beyond, the messaging by the legislation is not very progressive. In India, the pay is calculated over a period of three months right before the confirmation of maternity leaves.
With the NHS floundering after years of great service (5), the lack of social security beyond is really coming to an inflection point. The population is aging and hence the need for more health and social security which may not have been the case for the previous decades. Provisioning of insurance for the lower strata, the process of savings for the future will become the need of the hour whether it is through a Employee State Insurance Corporation or a forced saving through Provident Fund schemes etc. With the rigour in implementation and execution that UK is able to bring about, some of these can make a lasting impact on the population.
With unemployment increasing (6) and the Brexit affecting the mobility and availability of all sorts of talent, introducing legislations to encourage more jobs and opportunities is becoming important. One of the areas, could be re-introducing an appropriate retirement age to enable a regular movement of talent and jobs across the economy. It should also not be considered to be discrimination under the protected characteristics (under Equality Act 2010).
Some things India can get right
The process of retrenchment or redundancies needs to be through a formalized processed of consultation with the workers. In UK Employers have a number of legal obligations to consult with employees regarding redundancy. It is important that the individual employee is consulted. This means informing individuals of the proposal and giving them an opportunity to comment. Failure to consult an individual employee will almost certainly make dismissal unfair. Globally, India has the third largest startup ecosystem after the US and China. The country also has the third-highest number of unicorns (7). In this context It is time we moved beyond the ineffective conciliation process and trade unions (under the Industrial Relations Code), whenever these organisations want flexibility.
The process for appeal and adjudication of the labour law disputes, in the erstwhile Industrial Disputes Act, needs to be rejigged right from its constitution to the steps, timelines for the review and judgements, guidelines for compensation etc. The early conciliation mechanism has matured in UK with ACAS as the body responsible for this and it has become a statutory step in the dispute reconciliation mechanism. Each Employment Appeal Tribunal consists of an Employment Judge who is legally qualified and two ‘lay’ members, both of whom will be part-time with industry experience. The timelines for any of the disputes to be presented to the Tribunal are tightly defined making the accountability all across.
India is growing leaps and bounds and is now the 5th largest economy. However, inequality is also increasing. World Inequality Database (WID) Report, 2021 puts India in the category of ‘extreme inequalities’ countries.(8) While the top 10% and top 1% hold respectively 57% and 22% of total national income, the bottom 50% share has gone down to 13%. India stands out as a poor and very unequal country, with an affluent elite’. hence it is important to get the marginalized more into the job market to ensure that the inequality reduces. It is important that organsations make reasonable adjustments to help people with disabilities, sex, and a customized set of protected characteristics rather than reservations based on caste etc.
Critical juncture
With the juggernaut of capitalism chugging in leaps and bounds, the rights of the individual labour/employees need to be well protected in both the countries. Unfortunately, the decision makers are influenced (or lobbied) by the deep pockets of the corporates. Some of these changes in both countries will require major political will and a deep commitment to equity (not so much equality).
The narrative that capitalism rewards capability has been taken too far and most of the times with the legal rights of ownership (inheritance) it is only the rich who get richer. Hence some of these laws are essential to balance the power. It is a unique opportunity in both the countries for the ruling party to change the direction of justice and equity.
