Governments all over the world had neither the time nor the interest to care for the problems pertaining to labour arising in industry till the end of 1940’s.But the need for governmental interference arose out of the belief that government is the custodian of industrial and economic activities.
Since the 1940s the Government of India has increased its regulations of the way employers treat employees. The Trade Union act, 1926, permits workers to join unions, The Minimum Wages act, 1948, guarantees a minimum wages, The Factories Act,1948, ensures a safe and healthy environment , The Workmen’s Compensation Act, 1923, offers compensation to injured workers, The Payment of Wages Act, 1936, checks fraudulent practices, union management relations, compensation issues , dispute settlement, etc., is quite rigorous and elaborate. There are laws that prohibit discrimination and restrict the freedom of employers to make HR decisions in other areas as well.
As the guardian of the economy and as a regulator of employment relations, the central government does not seem to loosen its grip in the near future. Experts believe that the trend towards increased government intervention will continue. They base their arguments on the current trends in developed countries in this area in the form of employer-sponsored health insurance schemes, greater job security, improved treatment, etc.
Others, however, are not very optimistic about governments trying to regulate the employer-employee relations closely. Competitive pressures, deregulation of industry, rising wages bills, increasing number of older employees needing social security protection, inflationary pressures, heavy taxes and host of others factors having a significant bearing on the profitability of a firm do not seem to support government’s active intervention in industry. These experts contend that if Indian firms have to remain competitive in international markets, they should freed from all types of control, especially those imposed by the government.
Questions:
1. Which Trend do you think will occur and why?
2. If a government regulation continues to increase, how will HR departments be affected?