Emerging Contours of the Policy of Hire and Fire in the Indian Industrial Sphere

Abstract

The rule of hire and fire was characteristic of the laissez-faire economy which set out an ecosystem for the freedom of contract. A flipside to this free contractual regime was the underlying inequity between the employer and the employee in the industrial sphere. Consequentially, the working conditions of the employees were delineated by the whims of the employer who could extract hard labour from the employee while paying negligible recompense to them for expending their sweat and blood. This state of affairs led to a clamor for recalibrating the relationship between the employer and the employees by striking out an equitable bargain for the employee. With the advent of the social welfare state, the era of free contractual regime in the realm of industrial employment came to be circumscribed by the active intervention of the State. But in recent times, there has been an increasing demand to implement the hire-and-fire strategy in the economic environment, ostensibly to increase the competitiveness of Indian firms. In order to determine if the hire-and-fire concept should be implemented in India, this article looks at the timing of the change. As an alternative, the study will discuss whether the current social security system has to be strengthened in order to support this policy change, particularly in light of the unemployment situation.