Indian Legislative Regulations On Labor And Employment Business Essay

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The employment-relevant law frameworks in India has five different aspects which includes working conditions, industrial relations, wages, welfare and social securities (Amit, 2013). These five aspects could all be categorized as the Industrial Law. Post-Independence, laws were constructed and construed to safeguard the interests of the workers. In addition, more than fifty national laws with other state-level laws were framed to regulate the employment concerns (Lalit, 2007).

In India, there are three categories of employees namely government employees, employees of Public Sector Undertakings which are corporate organizations governed by the government and private sector employees (Lalit, 2007). As to the private sector employees, there are another two major types. One is the management staff and another one is the workman. For the management staff, they could earn at least Rs 1600 per month more than that of the workman. Furthermore, due to there is no relevant legislative enactment regulating their employment, the conditions of the employment are supervised and implemented by particular contracts of employment. For the workman, their rights and obligations are all been clearly defined and listed in the Industrial Dispute Act (Lalit, 2007).

In terms of the hotel industry, it is been regulated by the Factories Act 1948 (ILO, 2013). This Act defines the rights of workers in factories including health, safety, welfare, working hours and leave. This Act also gives the State governments to make changes based on the separate environment they confront. Moreover, this Act is to enhance the requirements on employees' health and safety by asking the employers to appoint safety offices for example(Amit, 2013).

Minimum wage

India is one of the first developing countries which developed minimum wage policy and the system of the regulation on minimum wage is also the most intricate one globally (Belser and Rani, 2010). There are three implications generated from the legislative statutory. One is that in different sectors and companies, the relevant authorities determine different level of minimum wage; one is that only part of the occupations are covered by the policy; the other one is that for the same employments in different states, the minimum wage could be different (Belser and Rani, 2010). There are two main authorities which could set the minimum wage. One is the Central Government and another is the state governments. Central government is responsible for setting minimum wage for state-owned enterprises and the minimum wage policy of any other types of companies is determined by the state governments. And there are also Advisory Boards to supervise the implementation of the laws. Furthermore, in terms of who could be covered by the relevant laws, in India, there were 13 different types of jobs called "scheduled employments" covering by the minimum wage policy. In these occupation sectors, there was no collective bargaining and also the employees were been seen as vulnerably to be exploited by the employers. However, the Factories Act 1948 does not limit the uses to any specific industries or jobs. And the Act gives the governments the right to enlarge the types of scheduled employments if it is necessary. Consequently, at the end of 2005, there were 311 different types of scheduled employments in total covered by the Act. Some of the governments expanded the list of scheduled employments largely but some of them hardly updated the list and still remain the 13 original ones. As to the precise levels of minimum wage in India, there is more than one answer. The Labour Law system does not decide the minimum wage and the minimum wage levels differ in different states and industries. According to the report from India's Labour Bureau, there are more than 1700 different minimum wage rates in different job categories (Belser and Rani, 2010).

Hours of Work

In India, the official weekly hours of work are 48 hours and no workers should be asked to work more than 9 hours a day (Wordpress, 2008, erlaws, 1948). However, for the hotel industry, it does not follow the hours of work above. The hours of work for different jobs and positions in hotel industry differ. For instance, the workers working in room division has relatively long and non-standardised hours of work; for the workers in other departments like Human Resource, they have standard hours of work per week and balanced life (Panwar et al., 2012). One problem with the working hours in India is that workers are always required to work in additional hours which extend the hours of work per day. The reason could be that when the employers promote the employees, they give the workers more job responsibilities therefore the hours of work have been lengthened (Panwar et al., 2012).

Women and Child Labour

With the modernisation of Indian Society, increasingly numbers of modern women realise that except become a good mother and wife, it is also important to become a member of the modern life (inflibnet, 2013). Furthermore, according to a report released by Catalyst (2012), in 2009-2010, 26.1% of rural workers and 13.8% urban workers in India were women and they only earn 62% of men's salary for identical jobs. Also, companies do not pay attention to the careers development of female employees (Catalyst, 2012). In terms of law, most of the major labour law set by th Central Government are applicable for female workers and there are some other statutory regulations protecting the female workers' rights (Lalit, 2007). For instance, if there are more than 30 female employees, the employer must build a free crèche in the properties for children less than six years of age.

As to the child labour, it is a serious problem confronting to the India society. It is estimated that there are more than 30 million child labour force in this country and it is the largest child labour force globally (savethechildren, 2013). The governments managed to tighten child labour laws since 2006. The Central Government amended the Child Labour Act 1986 to forbid children under 14 working as a "domestic servant" (Lalit, 2007). Moreover, the Government proposed to punish any employer who exploits child labour under 14 or 18 in hazardous industries (Kazmin, 2012).


After deciding entering the India market, then the company should understand the stages to register and invest a new hotel and acquire project approval from the Ministry of Tourism. Under the regulations set by both the Central and state governments, the company first offer a nice working environment to the employees in each different department. And following the statutory hours of work, each employee is eligible to have time to rest as well as to work for 48 hours per week. As to the overtime work, employees should be paid according to the relevant policies. However, due to the characteristics of the industry, the company has to inform the potential employees before recruitment that it is common to work for extra hours in this business but could obtain salaries. Furthermore, the company could design a more sophisticated and flexible shift schedule to allow the employees working for different shifts and guarantee the operation of the hotel simultaneously. For instance, it could a 3-shift schedule. One is from 8am to 5pm; one is from 4pm to 12am and another could be from 12am to 8am. Consequently, the management could allocate each worker into different shift depending on the personal willingness and practical needs. In addition, in terms of wage, in order to illustrate work equity to the employees, the basic salaries for the same work should be the same but the bonus could be fluctuated depending on personal performances. Also, there should be no different between female and male workers on salary level as well. For female employees, their rights should be expected for example having maternity leave and provide a supervisor to help their daily work and provide internal consultancy to them. Another aspect the company should pay attention is that it is illegal to employ child labour. Before recruitment, the company has to ask the applicants to provide legal certificates of age to avoid employing illegal employees.


Hospitality Industry is the key to the resurgence of India. It has achieved many distinctions and is being accepted as one of the fastest growing industries in terms of gross revenue and foreign exchange earnings. It also contributes a major share of Indian economy and plays an important role in the development of the country (Ministry of Tourism, Government of India). Many countries have found it difficult to introduce (TQM) total quality management successfully. Total quality management has massive potentials to improve quality issues in a wide variety of industries and also improve the organizations long-term performance. Six Sigma (SS) is an important management tool in business that many companies are using worldwide to strive for perfection. The tool enables the organization to continuously improve its work culture and processes. Total quality is achieved through SS as it defines a clear road map, since hotel industry is customer (guest) oriented. By using SS as a training tool hotels can achieve customer satisfaction and delight. In hotel industry customer interaction is imminent almost all the time. Every 'moment of truth' is critical for building personalized service and fellow feeling with the customer (The Six Sigma Way 2001). Manufactured products have specifications that must be met in order for the product to be considered functional and useful. A product needs to fulfill a number of criteria that can often be defined numerically; for example, a nut needs a certain internal diameter and thread in order to securely fix onto a bolt. In statistics, if the "mean" represents the desired specification and the nearest specification limit can be defined as six standard deviations from the mean, then virtually all manufactured products will fit within this spectrum of quality and be considered acceptable. Any process that is said to operate with Six Sigma quality will produce a defect level of less than 3.4 defects per million opportunities.

Any quality management approach assumes that a cultural change can be achieved within the organization and commitment to achieving quality management can be gained from employees at all levels of the organization including top management (Brussee, 2004).

There is a rich history of quality management methods, and the culture of Six Sigma has grown out of approaches such as total quality management (TQM), zero defect, and quality control. What differentiates Six Sigma from previous quality management approaches is that it focuses on defined projects with specific objectives, with an emphasis on creating a human resource infrastructure within the organization of Six Sigma "black belts" and "green belts" to lead these projects. Six Sigma also seeks to integrate statistics and quantitative data into the process to ensure that the outputs are measureable, quantifiable, and verifiable, rather than making assumptions or guessing in relation to the gains that can be achieved.

One approach, which could be considered "traditional" for quality management in manufacturing operations, is for the workers on the production line to be responsible for ensuring that a consistent quality of product is produced, while analysis is performed, possibly by in-house statisticians after goods are produced, to analyze the "defect rate." Six Sigma to a large degree "professionalizes" the role of quality management, and makes this a more overt role to be played within the organization. Quality management, rather than being an afterthought, becomes integral to all operations, with quality being managed by multiple employees at all levels of the organization, rather than as an afterthought.

As an employee's knowledge of Six Sigma practice develops, they are able to fulfill different quality management roles within their organization. The Six Sigma technique borrows from the parlance of martial arts, to define a hierarchy of skills:

Yellow Belt: the lowest level of Six Sigma knowledge and applies to an employee who has a basic working knowledge of Six Sigma and who may manage small process improvements but does not lead team projects.

Green Belt: a Six Sigma-trained individual who, although not working exclusively on Six Sigma projects, has duties that include implementing Six Sigma methodologies in team projects.

Black Belt: an employee who has been trained and certified in its methods. As a result, all of the duties of this individual include implementing Six Sigma at a variety of levels within the business. They will commonly lead Six Sigma project teams and provide mentoring to lesser belts.

Master Black Belt: the highest level of expertise, where all duties revolve around the application of Six Sigma and also training black belts.

Six Sigma has been criticized for effectively being a "rebranding" of existing quality management techniques and methodologies and lacking in originality. Indeed, Six Sigma has been criticized for being oversold as a concept. Furthermore, statistically, Six Sigma methods only apply to products whose specification outputs conform to "normal" distribution curves. If there is a statistical reason why the output specifications of a process might not fit a normal curve, then Six Sigma may not be a suitable process for quality management (Eckes, 2003).

Employment Relation India

Employee relations management (ERM) addresses personalise employee relations which is crucial for any organisation operating in a competitive environment. There is a paradigm shift from industrial relation's short term reactive approach towards problems which is a collective agreement and bargaining between the management and trade unions to ERM which is more proactive long term strategic outlook adopted by the management (Singh, 2011). ERM in India can be analysed by applying Dunlop's (Industrial Relations System, 1958) model which considers three factors which include management/employer, employees/union and the state/government.

In India there is existence of interpersonal relations due to the strong social family relationship which exist in the country. Such relationship might influence job related decision which can be based on more inter personal context rather than as required by duty. This has influenced the first factor which is the Indian management system which comprises of a mixture of social, political, religious and economic aspects. But over a period of time the outline of management has been influenced by the western practices due to training of manager overseas and adoption of such practices by the Indian Institutions. Such training programmes has inculcated work ethos which is global and professional (Budhwar, 2001). The Indian managers who were initially not focusing are now puting more emphasises on career development, performance review, involvement and participation, rewards and promotion (Singh, 2011) which is already discussed previously. This has resulted in building trust, commitment and helped develop good relationship with the employees which have enhanced employee relations.

Trade Union, a voluntary organisation is another vital factor for ERM. Trade unions are governed by the Trade Union Act of 1926 which entitles registered trade unions an identity of a corporate body and enables them to participate in collective bargaining with the employers in order to promote and protect the interest and welfare of the employees (BUSINESS.GOV.IN, 2013). In India, trade unions have political affiliations with vested interest. Every political party has dominance and control over the trade unions like the major central federation AITUC has link with the Communist Party of India, INTUC with The Indian National Congress, while the UTUC is politically tied to Revolutionary Socialist Party (Sinha, 2009). Such relationship has resulted in external leadership of union rather than emergence from the workers itself leading to furtherance of political goals rather than focus on immediate issues prevailing (Singh, 2011).

The Hotel Employees' Federation of India (HEFOI) is a first national federation of Hotel trade union in India which was established in October, 2007. It consists of the independent and affiliated hotel unions and also has support from the various central federations in India as mentioned above and also the IUF which is a world-wide federation of trade union (AsianFoodWorker, 2007). The main agenda of the HEFOI is to bring Hotel industry under Factories Act, secure 10% service charge and protect the exploitation of seasonal, trainees and temporary worker who comprises of majority of hotel workforce (Hotel Employees' Federation of India, 2010). Thus, Union plays a significant role in influencing employee relationships.

The state/ government, the third actor plays an important role for ERM. It passes various labour policies in order to encourages trade unions, maintain industrial peace and also include unions to play a prominent role in the formation of the five year economic development plans(Budhwar, 2001). It has established various labour laws to protect the interest of the employees which was discussed in the previous chapter. The hotel industry which is already under Shops and Establishment Act will now need to relook its rulebook as The Ministry of Labour and Employment has now put Hotel industry under the Factories act since 2008 to ensure safety and welfare of employees in the Hotel industry (Business Standard, 2008). Thus the state plays a imperative role in maintain ERM.

3. Employee Career management practices

Career planning and management (CPM) is assumed to be one of the fastest growing fields within the area of human resource management (HRM) (Baruck, 1999). CPM relates to all the activities and techniques that are facilitated by the organization concerning career development for employees. This encompasses two elements - planning (future preparation) and management (emphasizing and operating a plan of action) (Baruch, Career planning and managing techniques in use , 1996). A 'career' is referred to as a development process for an employee gathering experience from different jobs from one organization or more (Baruch & Rosenstein, Career planning and managing in high tech organizations , 1992 ).

The nature of labour markets depicts the quality of manpower that is available in a country. Riley (1996) explains internal labour markets (ILM's) by stating that it governs the movement of people and the pricing of jobs by establishing a set of conventions and rules. These rules comprise of criteria for promotion, opportunities for training, differences in the pay scales and job evaluations (Riley, 1996). The features of a weak labour market as determined by Riley (1996) include:

Hiring standards that are unspecified

Numerous entry ports

Specifity of low skill

Lack of on the job training

Promotion and transfers lack an established criteria

Weak workplace customs

Differences in pay scale over time

The Indian hospitality industry is seen to have weak labour markets considering the above factors as opposed to strong international labour markets. This is determined by excessive labour, an organization structure that is bureaucratic in nature, long working hours and low minimum wage rates (Jauhari, 2006). Since there are a large number of hospitality graduates for a small number of management positions in the Indian hospitality industry, the industry faces the challenge of lack of management training.

However, after the Indian economy was liberalised in the 1990's, there was a phenomenal amount of pressure which was put on the Indian personnel function which emphasized the development of its human resources (Budhwar P. S., 2003). For instance, a number of changes were witnessed which included the commencement of a Human Resource Department (HRD) ministry at the central government level, organizations and academic institutions were facilitated with the development of new HRD/HRM departments and the establishment of HRD related professional institutions which provided a significant amount of training and development programmes (Budhwar P. , 2000). Thus, it could be assumed that great emphasis will be put by Indian firms on training and development of their employees. Furthermore, to prove this there has been an increasing amount of money that is been seen to be spent on training employees in organizations. Such a dramatic emphasis on the training and development of employees indicates a drift in the direction of stronger employment relations (Budhwar P. S., 2003).

In order to establish a competitive advantage, the learning in the strategic HRM process is essential (Khandekar & Sharma, 2005). Findings indicate that:

Figure 3.1: Significance of organizational learning as perceived by various organizations (Khandekar & Sharma, 2005)

3.1 Recruitment and selection

The Indian hospitality industry is growing phenomenally. It accounts to 8.5% of the total labour force, employs more than 12 million people and generates more than 4% of the Gross National Product (GNP) (Chand & Katou, 2007). In order to be successful, it is crucially essential to lay heavy emphasis on HRD. A major concern that the industry faces constantly is the staffing problems. Major challenges have been witnessed by employers in retaining their employees, thus facing problems of lack of skill, consolidating labour market and high levels of employee turnover (Chand & Katou, 2007). Qualified applicants coupled with selection procedure which are provided by recruitment procedures have a dramatic influence on the type and quality of skills that new employees possess (Khandekar & Sharma, 2005). Contract labour could prove to have disadvantages in terms of helping the organization to learn (Jackson, Hitt, & DeNisi, 2004).

In regard to the luxury hospitality industry in India, organizations such as the "Oberoi Group of Hotels" and the "Taj Group of Hotels" (5 star Indian hotel chains) recruit laying heavy emphasis on the applicant's ability to abide by corporate standards and share the organization's values (oberoigroup, 2013) (tajhotels , 2013). The Oberoi Group has its own recruitment process known as the Oberoi Central Employment Registrar (OCER) which is an annual and step by step recruitment process and candidates are allotted to different hotels in different regions to commence their careers (Oberoi Hotels, 2013). This in turn makes these organizations reluctant to recruitment on the basis of an individual's personal traits supporting the organization values adding to the efficacy of the recruitment system. Moreover, Helmut Meckelburg (General Manager and Area Director, Goa - Taj Group of Hotels) states that an individual's cultural learning and intellectual stimulation comes to an end often faster when once the needs and demands of his/her particular job are identified, which results in people losing their interest in the job and looking elsewhere (Gautam, 2005). However, the Six Sigma approach could be used to optimize the organizations performance. "Six Sigma" is a data driven approach which is used to achieve stable and predictable process outcomes, reducing process differences and flaws (Laureani & Antony, 2010). Snee (1999) defines it as a business strategy which recognizes and eradicates causes of flaws in business processes by emphasizing on outputs that are crucial to customers (Snee, 1999). The main results indicate a reduction in employee turnover by saving on costs (Laureani & Antony, 2010).

Instruments such as interviews based on behaviour and ability tests are becoming increasingly common and are recommended to be used by employers to measure and analyze one's personal traits and organizational values. HVS International, a consulting firm that provides services to the hospitality industry, has also introduced a software called 20 20 skillsâ„¢ which eases the identification of peak performers and evaluates new employees (Gautam, 2005).

Another implication as seen in the recruitment practices of the Four Season hotels is that the top management is recruited from the home or foreign countries in order to maintain corporate standards, while middle management and front line employees are hired from the local labour pool so as to gain from their understanding of local culture (Praporski, 2008).Furthermore, Rajeev Menon (head of Marriott hotel chains in India) states that it is essential to maintain a good cultural mix when setting up a new hotel. This is why they have a policy relating to staffing the long time employees with the top-executive committee of a new hotel (Ganguly, 2012).

3.2 Training and Development

Hall and Soskice (2001) state that vocational training and education is one of the key areas where a firm or organization emphasizes to develop its core competencies (Hall & Soskice, 2001). Moreover, vocational training might be highlighted in numerous ways and only a few of these are likely to succeed in a particular country (Noble, 1997), if the necessity of the vocational training and education systems 'match' with its corporate government systems and the nature of its industrial relations systems. Colleges, training bodies, employees associations and trade unions are seen to be integral support systems which help firms in administration, monitoring and certification (Edwards & Rees, 2011). In India, there are approximately 180 institutions issuing certificates, diplomas and degree courses in specialized fields of hotel management (Jauhari, 2006). The distribution of these institutions offering hospitality management is private sectors, public sectors and foreign degree programmes. Moreover, in India, it is also common for hospitality organizations to collaborate with universities. A profound example of this is the collaboration of the Taj Group of Hotels in India with the Institute of Hotel Management in Aurangabad in India (Ramswamy, 2004). Furthermore, there are management training programs offered by the Taj Group as well such as the Taj Management Training Programme (TMTP) and the Hotel Operations Management Trainee Programme (HOMT) (Taj Group, 2013). The firm could establish training and development programs by collaborating with institutions in India as there are a number of them that are available and it would also create a brand name by adding and maintaining a service standard in terms of quality. Moreover, there are comprehensive training programmes such as the 'Systematic Training and Education Program' (STEP) offered by The Oberoi Group of Hotels which help provide on the job training opportunities to students who have completed or about to complete high school and are of a minimum age of 18 years. Furthermore, the organization has other training and development institutes such as the Oberoi Centre for Learning and Development which proposes a 2 year program for hospitality graduates and aims at instilling the organizational values and helps them grasp an understanding of the various operations in the institution (Oberoi Hotels, 2013).

Another example could be that of the Marriot in Hyderabad which has commenced a training programme for the youngsters that belong to under privileged backgrounds. This is a one year programme which also aims to offer permanent and long term jobs in the hotel industry (Ganguly, 2012). This would not be recommended for the company establishing in India as it may prove to be costly, at least during the initial stages of its commencement. However, once it has been established it could consider this practice as it would be seen as Corporate Social Responsibility (CSR).

Another practical implication is that of Hilton Garden Inns, that aims to identify the most desirable qualities of its best employees. Employees who are seen as peak performers are given tests which assess their aptitudes. New employees are also given similar tests to analyze as to how close they are to the model employee of the organization (Gautam, 2005). This could be utilized by the organization to gain knowledge on the training sessions that need to be conducted.

The examples given above signify that the organizations follow on the job training to a great extent in order to create permanent job opportunities within the organization as employee turnover is a great concern in India. It is proposed that the company adopts the same approach. Moreover, these organizations facilitate training opportunities to continuously improve their service quality due to rigorous competition in the Indian hospitality industry, keeping in mind employee satisfaction. Employees believe that "a company that provides lots of opportunities for career growth is always a great place to work" (Ganguly, 2012). Keeping this thought in mind, it is recommended that the organization being established in India creates opportunities consistently for its employees as far as jobs and promotions are concerned.


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Budhwar, P.S. 2003, 'Employment Relations in India', Employee Relations, 25, 2, pp. 132-148, Business Source Complete, EBSCOhost, viewed 9 March 2013