Laid-off Jet employees outside the Calcutta airport Citu office. (Pradip Sanyal)

New Delhi, Oct. 15: India’s labour laws leave no room for hire and fire, a grouse of foreign investors venturing into the country, but they won’t be of much help to the laid-off Jet Airways staff.

If the 1,900 employees “released” by Jet are probationers as the airline said, the company has the power not to confirm their services on the ground that their performance was unsatisfactory, lawyers familiar with labour laws said.

“Services of such probationers can be easily terminated,” said senior lawyer Raj Birbal, who is also a specialist in labour laws.

Some of the Jet employees today said their contract mentioned they could be sacked only for misconduct. But lawyers said that as long as employees are on probation, employers are free to ease them out citing the “unsatisfactory performance” reason.

Constitutional lawyer Rajeev Dhavan, however, held out a thread of hope for the retrenched employees.

“It is true that probationers can be easily removed from service,” he said. “But such a massive removal — whether on probationary contract (or not) — shows absolute non-application of mind. Such en-masse removal is ex facie (apparently) arbitrary.”

In such cases, he said, courts could set aside the termination orders on the ground of non-application of mind.

Before terminating the service of any probationer, Dhavan said, an employer has to embark on an “individual exercise”.

“Each individual case of a probationer has to be carefully scrutinised before the employer can actually say, ‘Thank you, but your services need not be confirmed’.”

Otherwise, Dhavan added, hire and fire was virtually impossible under existing labour laws. He also cited a landmark Supreme Court judgment in 1991 which said hire and fire was an “unfair exercise of contract” and, therefore, arbitrary and illegal.

Under law, no fixed-term contract employee can be dismissed except according to the terms of the contract, lawyer Raavi Birbal said.

Once probation is over, dismissals are tough to enforce. Even non-workmen — defined as those holding managerial or supervisory positions — on regular employment can be sacked only in accordance with the terms of employment specified in their contracts, Birbal said.

Workers in regular employment can only be sacked under Section 25f of the Industrial Disputes Act, 1947, which mandates that the employer has to give them a month’s notice indicating reasons for doing so and also payment in lieu of such notice.

Workers have to be terminated on the basis of last to come, first to go. Plus they have to be paid an additional 15 days’ wages for every year of service they have put in, she said. If the organisation has more than 100 employees on its rolls, it has to also seek permission of the government before sacking.

For years now, the government has been planning to make an official nod a must for only those units that employ more than 1,000 employees.

It has also been thinking of changing Section 10 of the Contract Labour Act, which prohibits contract labour if the nature of the job is perennial. But like the rest of the ambitious labour law reforms, they have remained stuck on paper.

Successive governments have tried to overhaul the labour laws to make India a more attractive destination for foreign investors, but none has taken off.

In 2001, the Atal Bihari Vajpayee government had announced plans to revamp the laws to allow hire and fire, but it couldn’t make any headway.

Three years later, the Manmohan Singh government also made clear its intention to change the laws, but hasn’t had much success — something blamed on its former Left allies.

Labour minister Oscar Fernandes had gone out of his way to warn private industry against adopting hire-and-fire policies. Days after sacked workers bludgeoned their CEO to death in Noida last month, Fernandes asked companies not to push employees “so hard”, only to retract under fire from industry.

The workers — mostly contractual — were demanding higher wages and permanent jobs.

Japanese company Hero Honda, operating from Gurgaon, was also forced to take back all 57 employees it had sacked after a three-month-long workers’ unrest.

The flip side of such a strict regimen has been a tendency among some employers to keep recruitment down to the minimum and wages depressed.