Page 185 - DMGT310_ENTREPRENEURSHIP_AND_SMALL_BUSINESS_MANAGEMENT

Entrepreneurship and Small Business Management

Notes Self Assessment

Fill in the blanks:
7. …………………. is about managing people so that businesses are competitive and
successful.

8. …………………. are also a multidisciplinary field that studies the collective aspects of the
employment relationship.
9. …………………. relationships have, therefore, become more complex than they were in
the past and have been given a sharp edge because of the widespread labour unrest.

12.4 Labour Laws

Labor law seeks to regulate the relations between an employer or a class of employers and their
employees. The access of this law is the widest, in that it touches the lives of far more people,
indeed millions of men and women as compared to any other branch of law and this is the aspect
which makes it the most fascinating of all branches of law and the study of this subject is of
enormous dimension and of ever changing facets.

There has been a remarkable change in the approach to Labor law and industrial relations since
the World War IL Philadelphia Charter adopted in 1944 provided that “Labor is not a commodity”
and that “poverty anywhere is a danger to prosperity everywhere”. W. Friedmann and others
who have tried to analyse the essential characteristics of the legal development in this branch of
law consider ‘social-duty’-on-the part of employer as the main bed rock on which this law is
built. This is exemplified by the very approach of law makers to the construction of a wage
packet of the working man in the post-second World War period, wage fixation and legislation
relating to condition of work. The Indian Constitution lays down broad guidelines to be followed
by State.
Otto Kahn-Freund in his book on Labor and the Law makes the following points.
(i) The system of collective bargaining rests on a balance of the collective forces of management
and organized labor. The contribution which the courts have made to the orderly
development of collective labor relations has been infinitesimal. Collective bargaining is
a process by which the terms of employment and conditions of service are determined by
agreement between management and the union. In effect, “It is a business deal (which)
determines the price of labor services and terms and conditions of labor’s employment.”
(ii) The Law governing labor relation is one of the central branches of the law on which the
very large majority of people earn their living. Nonetheless, law is a secondary force in
human relations and especially in labor relations.
(iii) Law is a technique for the regulation of social power. This is true of labor law as it is of
other aspects of any legal system. Labor Law also seeks to lay down minimum standard of
employment. It lays down norms by which basic conditions of labor are fulfilled such as
maximum working hours, minimum safety conditions, minimum provisions for holidays
and leave protection for women and children from arduous labor, prohibition of children
below certain age from employment and provision for minimum standards of separation
benefits and certain provision for old age.
Small-business owners already have a lot to worry about, and lawsuits brought by employees
are just one more thing to add to that list of worries. For many small businesses, a single
unfavorable jury verdict could deplete company assets enough to result in bankruptcy. As such,
it is vital for owners and managers to learn the basic labor laws that apply to their company.

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