Discrimination in Hiring

Existing Landscape and Recommendations

IIM BANGALORE - EGMP XV

May 7, 2010 Authored by: Deepak Chavan Prasad Manjre Shannu Kaw Smita Taneja Vikal Gupta : EGMP15117 : EGMP15146 : EGMP15178 : EGMP15180 : EGMP15192

Hiring Discrimination in India

Existing Landscape and Recommendations Legal Concern
Is the qualification for the job the only criteria for selection and hiring of candidates in the Indian Corporate? Is the discrimination based on sex, caste, religion, marital status and disabilities in private sector a cause for concern? What are the legal remedies currently available to potential candidates if they perceive themselves a victim of this discrimination? This is the basic legal concern that forms the basis of this paper. For the purpose of limiting the scope we will focus the discussion on discrimination based on Sex, Marital Status and Disabilities since discrimination based on caste and religion is already widely debated in public and media. Given below are some examples where discrimination could potentially be argued: 1. A female candidate with qualifications and experience equal to or better than other male candidates gets rejected due to a perceived apprehension of higher risk of attrition on account of marriage or domestic responsibilities. 2. A physically disabled person, who is equally qualified for a Marketing job, gets rejected due to apprehension of leaving a negative impression on the clients. In most disabled persons are thought to be suitable only for a back office jobs and not for client facing roles. 3. A married candidate who is otherwise equally qualified for job in a call centre gets rejected due to apprehension that only bachelors are suited for shift related jobs. 4. A candidate from North India is rejected for a job in South India due to apprehensions of log term retention. We have chosen the above examples to demonstrate the fact that in these cases the discrimination is not due to any inherent bias against a particular group but the overriding reasons (whether real or perceived) are business related mitigating risk of attrition, loosing clients or tardiness at work. Unlike Caste or Religious based discrimination which is clearly wrong, these cases are more complex since here we can potentially argue both for the employer and the candidate.

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Contents
LEGAL CONCERN ............................................................................................................. 1 CURRENT LANDSCAPE - EXISTING EMPLOYMENT LAWS IN INDIA ..................................................... 3 EMPLOYMENT/EQUAL OPPORTUNITY LAWS IN OTHER COUNTRIES ................................................. 4 EMPLOYERS PERSPECTIVE ................................................................................................... 5 RECOMMENDATIONS: ........................................................................................................ 6 PROMOTE FAIR HIRING PRACTICES ..................................................................................... 6 PROTECTION FOR EMPLOYERS .......................................................................................... 6 ALTERNATE FORMS OF REDRESSAL ..................................................................................... 7 END NOTES/REFERENCES ................................................................................................... 9

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Current Landscape - Existing Employment Laws in India

The Constitution of India guarantees certain fundamental rights to the citizens of India, including protection to individuals from discrimination on the grounds of religion, race, caste, sex or place of birth under the fundamental rights. While this provides the basic protection, there are other legislations and acts that have been enacted to strengthen employment laws and prevent against discrimination like: Equal Remuneration Act, 1966 THE PERSONS WITH DISABILITIES (Equal Opportunities, protection Of Rights And Full Participation) ACT, 1995 The Beedi & Cigar Workers(Conditions of Employment) Act,1966 The Plantation Labor Act,1951 The Contract Labor (Regulation & Abolition) Act,1970 The Inter State Migrant Workmen (Regulation of Employment & Conditions of Service) Act,1979 Factories Act,1948 The Mines Act,1952 Apprentices Act (1971) Compulsory Notification of Vacancies Act, 1959 Minimum Wages Act, 1948
Note: Refer to Endnotes 3. For more details on the acts.

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The Equal Remuneration Act is quite explicit and guarantees No discrimination is permissible in recruitment and service conditions except where employment of women is prohibited or restricted by or under any law. It also guarantees Payment of equal remuneration to men and women workers for same or similar nature of work. The Right to employment of persons with disabilities is protected under the Persons with Disabilities Act. Issues involved in this area include creating and reserving posts under the disability category, protecting rights on acquiring disability, reinstatement, promotion, compassionate employment, concessions, compensation, and alternate employment. In addition to the Acts listed above, there is a proposal to Institute an Equal Opportunity Commission of India by a bill in Parliament (Ref. 4.). While in principal EOC is for equal opportunity, the focus of the bill and the public debate is focused on the caste/religion based discrimination.

In addition to the acts of Govt. some industry forums like the NASSCOM and CII have specific guidelines and initiatives to increase diversity in workplace. These initiatives are mostly focused on gender based diversity. Given the above Acts and basic constitutional guarantee, the group feels that any candidate who may be a victim of discrimination on any ground can get legal redressal. However the issue in the cases specified in Section 1, for a candidate to prove that the rejection is due to discrimination and not due to insufficient qualification. In most Knowledge based jobs the selection criteria are very subjective and companies normally give very generic reasons for rejection technical, behavioural etc.

Employment/Equal Opportunity Laws in Other Countries

United States In United States the Equal Employment Opportunity Commission is responsible for enforcing laws that make it illegal to discriminate against a job applicant or an employee because of the person's race, color, religion, sex (including pregnancy), national origin, age (40 or older), disability or genetic information. It is also illegal to discriminate against a person because the person complained about discrimination, filed a charge of discrimination, or participated in an employment discrimination investigation or lawsuit. See Endnote 7. For a listing of all the laws enforceable by EEOC. Most landmarks Act in promoting equality were the US Civil Rights Act of 1964. This was further strengthened by the following Acts like the: The Equal Pay Act of 1963 (EPA) The Age Discrimination in Employment Act of 1967 (ADEA) Americans with Disabilities Act of 1990 (ADA) Civil Rights Act of 1991 The Genetic Information Nondiscrimination Act of 2008 (GINA) The laws in US have been amended to keep pace with the times to bolster the nondiscrimination in hiring. United Kingdom There are various Acts in United Kingdom which protect potential candidates against discrimination based on Sex, Race, Religion, Disability and Age. The Disability Discrimination Act (DDA) of 1995 The Race Relations Act 1976

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Sex Discrimination Act of 1975 The Employment Equality Act (Age) Regulations 2006 China Although Article 12 of Chinas Labor Law expressly prohibits discrimination based on race, nationality, sex and religious belief, no other laws or regulations exist for enforcing such anti-discrimination provision. Nor is there any mechanism for victims of employment discrimination not specifically prohibited by law to seek any legal remedy. Few lawyers are willing to take on what they view as a quixotic attempt to challenge well-accepted discriminatory practices. Under such a market and legal climate, government agencies as well as employers from state-owned enterprises and the private sector routinely and openly engage in discriminatory hiring and dismissal practices without a second thought. Despite the express prohibition against gender discrimination under the PRC Labor Law, discrimination against women is among the most flagrant in Chinas job market. The government itself continues to maintain different retirement ages for male and female civil servants

Employers Perspective
In Private for profit Enterprises, the employer may argue that he/she reserves the right to hire people at will to ensure successful business operation. Eg. If hiring married women with children means the company has a higher risk of tardiness at work, the company may want to minimize the risk by hiring only male or unmarried candidates. Also given the strict laws against layoffs in India, the companies may be even more circumspect in eliminating the risk the at hiring time instead of being stuck with a partially productive employee. Similarly companies spend a lot of money in training their employees before they are fully productive. Especially in IT and High Tech companies the ramp up time of employees is significantly higher sometimes up to a year. In this context the companies want to ensure that the people they hire can be retained for a minimum period to get their return on Investment. For this reason a company based in South India may be selective of hiring mostly local people to minimize the risk of attrition due to relocation back to hometown. The Employers have to weigh the business risk against a moral obligation to not discriminate. This is usually true of small companies, family run businesses and startups where every Rupee counts where the business risk usually overrides the moral angle.

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Recommendations:
There has to be a three pronged drive to address the issue: Promote Fair Hiring Practices Protection to Employers Legal Redressal Promote Fair Hiring Practices An act which provides guidelines for companies over a certain size to have procedures in place for promoting fair hiring practices which include: It should be mandatory for companies to train the hiring Manager and Recruiters about the fair and specific defined employment practices. Discourage employers from asking personal details which could lead to biases about religion, caste, age, sex, marital status or domestic status (number of children etc) not directly related to the job requirement. There should be some drive for the awareness of Hiring Discrimination. Government should form a separate corporate body, responsible for keeping a view on hiring discrimination and formulate the processes and policies to minimize the same. This could be taken up as part of setting up of the proposed Equal Opportunities Commission of India.
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Protection for Employers

The labor courts in India are overwhelmingly biased towards workers. This actually reduces employments and promotes biases since it makes companies reluctant to hire people who are perceived as high risk. Simplify the laws related to firing of employees for performance reasons. A classic example is the Uttam Nakate case where the court found the employer guilty under Unfair Trade Practices law for dismissing an employee for repeatedly

sleeping on the shop floor (Ref. 5.). Even though the Supreme court later upheld the companys right to fire but it took 10 years for the legal process to complete. It is also important to ensure that the law puts the onus on the employers to prove non performance to ensure the same is not misused. Enforceability of Minimum Employment duration Bonds A number of IT companies earlier used to have bonds with Employees to guarantee min. years of employment to ensure return of investment for training, onsite assignments etc that the company has to bear. However the lack of enforceability of these bonds has made them redundant. Our recommendation is that the labor courts need to recognize that IT Companies spend a large amount of money in training their employees and they need to make sure the company gets adequate return on investment. In this regard the violation of these bonds (which are signed by the employees at free will at the time of employment) should be honored by the employees and this should be upheld by the labor courts.

Alternate forms of Redressal

Since the formal litigation route is long and expensive for both employer and employees should have more alternate recourse. Eg some companies have an Ombudsman concept an independent authority to address the grievance of the employees. The term "Ombudsman" comes from Swedish word "Omboodz-man" meaning "a grievance man or person", which the Oxford Dictionary refers to as the " people's defender". In most democratic countries, there are Ombudsman institutions that are responsible organizations that make the government accountable to the people. Broadly these institutions function to prevent the misuse or abuse of the vast executive power of government by undertaking impartial investigations into governmental activities against its citizens w.r.t any kind of grievance in Legal, Banking, Insurance, financial, health, telecom etc.

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The following are some of the examples of the types of complaints for which Ombudsmen may be approached: Any partial or total discrimination by any employer. Any dispute in regard to rejection from the employment opportunities on the basis of Sex, Marital status, race, etc Any dispute on the legal construction of the employment offer letter. Any dispute w.r.t the discrimination for publishing the job requirement. On separation any kind of delay in settlement.

There are some limitations in the types of complaints that are usually encouraged by Ombudsmen. The decision of the ombudsman should be binding on the companies but not on the employee, who may approach the courts, if dissatisfied.

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End Notes/References
1. Govt of India Ministry of Labor website http://labour.nic.in/ 2. Employment of Women Legal Provisions http://labour.nic.in/women/WomenCell.pdf 3. Employment Laws in India Checklist http://www.scribd.com/doc/9364375/Employment-Laws-in-India 4. Equal Opportunity Commission What/Why and How http://minorityaffairs.gov.in/newsite/reports/eoc_wwh/eoc_wwh.pdf 5. Uttam Nakate case http://en.wikipedia.org/wiki/Uttam_Nakate 6. US Equal Employment Opportunity Commission (EEOC) http://www.eeoc.gov/ 7. Laws Enforced by EEOC in US
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http://www.eeoc.gov/laws/statutes/index.cfm
8. Discrimination in China

http://www.chinareview.info/issue2/pages/main1.htm