Q+A - Pilot strike highlights fragile labour relations

Jet Airways aircraft stand on tarmac at the domestic airport terminal in Mumbai September 9, 2009.

NEW DELHI (Reuters) - A standoff between pilots and management at India's top private carrier, Jet Airways, entered its fourth day on Friday, underlining fragile labour relations in India, where rigid employment laws have been blamed for a spate of recent strikes.

Here is a snapshot of some of the difficulties:

HIRING AND FIRING

India's labour laws, rated by the World Bank as among the most rigid, place strict limits on the number of people that can be hired and how they can be fired.

Prolonged labour unrest in the 1970s and 80s virtually wiped out the cotton textile industry in Maharashtra and jute and heavy engineering in West Bengal.

Government data for strikes this year is not available, but there is evidence they are on the rise as layoffs bite in a slowing economy.

Experts say more trouble is in store in India's public sector as the country looks to divest stakes in overstaffed state firms to bridge a yawning fiscal deficit.

The industrial dispute laws allow for firing of employees on grounds of indiscipline or non-performance, but a strong culture of trade unionism means such provisions can rarely be applied.

RIGHT TO FORM A UNION AND STRIKE

Investors have despaired over India's Trade Union Act of 1926, which grants the right to form a union and negotiate wages and fringe benefits, which analysts say raises costs and hurts competitiveness.

Indian laws do not allow unions in sectors such as IT and export-processing zones that help earn foreign exchange. But even in sectors such as IT, where layoffs have ticked up in a slowing economy, employees have tried to form unions.

Employees of public utilities and services such as hospitals, can go on strike with prior notice to the management.

A common form of protest by employees barred from a formal strike is to go on mass sick leave as in the case of Jet pilots. The Jet management has called the action a "simulated strike".

POLITICS

Political intervention is common, with unions generally affiliated to major parties and leaders often taking the side of striking workers to protect their vote base.

REPERCUSSIONS

Experts say the archaic labour laws will hurt businesses, unless the government overhauls them to also protect employers.

If strikes such as this one drag on or are replicated in other sectors such as IT and export-processing units, they could have a negative effect on foreign investment in India, experts say.