The Exclusionary Labour Law Framework in Mergers and Acquisitions: Implications for Marginalized and Outcaste Labour in India

Mergers and acquisitions are business transactions in which companies merge or one company acquires another to increase growth and profits. But these processes usually have a negative impact on the workers. Labour laws in India meant to safeguard workers from exploitation, insecurity and loss of wages are inadequate, particularly for the marginalised groups including the outcaste communities. Outcaste labour is a term describing those who have traditionally been marginalised, socially excluded and stigmatised by formal labour systems on the basis of caste and related structural discrimination. This paper analyses the reason behind the weak protection of marginalised and outcaste workers in the context of merger and acquisition of firms under the framework of Indian labour law. In India these workers are very commonly employed as contract or informal labour, and have low pay, little legal redress and little job security. In mergers and acquisitions, their vulnerability is accentuated because Industrial Disputes Act, 1947 and Contract Labour (Regulation and Abolition) Act, 1970 offer limited protection. The Companies Act, 2013 provides for schemes of amalgamation and arrangement under sections 230 to 232 requires employee impact disclosure in amalgamations, but gives no real protection to contract or informal workers. This paper reviews the existing jurisprudence, labour law and socio-legal literature to seek out such gaps and to suggest measures for change, such as making protection mandatory, improving enforcement, and increasing awareness of caste-based differences in labour outcomes.