The Legal Framework of Employment Exchanges in India
- Law Offices of Bhavpreet Singh Dhatt
- Mar 6, 2024
- 5 min read
The employment exchanges, also known as Career Centres, are established by the Ministry of Labour and Employment to provide free public employment services. Article 1 of the International Labour Organisation (Employment Service) Convention, 1948, requires all the signatories to provide free public employment services[i].
The employment exchanges provide for the grant of employment to eligible persons who apply for it. The State/UT government controls employment services through a network of Employment Exchanges/Career Centres. For ensuring that vacancies were being compulsorily notified, the Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959 (“Act”) was enacted. Section 2(d)[ii] thereof defines “Employment Exchange” as, "any office or place established and maintained by the Government for the collection and furnishing of information, either by the keeping of registers or otherwise, respecting, persons who seek to engage employees, persons who seek employment, and vacancies to which persons seeking employment, may be appointed". This article discusses the legal framework of these establishments in India.
ESTABLISHMENT OF EMPLOYMENT EXCHANGES:
The employment services in India came into existence due to post-war demobilisation. The scope of employment services extended gradually and made categories of applicants in employment exchanges open to all. As per the provisions of the ILO (Employment Service) Convention, 1948, the Government of India is mandated to provide for:
A free Public Employment Service (PES);
National system of employment offices under a national authority; and
Development of Employment Service Policy & Procedure through a consultative process[iii].
The States/UT have direct authority over the financial control and the performance of functions of employment exchanges. The objective of employment exchanges is to provide employment assistance services such as registration of job seekers, collection of vacancies from enterprises, submission of job-seekers against the notified vacancies, campus recruitment, dissemination of information, vocational & counselling guidance, etc. and ensure facilitation thereof[iv].
Based on the information received from State/UT Directorates/Commissioners of Employment, an E-Directory is prepared, which furnishes information to the Employment Officers and other stakeholders. The Directorate General of Employment is vested with the responsibility of development of programmes at the national level, particularly in the area concerning uniform policies, standards and procedures. The Directorate General of Employment is headed by the Additional Secretary (Labour & Employment) and Director General of Employment.
The number of persons registering with employment exchanges has fluctuated over the past decade. It increased from 61.86 lakhs in 2010 to 97.22 lakhs in 2012, then declined to 20.73 lakhs in 2020. During 2016-17, the decline in registrations was 33%, and during COVID-19, it was around 40%. However, the year 2021 witnessed a noteworthy increase of 55% in registrations. Despite a decline observed in placements offered through these exchanges between 2017 and 2020, they have experienced a remarkable growth of over 60% in 2021. Moreover, the number of notified vacancies has escalated by 97% in 2021[v] which demonstrates the continuing relevance of employment exchanges in contemporary times.
All persons, irrespective of whether they are employed or unemployed, are entitled to have their names included, since the objective of employment exchanges is to provide better employment opportunities that are relevant to their qualifications. As a registered applicant, the candidate is eligible for sponsorship against notified vacancies based on their qualification, age, category, and other relevant factors. Additionally, they are eligible for training and coaching under different government schemes and also receive career guidance for self-employment.
THE EMPLOYMENT EXCHANGES (COMPULSORY NOTIFICATION OF VACANCIES) ACT, 1959:
The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959, was enacted by the Parliament to, ”provide for the compulsory notification of vacancies to employment exchanges”.
The Act does not apply to all vacancies in the public sector. The exclusions are agriculture, domestic service, unskilled office work, employment connected with the staff of Parliament, and offices requiring employment for less than three months[vi].
The Act provides for the publication of a notification by all employers informing the employment exchanges of any vacancy that has occurred. However, the issuance of such a notification does not obligate employers to recruit exclusively from amongst candidates sponsored by an employment exchange[vii].
The employment exchanges are required to furnish complete information and returns regarding the vacancies from all employers under their jurisdiction[viii]. The Act authorises a government officer to access all relevant records, including information regarding vacancies[ix]. Any employer who fails to notify the employment exchange of a vacancy or fails to provide relevant information is liable for being penalised[x].
Section 10 confers rule-making power in the Central Government[xi]. In exercise of such powers, the Central Government had enacted the Employment Exchanges (Compulsory Notification of Vacancies) Rules, 1960 (“Rules”). The Rules list out the vacancies which are to be notified to employment exchanges[xii], and prescribe the form and manner of notification of vacancies[xiii], the time limit for notification of vacancies[xiv], the time and the form in which quarterly returns of the employer are to be submitted[xv]. Further, the Rules authorise the Director of Employment and Training to exercise the power to call for records under Section 6 of the Act[xvi].
NOTABLE JUDGMENTS ON EMPLOYMENT EXCHANGES:
In Union of India v. N. Hargobal[xvii], the Supreme Court held that the Act does not compel employers to mandatorily recruit candidates through employment exchanges. The purpose of the Act is to provide the candidate with a better opportunity of getting selected and not having to apply in every sector. However, ‘in the absence of a better method of recruitment’, the restriction that employment in government departments should be made through Employment Exchanges does not violate Articles 14 and 16 of the Constitution.
The expression ‘in the absence of a better method of recruitment’ was subsequently discussed in Exercise Superintendent Malkapatnam, Krishna District v. K.B.N. Visweshwara Rao and others[xviii], wherein it was held that an employer must mandatorily intimate the employment exchange of a vacancy, publicise it through newspaper publications, radio, television, etc., and display circulars on the notice boards. The Supreme Court observed that proper dissemination of information would result in fair play and an equal opportunity for all eligible candidates.
The Full Bench of Madras High Court in R. Sivakumar v. Ramanathapuram Mavatta P.E. Asiriyargal Sangam[xix] held that registration with the Employment Exchanges would not disentitle such persons from employments to which they were otherwise eligible, since any such restriction would offend Articles 14 and 16 of the Constitution. The purpose of employment exchanges was to provide an equal opportunity of being considered for a post regardless of the person’s employment status. A person employed in the private sector or even a government employee could be registered in employment exchanges as the employer's primary motive is to recruit a suitable and qualified person for a post.
I ILO (Employment Service) Convention, 1948 (No. 88), Article 1
[ii] Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959, (§) 2(d)
[vi] Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959, (§) 3
[vii] Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959, (§) 4
[viii] Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959, (§) 5
[ix] Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959, (§) 6
[x] Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959, (§) 7
[xi] Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959, (§) 10
[xii] Employment Exchanges (Compulsory Notification of Vacancies) Rules, 1960, Rule 3
[xiii] Employment Exchanges (Compulsory Notification of Vacancies) Rules, 1960, Rule 4
[xiv] Employment Exchanges (Compulsory Notification of Vacancies) Rules, 1960, Rule 5
[xv] Employment Exchanges (Compulsory Notification of Vacancies) Rules, 1960, Rule 6
[xvi] Employment Exchanges (Compulsory Notification of Vacancies) Rules, 1960, Rule 7
[xvii] Union of India v. N. Hargobal, (1987) 3 SCC 308
[xviii] Exercise Superintendent Malkapatnam, Krishna District v. K.B.N. Visweshwara Rao and others, (1996) 6 SCC 216
[xix] R. Sivakumar v. Ramanathapuram Mavatta P.E. Asiriyargal Sangam, 2007 (15) SCT 652
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