Watch: EY employee death: Do laws in India adequately protect the corporate workforce?

EY employee death: Do laws in India adequately protect the corporate workforce?

The tragic death of 26-year-old chartered accountant Anna Sebastian Perayil, who was employed at Ernst & Young—one of the “Big Four” accounting firms—has sparked a national outrage over exploitative corporate work environments.

A poignant letter from her mother, Anita Augustine, addressed to EY India Chairman Rajiv Memani, went viral on social media, accusing the company of overworking her daughter and condemning its toxic work culture. In the letter, she also alleged that no representatives from EY attended the funeral.

This tragic incident has also rekindled scrutiny of existing labour laws governing the white-collar workforce in India and whether reforms are required to curtail such exploitative workplace practices.

Currently, a host of central legislations govern the rights of private employees, including the Industrial Disputes Act, 1947, the Shops and Establishments Act, 1954, and the Factories Act, 1948, among others. However, white-collar employees are predominantly regulated by the contracts they sign upon employment, largely due to the ambiguities in the application of these laws.

There is also no standardised template for employment contracts mandated by these legislations, resulting in significant variation in contractual clauses across different companies. This lack of uniformity creates inconsistencies in the rights and obligations of employees, further complicating the regulatory landscape for white-collar workers. However, no contractual clause can contravene explicit legal provisions.

Historically, labour laws have been designed to protect the interests of blue-collar workers in factories and similar establishments, who possessed limited bargaining power. As a result, loopholes in these regulations are often exploited by multinational corporations (MNCs) and corporate firms to deny statutory benefits to employees. For instance, to qualify for benefits under the Industrial Disputes Act—such as layoff compensation, protection against wrongful dismissal, and safeguards against unfair labour practices—an employee must fall within the narrow definition of a “workman.”

Consequently, white-collar workers, often classified as managerial personnel in their contracts, typically do not meet this legal criterion. Companies often designate these individuals as ‘officers’ or ‘executives,’ thereby circumventing statutory protections and creating a legal grey area so to speak.