iscontractlabour theproblem orthesolution? cb- 27 july 2012.pdf · iscontractlabour theproblem...

Is contract labour the problem or the solution?Following the murder at Maruti's Manesar plant.the debate over the plight of lndia's contract labourers has come to the fore.

Most argue that India's labour laws need a retook, while others say the violence has nothinq to do with the nature of employment.

" .There is an increased inci-

dence of deployment of con-tractual labour by company

managements because resorting tothis reduces labour costs, In India,contractual workers get only a quar-terof whatregularworkersare paid,Hence, contractual labour' is un-doubtedly a major reason for the in-creasing labour unrest-even inManesar where the riots and killinghappened, This incident is not par-ticular to Maruti because not onlythe private sector but even govern-ment departments and public sectorundertakings have resorted to.con-tractual labour, However, the" rea-sons behind the incident at Manesarwere many, including the fact thatworkers were not allowed to form aunion of their choice,

A study by the National LabourInstitu te says that close to 55 % of theworkforce Is on contract and high-lights how poorly they are paid. Wehave pressed the government toamend the Contract Labour Act sothat they are paid the minimumwages of the industry where theywork. This is important becauseeven the PSUs don't follow this, andinstead pay the minimum wages setby the respective states, 'This is why contract workers are

a dissatisfied lot. It is difficult forthem to sustain themselves. The sit-uation is similar in other parts ofthe world, European countries pro-vided social security benefits totheir workers, but these are alsobeing curtailed,In India, contract workers are em-

ployed for six months, after which anew batch replaces them and this cy-cle goes on, So, they don't get workall year round, Noweven the govern-ment has frozen fresh appointmentsand has started recruiting workers011 contract employment with low

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'nonsj in 'market conditions, -the, •)~b(;lUrJl!':V't;r~ew~~k In inqia dis-, courages'flexlblnbr and' exit in the

use Of labow. This is why the abilityto use contract labour provides awin-wtristtuatton for both sides.It is important to' understand that

contract workers; are protected un-der' several: pl'oHsions of, labour.laws:,While the~ may be c3hipanyan4.~,ID!ll1sP~c,iflc,Vil.riatf,~~.;tp.Im-I>lemen:,ta,!ion'~,cross.the co '_, it, will be presumptive to as~_ at, contractlabour isthe cai -,' our, mirest.' There are ~irtltri' ies

i-i, wiioha\;~ffiaIiag"th'~" ceDI'both typJ~oHrri ",.'.- ar'iind'c6ntriiC;('" ~ areUsuaJIy'ci.tJ.·'L elpilie'em!5ioyti€stl{ e emp1dv~rs.

'!"~''''~;~ 'f·r.;:l'::"~; "?J':"\". 1..;,.~I{'i'~> VIOlence;', ,er'ltfiapt>erts,in-.

, side 'the prehlise's or outside it; is a'.'lawand order" issue and not anj'in-dustrlal;re~~an.S'i iSsue~We:h~veto'~~e·~!;!t~~,#~peW&Sthatare pushed 'to"ll1ldinstigated to un- ,leash Viofence; this is hot necilsSilrllY ,based'dn llil!fnature" of'tJie employ-

ganisedsector workers, incremental inel)t;'::fuf~:gtuli.ies have indicatedaccretions are actually higher in the that.contract lab31!t,iS 'a soclal-phe-private sector. As against 'a labour' , homenon,fli.1if.ilrlngS'rn~inployabili-force of, 470million in 2009-10, only , ty, flexibillty and spectallsation, en-15,60/0 had regular wage employ,' abllrigindu~trial·cbmpet!tlv.eness,ment/salartedworkwhtlaaboutone-: -.'Cll'stro ' '", atac6nVi!rgencethtrdwascasual labourandoverhajf I, needstQ'~Q' '~~plioiigaps'was self-employed, This has deprived thai exiSt' ~" , .ritfiu;f1abii'ilr.It is .largesections of society of the bene: necessary t&WV,isit~.e~~&.)ny.rs'infits of work security and emolu- India. CUrrentlY,we hiivti:ovet 50 Ceil-ments.leading to social rifts. 'traiJiiws:and tt.any mofe!~tAtelaws,One must appreciate that the abil- Theterm,Wii:ge~'hasbeen defined'in 11

ity to use contract labour enables a 'differentwltysUnder'11'differentlaws,very large part of the labour force, Such ratlonalisationcan bring aboutwho would have otherwise gone therequiredconvergenceamongstthewithout any employment or Iiveli- stajteho~~E!bi~d can truly leveragehood options, tobeemployed. Oneof the oppo!iun.lty that .contract labourthe reasons for the preference for Can offer fot large-scale employmentcontract labour is that whi!e compe- generatiomn thecountrytition and globalisation havebrought in their trail severefluctua-

INDUSTRY USING CONTRACTLABOUR TO LOWER COSTS IS A

MAJOR REASQN FORTHEINCREASING LABOUR UNREST.

AMENDiNG THE CONTRACTLABOUR ACT WILL ENSURE

INDUSTRY-SPECIFIC MINIMUMWAGES TO THESE WORKERS EVENIF JOB SECURITY IS NOT ASSURED

consolidated pay. ,If the Contract 'Labour Act is

amended, It will ensure minimum.wages of the industry to these work-ers even if it does not assure themjob security. Another important fac-tor is that MNCs do not tolerate theformation of trade unions.and evenif they do, the unions remain under'thetr control and most of them be-come puppet unions, 'In the case of Maruti, the new

union was registered with the bless,ings of the management in Decem-ber 2011,The union was recognised,but the management's negativeattitude led to the release of thiscumulative anger,Of the total labour force, only7%

is in the organlsed sector in India,especially' in automobile and con-

tit- It.

struction industries, and other man-ufacturing and service sectors, Thelaw permits contract workers 'toform unions or join any union ofregular-workers, but they are unableto do sodue to repression, victimisa-tion and unemployment.The Joint Action Committee

formed by all central trade unionshas urged the governmen t to amendthe law so that no,ooo can liegiven as minimum wages, besidesassured pension and suitable provi-sions to protect the interest, ofcontract workers,If these recommendations are ac-

cepted, theincidenceof labour unrestmight reduce to an extent in future, •

The author is secretary, All IndiaTrade Union Congress

•

While the number of con-,tract workers has gone upin recent years, the num-

bers of strikes and lockouts Is on thedecrease. Hence, it is quite unlikelythat industrial unrest is related toincreased contractualisation, How-ever, the violent stand-off at theMaruti Suzuki Ltd factory at Mane-sar wasunprecedented, Assault andbrutality under any circumstancescannot be condoned.andthe loss oflife is inexcusable, ,The larger issue for industrial un-

rest is the labour environment in In-dia.Tt is unfortunate that economicgrowth in:india has not been accorn-panled by commensurate employ-ment creation in the organised see-tor. Although the public sectoraccounts for the lion's share of or,

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ONE MUST APPRECIATETHAT THE ABILITY TOUSE CONTRACT LABOURENABLES A VERY LARGE PARTOFTHE LABOUR FORCE, WHOWOULD HAVE OTHERWISEGONE WITHOUT ANYEMPLOYMENT OR LIVELIHOOD "OPTIONS, TO BE EMPLOYED

, Theauttior isdirector general, CII•• New Delhi