With the distinction between core and peripheral work blurring, it is time to think of how to provide better wages and social security to contract labour.
Manish Sabharwal,
Chairman,
Teamlease Services
Definitions like core/ non-core are aimed at preserving the labour aristocracy. They are friendly fire that hurt the very people they masquerade to protect
The notion that legislation or regulators should decide what is a core or perennial activity for a company is intrusive, dysfunctional and outdated. Static notions of corporate strategy and organisational design do not recognise a change in the employment contract from ‘mai baap’ to a ‘taxicab’ relationship and a deconstruction that has blurred organisational boundaries. In the 1950s, William Whyte wrote a book called Organization Man whose thesis was that if you were loyal for life, learnt all aspects of a company, and were a man, the company would keep you for life. This change is strongly evident at one of the companies he modelled his book on — IBM. The company recently said that 50 per cent of IBM employees have spent less than two years with them, 40 per cent do not come to an IBM office everyday and 30 per cent are women.
The notion that companies should only use people or process outsourcing for non-core or episodic work is totally subjective. Is operating a telecom network a core and perennial activity for a telecom company? Bharti and IBM don’t think so. Is security core and perennial to operating an airport? Airports Authority of India and Central Industrial Security Force don’t think so. Is pension administration core and perennial to a pension plan? Pension Fund Regulatory and Development Authority and National Securities Depository Limited don’t think so. Is a tax information network core and perennial for tax collection? Obviously, the ministry of finance and NSDL don’t think so. I could go on but the outsourcing of people and processes have made static definitions of organisations irrelevant.
India’s archaic labour laws are now a weapon for trade unions. The partition between core and perennial work exists only in the cerebral cortex of trade union leaders trying to keep labour market outsiders (less skilled, less educated, people from small towns, women, etc) out of organised employment. The question of organised versus unorganised employment is more important that the temporary/ permanent or core/ perennial issue. The Contract Labour Act has failed because only 300,000 of the 80 million people on contract today are in the organised sector.
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The public policy case for organised contract or fixed-term jobs is strong. Most contract workers are labour market outsiders for whom temporary jobs have a powerful “apprenticeship effect”. Temporary jobs reduce frictional unemployment by providing labour market liquidity and substituting for the shameful performance of employment exchanges (who have 2 lakh jobs for the 4 crore registered last year). These jobs are a non-fiscal market substitute for social security and unemployment insurance. So, first we must ignore calls of self-interest by organised labour to block contract labour because a job is better than no job. Then we must rapidly review the regulatory cholesterol that breeds contract employment in the unorganised sector.
R A Mittal, National Secretary, Hind Mazdoor Sabha
Contract labour is now a reality and the courts’ stance is also changing. It’s time then to ensure better wages and security for these contract workers
The argument so far has been that contract labour should be used where work is not of a regular nature, where work orders change.So to adjust the number of workers and to be able to increase them as demand grows, you depend on contract workers. But now, employers have been using contract labour on a regular basis, even when there is no fluctuation in the nature of work. The distinction between core sector and non-core sector is also being violated.
The recent agitation in Italian company, Graziano Transmissioni, is a case in point. The company hired 400 contract workers this year as a substitute for permanent workers who were agitating for their right to form a union.
The problem is that the Contract Labour Regulation and Abolition Act, 1970 is not being followed by any company today. The trend has got a fillip from the judiciary itself. The law says that any worker on a job for more than 120 days should be regularised. But in the Steel Authority of India (SAIL) judgment of 2001, the Supreme Court reversed its own judgment in an Air India case a couple of years prior to this on the rights of contract labour. While the Air India judgment said contract labour had to be absorbed, the SAIL judgment stated that contract workers would have no right to automatic absorption. They would only have a right to a preference in employment if permanent workers were to be employed to fill in the vacancies created by the removal of the contract workers. In fact, the Maharashtra government has made a law where contract workers need to be considered first when regular vacancies emerge.
Given the court’s stance, there is no option left but to accept contract labour as a reality and work towards empowering workers.
If a contract labourer is made to do regular work, he must be provided social security, better wages and all other benefits at par with regular workers. If the labourer can be fired any day, then the employer should be made responsible for equipping each worker with skills and training that will enable him to find work when he loses his job.
Also, even if a labourer works for a single day, he should be entitled to Provident Fund and Employees State Insurance. At some stage, the contract worker should also be considered eligible for regularisation. Maybe after two to three years of work. The current law does not prohibit contract labourers from organising and they should be allowed to seek their rights in an organised manner. The law is now redundant as far as the ban on contract labour is concerned. But is is still valid in the social security benefits it seeks for contract labour. Unfortunately, even these are being violated.
A government order is enough to change any law today. The latest instance is that of the order by the Uttar Pradesh government last week, setting up an industrial relations unit which will make labour officials report to the police and civil administration heads. Where does that leave the workers?
(As told to Sreelatha Menon)