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As the Rajasthan government begins to reform its labour laws, industry experts said immediate changes were needed in rules for contract workers.
Rituparna Chakraborty, president, Indian Staffing Federation, said the contract labour rules should recognise the tripartite relationship among the worker, the contractor and the company. “Since only a bipartite relationship is recognised, there are fears of misuse because the role of each party is not well defined,” she said.
Chakraborty said India had about 144 labour laws and laws differed in 29 states and seven union territories. These include laws on minimum wages, contract labour, industrial disputes, and provident fund, with different levels of central and state jurisdiction. Labour is in the Constitution’s concurrent list, allowing the Centre and state governments to legislate on it. Chakraborty suggested labour laws should be clubbed with sections social security, health insurance, compensation and wages.
Moreover, India follows the tradition of common law, which includes case laws from different court rulings. Over time, these case laws have attained new meanings.
“There is no benchmark for minimum wages in India. In a big automobile company a casual worker could be paid Rs 7,000-8,000 a month, whereas the same person could earn Rs 4,000 in a smaller company. Since rules vary across states, it is difficult to achieve a common standard,” said a New Delhi-based labour rights lawyer who did not wish to be named.
The Vasundhara Raje government in Rajasthan has cleared three crucial amendments to its labour laws. In the Industrial Disputes Act, the government’s permission will not be required for retrenchment of up to 300 workers, up from 100 workers now. To be called a representative union in an organisation, it would need 30 per cent of the workers, up from 15 per cent. And the Contract Labour Act will be applicable to companies with more than 50 workers, up from 20.
In the Factories Act, now applicable to units with over 10 workers with power and 20 without power, the amendments raise the thresholds to 20 and 40, respectively.
Trade unions have made it clear they will oppose these changes. If they are implemented nationally, as the Bharatiya Janata Party (BJP) is planning, experts said many companies would fall below out of the law’s ambit, leading to a rise in labour right violations.
Sharit Bhowmik, ICSSR national fellow at the School of Management and Labour Studies in the Tata Institute of Social Sciences, said in 1996-97 when the Shiv Sena-BJP government in Maharashtra had proposed to raise the retrenchment limit in its Industrial Disputes Act, “we found about 78 per cent of the factories in the state would fall out of the ambit of the law. Now, the number would be much larger,” he said.
Amending labour laws as proposed by Rajasthan would reduce job security, he said and pointed out existent laws only covered organised labour.
Since intermediaries are not regulated contract workers are vulnerable, union leaders said. Most job “agencies” take away 40-45 per cent of a worker’s wages, they added.
A senior trade union leader who did not wish to be named said, “If these reforms are implemented, labour will be retrenched at the free will of the employer. Hire and fire policies will become an everyday affair in factories.”
Jane Cox, a labour rights lawyer, said real reform would abolish the contract labour system. “Contract workers have no security and get a fraction of the wages and benefits of permanent labour. Permanency encourages efficiency,” she said.
The Indian Staffing Federation said the temporary or flexi-staffing industry in India was growing at 18-20 per cent a year and this trend was likely to continue. There are around 1.3 million temporary workers in the organised sector.
RULE BOOK
- India had about 144 labour laws and these are different in the 29 states and seven union territories
- These include laws on minimum wages, contract labour, industrial disputes, and provident fund, with different levels of central and state jurisdiction
