The document discusses contract labor in India. It notes that contract workers are hired by contractors and perform work for establishments. However, contract labor should not be used for permanent, necessary work. The Contract Labor Act of 1970 regulates and aims to abolish contract labor in some cases. It requires establishments and contractors with over 20 workers to follow rules on wages, working conditions, and amenities for contract laborers. There is debate around balancing flexibility for employers with protections for contract workers.
2. A workman is deemed to be employed as
Contract Labour when he is hired in
connection with the work of an establishment
by or through a contractor.
Contract workmen are indirect employees;
persons who are hired, supervised and
remunerated by a contractor who, in turn, is
compensated by the establishment.
3. Contract labour should not be employed where
(a)The work is perennial and must go on
from day to day;
(b) The work is incidental to and necessary
for the work of the factory;
(c) The work is sufficient to employ
considerable number of whole time
workmen; and
(d) The work is being done in most concerns
through regular workmen.
4. The Contract Labour (Regulation and Abolition)
Act, 1970 Act and the Contract Labour
(Regulation and Abolition) Central Rules, 1971
came into force on 10.2.71
5. Main objective of the Contract Labour (Regulation
& Abolition) Act, 1970 is two fold:-
i) To regulate the employment of Contract
Labour in certain establishments; and
ii) To provide for its abolition in certain
circumstances.
In order to achieve above objectives, the Act
lays down various requirements with regard to
hiring of Contract Labour, its wages &
earnings, working conditions etc.
6. Every industry engaging 20 or more workers
on contract basis.
Every contractor engaging 20 or more
workers.
7. Contract is awarded by the concerned department
/commercial department.
Concerned deptt. send a job request to the purchase
deptt.
Purchase deptt. go through by the following steps.
I) Enquiry
II) Offers
III Comparative Statement
IV)Negotiation
V)Award the Contract
8. Work Order is given by the concerned deptt. to
the Contractor.
Contractors fill in an application Form for
engaging contract labour every month /new
entry.
Concerned department recommends the no. of
labourers.
Safety department imparts training to the
labourers.
9. The Act has laid down certain amenities to be
provided by the contractor to the contract
labour for establishment of Canteens and rest
rooms; arrangements for sufficient supply of
wholesome drinking water, washing facilities
and first aid facilities have been made
obligatory.
10. The contractor is required to pay wages and a
duty is cast on him to ensure disbursement of
wages in the presence of the authorised
representative of the Principal Employer. In
case of failure on the part of the contractor to
pay wages either in part or in full, the
Principal Employer is liable to pay the same.
11. Since 1970 when the Contract Labour (Regulation and
Abolition) Act was enacted the economy has undergone a
sea-change, from an era of protectionism to
liberalisation, from restricted domestic competition to
international competitiveness.
The system of contract labour offers tremendous
opportunities for employment and allows the employers
flexibility to choose what is best for them. This helps
improve productivity and service competitiveness.
The Act should be made applicable only to the main and
core activities of the establishment in so far as abolition of
contract labour system is concerned.
12. Supportive or allied activities of an establishment like
maintenance, house keeping should be out sourced and
the Act should only provide for regulating the working
conditions and wages.
The Principal Employer should, however, have to ensure
payment of wages to contract labour as laid down under
the law in force as also other basic amenities and social
security benefits.
Work requiring specialised skills unavailable within the
establishment.
If the contract labour system, which is cost effective, is not
allowed to continue, industries may go in for technological
restructuring with less number of workers leading to
reduction in employment.
13. The Trade Unions are totally opposed to then idea of contracting of
services and in jobswhich are perennial in nature for following reasons:-
Reduction of regular employment;
The contract labour generally belong to weaker sections of the society
and will be deprived of the benefits that accrue to regular employees.
Efficiency will decrease as establishment will be deprived of experienced
staff.
Coordination of activities of large number of contractors/sub-contractors
will prove to be more time consuming and costly than in house activity.
What is required is not privatisation but in house improvements and
restructuring.
Out sourcing will only lead to a type of employment founded on
discrimination and exploitation of contract labour in regard to wages
paid, working conditions, etc.
14. A contract worker at Maruti Suzuki's plant in
Manesar, Haryana. for the last two years is
paid Rs 7,200 per month. on the same
assembly line doing the same job, a
permanent Maruti employee earns Rs 18,000
per month.
15.
At the Omax Auto plant near
Dharuhera, Haryana, a contract worker for
the last 19 years, earns Rs 5,900 a month. But
permanent employee gets Rs 12,000. Omax
Auto manufactures two wheeler parts for
market leader Hero Honda.
16. Managing Director of the Dharuhera-based Rico Auto
Industries. Arvind Kapur says
"We cannot afford to keep all the employees
throughout the year," "There are ups and downs in the
business." Rico Auto, which also has a total workforce
of around 3,000, including contract workers, makes
gears and oil pumps for Maruti, and gear shift drums
for two-wheeler companies.
It saw a 45-day strike in October 2010, with the union
insisting on limited use of contract workers and equal
pay for them."The market is very competitive," adds
Kapur. "Using contract labour helps us to manage
costs."
17. In the absence of any labour law reforms over
the past so many years, the courts have taken
contradictory positions in the recent past.
One judgement said priority must be given to
absorption of contract labour whenever a
new position comes up, while another said no
such guarantee can be given by a company
because the terms of employment itself talk
about a fixed contract.
