Contract Labour

STRANGE IT MAY SEEM, FOREIGN investors and their domestic counterparts as well find Indian labour Laws heavily biased in favour of workers, not industrialists. And they identify it as the sole reason for slow growth of the economy. The Reverse is, however, true. Most of the laws related to industrial relations were enacted against the backdrop of World War II to fuel Britain’s war economy. As a result some concessions, though inadequate compared to western standards, were doled out to labourers toiling in those days under Dickensonian industrial culture. The laws have outdated themselves in the sense that they are no answer to increasing labour-bashing stemming from globalisation and neo-liberal onslaught in every sector of the economy. Not that contract labour is a recent phenomenon. It has been there since the early days of industrialisation. Some of the top business houses of ‘modern’ India were originally big labour contractors of the Britons. But contractual practice was restricted to labour-intensive manufacturing, port & dock, construction or mainly concentrated in hundreds of odd jobs requiring unskilled labour. Of late, contractual practice is sweeping the entire spectrum of the economy. Now educated and skilled youth are being increasingly recruited to by-pass labour laws involving some social security.

Right now private companies are hiring contract workers in large numbers, to dodge India’s ‘‘inflexible’’ labour laws. Of India’s top companies, contract employees account for 34% of the total workforce. Contract workers have a share of 46% in industry, and 8.8% of the services sector, covering software, finance and telecom companies. Software and financial services have a relatively high level of regular employees, amongst the services sector. Software requires specialized skills and banking functions in a regulatory format. Even then telecom has a high share of 46% of contract workers. Labour intensive jobs and current labour laws which are ‘advantageous’ to workers, have resulted in a high share of temporary workers in industry. So say the captains of the industry wherever labour unrest is high or where the services division recruits temporary workers on a project basis, temporary workers account for a higher share, viz 47% in the automobile industry, 54% in energy and utilities, 52% in cement and nearly 75% in the large engineering and construction firms. The global level of contract employees is 5% to 10%. High level of contract workers affects employer investment in human capital. There exists a higher level of casual workers among smaller firms in trade.

The recent trend in engaging more and more contract workers in almost all perennial nature of jobs, has made labour-organising more difficult than ever before. It was somewhat easy to organise unskilled contract workers for trade union rights and other statutory benefits but it is not that easy to organise ‘cyber coolies’ though they are skilled and well-educated even for right to union.

The Left has stopped talking about ‘hire and fire at will’ policy of employers. Nor do they offer any comprehensive labour law on their own to empower workers. Then mere farming laws are not enough unless discrepancies crept into older laws are being substantially addressed. American companies follow one labour standard in their country but they completely ignore minimum human dignity in India and elsewhere when they deal with labour. If massive contractual practice is not challenged in the streets, whatever remains of the organised sector with a better bargaining power for employees will decline further. The tragedy is that Contract Labour (Abolition and Regulation) Act of 1972 is of no use to fight massive contractualisation of high-skill perennial nature of jobs.

Vol. 46, No. 43, May 4 -10, 2014