In a joint memorandum of Central Trade Unions, submitted to the Finance Minister, in February 2011, as part of the pre-budget consultation, union leaders have highlighted the inhuman exploitation of contract labourers "who died in industrial accidents, be it the BALCO chimney collapse, fires in Agra shoe companies, in Bhushan Steel or construction workers, including those employed in the prestigious Delhi Metro project and in the construction related activities of the Commonwealth games."
Trade unions observed that contractualisation and outsourcing have become so rampant in the private and public sector undertakings and government departments. Millions of workers are at present employed as contract workers in regular jobs, to perform work of a permanent nature. These workers are paid miserably low wages and have no social security benefits, thus creating a situation "where two types of workers work side by side in an enterprise, doing the same job but getting highly un equal wages and benefits, thereby creating rifts among the workers."
The Supreme Court recently deprecated the unfortunate state of affairs prevailing in the field of labour relations in the country wherein employers often resorted to contract employment and thereby curtailed statutory rights of workers. The Bench expressing its anguish said : “Labour statutes were meant to protect the employees/workers because it was realized that the employers and the employees are not on an equal bargaining position. Hence, protection of employees was required so that they may not be exploited.” The Bench further observed :”Globalisation/liberalization in the name of growth cannot be at the human cost of exploitation of workers.”
The recent labour unrest at Maruti Suzuki have been over better wages and working conditions or against management’s refusal to recognize the unions that workers say are more representative of their interest. And their demands appear genuine. Till a decade ago, temporary workers made about 15 per cent of the industry’s total labour force. That proportion has now gone upto 40 per cent or so. At Maruti plant a person on contract would typically get around Rs.6000 in hand every month, which is a third of the take-home for someone on the permanent rolls. No medical or casual leave is allowed and each day’s absence costs a worker Rs.1500, while even a minute’s delay in reaching the assembly line after his tea or lunch break costs him half a day’s wage.
There are various other issues relating to working conditions at Manesar plant, which the workers have been agitating for an independent union of their own for the past few months and have formed the Maruti Suzuki Employees’ Union(MSEU) with workers of the plant as its office-bearers. The management and Haryana’s labour department have refused to recognize the MSEU and negotiate with them.
Though Maruti has taken a tough stand saying it doesn’t understand what the actual grievance is, the issue brings India Inc’s relationship with contract workers into sharp focus. The issue is sensitive and nation has already seen violent example of this, when a few workers killed manager of a plant because he allegedly replaced permanent workers with ones on contract.
The Industrial Disputes Act prevents any establishment with more than 100 employees from undertaking layoffs even in downturns without obtaining government permission(which is seldom granted). Firms, therefore, prefers to keep their regular workforce as low as possible and hire casual workers to adjust the labour requirements to the ebb and flows of business cycle. It has created obvious inequalities in the shop floor between permanent employees and those on contract.
Union Minister for Labour and Employment Mallikarjun Kharge while speaking at the second World Social Security Summit organized by the International Social Security Association in Cape Town, last year, stated that around 430 million workers are employed in the unorganized sector out of a total work force of around 450 million. The Arjun Dasgupta Committee on employment showed that the informal economy accounted for more than 80 per cent of total employment and calculated that by 2017, more than 95 per cent of the work force would find jobs in the unorganized sector, a trend almost endorsed by the finding of the Economic Census for 2005.
The trade union leaders point out that the employees in the unorganized sector, despite comprising a majority of the working class in the country, mostly remain in low-paid insecure jobs, have little access to institutionalized social security and are most vulnerable to the negative impact of economic slowdowns in terms of job loss and wage cuts.
The Contract Labour(Regulation and Abolition) Act was originally enacted to regulate the practice of contract labour to avoid exploitation of sweated labour. Section 10 of the Act empowers the government to prohibit contract labour in certain situations at the discretion of the government. Though the formal system has not changed, employers have devised several managerial strategies to achieve labour flexibility and control over work process, as also get around labour power. Trade union leaders have highlighted these ‘labour reforms by stealth’ which include reduction in the number of regular workers via voluntary retirement scheme, labour re-allocation, transfers, multi-tasking, freeze on employment, idleness pay, increased use of contract labour, outsourcing, subcontracting and even job freeze.
As a result of deliberate managerial strategies, the employment of non-regular workers, especially contract workers has increased considerably in the last decade or so. Primary surveys of industries in the organized manufacturing sector across India show that the share of contract workers in total workers in total workers in the organized manufacturing industry in India has been rising. Economically, frontline states like Andhra Pradesh, Gujarat, Tamil Nadu and Maharashtra, which increased employment, did so by increasing the share of non-regular workers.
Recent findings also suggest that some of the key industries, such as cement, iron and steel, cotton textiles and jute, rely on contract labour for as many as four out of every five workers. In the past, contract workers were used in seasonal industries like sugar, where permanent employment cannot be provided for whole year to all workers.
New sectors such as IT and the rest of the services industry give only minimum rights to employees, key states such as Punjab, Hariyana and Uttar Pradesh take as long as three years to register new trade unions in these sectors. Many state governments have allowed IT and ITeS companies to self-certify their labour law compliance, in order to encourage more investments in their state.
According to labour historian Rana Behal, there will be more new sectors opening up in the coming days, where contract labour with peripheral rights will dominate. And there will be a noticeable decline in the organized sectors’ bargaining power too.
Evidence of exploitation of workforce is indicated by the fact that according to the Annual Survey of Industries(ASI) the money wages per worker increased by less than 6 per cent between 2004-05 and 2008-09 while the rate of inflation was higher, argues Vinitha Kumar, Advisor-Labour and Employment, Ministry of Labour and Employment, New Delhi(Business Line 22.06.2011)
Pro-corporate media frequently carry articles demanding labour reforms by amending the antiquated laws to enable hire and fire approach in the context of manufacturing growth,but unbridled labour exploitation will create explosive situation like the one at Manesar.
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