Contract Work: NTUI statement

If there were an area of employment relationships that is most perverse from the perspective of the emergent idea of human right in the workplace, in most probability the contract workers in the organised sector would fit the bill. The underlying political notion of universality of equality, engraved into the Indian constitution, has been progressively made into legal entitlements in employment relationships through various legislations. Within a same class of employment in an establishment viz. within a factory, equality of treatment and entitlement was accepted and became a basis of both, discourse and struggle. Even the Contract Labour Act is founded on progressive realisation of this universality.

Successive judgments of High Courts and the Supreme Court have in the past few years violated this underlying political notion and strengthened the need and demand of capital to keep labour unregulated.

The large majority of contract workers are from among disadvantaged sections of the society. Scheduled caste employees and women find themselves employed largely as contract labour. The Sixth Pay Commission recommendations for Central Government Employees singles out Class IV employment for outsourcing, effectively implying that the lowest class of employment in the government and public sector will get contractualised. Class IV employment has traditionally been the only avenue available to candidates from the scheduled castes for a decent tenured employment. Legal support to abolition of contract labour, as envisaged under the Contract Labour Act stands compromised with recent judgments of the Supreme Court and other courts. Today, when the economy is in a severe downturn, the first workers to lose employment are contract workers.

Contract workers have no security of employment. They have no real recourse to social security benefits, despite the Contract Labour Act clearly specifying social security coverage of contract workers. Wages to contract employment is generally limited to the statutory Minimum Wage. The workers get wages less than one fourth wages to tenured workers in similar employment.

The New Trade Union Initiative (NTUI) represents over 2 hundred thousand workers in contract work, from all sectors of employment, including the public sector, private manufacturing, service sector, government employment in municipal work, anganwadi work, etc. NTUI, while affirming the urgent requirement for reforms in contract labour, demands:

  • The Contract Labour Act is strictly implemented, for the progressive abolition of contract employment, and absorption of contract workers in perennial employment as tenured workers. In the context, NTUI urges the Labour Ministry to immediately constitute a Commission to examine the current situation of contract workers.
  • A separate review of employment of contract workers, and implementation of the Contract Labour Act in the public sector. It refers to the ruling of the Supreme Court in 1999 on the Gujarat Electricity Board case recommending such a review in the public sector.
  • Wages to contract workers should be regulated strictly on the basis of equal wages for equal work. On the same principle, minimum wages for contract workers should be fixed as the lowest wages to tenured workers in the industry.
  • Labour Commissioners should be mandated under the powers of Clause 5 of the Contract Labour Act to declare minimum wages for contract labour in the industry. Industry Wage Boards for contract workers should be declared for this purpose.
  • The system of automatic licensing of contractors should be immediately stopped. Clear guidelines should be specified for qualification of contractors. Contractors convicted for basic labour law violations, including non-payment of minimum wages, should be debarred from recognition under the Act.
  • License to contractors for the same work process or contract should not be for more than a year. This will help in controlling sham contracts in situations of work of permanent nature.
  • In all cases of contract employment continuing for a year or more, the principle employer should be mandated to maintain a sub account for Provident Fund of contract workers.
  • Labour cooperatives of contract workers should be given preference in employing workers on contract. The labour cooperatives should be given a 15% price preference, as is the norm for business with other cooperatives. Even in a situation where a labour cooperative is not the lowest bidder, the cooperative should be given the first option of refusal for taking up the contract at the accepted bid.
  • Seniority of contract labour should be recognized for preference in employment as tenured workers in any company.