Govt may amend contract labour Act to ensure equal pay

Labour minister says huge difference of wages between regular and contract workers lead to unrest
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First Published: Wed, Oct 10 2012. 10 30 PM IST
Labour minister Mallikarjun Kharge.
Labour minister Mallikarjun Kharge.
New Delhi: The government is considering an amendment to the contract labour Act to ensure equal pay for all workers, permanent or temporary, labour minister Mallikarjun Kharge said on Wednesday.
Firms in India are increasingly adopting flexible staffing procedures and paying at least Rs.15,000 crore annually to temporary workers, according to a report released the same day by a group of human resource companies.
The wage differential between permanent and temporary employees has given rise to several outbreaks of labour strife, including violent clashes at the country’s biggest carmaker Maruti Suzuki India Ltd that led to the death of one company executive.
Labour problems occur “when the workers are not paid their due or exploited in terms of wages, hours of work, etc.,”, Kharge said. “Huge difference of wages between the regular workers and contract workers lead to cause of unrest.”
“The proposal to amend the Contract Labour (Regulation and Abolition) Act, 1970, to safeguard the interest of the contract workers in terms of wages and social security is under consideration,” he added, speaking at a function to release the report by the Indian Staffing Federation (ISF), an umbrella body of 30 leading human resource firms.
India is among the top five nations in flexi-staffing, according to the survey, said K. Pandia Rajan, ISF president.
The report predicts India’s temporary staffing industry will grow to about 9 million workers by 2025 from 1.3 million now. On an average, a temporary employee gets an annual pay of Rs.1.2 lakh, adding up to about Rs.15,000 crore, it said.
“Companies need flexibility to remain competitive and in the absence of the right environment that supports flexibility in an organized manner, work tends to go casual, thereby denying the employee a secure job,” Rajan said.
IFS urged the labour ministry to regulate the flexi-staffing industry.
“Due to a lack of regulation specific to this industry, there is a huge prevalence of unorganized players who are playing outside the ambit of labour laws,” said Rituparna Chakarborty, senior vice-president of staffing and training firm Teamlease Services India Pvt. Ltd.
Kharge said the labour ministry is also discussing legislation to ensure every worker gets equal social security benefits such as access to medical insurance and provident fund.
India has a workforce of 418 million people, of whom at least 361 million are in the unorganized sector, according to the ISF report.
Vipul Prakash, managing director of Gi Group, a multinational human resources company, suggested the labour ministry should mandate industries to spend around 2% of their revenue on skilling and reskilling of temporary workers to improve productivity.
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First Published: Wed, Oct 10 2012. 10 30 PM IST
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