New Delhi: After asking central ministries to come clean on contract workers, the government is now planning to make hiring of contract workers in private as well government sectors transparent.

As part of the plan, the labour ministry is proposing to make it mandatory to hire contract staff only through established agencies and ensure that staffing agencies deposit enough bank guarantee to safeguard workers in case a company closes down, according to two government officials and documents reviewed by Mint.

According to the plan, it will make staffing agencies accountable and make sure that they are licenced either by the central government or a state government. “In case a firm is supplying manpower to multiple companies in multiple states, it is required to take a central licence," said one of the two unnamed official cited above.

The second official, who also declined to be named said that the central licencing system is new and will reduce clutter from the staffing space while ensuring that such firms are accountable. Such licences will be renewed after a gap of every three year.

“It will curtail the fly-by-night contract labour suppliers and reduce the fear associated with the contract work as a form of employment," said the second official.

Rituparna Chakraborty, president of the Indian Staffing Federation, a federation of lead staffing firms said that they have been demanding central licencing and regulation to reduce the clutter in the staffing space. “It’s a good move and will have two benefits: only serious players will operate and two, the apprehension that contract jobs are not good will subside to some extent," she added.

The plan follows a labour ministry move last month when it had reached out to all the key ministries, including Railways, to disclose their staff strength, especially that of contract workers, to make a fair assessment of minimum wages currently paid.

The central labour commission has been meeting authorities from ministries and departments with bigger staff pools to prepare a factual report on the number of contract workers and their service conditions. While the move will allow the government to prepare a minimum wage plan as part of a broader wage code it is formulating, it may also help in it dealing with a possible uproar during the winter session of Parliament, Mint reported on 23 November.

Chakraborty said the perception about contract employment is that its quality is low and it does not come with required minimum wage or social security benefits. This is largely because of the clutter, and the prevailing system where any one can come and operate in the space. “Once you fix responsibility, staffing agencies will not dare to flout rules."

As per the plan, when a staffing agency gets a contract from a private or government firm, it has to keep the authorities either in the state or at the centre in the loop. This will also help in a fair assessment of the number of people working as contract workers in the country.