Industrial Relations paradigm in India had dramatically changed following the adaptation of free market policy in the early nineties. With the dawn of liberalization, privatization and globalization (LPG), the country is, by and large, able to preserve a sound and positive industrial relations climate. This is apparent from the statistical figures of Union Government’s Labour Bureau, which exhibits drastic decline of industrial disputes from 1,825 in 1990 to 403 in 2016, and India being the third most preferred global investment destination.
‘Liberalization’ and ‘Globalization’ introduced change of business environment, and increased competition among industries for survival. Potential market capacity and availability of workforce lured many MNC’s, represents the best brands of the world, to set up their offices in India, giving a tough competition to their counterparts. To compete in this customer driven market economy, industries requires flexibility in managing manpower to address occasional upsurge or slowdown in demand. But the archaic and rigid Indian labour laws, which were enacted 8 – 4 decades back, restricting right-sizing of manpower, are creating hurdles in smooth functioning of industries.
These factors are tending industries to hire more and more numbers of contract labours to have greater flexibility to adjust the number of workforce
based on economic efficiency, better utilization of resources, optimization of profit and bringing cost effectiveness, despite the of risk of lower worker loyalties and lousy pay. But primarily we need to know, who is a ‘Contract Labour’? ‘Contract Labour’ can be distinguished from ‘direct labour’ in terms of employment relationship with the principal establishment and the method of wage payment. A workman is deemed to be a contract labour when he/she is hired in connection with the work or “contract for service” of an establishment by or through a contractor. They are indirect employees; persons who are hired,
supervised and remunerated by a contractor who, in turn is compensated by the establishment.
In either form, contract labour is neither borne on payroll or muster roll or wages paid directly to the labour. During the recent years, employment of contract labour has become a contentious issue and a key reason for the increasing labour unrest. While strikes and protests are common global phenomena but violence and killing is not at all justifiable under any circumstances as it is a pure case of disruption of law and order situation. This surge in violence disturbing industrial relations has become a concerning situation for all. On September 22, 2008 the CEO of Graziano Transmission India, the Indian unit of an Italian auto component maker, was clubbed to death by a group of 200 workers. In another incidents, in March 2011, a Deputy General Manager (Operations) of Power Steel, a unit of Graphite India Ltd. was killed after his vehicle was set afire by irate workers, in November 2010 an Assistant General Manager of Allied Nippon, an auto parts maker, was stoned to death by angry workers, in September 2009 the Vice-President (HR) of Pricol was beaten to death by agitating workers, and many more. The most recent worst form of industrial unrest was witnessed in the Maruti Suzuki India Ltd., Manesar plant, where workers went into riotous, leaving its General Manager (HR) dead and 100 other officials laid up in hospital with serious injuries.
These surging incidents of industrial unrests are for sure denting investor’s confidence in the country being a safe investment destination and a preferred global investment hub. It has also led to production and financial losses to companies operating in the country. If left unchecked, this ongoing turmoil will surely send wrong signals to foreign and domestic investors, which will directly affect the country’s economy and employment generation targets.
One of the major reasons for the rise in industrial unrest could be incre asing dependence of industries on contract labour for requirement of flexibility. This segment of worker due to anxiety of job security, lack of social security, exploitation in the hands of contractors, low wages, unequal treat ment by Trade Unions and even abusive behavior of the permanent workers and supervisors develop rebellion feelings Despite the consequences, practice of employing contract labour through contractors and other agencies is prevalent across nations and industries in different occupations including skilled, semi-skilled and unskilled work. Today it has become a global phenomenon, and looking into the market driven economy, organisations has to hire short term Or temporary skilled or unskilled manpower to address occasional Up surge in demand. It Is all about how we manage the contract labour ers today, giving them their right dues.
There is no best way but clearly industry associations have to sit down and relook at that equation. Where the contract labour is not paid a decent wage, they have to be paid. It is not possible to bring them up to the same level of regular employees because the skills are different; the kinds of jobs that are done are different.
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