Government ropes in India Inc to frame norms for contract labour

NEW DELHI: With legislative changes in labour laws not happening anytime soon, the government has roped in big corporate houses and industry chambers to encourage Indian companies to adopt voluntary guidelines for contract labour to give them a better deal.


Business houses like Tatas, Mahindras, and Godrej, Confederation of Indian Industry (CII) and the Federation of Indian Chamber of Commerce and Industry (Ficci), and engines company Cummins India have already joined the initiative, the Planning Commission claims.

The process of building a consensus has already started and plan panel hopes to come out with these guidelines by early next year to be implemented on pilot basis in some of these companies. “Plan panel is in the process of talking to big employers, industry chambers and unions to frame norms for contract labour, as we see this as a first step in bringing out labour reforms in the country, even before any legislative changes are made in the existing laws,” Arun Maira, member, Planning Commission told ET.

The issue of contract labour has become a big concern for industry that has been relying on part time workers to get around the rigid labour laws. The violent strike at country’s largest automobile company Maruti Suzuki in July last year shook the industry as well as the government.

There is increasing realisation among the stakeholders that using contract workers only for short-term cost arbitrage will not be sustainable and there needs to be some parity between full time workers and temporary hands.

Rajeev Dubey, president (human resource), Mahindra & Mahindra agrees that contract labour is a ticking time bomb that needs to be addressed immediately and not put under the carpet. “Since contract labour as a mode of employment is here to stay, we need to look at the conditions under which contract labour operates with special focus on compensation, the behaviour of management and the permanent workforce visa-vis contract workers, their involvement in innovation and productivity initiatives, training and skill developments, besides ensuring safety, medical facilities, canteen, uniform and social security for them,” he said confirming that his company was part of the Planning Commission initiative. Earlier also there have been instances of riots and killings by contract labours.

CEO of Graziano Transmissioni India was killed in 2008 while in 2011 irate workers of Powmex Steel, a unit of Graphite India, had killed the company’s deputy general manager by blazing his vehicle. Pradeep Bhargava, director, Cummins India, feels that there is a need for consistency in morality and legality of treatment meted out to contract workers vis-a-vis permanent workers.

“In the context of today's business dynamics where contract labour has become necessary for core jobs, companies need to look inward to address issues of hygiene, number of contract workers and their pay when compared to permanent employees,” he added.