Govt plans to build a shield for temps

NEW DELHI: The government is planning to enact a legislation that will regulate the practice of employing temporary staff. The proposed legislation is likely to ensure medical benefits and insurance cover for the employees. At present, the government only stipulates minimum wages and working hours for these workers. But there are no specific regulations to protect their interests, leaving them at the employers’ mercy.

The government’s move to make it mandatory for employers to extend healthcare benefits to temps is seen as the first significant attempt to bring more accountability into the growing temporary staffing business. Temping is a short-service contract where workers are on the rolls of a staffing firm who routinely send them to companies to work for a short period.

According to analysts, the new law will go a long way in sheltering temps who are now employed in large numbers across sectors like retail, telecom, financial services and manufacturing.

As per the labour and employment ministry’s estimates, the private sector employs around 3 lakh temps. Government officials say this number is expected to almost double in the next two years. “We are working on a proposal where the company and the temping agency would be made jointly responsible for extending healthcare facilities at lower premiums and shorter eligibility periods to all uninsured employees. There are three to four other proposals, but it will be premature to comment on them,” an official in the Employee’s State Insurance Corporation told ET.

Lack of clear policies protecting temp employees have often led to labour unrests such as the one in Honda Motorcycles and Scooters India in 2005 and in Hero Honda in 2006. The agitating workers, who were on the rolls of staffing agencies, were demanding healthcare and other benefits on a par with regular workers. The US retailer Wal-Mart is also embroiled in a controversy in its home market for not extending medical and healthcare benefits to its temp staff.

The government’s move to address this issue will help both the growing temp employees and the industries that are employing them as a substantial chunk of their workforce. “The existing laws guiding temping favour the employer. If a change is made allowing more benefits to a company’s temp staff, it will significantly impact sectors like retail,” said corporate law firm Majmudar & Co managing partner Akil Hirani.

Government officials say the labour and employment ministry is concerned that the existing contract labour laws are not sufficient to protect the rights of temp staff. It may seek the law ministry’s opinion on the subject. “Temping is rapidly gaining acceptance in India and has emerged as an important HR tool for companies. In fact, employees in sectors like retail chains, credit card companies, financial services and manufacturing are primarily temp staff,” said Kelly Services county head Achal Khanna.