People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 51

December 19, 2010



Govt Stand Encourages Employers’ Obstinacy

 K Hemalata


THE 43rd session of the Indian Labour Conference (ILC) met on November 23-24, about two years after the 42nd. As per the decision of the Standing Labour Committee, the agenda items discussed in the 43rd session were almost the same as in the 42nd: Global financial downturn – its impact – job losses – comprehensive package for protection of labour force; Problems of contract labour, social security, wages etc, and Amendments in the Contract Labour legislation; and Employment generation and skill development. Despite discussing for the third consecutive session the issue of contract labour that is becoming extremely pressing, the Indian Labour Conference could not take a common stand on the issue due to the obstinacy of the employers’ group, which probably was encouraged by the contents of the inaugural address of the prime minister himself.




The prime minister, who inaugurated the 43rd ILC, could not find enough time to hear the views of the labour representatives. But he made it amply clear as to which side of the line he stood on the issue of labour laws. Completely ignoring the fact that around 94 per cent of workers in the country were in the unorganised sector where labour laws were either not applicable or not being implemented, Dr Singh said there was a need to consider the possible role of some of the labour laws in “contributing to rigidities in the labour market which hurt the growth of employment.” He indicated the willingness of the government to amend the labour laws to make them more flexible, of course to suit the needs of the employers. This naturally set the tone for the employers who stood their ground on continuing with the inhuman exploitation of the workers through the contract labour system.


Dr Singh had nothing to say by way of reassuring the workers who demonstrated unprecedented unity by going on an all-India strike on September 7 on five major demands including price rise, effective implementation of labour laws, adequate funds for universal social security for the unorganised sector workers, job protection and against disinvestment. Besides stating that his government was aware of the need to control price rise but was facing difficulties, he harped on his favourite theme of commitment to “economic reforms with a human face” and “the need to sustained growth of 9-10 per cent to make a dent on poverty, unemployment and under development.”


The CITU delegation to the ILC comprised its president A K Padmanabhan, general secretary Tapan Sen and secretaries Hemalata and Kashmir Singh. The views of the CITU on the agenda items were explained in a note that was circulated in the ILC.


Countering the claim of the government that India was able to come out of the impact of the global economic crisis without much suffering because of the initiatives of the government, the note pointed out that employment and social protection of the workers were left entirely to the mercy of the employers who were provided with four stimulus packages worth lakhs of crores of rupees, without linking them with job protection as unanimously demanded by the trade unions. The gross profit earned by the corporate sector increased by around 36 per cent every year including 2008–09 and 2009–10 when the global economic crisis had its worst impact. The proportion of profit to the wage bill, which was 44 per cent in 2001, rose to 176 per cent in 2008, indicating that the entire additional value generated through GDP was cornered by the employers. This was the result of the increasing exploitation of the workers, particularly those employed under irregular employment.


The CITU strongly criticised the agenda note of the government on contract labour for dealing more with the concerns and problems of the employers and trying to justify and finally seeking to legalise the violations of the existing law on contract labour. The agenda note was conspicuously silent about the unlawful deployment of contract labour even in regular production jobs or the so called ‘core jobs’ and denying them minimum wages. It demanded that employment relations should be redefined linking the principal employer to the worker at the lowest level, outsourcing be treated as contract, equal pay for the same and similar work to be incorporated in the main body of the legislation, regularisation of contract workers deployed in permanent or perennial jobs, minimum wages prevalent in the company, etc.




On the agenda of employment generation, the CITU note pointed out that between 2005 and 2008 when economic growth was robust, the employment generated was only eight lakhs per year. In fact, this was the lowest rate of job growth in the last three decades for which data are available. CITU representatives pointed out that the Report on Employment and Unemployment Survey, conducted by the Labour Bureau of the Ministry of Labour and Employment, has recorded the unemployment rate as 9.4 per cent while it was higher at 10.1 per cent in the rural areas. The CITU demanded adoption of an employment intensive growth and development strategy and immediate lifting of the ban on recruitment and stopping the drive to abolish the existing posts in different central and state government departments and public sector undertakings. It has pointed out that simply ensuring strict implementation of the eight hour working day would create lakhs of additional jobs. It has also suggested extension of employment guarantee act to all individuals, to urban areas and filling up of the backlogs for SC/ST and OBC reserved posts etc as measures that would generate employment.


The ILC constituted three separate committees to discuss each of the agenda items. While the conference committees on global financial crisis and employment generation made unanimous recommendations, the employers and workers’ groups in the committee on contract labour were divided on the major issues.


The conference committee on ‘Global Financial Downturn’ recommended strict implementation of labour laws on lay offs, retrenchment, job losses, closures etc, devising of broad based social security including unemployment insurance, credit at concessional rate of interest to micro, small and medium enterprises besides traditional and export oriented industries, incentives to labour intensive industries, formulation of urban employment guarantee scheme, adequate funding to the Unorganised Workers’ Social Security Fund, extension of the scope of public distribution system to all unorganised workers in terms of commodities and coverage, investment in education and health care in rural areas etc. The committee also recommended more investment in infrastructure, non-conventional renewable source of energy, agro-based industries so as to stimulate domestic demand, fixation of national floor level minimum wages, extending employment guarantee from 100 to 180 days etc as long term measures. The committee was of the view that the stimulus and financial packages should continue and provide more focus on employment generation to compensate their loss in wages or job losses due to the economic slowdown.


The conference committee on ‘Employment Generation and Skill Development’  unanimously recommended that employment generation should be at the top of the agenda of the government and that each programme/scheme/economic activity of the government should look at this aspect; all round development of agriculture should be taken up as a priority with allotment of adequate funds for comprehensive infrastructure development in the rural areas, investment in agro based industries etc, increase in the workdays under MGNREGA to 200 days in a year and extension of employment guarantee to urban areas, ensure implementation of minimum wages of the state governments to the workers of MGNREGA, lifting of the ban on recruitment in public sector and government departments, broadening the definition of economic activity to include a number of women centric work and activities like home based work, etc, increase the wages of the Anganwadi employees and provide them with social security benefits etc.


Though the conference committee on ‘Problems of Contract Labour, Social Security, Wages etc, and Amendments in the Contract Labour Legislation’ could not come to a consensus on the recommendation, it adopted a unanimous resolution that all efforts should be made to ensure that the existing provisions of the Contract Labour (Regulation and Abolition) Act 1970 and rules made under it are implemented in letter and spirit; that the labour enforcement machinery in the centre and states should be strengthened by providing requisite manpower and other logistic facilities so as to ensure effective implementation of related legislations; that tripartite state advisory boards be constituted at the earliest; and that payment to contract workers be made through banks.




While the workers’ group and the state governments’ group unanimously supported the proposals that where the contract labour performed the same or similar kind of work as the workmen, directly appointed by the principal employer, the wage rates, holidays, hours of work, social security and other conditions of service of the contract labour shall be the same as are available to the workmen on the rolls of the principal employer. This provision, which exists under the existing rules, needs to be incorporated in the principal act. They also recommended that the threshold limit of 20 for applying the act should be removed. The employers’ group did not agree with these proposals. The state governments’ group agreed to the suggestion of the workers’ group that workers should be absorbed/regularised in the event of abolition of contract labour under Section 10(2) of the Act, the employers’ group did not agree to it.


Even while increasingly employing contract labour in the same jobs done by the permanent workers and in jobs of perennial nature, the employers put forward the argument that they have to ‘look at the education and skill levels’ and were not ready to extend the same benefits. The argument of lack of skills was totally rejected by employee representatives. Kashmir Singh countered the employers’ argument asking ‘If the contract workers are not well educated and have low skills, why employ them at all and lower the quality of industrial production?’


Participating in the discussion, Tapan Sen criticised the lack of seriousness on the part of the government to practise tripartism in letter and spirit, except for the symbolic act of calling the Indian Labour Conferences as a ritual. He lambasted the short sightedness of the employers in their eagerness to garner profits of denying the due benefits to the workers, which was not only harming the workers but the country and its economy as well.