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Contract Labour Conundrums in the Manufacturing Sector: Time for Regulators to Wake Up and Smell the Coffee

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Abstract

Indian contract labour regulation in the manufacturing sector has been the subject of a plethora of studies over the years, and many amendments to the legislation have been proposed and enacted. However, these have failed to identify or solve a number of chronic issues plaguing the sector, as evidenced by the widespread contract labour unrest in the manufacturing sector and dissatisfaction among all stakeholders. Contract labour law is archaic and obsolete, and thus unable to meet the needs of the present-day organizational order.Here, a practical diagnostic study is undertaken to identify issues and examine potential remedies based on comparative analysis with other jurisdictions wherever possible, and to suggest innovative solutions for addressing India’s unique problems.

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Fig. 1

Source ASI calculated from various years

Notes

  1. The Royal Commission on Labour 1929.

  2. Panda, A. K., & Feroz, Mohammed.). Evolution of Contract Labour Law in India: A Critique of Regulatory Objectives and Development Post-Sail Judgment, Review of HRM, 3, 276-283.(2014).

  3. Mathur D.C, Contract Labour in India (Mittal Publications, 1st edition, 1989).

  4. Vaid K.N, Contract Labour in Manufacturing Industries: A Report and An Analysis (Shriram Centre Press, Shriram Centre for Industrial Relations, 1966).

  5. Report of the Royal Commission on Labour (New Delhi: Government of India 1932).

  6. The Bombay Textile Labour Enquiry Committee 1937, the Bihar Labour Committee 1940, and the Labour Investigation Committee 1946 were a few of the committees which discouraged contract labour practices.

  7. Planning Commission, Government of India, Sect. 33, Chapter 7 of The Second 5 Year Plan, 1955.

  8. AIR 1960 SC 948.

  9. 1997 LLR 288.

  10. (2001) 7 SCC 1.

  11. 2001 LLR 305.

  12. 2006 (5) Bom CR 372.

  13. AIR 2006 (SC) 1806.

  14. Richard Regis, Strategic Human Resource Management and Development, New Delhi, Excel Books (2008).

  15. James P. Walsh, Gerardo Rivera Ungson, The Academy of Management Review Vol. 16, No. 1 (Jan. 1991), pp. 57–91.

  16. 2010 L.L.R. 453.

  17. MOHRSS Order No. 22, January 24, 2014; the Chinese law also envisages parity between contract labour and payroll workers. If there are no directly hired employees doing the same work, the enterprise must base remuneration to dispatched employees on what employees doing the same or similar work in the area where the enterprise is located are paid.

  18. Section 7 of the Contract Labour Regulation and Abolition Act 1970.

  19. Rule 18 of the Contract Labour Regulation and Abolition CLRA Central Rules 1971.

  20. International Labour Organization, Private Employment Agencies Convention, 1997 (No. 181).

  21. European Union, Temporary Agency Work Directive 2008/104/EC.

  22. Section 12, Contract Labour (Regulation and Abolition Act) 1970.

  23. 2002 (93) FLR 58.

  24. Form V of the Contract Labour (Regulation & Abolition) Central Rules, 1971.

  25. Sections 9 and 14 of the Contract Labour Regulation and Abolition Act 1970.

  26. Steel Authority of India Ltd. v. National Union Waterfront Workers (2001) 7 SCC 1.

  27. Rule 32 of the Contract Labour (Regulation and Abolition) Central Rules 1971.

  28. EC Directive 2008/104/EC.

  29. UKEAT/0403/14/RN.

  30. Section 2(c) states: ‘contractor’, in relation to an establishment, means a person who undertakes to produce a given result for the establishment, other than a mere supply of goods or articles of manufacture to such establishment, through contract labour or who supplies contract labour for any work of the establishment and includes a subcontractor.

  31. AIR 1974 SC 960: (1974)I LLJ 489 SC.

  32. Form V is a certificate issued by the principal employer.

  33. Application for License under CLRA Central Rules.

  34. Item 4(a) of Form IV.

  35. Section 21(1) reads, ‘A contractor shall be responsible for payment of wages to each worker employed by him as contract labour and such wages shall be paid before the expiry of such period as may be prescribed’.

  36. Section 21(4) of the Contract Labour Regulation and Abolition Act 1970.

  37. Sections 18 and 19 of the Contract Labour Regulation and Abolition Act 1970.

  38. Section 20(1) of the Contract Labour Regulation and Abolition Act 1970 1970.

  39. Section 20(2) of the Contract Labour Regulation and Abolition Act 1970.

  40. Section 1(4)(a) of the Contract Labour (Regulation and Abolition) Act, 1970.

  41. Kerala Food Corporation of India Labourers Federation v. Union of India1996 LLR783.

  42. China, Interim Regulations on Labor Dispatch (MOHRSS Order No. 22.)

  43. Italy, Law Decree 276/2003.

  44. (2015) I LLJ 25.

  45. 1974 SCR (3) 665.

  46. (1992) II LLJ 190.

References

  • Contract Labour Regulation and Abolition Act 1970.

  • Enfield India v RPFC (85) FLR 519 (Mad) (2000).

  • General Manager (P&A), Hindustan Petroleum Corporation Ltd.v. General Secretary, General Employees Association 2010 LLR 957 (Bom HC).

  • Government of India. 2013. Press release: Enforcement of Labour Laws in Central Sphere Establishments, Ministry of Labour & Employment. Available at http://pib.nic.in/newsite/erelcontent.aspx?relid=95236 (Last visited on June 6th 2018).

  • Kerala Food Corporation of India Labourers Federation v. Union of India (1996) LLR783.

  • Management of Cruickshank & Company Ltd. v. The Appellate Authority and Superintending Engineer MANU,7635, TN (2006).

  • Management of Swatantra Bharat Mills vs Workmen of Swatantra Bharat Mills 1995 (35) DRJ 530.

  • Recommendation concerning Unemployment Adoption: Washington, 1st ILC session (1919) - Status: Withdrawn instrument.

  • Report IV(1)of the International Labour Conference 85th Session 1997 “Revision of Fee Charging Employment Agencies Convention (Revised) 1949. No 96.

  • Report of the Royal Commission on Labour (New Delhi: Government of India, 1932).

  • Steel Authority of India Ltd. v. National Union Waterfront Workers, (2001) 7 SCC 1.

  • The Contract Labour (Regulation And Abolition) Central Rules (1971).

  • The Directive on Temporary Agency Work (2008/104/EC).

  • The Labor Contract Law of the People’s Republic of China, 2008.

  • The Unemployment Recommendation 1919 (No.1).

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Authors and Affiliations

  1. Faculty of Law, Xavier University Bhubaneswar, Bhubaneswar, India

    Arun Sasi

  2. Faculty of Law, XLRI Jamshedpur, Jamshedpur, India

    Tina K. Stephen

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  1. Arun Sasi
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  2. Tina K. Stephen
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Sasi, A., Stephen, T.K. Contract Labour Conundrums in the Manufacturing Sector: Time for Regulators to Wake Up and Smell the Coffee. Ind. J. Labour Econ. 62, 291–306 (2019). https://doi.org/10.1007/s41027-019-00169-6

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