Why in news?
The Finance Minister advocated “fixed term employment” in the budget speech.
How have the labour laws evolved?
- Present labour laws are a carryover from war-time legislation promulgated by the British to protect industry from disruption.
- These laws were incorporated into the Industrial Disputes Act in 1947.
- The crux of the law is government intervention in industrial disputes to balance between labour and management.
- This never worked well and succeeding labour ministries tried to end this war-time anachronism.
- The role of the State in essentially an issue between labour and management was sought to be reduced.
- The aim is to ensure bilateral resolution of conflict, as happens in every liberal democracy.
- During the emergency period it was ruled that permanent workers cannot be sent away.
- Nor were the places of work be closed down without the consent of the state.
- Industry’s response to the rule on permanent workers has been a massive shift to contract labour.
How is contract employment in India?
- There are firms which employ no permanent workers at all, except for a small clutch of officers.
- Industries are also increasingly diluting the law that forbids the employment of contract labour in core processes.
- Permanent workers are unconcerned with these changes so long as their interests and emoluments are secure.
- The trade unions are just beginning to organise contract workers.
- The unions at most ask for minimum wage for the contract labourers.
- The unions cannot call a strike because permanent workers will not back it.
- The contract workers themselves cannot go on strike because they risk losing their jobs.
- Employers will in any case not pay more.
- Although employers are the driving force behind the shift to massive contract employment, the government also seems to be supporting this.
How can fixed term employment help?
- The present unfixed contracts can be terminated any time.
- Organised industry is riding on cheap contract labour, due to immortality on the enterprise.
- In this backdrop, the fixed-term employment does not promise lifetime employment.
- However, it will be a clear tenure, as a company or an enterprise hires an employee for a specific period of time.
- The contract can be renewed or terminated according to the performance of the worker.
- A fixed term contract will enhance workers’ security and remuneration.
- It will also allow the employers the flexibility they desire.
What is the way forward?
- The fixed contract could raise opposition from both labour and management.
- Fixed contracts will push up the wage bill, which employers will resist.
- These are important considerations and challenges before working on labour laws.
- But India cannot continue to rely on an insecure and impoverished labour force, for it to become a manufacturing powerhouse.
- The insensitive exploitation of the weak and vulnerable in the formal sector cannot be justified in a society striving for equality.
- Well thought out labour reforms are crucial to address all these.
Source: BusinessLine
