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Issues and Problems of contract Labourers in India

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© 2020 IJRAR May 2020, Volume 7, Issue 2 www.ijrar.org (E-ISSN 2348-1269, P- ISSN 2349-5138)

Issues and Problems of contract Labourers in India

Hanumantha G,1 Research Scholar, Department of Studies and Research in Social Work, Vijayanagara Sri
Krishnadevaraya University, Vinayaka Nagara Cantonment, Ballari- 583105.

Dr Pavitra R Alur,2 Assistant Professor, Department of Studies and Research in Social Work, Vijayanagara Sri
Krishnadevaraya University, Vinayaka Nagara Cantonment, Ballari- 583105.

Abstract

Contract Labourer is a backbone of every industry or organisation; contract labourers contribute to

growth of the Industrial economy and Indian economy, contract labour faced so many problems relating
working conditions of contract labour, nature of work, minimum wages or deference’s in salary, welfare
activity and social security schemes. The utilization of contract labours is now the biggest issue in the time
of globalisation and liberalisation. The aim of this paper is to focus on the overview of issues and
challenges of contract labourers system in India, Evolution the present law, regulation and various
loopholes under the Contract Labour Act( Regulation and Abolition) 1970 This Paper also analyses the
difference between contract labour and general labour, issues and problems of contract labourers in
industries history of the contract labour Act and how the existing law evolved in India by referring to
various committee’s recommendations. The present study based on secondary data use like articles,
journals, websites library etc. This paper also explains judicial interpretation of some important issues of
contract labour Prohibition and Abolition Act, 1970.

Keywords: Contract Labour, Issues and Problems, Industry.

Introduction

Industrialisation is one of the major part of society, while contract labourer’s backbone of every
industry and contribute to the growth of economic status and GDP. With the reduction nature of business
performance, the use of contract labour has gone up in various industries. Labour costs often become a
significant amount, directly influencing the bottom line performance of the company. And with many
sectors of the economy facing disruptions and a certain level of unpredictability, many opt for contract
labour rather than hiring permanent workers. Treating labour costs as a variable rather than a fixed
expenditure every year has partly been the reason behind why industries have increasingly preferred
contract labourers. Contract labourers faced so many problems within industries and community; there is
no continuity job, less than social security and welfare measures, didn’t effectively implement of Contract
Labour (Regulation and Abolition) Act 1970 and recent amendment Supreme Court told sometimes
pertaining contract labourers wages and salaries but industries or principal employers still didn’t follow the
procurers.

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The industries justify contract labour on the grounds that the requirement is temporary or seasonal.
Nonetheless, there are ready instances of contract labour being deployed for tasks as security, sweeping
and cleaning, though it is difficult to comprehend how these tasks are temporary and do not justify a full
time regular employees (Karibasamma N and Pavitra R Alur,2016).

Definition of Contract Labourer

Contract labour normally refers to workers who are hired for a specific task and a finite period. In
Third World countries the term sometimes refers to a system whereby workers are hired by an
intermediary-the labour contractor-who supplies them to the employer for a fee. Such workers are often
bound to the contractor by a variety of mechanisms and their freedom of movement may thus be restricted.

Contract Labourer (Regulation and Abolition) Act 1970

This act has been enacted to regulate the employment of contract labour in certain establishments
and to provide for its abolition in certain circumstances and for matters connected therewith. It applies to
all establishments employing 20 or more contract labour and to all contractors who employs 20 or more
contract labours. It applies to all establishments 20 or more contract Labour and to all contractors who
employer, 20 or more Contract Labour. The Act provides for the constitution of Central and State Advisory
Boards to advise the concerned governments on matters arising out of the administration of the Act. The
Central Government has issued a number of notifications prohibiting employment of Contract Labour in
different categories of works, job and process as in mines, Food Corporation of India's godowns, port trusts
and many other industries/ establishments for which it is the Appropriate Government. The Central
Advisory Contract Labour Board has also constituted a number of committees to enquire into the question
of prohibition of contract labour system in different establishments.

Government of India formulated the act of Contract Labour (Regulation and Abolition) Act, 1970,
main purpose of this act provide the social security, safety, health, welfare measures, minimum wages,
working condition of contract labourer, job security, relationship between contractor and contract labour
then agreement of contractor and principal employer etc.. These are views explained in this act. Recently
Supreme Court gets the serious action/judgement regarding contract labourer on several issues, one is The
Supreme Court ruled that contract workers should get the same pay as permanent worker, Second one the
court also made the philosophical point that denial of the principle of equal pay for equal work is a
violation of human dignity etc.

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Problems of Contract Labourer

Contract labourer are faced various problems within industry and society following these problems.

 Contract workers are far more insecure compared to regular labourer.

 The exploitation of contract labourer in employment is one the biggest concern of the government.
 Contract labourer has little bargaining power, social security and often engaged in the hazardous
industries with lesser facilities and security.
 The contract labourer generally belongs to weaker sections of the society and will be deprived of the
benefits that accrue to regular employees.
 Hours of work are frequently longer as remuneration is linked to output and task completion.
 Unionization rate among contract labourer is low.

Review of Literature

Paramita Ray, 2016 She explained about Contract Labour system in India: issues and perspectives,
Contract Labour is a significant and growing form of employment in various types of industries. The
exploitation of contract labour is now the biggest issue in the era of globalisation and liberalisation. The
aim of this paper is to focus on the overview of the contract labour system in India, Evolution, the analysis
of the present law and various loopholes under the Act. This paper also analyzed the history of the contract
labour Act and how the existing law evolved in India by referring to various committees’
recommendations. This paper also explained the judicial interpretation of some important issues of contract
labour Prohibition and Abolition Act, 1970.

Jaivir Singh, et and all, September 2016, in their study on Law, Skills and the Creation of Jobs as
‘Contract’ Work in India: Exploring Survey Data to make Inferences for Labour Law Reform, The paper
begins with a discussed of Indian labour law and the increasing use of ‘contract labour’ in Indian formal
manufacturing. Researcher question the widespread perception that employment of contract labour
provides flexibility to employers in terms of adjustment in response to demand and technology shocks, by
bringing in the concept of ‘incomplete contracts’. Apart from the ASI data, we use the responses from the
specially-commissioned survey in Haryana: a state having a well-established industrial base with a large
pool of skilled labour force, in order to gain empirical insights on the links between law, skills and the
extensive use of ‘contract’ labour. The paper then goes on to discuss some theoretical literature
emphasising the importance of relationship-specific investments for skills and proceeds to emphasize the
role of the labour law in this context. It is strongly hoped that these conclusions will be used to comment
on the costs and benefits of the ‘contract’ labour system and its variants across South Asia,

K.R. Shyam Sundar, 2007, in their paper, explored Contract Workers: The Need for ‘Community of
Interest’ Perspective, informative of employment has been the principal the outcome of the recent wave of
globalisation. Contract labour is one of the forms of informal employment obtaining in both formal and
informal sectors. Contract labourers even in the formal sector are not organised and do not enjoy collective
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bargaining rights. The contract labour system represents an exploitative system. Employers prefer it for
flexibility; the question is how can the condition of contract labourers be improved? This paper presents
four case studies to show that the organisation and representation of contract labourers yield benefits to
them. It further argues that labour market actors should adopt a ‘community of interests’ approach, a kind
of ‘holistic outlook’, to encompass contract workers in the scheme of development.

Mr. Nagesh Sawant, April 2015, in their study explained here Contract Labour in India: Issues and
Challenges, India is marching towards becoming a superpower in the world. To turn into a superpower, the
government has initiated the programmes and opened its market for industries to set up their business. It is
a known fact that Indian labour market is cheap as compare to other countries. Hence, for industries, India
became a suitable place to open businesses. Moreover, it is painless to engage in contract labour without
taking much responsibility. Not only the private entities but also the government agencies are also
engaging contract labourers. This article tries to portray whether the purpose of the Contract Labour
(Regulation and Abolition) Act, 1970 is accomplished or not and what are the issues and challenges for
contract labour in India.

Karibasamma N and Pavitra R Alur, 2016, in their study done with, A Study on Contract Labours
Practices in JSW Steel Company Pvt. Ltd. of Ballari District in Karnataka State, Contract Labour is a
significant and growing form of employment. The practice of employing contract labour is observed all
over the world and has been in operation since ages. The contract system is based on triangular relationship
between the user enterprises. The workers are recruited by an outside agency or person and are supplied to
an establishment or engaged on its work. Unlike direct labour, they neither feature on the muster roll of
principal employer/ establishment nor are paid directly. Hence the researcher explained by the know how
the working conditions is this conducive or not for contract labour by without direct intervention of
employer and also know the policies of Contract labour in Ballari district JSW Steel Ltd. is one of the
largest Steel producers by giving lots of employment opportunity given, this paper is going to investigates
the working conditions of contract Labour in JSW Steel Ltd. and also to elucidated the provisions and
policies of Contract labour and Abolition Act 1970 in India.

Meenakshi Rajeev, 2006, In Contract Labour in Karnataka order to effectively compete in a global
market the industrial sector demands flexibility. To circumvent rigidities imposed by labour laws, the new
form of employment that is being created in the economy is largely contractual. Based on a field survey,
this paper looks at the status of contract labour in the state of Karnataka. The study finds that while a
number of large firms pay wages above the minimum wage fixed by the state and support an increase in
the minimum wage levels, a considerable number of small firms exploit the contract workers in various
ways, including through non-payment of minimum wages. The study finds an urgent need to improve the
social security network and supervisory mechanism for contract labour in the state.

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Statement of the Problem

Contract labourer is one of the current issues worldwide, as well as India, there are many industries
provide minimum wages, less social security and welfare measures, lot of deferent between contract
labourer to the general labourer in the working condition of contract labour, nature of work, working
conditions of contract labourers, lack of skills and training programs, socio-economic conditions of
contract labourer, various committees to recommended solve the problems of contract labour, sagest and
evaluate the present situation of Contract Labour (Regulation and Abolition) Act 1970 effectively.

Objective of the Study

1. To know the current situation of Contract Labour Act (Regulation and Abolition) 1970.
2. To understand the issues and problems of contract labourer.
3. To analyses the socio-economic status of contract labours.
Formulation of the Hypothesis

1. Contract Labour (Regulation and Abolition) Act 1970 still not implement effectively (Including
amendments).
2. Contract Labourers facing many problems such an regarding continuity job, equal pay equal
work, security and welfare measures etc.
3. Contract Labourer socio and economic status is very low compared to general labourer.

Research methodology

Used tools in the present study based on purely secondary data, the research on website,
journals access online, books and publications, news paper, reports, library, etc.

Suggestion

1. To implement Contract Labour (Regulation and Abolition) Act, 1970 effectively

2. To provide the skills and training for contract labourer to the specific job oriented.
3. To provide the continuity job, social security and welfare measures for contract labourer.
4. To build the concept of all are equal and provide equal opportunities (Contract Labour and General
Labour)
5. Extending some welfare amenities to contract workmen too, but lesser than those provided to
permanent workers.
6. Positioning of a dedicated social worker or welfare officer to look after the interests of the contract
workers.

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Conclusion

The Contract Labour (Regulation and Abolition) Act, 1970 has not been able to understand the
problems of the contract labourer. It should need a complete change to improve the social and economic
status of the contract labourers. Contract labourers must be given due attention by bringing them under the
net of social security and welfare measures program.

Reference

 Jaivir Singh, et al, 2015, Law, Skills and the Creation of Jobs as ‘Contract’ Work in India:
Exploring Survey Data to make Inferences for Labour Law, JEL classification: J08, J21, J50,
and J53.
 Karibasamma N and Pavitra R Alur, 2016, A Study on Contract Labours Practices in JSW Steel
Company Pvt. Ltd. of Ballari District in Karnataka State, PARIPEX - Indian Journal of
Research, Volume , 5, Issue, 10, Pp, 291-293.
 Karibasamma N and Pavitra R Alur, 2016, A Study on Contract Labours Practices in JSW Steel
Company Pvt. Ltd. of Ballari District in Karnataka State, Indian Journal of Research, Volume: 5
Issue 10, Pp, 291-293.
 K.R. Shyam Sundar, 2007, Contract Workers: The Need for ‘Community of Interest’
Perspective, The Indian Journal of Labour Economics, Vol. 50, No. 4, Pp, 807-8017.
 Meenakshi Rajeev, 2010, Contract labour act in India: a pragmatic view, International Journal
of Economic Policy in Emerging Economies ·
 Nagesh Sawant, April-2015, Contract Labour in India: Issues and Challenges, Global Journal for
Research Analysis Volume-4, Issue-4, Pp, 1-2.
 Paramita Ray, 2016, Contract Labour System in India: Issues and Perspectives, International
Journal of Law and Legal Jurisprudence Studies: ISSN: 2348-8212: Volume 3 Issue 3, Pp
297-307.
 https://www.google.com/search?q=contract+labour&rlz=1C1CHBD_enIN841IN841&oq=contract+labou
r+&aqs=chrome..0j69i57j69i59j69i60l3.8204j0j8&sourceid=chrome&ie=UTF-8.
 https://clc.gov.in/clc/acts-rules/contract-labour-act.

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