I. Legislation : Background & where it stands II. Necessity of Contract Labour III.

Present Scenario of the Contract Labour IV. Wages of Contract Labour V. Contract labour Scenario in AAI VI. Conclusion / Inference

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i. Facts about Contract Labour:

Labour management is one of the most crucial task of an entrepreneur. In order to surpass the stringent labour regulations, the industry sector in India is largely resorting to contract laborers, who are governed by the Contract Labour Regulation and Abolition Act of 1970 Engaged in almost all industries (Pvt,Public-Sector & Govt. Unertakings) Govt. is the largest employer of contract labor.( Rlys.,Airports,PSUs, etc.)

ii. Consequences-lead for legislation of CL Act.

Pre-Independence: Recommendations of Royal Commission, Labour Parliament & Pitboys Commission.

Post-Independence:
Demands made before Tribunals. Recommendations during second 5 year plan. Standard vaccum refining case(1960 2 LLJ 233)
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I. Contract Labour Regulation & Abolition Act, 1970 Introduction The main objective of this act is to regulate the contract labour and abolish it in certain cases.
The Act came into force on 10th Feb,1971 & Act has 35 Section into 7 Chapter

Important provisions of Contract Labour (R&A) Act,1970

Sec.7(1) Registration of certain establishments Sec.10(1) Prohibition of Employment of contract labour. Sec.12(1) Licensing of contractors Sec.21 Responsibility for payment of wages Rule 25 Condition of License

Abstract of Contract Labor Act

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II. Why Contract Labour is required:

Necessity of Contract Labour: Undisputedly engagement of contract labour is necessary for the following reasons: 1. Principal employee relieved of-direct supervision & control over the employees.

2. Contract labour will ensure speedy completion of the assigned work according to specification and requirement. 3. Relieves principal employee form burden of looking non-essential things and allows concentrate only on main business activity. 4. The employment of contract labour would be comparatively cheaper with lesser liability of supervision and control. 5. Less IR Problems in respect of such contract labour. Employment of contract is very common for works related for a short while or period.(non repetitive works)
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III. Present Scenario of Contract Labour

The Group of Ministers (GoM) proposal considered of amending CL(R&A),1970 The GoM, identified, which are in nature of supportive services of an establishment exemption:
Employment permitted by the Central Govt for employment of Contract Labor

Housekeeping Horticulture Loading & Unloading Type of jobs Percentage (%) 0.55 2.75 8.79 10.99 12.64 19.78 39.01 etc
5

Material Movements
Canteen Employment Security & Vigilance

Gardening Canteen Security Technical Loading, unloading, packaging House keeping Helper Others* 5.49 * Others include tailoring, painting

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AAI Scenario Contract Labour Main function & Contract labour in AAI:
1.To manage the airports, civil enclaves and aeronautical communication stations efficient 2. To provide air traffic services and air transport services at airports & civil enclaves

To fulfill the mission and objectives of the Authority, besides regular employees, number of contract workers, are employed for the jobs which are not perennial in nature. Such Contract labour force is around 20% of the total work force.

Jobs performed by Contract labour in AAI: (As per MoL G.O dated 16.11.99)
Project work Loading & Unloading Palletizing & Packing of Cargo Bird Scaring Trolley retrieval Civil,Electrical & Electronic maintenance etc.,
All these jobs are not perennial in nature & required to be done as and when necessary

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Contract Manpower status as on 01.01.2010.

S.No Department Region / Airport Cargo Security Horticulture Engg(E) Engg(C ) Terminal Operation Others TOTAL

1 NORTHERN 2 EASTERN 3 SOUTHERN 4 WESTERN 5 CHENNAI 6 KOLKATA

0 3 0 0

18 19 230 33

0 0 0 8

488 156 289 257

240 16 104 3

0 78 175 210

42 14 45 18

37 1 59 0

825 287 902 529

688
80 771 16.26

41
0 341 7.19

0
0 8 0.17

161
973 2324 49.00

22
0 385 8.12

0
0 463 9.76

28
99 246 5.19

0
108 205 4.32

940
1260 4743 100.00

TOTAL %

Prohibition of employment of contract labor

The Government can prohibit the employment of Contract Labor by a notification in the following areas: The process, operation is the main business of the establishment Continuous Manufacturing Perennial nature of work Where the work should be done by whole time workmen.
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WAGES Contract Labour In general, it has been found that there are three categories of firms as far as wage payment is concerned.

1. The large private firms -pay more than market wages as efficiency wage. The efficiency wage hypothesis in economics states that if the work effort depends positively on the wage level, a profit maximizing firm would find it profitable to pay above the market clearing level
2. The second category of firms are those which strictly adhere to the prescribed minimum wage norms. Public sector firms fall in this category
3. The third category comprises the large number of small private firms who prefer to employ uneducated workers who can be paid even less than minimum wages. Much of migrant laborers from the eastern and north eastern regions of India and also from Nepal, fall in this category.

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Contract labour wages in other PSUs

S.N o ORGANISATION BASIC WAGE COMPONENTS ALLOW ANCE INCREMENT OTHERS TOTAL SALARY Entitled for

D.A

H.R.A

MIN.

MAX.

RCF,MUMBAI

1,540

[47%]

30%

6%

34%

7,422

12,413

6,251

Paying at par with regular workers

2

ONGC-INDIA

NALCO

RINL,VSKP

Paying randomly.

Contract labour Wages in Airports Authority of India.

5

AAI

In most of PSUs pay more then minimum wages and almost equal to permanent workers for the same nature of category.

Reason being

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Advantages of Paying better wages aligning with statutory compliances:

1. Money is considered as a powerful motivator 2. Paying wages more that minimum wages gives more efficiency 3. Better wages reduces to think about other alternatives

4. Paying aligning with statutory guidelines free principal employees for many worries. 5. Attract talented people into contract employment 6. Satisfied labour less IR problems & less complication reg. statutory compliance. 7. Better wages leads to high productivity. 8. Ultimately payment of better wages have a long term Advantage
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10

AAI and cases related with Contract Labour Act,1970

No case as on dated related to payment of wages

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11

Current Scenario of CL Act Imp. Provision of Sec(10)

POSITIONS AND INTERESTS OF DIFFERENT STAKEHOLDERS ON THIS LEGISLATION Trade Unions: Trade Union Section 10 should not be amended to the disadvantage of contract workers. It will ensure following favors for workers. Ensure due wages to workers. 2.Job security 3. Get benefits of labour laws. Employers: Employers want amendment in Section 10 to facilitate of activities without any restrictions. It will help them in Reducing costs. 2Getting more flexibility at work place 3.Power and control at work place. Saving from legal battles. 5.More flexibility leads to better outputs and a more competitive working environment. Political parties: There is lack of consensus among different key personnel in political parties. They have to make balance between the two diametrically opposite interests, Political support of workers Financial support of employers to meet election expenses. Government: It varies with the political party in power; NDA government seemed more inclined to allow outsourcing and engaging workers on contract. It is the responsibility of government to bring requisite amendment in this act so that more money can flow in India in form of Foreign Direct investment. POSSIBLE ALTERNATIVE SUGGESTIONS Though there are significant conflicts in the interests of the trade unions and employers, the contact workers are quite freely changed by employers owing to high vulnerability of those workers. The high job insecurity and unemployment in the country virtually forces the contract workers to insure compliance to employers. It enhances the control of the employers at the workplace. Hence, the trade unions are keen to develop strict norms of employing least number of contract labour and higher number of regular employees. In such scenario, it is a challenge to both the employers and trade unions to reach to a common ground to get solution to the present 12 1 May 2012 situation.

Conclusion:
Wages play a crucial role . Wages develop a considerable relationship

between employees & employer.

The contract Labour Act deals with both abolition & regulation of the contact workers. While engaging contract workers through contractors in AAI, It is always ensured it is done with conformity of the Law