ET News related to HR
(22 Nov’10 to 26 Nov’1o)
Contract worker status top labour
•Top agenda of the Indian Labour Conference is to
treat country’s 130 million contract workers on par
with regular employees.
•It is a tripartite annual meeting of employers,
employees and the government.
•Labour ministry has already submitted the impact
analysis , carried out by VV Giri National Labour
Institute, of proposal to the committee of
secretaries for its approval.
•Organizations treating its contract labour less
favourably than regular employees is penalized for
not getting license of contract labour and not for
violating contract labour terms.
•Once the contract labour law is changed,
violations to act would amount to criminal
violations and the penalty will be much greater.
Employers refuse to put contract
staff on par with regular workers
•Employers have refused to back the government’s
proposal to extend same wages, leave and social
security benefits to contract workers as provided to
regular employees doing same work.
•Employers have also opposed the suggestion that all
organizations should be covered by the Contract
Labour Act, now being on organizations employing
than 20 workers.
•Implementation of changes would be difficult if
the changes are pushed through without consensus
•Employers put forward that regular workers with
better and multiple skills deserved to get more than
the low-skill contract labour.
•Argument of lack of skills was rejected by
Certain rigid labour laws blocking
•Certain labour laws may be contributing to the
rigidities in the labour market and hurting
•There may be a need to rethink the nature of laws
to draw more workers into the organized sector.
•Rigid labour laws are largely the reason
companies opt for capital intensive manufacturing
as opposed to labour intensive ones and hire
contract labour instead of permanent workers.
•A 2004-05 survey showed 26 million employed in
organized sector against 433 million in the
unorganized sector where wages are low and
•The organized sector employment rose to 27.5
million by 2008.
•The government is working on the National
Employment Policy to accelerate employment
growth, particularly in organized sector.
It’s unwise to link minimum wages
•Fiscal experts are worried the government could
be starting at a financial black hole if it agrees to
the demands to provide minimum wages under the
employment guarantee law, as states could revise
the minimum wages sharply knowing that the
centre will be legally bound to pay.
•Mahatma Gandhi National Rural Employment
Guarantee Act is an open ended scheme or
employment is provided on demand.
•The spending on scheme is already one of the
biggest item of expenditure for the government,
budgeted at Rs. 40,100 crore for the current fiscal.
•UP has raised its minimum wages twice in the last
six months, from Rs. 58 to Rs. 80 and then Rs. 100
immediately after that Rajasthan raised its
minimum wages to Rs. 100 from Rs. 73,
highlighting the risk inherent in extending
minimum wages to MNERGA.
•20 states already have a minimum wage rate that
is higher than prescribed under the employment
•Centre fixes a national floor for minimum wages,
which has been enhanced recently from Rs. 80 to
Rs. 100 a day.
•Law gives State the power to fix task-based wage