The neglected foot soldiers of a liberalised economy

India’s contract workers need greater state protection

Updated - December 05, 2019 01:04 am IST

Published - December 05, 2019 12:05 am IST

Editorials and articles have been written on the proposed merger of BSNL and MTNL. Permanent employees of the two telecommunication companies are planning to opt for lucrative voluntary retirement schemes and a generous package also awaits the senior employees. But what about the thousands of contract labourers, contractual and temporary workers — who have served the two organisations for several years for far less wages and without any substantial social security benefits? It is not an exaggeration to say that these workers constituted the rudimentary service pool of these organisations. But now, after doing unpaid work for many months, many of the desperate employees are committing suicide.

The BSNL-MTNL case is not an aberration. There are thousands of employees in the informal sector, a majority of them engaged through contractors, working in precarious service conditions. But, who will rehabilitate these victims of an emerging market economy where most graduates are not employable due to skill deficiency and there is an acute shortage of job opportunities?


The Contract Labour (Regulation and Abolition) Act, 1970 and the Inter State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979 have been in place for long; but non-compliance is the order of the day. Similarly, manual scavengers, most of them employed as contract labourers, are still forced to do cleaning jobs under the most inhumane conditions, despite this barbaric practice having been outlawed through successive pieces of legislation. The Supreme Court, in judgment after judgment, has ruled that contract workers should be paid the same wages as permanent employees for similar jobs, but these orders seem to exist only to be taught in law classes, not for compliance by employers.

Similarly, Unorganised Workers’ Social Security Act, 2008, has largely been a cosmetic exercise. The second National Commission on Labour, in the year 2002, had strongly recommended abolition of the exploitative contract labour system in course of time and, in the meantime, suggested implementation of a comprehensive social security scheme. It had very rightly recommended that after two years of working for an organisation, a contract worker should be treated as a permanent worker. However, the apex court in SAIL vs. National Union of Water front Workers and others (2001) overruled some of its earlier judgments and decided that the law does not provide for automatic absorption of contract labourers upon its abolition and that the principal employer has no liability to regularise them.

Hire and fire the norm

It is true that our labour laws are stringent and protective, but this statement applies only to the fortunate permanent employees, who constitute roughly 10% of the total workforce. Hire and fire is the rule for the contract labourers. Laissez faire is in full bloom. Paradoxically, a rigid labour law system has also contributed to greater contractualisation of the workforce. And, engaged in substantial numbers as contract labourers are people from vulnerable caste groups. The Contract Labour Act, 1970, is applicable only to organisations and contractors who are employing 20 or more workers. Hence, the number of such workers could be much more than what the numbers suggest.

In the liberalised Indian economy of the 21st century, such labourers are treated as sacrificial goats. Pay Commissions are always very gracious to upgrade the salary structure of permanent employees on a periodical basis, but the genuine needs of contract workers are repeatedly ignored by the state. Unless our policymakers ensure strong enforcement of policies linked to such workers, suicides, as in the BSNL-MTNL case, will continue. Parliament has already enacted the Code on Wages, 2019. Indeed, we do need reform in our labour laws to enhance globalisation. But, at the same time, we also need a comprehensive umbrella of social security for these foot soldiers of growth and development.

Alok Ray is a Kolkata-based lawyer and labour law expert

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