17/04/2020 - Government Policies

KEY POINTS

·         It has been quite clear that the group of Indians most immediately hurt by the effects of the nationwide lockdown have been migrant workers. 

·         The potential source of migrant worker instability is the segmentation of the labour market, including in the formal sector, into permanent and temporary — where the former are given excessive security and the latter none at all.

·         This division has lasted long past the time when it has become understood that it helps neither employer, nor employee, nor the broader economy. Unifying the labour market, greater flexibility, as well as more widely shared security, are a must.

·         Together with the expansion of benefits to cover all workers, the labour market should have greater flexibility so that employment itself is expanded.

·         Once lay-offs — with proper compensation — are rendered legal across the country, then there is far less incentive to employ casual or contract workers. Certainly, mass firing should be dis-incentivised within reason.

·         A fair way to do this is by stipulating a minimum financial compensation for those workers who are laid off, as is best practice throughout the world. Clearly, there should be no government intervention in what will have to be a commercial decision, driven by business requirements.

·         Migrant workers, contract workers, and the like need the protection that a proper labour law regime can provide and employers need the security of knowing that their labour market is flexible within reason. This will also incentivise firms to hire more labour in the medium to long run.

Covid-19 pandemic created panic in private workforce particularly among contract employees.As per International Labour Organization,almost 25 million jobs could be lost worldwide.Employers are looking for cost-cutting measures like laying off employees due to disruptions in both demand and supply chains.Contract workers are more vulnerable to the loss of employment than permanent workers if mass lay-offs take place.This vulnerability highlights the division between regular and contract workers.

Division between regular and contract workers in India : 

Several legislations like Industrial Employment Act 1946,Factories Act,1948,Contract Labour Act 1970,Inter State Migrant Workmen Act,1979 etc were enacted by the parliament to regulate the workforce in various fields like wages,employment,termination,welfare etc.

Inspite of many legislations enacted by the parliament,contract workers are facing many problems like job security,occupational safety,health and working conditions.

A clear demarcation can be observed between permanent and contract workers in areas like incentives,lay-offs,personal liberties where contract workers are being exploited by the employer.

Areas in which the division can be reduced/removed :

1.Employers need to consider the welfare of the contract workers on par with its permanent workers thereby providing them with required food and accommodation.

2.Considering social lives of the contract workers,they should be given equal skill training as of permanent employees.

3.The contract workers can also be made permanent if they show efficiency in the work they are doing.

However,the employers are not free to provide flexibilities to the contract workers stating their loyalty,experience and so on.

But Supreme court and Government of India are well aware of this divide and trying to decrease the gap in required fields.

Recently supreme court also said in a judgment that giving unequal wages to equal level of work is a violation of dignity of an individual.

Government of India in its recent Organizational safety,health and welfare code,2019 has reduced the divide between contract and permanent workers.

It might not be possible to remove each and every division given the nature of employment in India but its possible to some extent.