123 contract labour act-final
TRANSCRIPT
8/3/2019 123 Contract Labour Act-Final
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I. Legislation : Background & where it stands
III. Present Scenario of the Contract Labour
IV. Wages of Contract Labour
II. Necessity of Contract Labour
VI. Conclusion / Inference
V. Contract labour Scenario in AAI
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i. Facts about Contract Labour:
Engaged in almost all industries (Pvt,Public-Sector & Govt. Unertakings)
Govt. is the largest employer of contract labor.( Rlys.,Airports,PSU’s, 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)
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”
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I. Contract Labour Regulation & Abolition Act, 1970
Introduction
1 May 2012 3Abstract of Contract Labor Act
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
Sec.7(1) – Registration of certain establishments
Important provisions of Contract Labour (R&A) Act,1970
Sec.10(1) – Prohibition of Employment of contract labour.
Sec.12(1) – Licensing of contractors
Sec.21 – Responsibility for payment of wagesRule 25 – Condition of License
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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 withlesser 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
• Material Movements
• Canteen Employment
• Security & Vigilance
Type of jobs Percentage (%)
Gardening 0.55
Canteen 2.75
Security 8.79
Technical 10.99
Loading, unloading, packaging 12.64House keeping 19.78
Helper 39.01
Others*
5.49
* Others include tailoring, painting etc
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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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Prohibition of employment of contract labor
The Government can prohibit the employment of Contract Labor by a notificationin the following areas: The process, operation is the main business of theestablishment
• Continuous Manufacturing
• Perennial nature of work
• Where the work should be done by whole – time workmen.
S.NoDepartment
Cargo Security Horticulture Engg(E) Engg(C ) Terminal Operation Others TOTAL
Region / Airport
1 NORTHERN
0 18 0 488 240 0 42 37 825
2 EASTERN 3 19 0 156 16 78 14 1 287
3 SOUTHERN 0 230 0 289 104 175 45 59 902
4 WESTERN 0 33 8 257 3 210 18 0 529
5 CHENNAI 688 41 0 161 22 0 28 0 940
6 KOLKATA 80 0 0 973 0 0 99 108 1260
TOTAL 771 341 8 2324 385 463 246 205 4743
% 16.26 7.19 0.17 49.00 8.12 9.76 5.19 4.32 100.00
Contract Manpower status as on 01.01.2010.
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WAGES – Contract Labour
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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 PSU’s
S.N
oORGANISATION
WAGE COMPONENTSINCREMENT
TOTAL SALARY Entitled
for
BASIC D.A H.R.A
ALLOW
ANCE OTHERS MIN. MAX.
1 RCF,MUMBAI1,540 [47%] 30% 6% 34% 7,422 12,413 6,251
2 ONGC-INDIA
Paying at par with regular workers
3 NALCO
4 RINL,VSKPPaying randomly.
5 AAI
Contract labour Wages in Airports Authority of India.
In most of PSU’s 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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AAI and cases related with Contract Labour Act,1970
No case as on dated related to payment of wages
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POSITIONS AND INTERESTS OF DIFFERENT STAKEHOLDERS ON THIS LEGISLATION Trade Unions: Trade Union Section 10 should not be amended to the disadvantage of contractworkers. 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 anyrestrictions. 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 competitiveworking 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 inclinedto allow outsourcing and engaging workers on contract. It is the responsibility of government tobring requisite amendment in this act so that more money can flow in India in form of ForeignDirect investment.POSSIBLE ALTERNATIVE SUGGESTIONS Though there are significant conflicts in the interests of the trade unions and employers, thecontact workers are quite freely changed by employers owing to high vulnerability of thoseworkers. The high job insecurity and unemployment in the country virtually forces the contractworkers to insure compliance to employers. It enhances the control of the employers at theworkplace. Hence, the trade unions are keen to develop strict norms of employing least numberof 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 presentsituation.
Current Scenario of CL Act Imp. Provision of Sec(10)
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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