The idea that the huge difference in wages between permanent and temporary staff is the chief cause of labour unrest in many industries. This is said to have made the Union Labour Ministry to consider amending the Contract Labour Act.
The Union Ministry of Labour is considering a law mandating that the temporary staff be paid the same as the permanent staff. Labour Minister Mallikarjun Kharge has been speaking of this at various fora.
Ever since the slowdown hit, some 30% of jobs in Karnataka are estimated by the government to have moved from permanent to temporary, a senior government official told Business Standard in Bangalore. The argument put forward by the labour ministry is that the temporary staff do not have job security. Over and above that, the principle of ‘equal pay for equal work’ has an important place in India. It is read with Article 39(d) and Article 14 of the Constitution of India.
In the last 12-18 months, as demand has been outstripping supply, there has come about a parity in the pay between temporary and permanent staff. "It's a good option," said Sangita Lala, senior vice-president & co-founder, Teamlease, one of the large temping companies in the country, adding "but, it's a challenge given the archaic rules and regulations that are still in force." As of now, "it looks great on paper and it will be great for temporary staffing companies too." she said.
Much of temporary employment is driven by supply and demand.
Globally, temporary staffing is for short periods and most often it is for specific skills as in the European countries. Often, the employer ends up paying more what he would pay a permanent employee. In India, on the other hand, most often temporary staffing is for the lowest strata of the workers, often the unskilled workers.
Said E Balaji, MD & CEO, Randstad, "In certain countries, there's a rule emphasising equal pay for equal work. But, here we need to see how the government will make it work." The major organised players in the temping industry have been calling for regulation of the temporary staffing sector for many years now. "Regulation of the temporary staffing sector has been a long-felt need. This will benefit organised players," said Sudhakar Balakrishnan, MD & CEO, Adecco-India, adding "a lot of jobs in future will be in the temporary." It has been argued that many who are freshers will look at it and they can get jobs through temporary jobs with global corporations. As of now an estimated half a million temporary staff are said to be on the rolls of the organised players. According to a study by the V V Giri National Labour Institute, contract labour accounts for 55% of public sector jobs and 45% of all private sector jobs. The major temporary staffing players in the country include Adecco, Randstad, Teamlease among others.