Encourage contract employment and increase working hours of contract employees, says survey

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The Economic Survey has suggested a series of amendments to labour laws which could make retrenchment easier, encourage contract employment, and increase working hours of contract employees, which will help employers cut costs.

The survey has suggested amendments to the Industrial Disputes Act to ease retrenchment and enable adequate compensation, a demand raised by the industry at the height of the recession last year.

It has also asked for some more legal amendments, including a provision to increase the number of working hours per week and to enable an increased use of contract labourers.

Trade unions label these suggestions ‘exploitative’ and ‘anti-worker’. M K Pandhe, who heads the Centre for Indian Trade Unions (CITU), said that even the Congress-backed Indian National Trade Union Congress would not support such an amendment.

“This can be fine for executives but wo rkers need protection,” Pandhe said.

The survey says that Chapter V of the Industrial Disputes Act should be repealed to enable easy retrenchment by companies.

It, however, suggests addition of clauses to make companies pay adequate compensation to workers when they are sacked.

It says: “At present, prior permission of the government as per Chapter V B of the Industrial Disputes Act is needed for this purpose (retrenchment of workers). This needs to be removed, with a simultaneous increase in the compensation from the present 15 days’ wages to wages for every year of service.”

The survey also recommends amendment to the Factories Act to “increase work week to 60 hours from 48 hours” and the daily limit to 12 hours to meet seasonal demand through overtime.

It also suggests amendment to the Contract Act to allow use of contract labour in non-core activities or when the activity is of intermittent nature during the year.

Pandhe said this was a trap to send away most of the regular employees, as the next step would be to reduce the number of core jobs.

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