Outsourcing Worries Labour Minister
The labour ministry has taken a serious view of the industry's practice of outsourcing goods and services after closing down certain production units in the organised sector. The system of sub-contracting and parallel production arrangements is pushing a large number of workers into sub-standard employment conditions, the ministry feels.
The ministry has initiated a series of studies that will form the basis of changes in labour policy and laws. The studies will focus on the inability of the organised industrial sector to create additional job opportunities in sufficient numbers and the movement of labour from the organised to the unorganised sector.
Union labour minister Satyanarayan Jatia has asked for an in-depth study on the industry's practice of aiding and abetting voluntary separation in the production processes through outsourcing. This has severely affected workforce adjustments and harmed the interest of workers.
On the other hand, organised industry has not been sufficiently forthcoming in supporting programmes for redeployment of workers. The ministry has also initiated studies in the increased use of casual and temporary labour and the widening income differential between skilled and other workers.
Jatia disagrees with the view of industry bodies like the Confederation of Indian Industry and Federation of Indian Chambers of Commerce and Industry that over-protection in the form of regulations governing recruitment, job security and other benefits was coming in the way of industrial growth.
"It is often claimed that labour market rigidities stand in the way of employment creation. However, the extent of labour market rigidities is not yet known and very little systematic research has been done in this area," Jatia recently told a gathering at the V V Giri National Labour Institute.
The institute, which is carrying out these studies, is also examining the process of labour organisation and the system of tripartism. This is significant as the role of central trade unions is on the wane because of the differences between plant unions and central unions and the process of liberalisation.
On the other hand, industry leaders have been demanding that the system of tripartism to settle labour disputes, involving representatives of labour, industry and the government, be replaced by bipartism. They want direct negotiations with labour representatives and not through government agencies, which, they feel, delays the arbitration process.
More mandays have been lost due to lockouts than due to strikes in the last two years. Trade unions have also been complaining that a section of the industry has been using abnormal means like refusing to pay electricity bills to bring about a closure of the units instead of going through the legal process of declaring lockouts.