Scope, Navratna Psus Seek Review Of Contract Labour Act

The Standing Committee of Public Enterprises (SCOPE) has sought the review of the Contract Labour (Regulation and Abolition) Act, 1970, following the Supreme Court directive to Air India for absorption of contract labour.

Under the aegis of SCOPE, the nine navratna PSUs have also decided to move the apex court to review its decision. The judgment will have major implications for most PSUs including National Thermal Power Corporation, Oil and Natural Gas Corporation and Steel Authority of India, SCOPE chairman Uddesh Kohli said yesterday.

The Supreme Court had directed that the principal employer would have to absorb contract labour in sectors where contract labour had been abolished. The apex court has drawn its interpretation on the basis of the Contract Labour Act which was formulated nearly two decades ago with the objective of protecting contract labour from exploitation.

 

Normally, a company hires contract labour for sundry jobs. Contract labour in any sector is abolished based on the recommendations of an advisory committee constituted under the provisions of the Contract labour Act.

According to SCOPE officials, the company concerned has no say in which sectors contract labour should be abolished. When coupled with the Supreme Court direction, this means that if the government decides to abolish contract labour in rigging operations, for instance, ONGC will have no choice but to absorb such labourers as its regular staff. Companies prefer contract labour in functions which are sporadic in nature.

The Supreme Court judgement has major implications for all industrial units using contract labour, especially PSUs with bloated work force. Besides, unlike the private sector, which could get around the legal provisions, PSUs are bound by regulations. They are also subject to stringent appointment norms including reservations for various categories which would be breached if the Supreme Court judgement has to be implemented, SCOPE sources said.

Kohli said that SCOPE had taken a delegation of director personnel of the concerned PSUs to make a presentation before the labour secretary for the review of the Contract Labour Act.

He said the Act is redundant in the present context of globalisation and competition. At a time when slimmer organisations were in vogue the implementation of the court judgement would affect the competitive edge of the PSUs, Kohli said.

SCOPE secretary general M A Hakeem said that India is rated comparatively low as an investment destination primarily on account of its inflexible labour laws. The International Labour Organisation too had taken cognisance of this law and was in the process of finalising a convention on contract labour.

The strength of contract workers in navratna PSUs alone is around 20,000, and the court verdict could affect the economies of PSUs, he added.