Thread by @someshjha7

In @bsindia today: The government has proposed a sea change in India's contract labour system. Companies will be encouraged to hire contract workers in all areas of operations, even as more firms will come out of the ambit of the contract labour law.

business-standard.com/article/econom…

The country’s present contract labour law, known as the Contract Labour (Regulation and Abolition) Act, 1970, is designed in a way that it is meant to encourage permanent roles, along with abolishing contract workers in jobs of “perennial nature”.

The Code on Occupational Safety, Health (OSH) and Working Conditions Bill, 2020, facilitates hiring contract workers across the board for companies, even though it has introduced the concept of core and non-core activities in the functioning of a unit.

Contract workers in India are outside the purview of retrenchment or layoff and trade union laws, making such arrangements attractive to businesses.

On fixed-term employment, a mechanism through which firms can hire contract workers directly, the government has not placed any cap on the tenure of fixed-term contracts or the number of times it can be renewed, as is the norm in developing economies such as China and Vietnam.

In fact, the government has scrapped a proposal disallowing firms to convert its existing workforce into fixed-term workers.

The OSH code Bill states that “employment of contract labour in core activities of any establishment is prohibited”. Core activity will be defined as “any activity for which the establishment is set up and includes any activity which is essential or necessary to such activity”.

But a careful reading of the OSH code showed that even for core activities, firms will be free to hire workers on contract, if they “ordinarily” use contractors for such recruitment. “Any sudden increase in volume of work” can also be a reason for employing contract workers.

The government has for the first time proposed a single pan-India licence for establishments executing multiple projects, involving contract workers, for a period of 5 years. At present, for each work order, a firm is required to obtain separate licences.

Do read this piece I wrote in June 2020 about complexities of India's labour laws and what we need to do to fix them.

Also, with the proposed changes, India's contract workers will have lesser safeguards than in countries like China and Vietnam.

business-standard.com/article/econom…