Contract Labor (Regulation & Abolition) Act, 1970--role of the trade unions & challenges.
| Author | Babu, I. Sharath |
| Position | Report |
Contract labor refers to labor assigned to perform tasks by an employer without any formal and direct employer-employee relationship. The relationship is mediated by individuals or agencies termed as contractors who employ workers and hire them out. Contract labor is a phenomenon visualized, originally, as a help to the growth of services of seasonal and temporary nature. The Contract Labor (Regulation & Abolition) Act, 1970, is a legislation to regulate the employment of contract labor in certain establishments and to provide for its abolition in certain circumstances. This article focuses on the role of the trade unions and their challenges while dealing with the provisions of the Contract Labor (Regulation & Abolition) Act, 1970.
Introduction
It is a well known dictum that the labor laws especially the laws relating to industrial relations in the country are rigid to carry on their business and to have flexible labor in meeting the situations of a competitive global market. Opposed to the traditional industrial culture of open competition or laissez faire, the present structure of industrial law is an outcome of long-term agitation and struggle of the working class for participation on equal footing with the employers in industries for its growth and profits. Two socially vital factors must inform the understanding and application of industrial jurisprudence. First is the constitutional mandate of Part IV, obligating the state to make "provision for securing just and humane conditions of work". Security of employment is the first requisite of a worker's life. The second, equally axiomatic consideration is that a worker who willfully or anti-socially holds up the wheels of production or undermines the success of the business is a high risk and deserves, in the industrial interest, to be removed without tears (Michael & other vs. M/s Johnson Pumps and Another.) Up to certain stage of the post-independent history the legislation and judicial interpretation have woven the legal fabric based on these patterns.
Law is a form of order, and good law must necessarily mean good order. The roots of jurisprudence lie in the soil of society's urges and it blooms with nourishment from the humanity it serves. Labor flexibility as visualized by the reform process emphasizes capacity of labor to transform and adapt to new and emerging technologies introduced as part of structural reforms, and to face challenges of a highly competitive structure--domestic as well as external through improving productivity and quality of output. Labor employed on contract has been one of the most common forms of non-regular employment. Contract labor refers to labor assigned to perform tasks by an employer without any formal and direct employer-employee relationship. The relationship is mediated by individuals or agencies termed as contractors who employ workers and hire them out. Contract labor is an age old phenomenon visualized, originally, as a help to the growth of services of seasonal and temporary nature (Ramanujam & Sodhi, 2004). Employment of contract labor expanded and diversified substantially during the last one and a half decade with the initiation of the reform process and culminated in to new heights presently. Today contract workmen are employed in every sphere of industrial activity irrespective of the nature of work.
The Contract Labor (Regulation & Abolition) Act, 1970 (herein after referred to as the Act) is a legislation to regulate the employment of contract labor in certain establishments and to provide for its abolition in certain circumstances and for matters connected therewith. The Act applies at the first instance to every establishment in which twenty or more workmen are employed or were employed on any day of the preceding twelve months as contract labor and to every contractor who employs or who employed on any day of the preceding twelve months twenty or more workmen. Under this Act a workman shall be deemed to be employed as "contract labor" in or in connection with the work of an establishment when he is hired in or in connection with such work by or through a contractor, with or without the knowledge of the principal employer. (1) It is difficult to comprehend as to why the law chooses to use the words 'with or without the knowledge of the principal employer'. (2) "Workman" means any person employed in or in connection with the work of any establishment to do any skilled, semi-skilled or unskilled manual, supervisory, technical or clerical work for hire or reward, whether the terms of employment be express or implied, but does not include some persons (3)
Section 2 (1) (i) of the Act excludes the following persons as workmen:
i. who is employed mainly in a managerial or administrative capacity; or
ii. who, being employed in a supervisory capacity draws wages exceeding five hundred rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature; or undoubtedly the contract labor are referred to as the workmen under the Act and explicitly perform all types of work to that of the regular employees of the principal employer in the establishment. The Act, though speaks about a module of concept of regulation of employment, is however, silent about the definition of 'trade union' in the Act. (4)
The next principal question that stands for clarity in the context is whether the Trade Unions Act, 1926 enables the contract labor to form a trade union and register it? The Amendment Act, 2001 to Section 4 of this Act perhaps changed the very concept of trade unionism as perceived originally by the law itself. (5) It may be pointed out here that Indian trade unions, from the very beginning, have been considered not only as wage-welfare organizations of labor, but also as instruments of social and economic change. On the whole the present text of the Trade Unions Act, 1926 encourages the establishment or industry wise trade unions as opposed to general trade unions of workers. It is quite clear from the combined reading of both legislations, and the relevant provisions there under the contract labor employed in any establishment can form a trade union and register it. (6)
The fundamental purpose of this research is to pave the way for the trade unions working for the welfare of the contract labor to have proper understanding of the legislation in promoting the interests of the contract labor employed under genuine contract labor system. In terms of judicial verdicts the usage of the phrase 'genuine contract' is referred to the situations wherein the principal employer carrying the system of employment of contract labor validly within the framework of the Contract Labor (Regulation & Abolition) Act, 1970. Carrying the system of contract labor validly within the framework of the legislation in the sense means, the principal employer has duly employed the contract labor by clearly complying with all the provisions of the Act as well as the Rules framed there under in respect of such employment. (7) The terms like a system of camouflage or sham contract or a system of smokescreen or a system of subterfuge as referred to by the judiciary cover the situations wherein the system of employment of contract labor is being carried on by the principal employer by clearly defeating the provisions of the Act as well as the Rules framed there under.
The statement of Objects and Reasons of the Act provides that the 'system of employment of contract labor lends itself to various abuses. The question of its abolition has been under the consideration of the Government for a long time. In the second Five-Year Plan, the Planning Commission made certain recommendations, namely, undertaking of studies to ascertain the extent of the problem of contract labor, progressive abolition of system and improvement of...
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