Trade unionism & contract workers in selected industries in Jamshedpur.

AuthorKumar, Vinay

This paper deals with the plight of contract workers. It highlights the emerging challenges of trade unionism among them in selected industries of Jamshedpur in India. After 1990s, casualization of workforce has been the major development among Indian industries. The triangular employment relationship, dispersal over multiple job sites, several bosses, and non-cooperating attitude of regular workers make it difficult for the contract workers to unite against exploitation and defend their rights. Trade unions are not capable to intervene among casual workers as much as required. This paper tries to provide the current status of trade unionism among contract workers in India.


With the onset of liberalization in 1991, Indian industries, known for employment of regular wage workers, have started to increasingly utilize contract workers both in perennial and non-perennial works. True, Contract Labor (Regulation and Abolition) Act, 1970 prohibits the utilization of contract workers in perennial work; complexity and vagueness about its abolition provisions and government's eagerness to promote investment encouraged industries to utilize contact workers for increased production. Industries utilize contract workers not for flexibility alone but also for lowering production costs. Contract workers are denied several social benefits available for regular workers. In several industries basic amenities are not provided to contract workers. Trade unionism has very low penetration; neither collective bargaining nor other grievance redressal mechanisms have been developed. This situation leads to sporadic industrial violence (Tables 1 & 2) which could not auger well for the 'Make in India' campaign, highly sought after by the new government that came to power in 2014. This paper explores the plight of contract workers in Tata Steel Ltd and Lafarge Cement (earlier a Tata Steel unit) Jamshedpur and examines the status of trade unionism among them.

Contract Workers

Informalization of workforce has been a common trend among industries the worldwide. There are two categories, informalization from above and informalization from below (Theron, 2010). Informalization from above occurs in organized industries where contract workers are engaged with regular workers at the same workplace and mostly doing the same work. Informalization from below occurs in unorganized industries or informal sectors as self-employment assisted by family members, business run with the help of family and hired labor and workers perform work for organized sectors through a complex network of subcontracting and outsourcing. Organized industries utilize both the types of informalization to curtail the production cost as their requirement.

This paper deals with the former type of informalization in which contract workers perform work for the principal employer on its workplace but not under the principal employer's payroll. The contractors are responsible to pay wages and other social security benefits to the workers. These intermediate employers were considered previously as labor supply agencies involved in emergency work as break down or major shutdown for short durations. Now they are engaged in full time with the principal employer on a permanent basis to perform perennial or non-perennial types of work. Contract workers in this new arrangement share same work sites and do the same work, earlier performed by the regular workers, with lower wages being paid to them. The accountability to pay compensation in case of accidents and other benefits are with the contractors and not with the principal employer. The irony of this arrangement is that contract workers work for the principal employer and supervised by officer or supervisor of principal employer, but get wages from contractors.

The emerging employment relationship in this arrangement is not vertical or linear as in the case of traditional employment for regular workers. The employment relationship is triangular and contract workers are controlled and guided by both the principal employer and contractor. This can be illustrated as in Fig. 1.

Contract workers are obliged with both the principal employer and the contractor. The managers and supervisors of principal employer are concerned with contract workers only to get the assigned job done. The principal employer transfers the responsibilities for amenities, social security and any accidents to the contractor as the contract workers are not in his payroll and thus save the compensations that was not possible in case of regular workers. Even Contact Labor (Regulation and Abolition) Act, 1970 has mentioned that basic amenities as toilet, drinking water, restrooms and canteen facilities should be provided by contractor at the workplaces. On the other hand, as per Factories Act, 1948, these facilities should be provided by the principal employer. Both principal employer and contractors try to escape from these liabilities and contract workers are compelled to work in unhygienic and inhuman conditions. Not maintaining proper job records is a common thing. The workplace and contractors have been changed frequently. Contract workers have the same principal employer but not the same contractor.


The other lacuna of th is arrangement is that the principal employers provide the contracts to those who quote low during tenders. Employment scenario in India compels the contractors to quote low amount for getting contracts. They also spend some amount to bribe the officers to get contracts. After all, they are doing business and business cannot sustain without profits. In government sector, they can handle the situation through low quality work, in private enterprises, this cannot be possible. Private industries are more concerned with the quality. The only option left to contractors is to resort to...

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