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Keep labour flexibleThe labour laws of a country play an important role in determning the labour market flexibility which in turn helps the ...

Keep labour flexible

The labour laws of a country play an important role in determning the labour market flexibility which in turn helps the industry in coping with the competition, ever changing business needs, cost rationalisation etc.

One of the labour laws which in the existing circumstances is creating enormous difficulties for the industries is the Contract Labour Ramp;A Act 1970. Contract Labour Ramp;A Act, 1970 was enacted largely on account of the conditional prevailing prior to independence and during the early part of our industrialisation in 50s and 60s. Thereafter, a number of other legislations governing the conditions of work in different fields have come into force and the scene of industrial relations has undergone a vast change. While, it is not the practice of engaging contract labour, which is intrinsically despicable, but conditions governing their employment should be of prime consideration for all the three social partners. Even, internationally, in the International LabourOrganisation the issue is under discussion, but it concentrates on how to regulate the contract labour employment and not abolish the same.

With the demolition of many of the barriers, and international trade increasing day by day, it has become necessary for the countries to be competitive, as otherwise they run the risk of being wiped out as manufacturing and trading nations. The annual exercises undertaken by well-known business schools and world economic forum indicate that the competitive advantage of nations, among other factors is also considerably dependent on the labour market flexibility. It is now common knowledge that India has figured very low among the nations in respect of competitive advantage. One of the important reasons attributed to this low competitive advantage is the inflexible and over-protective labour market in India. Most of the labour laws, including the Contract Labour Ramp;A Act 1970, do not take a very long term view in terms of job creation and are considered not only veryprotective but restrictive. The Contract Labour Ramp;A Act 1970 was passed to prevent exploitation of contract labour and to introduce better conditions of work. No employers need object to any regulatory provisions which seek to provide workers their due by improving their conditions of service. However, the abolition of the contract labour is the are which requires immediate review. Abolition of the contract labour in very rare and selected circumstances could possibly be justified but not in any or every industry across the board.

Unless the industrial establishments concentrate on their core activities, they will not be competitive and will fritter away their energies, efforts and resources in peripheral activities which can best be undertaken by specialised agencies. Secondary and tertiary activity is best performed by sourcing out and should remain flexible with increase and decrease of demand. Some of the recent judgements of the High Courts as well as the Supreme Court of India have made things verydifficult for the employers and impose enormous additional burden. Therefore, a time has come when it has become very necessary for the Government to review the entire Contract Labour Ramp;A Act otherwise it will be detrimental to the interests of the business and the country in turn. For reasons which need not be elaborated here the pressure, in this regard, is much more on the public sector enterprises, which are already passing through testing times.

The author is Secretary General of Standing Conference of Public Enterprises and the views are personal.