Ministries face EPFO heat over contract labour

Written by Raj Kumar Ray | New Delhi | Updated: Sep 25 2013, 08:01am hrs
Following a parliamentary panel's criticism over the working conditions of contract workers in government departments, the Employees Provident Fund Organisation has launched a reality check on whether labour rules, including that for provident fund contributions, are being adhered to by the respective ministries.

While the private sector has been aggressively hiring workers on contract to cut costs and shed flab during downturn, the Centre along with PSUs employs about 18.4 lakh contract workers.

Big registered HR firms often tend to comply with labour norms, but there are instances of smaller contractors flouting rules to cut costs and win job contracts.

In an internal circular, additional central provident fund commissioner PK Udgata informed regional PF officers that the parliamentary consultative committee for labour has "raised the issue of contract labour and their working conditions and violations of labour laws by the employing department, central PSUs and their contractors in the country."

Accordingly, the central labour commissioner inspected some of the ministries and departments between December 2012 and February 2013 and came up with a detailed report on the contract workers. EPFO has now asked its officials to "verify" the compliance position of contractors by month-end "for further action".

Inspection by labour commissioners revealed nine ministries/departments employed close to 5,000 contract workers for various jobs ranging from house-keeping to security and IT related.

The health and family welfare ministry employs around 1,794 contract workers while the railways engaged 704 such workers, commerce and industry ministry (401), revenue and expenditure departments under finance ministry (413) and HR ministry (249).

Recently, the EPFO has asked all autonomous bodies under various ministries to submit details on whether they are part of any exempted PF fund or not.

Although the labour ministry is considering changes in the outdated Contract Labour (Regulation and Abolition) Act of 1970 to ensure equal pay for similar work and improving working conditions, the new minister Sis Ram Ola recently ruled out absorbing 18.44 lakh of contract labourers in various ministries and PSUs saying that there was no provision to regularise workers under the Act.

However, the labour ministry has been reiterating that said contract and permanent workers are supposed to be paid the same wages for similar kind of work as per Rule 25 of the Contract Labour Act and any contravention of this provision is punishable under the Act.

Contract jobs are on the rise as direct employment growth has been sluggish in past few years -- jobs in organised sector increased to 289.99 lakh by the end of 2010-11 from 287.08 in 2010-11 and 275.49 lakh in the pre-crisis year of 2007-08.

While jobs in public sector declined to 175.48 lakh in March 2011 from 178.62 lakh in March 2010, the figure rose to 114.52 lakh from 108.46 lakh in the private sector.