Pink slips: Calls for social security measures in contract employment get louder

Sep 14 2013, 13:41 IST
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Issue of termination of employment has become one of the most sensitive issues with studies and deliberations being underaken by various organisations. Issue of termination of employment has become one of the most sensitive issues with studies and deliberations being underaken by various organisations.
SummaryPink slips have triggered panic across all industry verticals in the country.

Pink slips have triggered panic across all industry verticals in the country with the chorus for incorporating social security measures in contract employment getting louder. With close to 1.2 billion people getting ready to enter the labour market in the next 10 years, the issue of termination of employment has become one of the most sensitive issues with studies and deliberations being underaken by various organisations.

As per the latest survey of National Sample Survey Organisation (NSSO), around 13.9 million people got employed in 2011-12 of which a majority of jobs created was of low quality and in unorganised sector with little or no economic or social security and benefits.

In a bid to generate formal employment, especially in the manufacturing sector, an internal study conducted by Export-Import Bank of India  titled ‘Comparison of Labour Laws: Select Countries’ suggested that the country needs to encourage contract employment, with adequate safeguard measures which include provisions of social security measures.

According to Exim Bank chairman and managing director TCA Ranganathan, the industrial-intensive countries have been encouraging contract form of employment in order retain then talent pool. In developed countries, contact employment is the preferred course for both employers as well as employees.

“With favourable demographic dividend, we need to align our policies to match with those of our competitors so that the implications of free trade agreement and preferential trade agreement would be favourable to our business,” Ranganathan said.

The study has undertaken a comparative analysis of labour laws in 20 countries including in France, Germany, Russia, UK, Brazil, US, Kenya, South Africa, Bangladesh, China, India, Indonesia, Malaysia, Pakistan, Sri Lanka, Thiland and Vietnam.

According to the study, the Indian Trade Union Act was enacted in the colonial period, during which the focus was on industrial development, which is different from what is being propagated now. The study said that outdated labour laws are principal reasons for declining employment potential in India.

While the labour regulations in India are made with the objective of protecting the interests of employees, they give a sense of neglecting the interest of employers who are investors. Inflexible labour market is one of the factors that hinder large-scale investments, technology absorption, productivity enhancement and high employment growth in the country, the study said.

The Indian Staffing Federation (ISF), an apex body of flexi staffing industry in India comprising of about 30 members from the staffing industry and representing over 4,00,000 temporary staff, said

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