More workers being hired on contract; here’s what must be done to ensure fair treatment to all

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Published: April 3, 2019 6:30:56 PM

Increasing casualisation of jobs impedes India's ability to pursue inclusive growth, which has become the prime focus of the government in the last few years.

Increasing casualisation of jobs impedes India’s ability to pursue inclusive growth.

The casualisation of the labour market in India, which continues to be characterised by fragmentation and informality, often puts workers at an unfair disadvantage in comparison to their formally employed counterparts. However, the rising number of contract workers, who are substituting permanent workers in industry, may yet be given fair treatment with implementation of relevant welfare policies, Oxfam India said in a report.

India ranks among the fastest growing economies in the world with an annual average GDP growth of 7 per cent over the last two decades. Yet, the labour market in the country is highly informal, with 62 per cent of the country’s employed population consisting of casual workers, according to a report by Oxfam India released last week. More than one-third of all the manufacturing sector workers are now hired on contract.

Contract workers consists of more than half of the total workforce in industries involved in manufacturing tobacco products, coke-refined petroleum products and nuclear fuel, non- metallic mineral products, motor vehicles and other transport equipment, according to Oxfam India report ‘MIND THE GAP – The State of Employment In India’.

Increasing casualisation of jobs impedes India’s ability to pursue inclusive growth, which has become the prime focus of the government in the last few years. Casualisation often exposes workers to unfair terms of service, wage inequality, and lack of social security benefits, job security and collective bargaining power, said the report.

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One major problem that has led this trend of rising casualisation of jobs in the economy is lower labour market rigidity, said the report. The Industrial Disputes Act 1947, which is applicable on permanent workers, makes it difficult for companies to lay off even one worker. This has made companies to resort to hiring more workers on contract.

Ensuring equal wage for equal work, reforming the Industrial Disputes Act 1947 and Contract Labour Act 1970, fixing a minimum threshold for firms to hire contract workers and setting up employee welfare board are some measures suggested by the Oxfam report to address the issue.

Moreover, with increasing automation, artificial intelligence and machine learning, companies must invest 3-5 percent of its total annual profits to retrain or skill its employees in order to maintain worker’s productivity, said the report.

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