Article (November-2021)


Will the OSH Code mitigate the aspirations of Contract Labour?

Deepanjan Dey

Designation : -   General Manager-HRM

Organization : -  Tata Steel BSL Ltd., Angul, Odisha


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The incidents of labour strife involving contract labour, its welfare issues, wages, working hours and raw handling in recent past have again brought the contract labour issue in focus.

The data of Annual survey of Industry (ASI) which covers establishment registered under the Factories Act, shows a surge in deployment in contract labours usage in the organized manufacturing sector. As per this report the over half of the increase in total employment from 7.7 million to 13.7 million between 2000-01 and 2015-16 was accounted for by contract workers. The share of contract workers in total employment increased sharply from 15.5 per cent in 2000-01 to 27.9 per cent in 2015-16, while the share of directly hired workers fell from 61.2 per cent to 50.4 per cent over the same period. More interestingly the surge in the Contract Labour workforce has been found more in capital intensive industry rather than labour intensive industry. The reason for such surge can be attributed to four-fold reasons. One the rigid labour laws, two the flexibility the industries feel in deployment of contract labour, three the reduced cost of labour and last but not the least the mindset of the industries.

The Contract Labour Regulation & Abolition Act 1970 (herein after referred to as CLRA Act) was enacted with an objective toregulate the condition of contract labour to alleviate their conditions but unfortunately despite such noble intention of the law the Contract Labour remained exploited for last fifty years. The spirit of the CLRA Act is aptly described in M/s Gammon India Ltd. Vs Union of India and Others, (1974(1) Lab. LJ 489 (SC) = 1974 Lab. IC 707 (SC) =AIR 1974 SC 690) wherein it is held that the objective of the CLRA Act is to abolish the system of contract Labour wherever possible; and to regulate wherever it is not possible to abolish Contract Labour. This view point of Supreme Court has been also reverberated in other cases also. In R.K. Panda Vs Steel authority of India (1994 (69) FLR 256 (SC) the apex court observed the primary object of the Act is to stop exploitation of contract labours by Contractor or establishment.

The question that arises can the presently enacted the Occupational Safety Health and Working Conditions Code 2020 (hereinafter referred to as OSH Code) which will subsume the CLRA Act can to an extent alleviate the condition of Contract Labour. The OSH Code has defined Core activity. Core activity has been defined as any activity for which the establishment is set up and includes any activity which is essential or necessary to such activity'. Further, the definition excludes eleven activities from the ambit of core activity of the establishment provided the establishment is not set up for such activity. It may be apposite mention herein that the CLRA Act has not defined what is a core activity for an establishment.

Section 57 of the OSH code prohibits the deployment of contract labour in core activity of the establishment. However, it has three appendage provisos attached which has created more confusion and in future will lead to various litigations. Hence, to appreciate appropriately section 57 is reproduced which reads as follows:

57. (1) Notwithstanding anything contained in this Part, employment of contract labour in core activities of any establishment is prohibited:

Provided that the principal employer may engage contract labour through a contractorto any core activity, if-

(a) the normal functioning of the establishment is such that the activity is ordinarily done through contractor; or

(b) the activities are such that they do not require full time workers for the major portion of the working hours in a day or for longer periods, as the case may be;

(c) any sudden increase of volume of work in the core activity which needs to be accomplished in a specified time.

(2) (a) The appropriate Government may, by notification, appoint a designated authority to advise that Government on the question whether any activity of an establishment is a core activity or otherwise;

(b) if a question arises as to whether any activity of an establishment is a core activity or otherwise, the aggrieved party may make an application in such form and manner as may be prescribed, to the appropriate Government for decision;

(c) the appropriate Government may refer any such question suo motu or refer the application to the designated authority, which on the basis of relevant material in its possession, or after making such an enquiry as it deems fit, shall report to the appropriate Government, within such period and thereafter the appropriate Government shall decide the question within such period as may be prescribed.

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Deepanjan Dey - General Manager - IR, Eveready Industries India Ltd., Kolkata