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Wages of industrial sin by Sreelatha Menon

Denial of labour entitlements to contract workers is at the root of urban squalor

The human development report does not say anything new. It only sums up the outcome of policies being followed in this country. It does not, for instance, highlight the seeds that have manifested themselves in hunger and poverty. One of the seeds is the helpless labour enforcement machinery, which is unable to deal with the mammoth reality of contract labour system.

How does one ensure that cotractors or sub-contractors who supply workers to industrial establishments pay minimum wages, bonus, overtime and other entitlements due to workers? The management at Maruti Suzuki India and the protesting workers arrived at a settlement because both regular and contract workers fought the battle together. But contract workers on their own are exposed to exploitation, as any complaint would just lead to termination.

Eight contract workers in Tata Consultancy Services (TCS), Noida, saw their contracts terminated this week for violence but, according to workers, they were protesting against the company’s policies. They say the workers are paid only Rs 4,000 for working round the clock. They are denied holidays and bonuses, except a token amount of Rs 1,000 every Diwali.

The workers are actally entitled to Rs 7,500-8,000 a month, but are paid only half the amount. The rest presumably goes for the Public Provident Fund (PPF) and the employees’ state insurance (ESI). But no worker yet has any receipt of PPF or ESI, despite having worked for one-two years. They say their contracts are terminted if they complain.

The workers are primarily migrants living in the slums of Ghaziabad and Noida. Their wives and children have a typical hand-to-mouth existence. In an urban scenario, denial of minimum wages and exploitation of contract workers equal to hunger and poverty. Unless these issues are rectified, the third human development report would have the same findings.

The labour enforcement officer in Noida — where TCS has four or five offices — expresses his helplessness. The officer can take an action when he receives a complaint. But who would complain at the risk of losing the job?

In fact, Atal Kumar, assistant labour commissioner of Noida, says in the entire year, not a single complaint has been made about non-payment of wages, PPF or ESI in the area.

The Centre of Indian Trade Unions, which took up the case of workers in Allied Nippon in Ghaziabad where a general manager was beaten to death a couple of years ago, alleges that companies and contractors together benefit at the expense of the contract workers.

Labour officials in Noida responsible for enforcement of the industrial disputes Act and other labour laws say they are like toothless tigers and lack any power to enforce the laws. The action taken needs approval from the government and, hence, there is no fear of the labour department or the laws.

B C Dwivedi, labour enforcement officer in Noida, says he has sent complaints against two or three contractors this year and no action has been taken so far in delicensing or penalising them. He assures action in TCS against the contractor if a complaint was made.

An official at TCS’ sub-contractor Sumeet Facilities Pvt Ltd says the TCS workers received Rs 4,200 a month, which is more than the minimum wages while the rest went towards PPF and ESI. He says the workers had temporary ESI cards and it was their fault if they did not make permanent cards. The PPF slips were not fake and every account was audited by TCS. As for bonus, the workers never stayed for more than two-three months and, hence, got only Rs 1,000 last year. If they stayed for a year, they would have got close to Rs 3,000. The workers who lost their job were indulging in violence, he says.

Commander Satish Mehta, who deals with contract labourers in TCS, says the company paid the minimum wages and other entitlements to the contractor and it was for it to pay.

Sudha Pilla, member secretary of Planning Commission, says the denial of minimum wages and other labour entitlements is at the root of poverty and hunger in the county. The way forward, she suggests, is to address this squarely.

Will the Twelfth Plan have a formula to resolve the enigma of contract labour?