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New Labour Codes expanded the scope of engaging contract labour - Industry Experts

Nov 29, 2020

NEW DELHI, 29 November 2020: The All India Organisation of Employers (AIOE) jointly with FICCI on Friday organized virtual session 'Position of the Contract Labour Under Occupational Safety, Health and Working Conditions Code 2020' to deliberate on the new Labour Codes particularly the contract labour dynamics. The Code has further expanded the scope of engaging contract labour, noted the industry experts.


Dr Rajen Mehrotra, Former Sr. Specialist Employers Activities ILO and Former HR Head ACC Ltd said that there has been an increase in the number of informal workers working in the formal sector. "Enterprises mostly increased hiring contract labour after the Supreme Court's verdict on 30 August 2001 (Steel Authority of India Ltd and others v/s National Union Waterfront Workers and others)," he said.


He further added that for the first time CORE activities have been defined under the OSH and working conditions Code2020. "Now the principal employer will be responsible for providing welfare facilities to contract labour. Under section 1(5)-(c), SEZs were exempt from The Contract Labour (R&A) Act as many activities performed were deemed to be considered temporary or intermittent. This does not exist in the new Code," Dr Mehrotra said.


Mr Michael Dias, Secretary, The Employers Association, Delhi and Eminent Lawyer said that the earlier law had Prohibition and Abolition which has been removed in the new Code. "The provisions of contract and migrant labour will now be fully applicable not only to private enterprises but also to the offices of State government and Central government under which they will be treated as principal employer. The contractor will now have to issue appointment letters to its contract/migrant labours," he added.


Mr Dias also said that in case there is a shortage of payment by the contractor then the principal employer will have to pay for the shortfall and same can be adjusted from contractor's payments. "There is also a provision where the contractor has to deposit a security money to the licensing authority and the licencing officer can adjust the shortfall of payments by adjusting it against the security money deposited," he noted.


Mr Kaviraj Singh, Managing Director, TA Netgables Pvt. Ltd, and leader of the SARALWEB team said, "There is no long-term liability for engaging contract labour, but it comes as a cost. Many of the contract labourers opt for permanency claims."