With the globalisation of business and trade there is increasing competition among nations and industrial groups. In order to compete, it is important to streamline the operations and produce goods and services most efficiently and at the least cost. It is recognised widely that the enterprises should concrete and focus on their core activities and the rest be left to the agencies and outfits which can undertaking the peripheral activities more efficiently and economically. Out-sourcing of various goods and services is the inevitable outcome. In this context, engagement of contract workers, directly or through contractors, has not only assumed importance but is crucial. This has also attached the attention of International Labour Organisation with a view to regulate the same.

In India contracting out various items of work to workers or to contractors has been common and wide-spread. Governments are the biggest contract labour employing agencies. Public and private sectorextensively use the services of contractors and in turn their workers. Engagement of contract labour provides flexibility, leads to efficient utilisation of resources and improves productivity. Considering the need to regulate such employment and protect the interests of the workers, the Government of India brought in Contract Labour (Regulation & Abolition) Act, 1970.

This Act not only seeks to regulate the contract labour but provides for abolition industries where the nature of work is perennial. Even thought this Act has been in force for more than Twenty-five years, its enforcement is far from satisfactory and has led to enormous litigation. The enforcement machinery is pre-occupied more with the activity of abolition rather than regulation. The pressure on the public enterprises, the railways, the Government, to abolish the contract labour and provide regular and permanent employment to the workers is much greater as compared to cases where private industry is involved.

Various judicialpronouncements in regard to the Contract Labour (R&A) Act, 1970, have made things much more difficult for the employers and have not. Often trade unions, working in tandem with the enforcement machinery, have harassed the employers and burdened them with manpower they do not need. The employers have been seeking a complete review of the Act and requesting the Government to regulate contract labour personally and not abolish it. While employers want flexibility, the workers need security. These objectives are not difficult to achieve. If our industry and trade have to have the competitive edge in the international market, there should be flexibility in the labour market. The background in which the Act was promulgated has since undergone a complete change. Therefore, there is adequate justification for a complete review of the legislation and bringing out a new piece of legislation which would provide the needs of both the employers and workers in a balanced way.

It is paradox that we, in India, have,probably, the most stringent law on contract labour (yet, as reported by the Government) the plight of contract labour has not improved. This speaks for itself.

Part of the chaos in Indian labour market is on account of the fact that we have too much of freedom of association. Our Contract Labour (R&A) Act, 1970 needs to be completely re-drafted.

The author is the secretary general of the Standing Conference of Public Enterprises.