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DRAFT PROPOSAL

Research Proposal

Contract Labour Management in Manufacturing Industries in the state of


West Bengal with reference to statutory compliance: An empirical
Industrial study

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Table of Contents
1.0 Introduction ............................................................................................................................... 3

2.0 Background of the study ........................................................................................................... 4

2.1. The Contract Law Framework in India ................................................................................ 4

3.0 Statement of the problem .......................................................................................................... 5

4.0 Aim and Research Objectives of the study ............................................................................... 6

5.0 Literature Review...................................................................................................................... 6

6.0 Research Methodology ............................................................................................................. 9

7.0 Contribution of the research.................................................................................................... 11

8.0 Scope and delimitations of the study ...................................................................................... 12

9.0 Chapter Scheme: ..................................................................................................................... 12

References ..................................................................................................................................... 13

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1.0 Introduction

This research attempts to empirically examine the extent to which the labour regulatory
framework in India protects the interests of workers and trade unions at workplace level. The
employment relations debate in India is largely centered on the regulation of labour markets and
the role of actors within the existing regulatory framework, namely the State, trade unions and
employers (Sharma, 2006). Thus, theoretically, this debate is rooted in the institutional approach
to industrial relations. The growing interest in Indian employment relations is primarily sparked
by the new economic policies of liberalisation, privatisation and globalisation, which the
Government of India embarked upon since 1991(Agarwala et al., 2004; Frenkel & Kuruvilla,
2002; Hill, 2009; Papola et al., 2007). Following a serious balance of payment crisis in 1991,
India embarked upon major economic reforms, consisting largely of a move from policies of
import substitution to an export orientation. It is claimed that the deregulation of product and
capital markets over the past decade has resulted in an impressive GDP growth rate of around
7% per annum and a healthy foreign exchange reserve of over US$ 270 billion (Panagariya,
2008; Banerjee, 2005; Jha, 2005; Jha & Golder, 2008; Desai, 2009; Saini, 2010; Sundar, 2010;
Sundar, 2004). Further, the product and capital markets have been deregulated by the labours and
(Banerjee, 2005; Jha, 2005; Jha & Golder, 2008; Desai, 2009; Saini, 2010; Sundar, 2010;
Sundar, 2004; CII 2006), thus, regulatory framework in India remains archaic and in dire need of
reform in order to make the country an attractive destination for private domestic and foreign
investments (Carter , 2004).

The 201213 Global Competitiveness Index published by the World Economic Forum
(WEF) has downgraded India by three places compared to its 2011 ranking to 59th place out of
144 countries, and the WEFs report has been particularly critical of inflexibilities in hiring and
firing, redundancy costs and wage inflexibilities in the country. India is now poorly placed
compared to other emerging economies such as South Africa, Brazil and China on its labour
market efficiency. The 2013-2014 Global Competitiveness Index published by the World
Economic Forum (WEF) in India has downgraded as 60th rank placed out of 144 countries this

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trend began in 2009. . On the other hand, the critics of labour market reforms argue that there is
few evidence only suggests that the existing regulatory framework and especially contract labor

2.0 Background of the study

2.1. The Contract Law Framework in India

There are about 400 million workers in the Indian labour market. Of these, around 93%
are employed in the informal or unregistered sector of the economy (also referred to as the
unorganised sector). Only about 7% are employed in the registered sector enterprises operating
in the formal sector of the economy. Some estimates suggest that within this regulated sector of
the economy, about 6070% of workers are employed as contract workers hired through labour
contractors/agents with little or no legal protection (Saini, 2010). Recently, almost in all
industries contract labour growth is increased in day-day employment especially in hazardous
occupation its endangering their health and safety (ITEM, 2009). Thus effectively, the coverage
of labour laws in India is restricted to only a small proportion of the entire workforce. (Papola et
al., 2007) estimate only about 15% of the total workforce are covered under some provisions of
the industrial relations and welfare laws in India.

Another important piece of labour legislation, which has been much debated in the post-
economic reforms era, is the Contract Labour (Regulation and Abolition) Act (herein referred as
CLRA Act) 1970. This is primarily due to the significant rise in the number of contract or casual
workers even in enterprises in the formal or registered sector of the economy and in the wider
labour market (Dibyendu, 2014; Bhaumik, 2003). This law stipulates the tasks for which an
employer can hire workers on short-term contracts. It prohibits employment of contract labour in
core activities of the firm, which are carried out on a long-term and continuous basis. It also
provides for the fair payment of wages to contract workers and stipulates supervision of wage
payment by the principal employer. Furthermore, it requires the contractor/agent or, in some
instances, the principal employer to provide for health and safety and welfare of the contract

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workers employed in the enterprise. There are some cross-references with the IDA 1947, where
section 25B of the IDA states that if a worker has continuous service of 240 days (which
includes contract workers), then that worker can claim permanency of employment which in turn
confers upon him/her the statutory protections under various labor laws. Thus, the primary
objective is to stop exploitation of contract labourers by contractors or establishment.

To compound the problem, the different local rules that domestic workers are subject to
in their labour market engagements, such as work organizations, working conditions and wages.
The heterogeneity Uberoi and Chakrabarti (2004) and local variation make it difficult to arrive at
general, abstract, or uniform legal categories and to add these problems, there is very little
background literature or evidence based documentation to enable an understanding of how these
complexities may be incorporated in the regulation of the working conditions for contract
labours in India. It has been nearly 44 years since the C L (R&A) Act has come on the statute
book. It is now high time to examine whether various judicial pronouncement on the provisions
of the said Act have served the object and purpose, due to the pronouncement of the latest
judgments on the Act, the question that arises is whether the pronouncement have virtually
defeated the object and purpose.

3.0 Statement of the problem

The proposal argues that regarding the reasons for the lack of governmental action on
contract workers. It has been noticed that the contract labour has remained a disadvantaged
section of the working class mainly due to lack of organizations structure and
ignorance..Although various Committees and Commissions set up to look into the contract
labour system laws and recommended its abolition. However, recognizing the need and
inevitability of this system in the increasingly uncertain business environment, the Labour
Investigation Committee in 1946, recommended the abolition of contract labour, wherever
possible.. Based on this view, the Contract Labour (Regulation and Abolition) Act, was passed in
1970 where under this act, contract Labor has been banned in certain categories of work. In
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West Bengal (Dibyendu, 2014), contract laborers are hired based on a flexibility largely supplied
by the contractors. It is observed that intermediation is captured by the politically influenced
group (i.e., the politically active state). From the above it is still not clear on the existing contract
labour law to protect labour workers and the topic is largely unexplored. Hence, given this gap
the following aims and objectives are proposed.

4.0 Aim and Research Objectives of the study

The present study examined contract Labour, with special focus on CLRI act

1. To explore the present system of the contract Labor act to protect contract workers
2. To understand the mechanism and methodology of the implementation of the act
3. To assess the limitations of CLRI act in protecting employers and employees during
working environment
4. To explore the various cases and courts decisions in respect of the implementation of the
provision of the Act
5. To examine various stakeholders involved in the effective implementation of the ACT

Hypothesis

H1: Contract labour, specifically CLRI act significantly protects contract workers in West Bengal

5.0 Literature Review

These findings are similar to those reported by other researchers, such as Mathur (1991)
and Sen Gupta and Sett (1992). They also report other ingenious ways in which employers try to
exclude workers from statutory protection of IDA; for instance, re-designating a telephone
operator to communications officer and an accounts clerk to payroll executive Sen Gupta and
Sett (1992) have collected primary data from workers in the manufacturing sector enterprises
from six different states in India. They report that the liberalisation policies pursued by the
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Indian government have delivered an unfair deal to the workers in terms of their job security,
wages and working conditions. Their work, however, is confined to the manufacturing sector and
does not explain the impact of labour regulations on working conditions. Our research attempts
to address this gap in the literature on labour market regulations in India by undertaking an
extensive survey of workplace union activists of a large national trade union federation

Meenakshi Rajeev (2009) did research on Contract Labour Act in India. The findings
were that in India for a contract worker it is not only hard to prove his or her identity as worker
under the labour law but employer employee relationship is also not easily to establish;. It is
observed that collusive agreements between various agents often result in the exploitation of the
contract labour. However, to be able to do this it is necessary to make the workers aware of their
rights and responsibilities so that they are able to detect violation of laws.

Saini, Debi (2010) did research on role of the contract worker. The findings were that
the rights conferred on the contract workers by the Constitution of India and various labour laws
are poorly enforced. Since May 2007 the Indian Government has been talking to the need for
inclusive growth mainly to counter act the above threats envisaged by the social scientists. It
should be kept in mind that inclusive growth can be sustained only if it is built on the
foundations of basic rights of the working people, especially the powerless people.

Prakash (2008) did research on contract labour act. The findings were that the Act
applies to every establishment in which 20 or more workmen are employed or were employed on
any day on the preceding 12 months as contract labour and to every contractor who employs or
who employed on any day of the preceding 12 months 20 or more workmen. The contractor is
required to pay wages and a duty is cast on him to ensure disbursement of wages in the presence
of the authorized representative of the Principal Employer. In case of failure on the part of the
contractor to pay wages either in part or in full, the Principal Employer is liable to pay the same.
In case the contract labour performs same or similar kind of work as regular workmen, they will
be entitled to the same wages and service conditions as regular workmen. Ashis, Pandey and
Dhananjay (2004) did research on economic & social issues relating to the contract workers.
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The findings were that the Contract Workers (CWs) get minimum statutory wages with few
instances where they receive higher wages for skilled work. Incidents of contractors deducting
token money from CW's wages were reported from the cement and white goods companies.
However, they get better deals if they have collective bargaining strength. Illiteracy,
unscrupulous contractors and hazardous working conditions impose serious safety concerns for
them. Longer working hours and job insecurity are other factors that such workers face. There is
no social security for them except ESI. A majority of them live in slums or rented hutments with
poor civic amenities. Employers and contractors to some extent fulfill their economic and social
needs.

Paras Jain (2005) did research on facts of the contract labour (regulation& abolition)
act1970. The findings were that the object of the (Contract Labour Regulation and Abolition)
Act, 1970 is to prevent exploitation of contract labour and also to introduce better conditions of
work. Contract Labour differs from Direct Labour in terms of employment relationship with the
establishment and method of wage payment. Contrac Labour by and large is not borne on pay
roll nor is paid directly. The Contract Workmen are hired, supervised and remunerated by the
Contractor, who in turn, is remunerated by the Establishment hiring the services of the
Contractor.

Dhiraj Ramchandani (2006) did research on actual position of the workers. The
findings were that the practice of employing contract labour is prevalent in most of the industries
in different occupation including skilled and semi skilled jobs. A workman shall be deemed to be
employed as contract labour when he is hired in connection with the work of an establishment by
or through a contractor. The various studies conducted by commissions, committees and
Ministry of Labour shows that the situation has always been exploitative. The government has
taken various initiatives to improve the situation of the contract.

Kumari and Malhotra (2012) cross check whether the contract labours are facing same
problems in different companies for their upcoming projects. Descriptive research is used for this
purpose. The whole picture of Contract labour (regulation & abolition) act1970 is totally
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different where the organizations try to implement this act but due to carelessness of contractors
and uneducated labour workers they are not able to use this act fully. One rule has been issued by
the Chattisgarh state that now banks will give the payment to the labour workers it means that
contractors has to submit their cheques in the bank for the payments of the labour workers or
open a different account for the labour worker from which they can take their payment on time
positively but it is not being implemented by the BALCO OR LANCOS contractors or even
labour workers are not aware of this new rule.

India, in 2001 the Supreme Court of India in another public sector dispute (Steel
Authority of India v National Union Waterfront Workers, 2001) ruled that the Contract Labour
Act does not provide for the automatic absorption of contract workers as permanent workers if
the enterprise decides to abolish contract labour system(Cox , 2008). By delivering such
judgment, the Supreme Court has over-ruled its own previous pro-worker judgments that
required employers to absorb permanently contract and temporary workers who fulfilled the
necessary conditions of 240 days of continuous service. The repercussions of these anti-labour
judgments have been felt widely across public and private sector enterprises in India, affecting
the working conditions and livelihood of thousands of workers (Dhavan, 2006; Singh, 2008;
Ray, 2008). On 23 February 2011, the INTUC along with some other national trade union
federations organized a Workers March to the Parliament to register their protest against the
violation of labour laws by employers, increased use of contract labour on exploitative terms and
privatization policies pursued by the government, amongst other things Badigannavar and Kelly,
(2013).

6.0 Research Methodology

Research design: The research design was used Descriptive Research Design. The key to
good descriptive research is knowing exactly what you want to measure and selecting to survey
method in which every respondent is willing to cooperate and capable of giving you complete
and accurate information. The quantitative approach is used for empirical evaluation of the
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variables and also identifying the properties and linkage between them. The mathematical
hypotheses were used as well models for this kind of research. The proposed hypotheses were
performed in order to find out the relationship between the empirical observations and the
mathematical formulation from the interpretation

Sampling: Stratified Sampling. Population is divided into homogeneous (identical) subgroups


and then taking a simple sample in each subgroup. It assures that you will be able to represent
not only the overall population but also the key sub-groups of the population.

Sample Size: The sample size XXX in which XX were labor workers XXX were contractors

The present study deals with the gathering of primary data which is used for quantitative
analysis. The information becomes easily accessible to the applicant by the use of primary data
collection. This is done in order to reduce an error and authors favoritism. It also gives instant
data for evaluation.

Primary data collection methods of this thesis:


The survey method was also used in the current research in order to gather the primary
data. To find the motivational feature, they use the structured closed ended questionnaire
including the customers requirements and limitations. From this method, the author can access
to several applicants in the least amount of time duration8. The questionnaire was developed in
such a way that, the clients were completing the task at short time interval. In addition to
questions on the demographic profile of the respondent and the workplace, we sought
information on key areas covered by the main industrial relations laws such as employment
protection, industrial disputes, dispute resolutions and unfair labour practices. In primary data
questionnaire is used & in secondary data Published material, computerized data bases,
Syndicated services in which telephonic interviews and personal interview method was used.

For the purpose of data collection two schedules (Annexure- II) were used: These are I)
Principal employer schedule and II) Contractor schedule. In the principal employer schedule the
information was collected from principal employer about employment of direct and contract
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workers, details of contractor-wise employment, jobs performed by the contract workers, reasons
for employing contract labour on perennial and non perennial jobs etc. In this schedule, data
regarding working conditions of direct labour was also collected in respect of the
jobs/occupations in which both categories of workers (direct and contract) were found to be
working in the same unit. In Schedule II pertaining to Contactor, information was collected from
contractors on nature of jobs undertaken by them, employment of contract workers, method of
their recruitment, working conditions, wages and allowances, fines & deductions, payment of
bonus and other welfare facilities, social security, industrial relations etc. Offices of the trade
unions, office of the Assistant labour Commissioners, their residences. The other constituents
related to the Act were also contacted and interviewed with help of different checklists.
Secondary data was collected such as discussion in the Lok Sabha and since pilot study was
related to the West Bengal State, Labour policy of the state was also studied.

7.0 Contribution of the research

Firstly, the study would throw light on the artificial distinction that is the root cause between
regular employee and the contract labour in any establishment.

Secondly, the study also answers the practices to circumvent the regulations and deprive
the benefits available to the contract workers.
The study would leads to an inference that a symbiotic relationship has to be established
between the employer - management including the principal employer and the contract labour
balancing the right and obligation of both the parties.

Thirdly, contract labour system shall continue to exist because of socio economic
necessity, therefore instead of abolition, if all stakeholders take a pragmatic approach, the
objective and mission will be fulfilled.

Finally, no doubt the growth of the industry/economy is paramount consideration of the


state; the human side of the labour force has not been addressed by all concern. Therefore it is a

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vinculum juries to address the productivity and welfare of the vast labour force at the same time
so that the purpose object of the law is achieved.

8.0 Scope and delimitations of the study

The scope of the study is limited to the Industrial zone of the West Bengal, Kolkata areas.
Further, the survey would be restricted to only contract workers and their employers for whom
the act is applicable. In addition, only workers from manufacturing Industries are selected and
contract labor is a vast topic with several regulations, the study specifically attempted to look at
CLRA regulations. The study is cross sectional and quantitative study design. Hence
generalizability of the findings will not be applicable to other states of India

9.0 Chapter Scheme:

The overall structure of the current research paper is presented below:

Chapter One Introduction This chapter presents the fundamental information regarding the
current research topic and introduces the basic concepts and also lays the foundation on which
the research is built up on. It also presents the background of the research and also identifies the
main objectives and goals of the project. Finally the research questions that are part of the
objectives will also be presented.

Chapter Two Literature Review The literature review section generally provides a
collection of literatures that have already been published and that have been done on a similar
research area. Thus the review of literature provides the necessary secondary research in relation
to the study. A literature review presents a theoretical perspective and is important in answering
the research questions.

Chapter Three Research Methodology This chapter will provide a review of all the
methods that would be applied and used in the study while carrying out the necessary research.

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Typically, research is of two types Qualitative or Quantitative. This chapter will present all the
various methodologies used along with the justification for using them in the current study.

Chapter IV: Profile of West Bengal:

Chapter Five Results and discussion The fourth chapter will present the factual analysis of all
the data that has been collected. This chapter will present the results of the data that has been
gathered, it will present the analysis of the data, however it will not form a conclusion. The
discussion also would be a part of this chapter and the analysis of the information collected will
be part of this chapter. The discussion would also involve analysis the data in relation to the
research questions that have been set.

Chapter Six Conclusion This chapter concludes the final points in relation to the research
questions. It speaks to the point and gives the final answer to the research problem.

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