Centre steps in to ensure PF, health benefits to contract workers

The Centre seems to be moving ahead to ensure social security benefits such as provident fund (PF) and health benefits under Employees State Insurance Corporation (ESIC) to the growing number of contract workers employed by government and public sector agencies, even as trade unions have been demanding regularisation, equal wages and benefits.

The Cabinet Secretariat got into action and moved a note to ensure that contract workers get social security benefits.

The Ministries, departments and public sector units, who outsource their work to agencies that deploy staff, should make payments to contractors only after ensuring that they are registered with EPFO and ESIC, Cabinet Secretary PK Sinha wrote in a letter (seen by BusinessLine ) to the then Revenue Secretary Shaktikanta Das in mid-August.

As principal employers, the Ministry/department/public sector undertakings should also ensure that all their staff are getting legally entitled benefits, added the letter, calling for using the provision under the establishment search option of EPFO to find out whether the contractors are depositing PF. There are similar provisions in ESIC as well.

Following this, on October 15, circle heads of public sector telecom major, BSNL, were asked to give ‘top priority’ and submit a compliance report on implementation of social security measures to the Lok Sabha Secretariat by October 21.

“It has been brought to the notice that a) at many circles…contractors have not issued EPF/ESI cards. b) Many contractors are working without registration under EPF/ESI. c) Prescribed contribution is not being deposited with the EPF/ESI Authorities. d) The notices issued by EPF/ESI authorities are not responded,” the letter said.

However, there is no latest official estimate yet of the number of contract workers in the government sector. In a written reply to a question in Parliament, Labour Minister Bandaru Dattatreya had said no “centralised data in this regard is maintained”, adding that in 2013-14, the estimated number of contract workers engaged by licenced contractors in the Central sphere was 21.12 lakh. 

 However, a report by industry chamber FICCI quotes a VV Giri National Labour Institute study estimating a total of 3.6 crore contract labour in the country, of which 60 lakh are covered under the Contract Labour (Regulation and Abolition) Act, 1970 in both the Central and State sphere.

The study also notes that while regular employees get about ₹441.9 average a day, it is only ₹185.28 for contract workers for the same kind of work.

The country-wide general strike on September 2, by 10 trade unions had flagged the issue, demanding regularisation and equal benefits and wages for contract workers who “account for over 50 per cent in the public sector,” and some of them “are not even being paid minimum wages.” But, some large unions, such as All India Railwaymen Federation headed by Shivagopal Mishra, said they were not against outsourcing per se, but wanted all benefits for contract workers.  

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