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Govt may allow contract labour in IT, select sectors Excluded industries may be placed in a separate schedule

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Ambarish Mukherjee
Deepak Goel

New Delhi, Oct. 15

IN a move that can completely transform the Indian labour market, the Government is planning to exempt certain industries such as information technology, transport, construction and maintenance of buildings, roads and bridges, and many others, from the purview of the Contract Labour (Regulation and Abolition) Act, 1970.

As of now, some of these industries employ contract workers but the Government has the power to prohibit such employment through an official notification. Exemption would mean that the Government would give up that power.

In an official note circulated by the Ministry of Labour, the Government has stated that, "Despite the existence of the Contract Labour (R&A) Act, 1970, the emerging reality in workplaces is increasing use of contract labour. It is important that this reality is recognised and appropriate formalisation of this ground reality be made in the existing legal framework."

The Ministry of Labour has suggested that certain activities be excluded from the application of section 10 of chapter 3 of the Act that empowers the Government to prohibit employment of contract labour.

The Ministry is of the opinion that the excluded industries may be placed in a separate schedule that can be amended from time to time as the requirement may be.

The industries that the Labour Ministry note has suggested for exclusion from the purview of the Act include information technology, services in respect of an establishment relating to ports/dockyards, airports, railway stations, inter-state bus terminals, hospitals, educational and training institutions, guest houses and transport. The proposed exemption would also cover construction and maintenance of buildings, roads and bridges and export-oriented units (EOU) established in Special Economic Zones (SEZs) and units exporting more than 75 per cent or more of their production.

The other industries for which exemption from the ambit of the Act is proposed include sweeping, cleaning, dusting and gardening, collection and disposal of garbage and wastes, security, watch and ward, maintenance and repair of plant, machinery and equipment, housekeeping, laundry, canteen, courier services and loading and unloading.

The move, officials feel, will formalise the informal sector and ensure statutory benefits such as provident fund and medical benefits under the Employees' State Insurance Corporation (ESIC).

At present, the Contract Labour Act provides for mandatory provident fund and ESIC benefits but because of the informal nature, contract labourers are deprived.

Once it is formalised, officials feel these workers will get their statutory benefits.

(This article was published in the Business Line print edition dated October 16, 2005)
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