Labour's love lost
We should worry about the casual workforce who may be exiled into the outer reaches of the galaxy. Indrajit Hazra writes.columns Updated: Jul 28, 2012 23:12 IST
There is a neat astronomical model that can be applied to the various levels of being gainfully employed. There is the 'permanent' employee closest to the sun, firmly orbiting the organisational star and enjoying its warmth and gravitational comforts in the form of a decent, regular salary and other social security amenities.
There's also the employee on contract, farther away from the sun who, depending on the organisation, has less or no social security and usually earns less, but who still remains within the ambit of the solar system.
And then there are the comets and other varieties of space rock that make for the casual employee, flitting in and out of star systems, becoming visible through their seasonal proximity to various suns. They are paid less and depending on the job required at that particular place and time. No gravitational comforts of social security benefits or performance-based gift hampers for this lot.
But they can, if they possess skills in demand, become valuable. If things are going good, this kind of employment works out perfectly for both employer and employee. The former gets to spend less money than he or she would on permanent or even contract employees possessing those skills; the latter makes more money by having more sources to exchange his services for money.
There has been much in the business media of late pointing to the growing clout of skilled temporary workers in India, especially in traditionally 'full-time' areas like management. I have personal reasons to be delighted at such a trend. My query, however, involves temporary employment in a different universe. Here, you don't call them 'temps' or 'freelancers'. You call them 'casual labour' or — to use the 'blue collar-white collar' sartorial metaphor — 'casuals' on contract.
Wipro chairman Azim Premji, someone who knows that a company answers only to its shareholders and therefore needs to keep its employees happy, recently remarked that “when growth slows down, incremental jobs getting created also slow down significantly, and unemployed people can be people who generate social unrest”. Premji was speaking in the context of the horrific violence unleashed at the Maruti Suzuki plant in Haryana that saw a general manager brutally murdered and others seriously injured. While underlining the fact that the government has to "act ruthlessly" against a possible new wave of militant trade unionism, Premji's warning about brewing social unrest from workers' discontent is a serious one.
Casual labour, usually paid by the day, accounts for about 40% of those employed in India's 'organised sector'. And when new jobs aren't there, it's the fly-by-night comets, the casuals, who are the worst hit.
Economists Abhijit V Banerjee and Esther Duflo in their book Poor Economics, write: “Stability of employment appears to be the one thing that distinguishes the middle classes from the poor. In our 18-country data set, middle-class people are much more likely to have jobs that pay them weekly or monthly, rather than daily, which is a crude way to separate temporary or more permanent jobs.” “The important fact is opportunity. That there are jobs to be had,” they continue. “Compared to the anxiety of an agricultural labourer waiting for the rains, a migrant construction worker's life is much more favourable.” It is indeed. But only until jobs don't start drying up.
The Maruti management has stated that the mob violence at Manesar was not caused by any wage dispute. But the car manufacturing industry is a good place to see what's going on in the permanent-contract employment divide. Car manufacturing has seasonal ups and downs in demand. So getting all on to the 'permanent' boat makes no sense. Currently, out of the 3,000 workers at Manesar, 2,100 are on contract. Plans are now on to bring more workers into the 'core' employee circle.
But in the long run, very few places will make such wholesale contract-to-permanent worker conversions. And why should they? The economics of running businesses will become nonsense. It's India's notorious labour laws, which make hiring and firing a permanent employee such an impossible task, that continue to stifle a better deal for contract and casual workers.
Employers far less amenable towards providing employee satisfaction than Maruti figure, 'What the heck. I can hire a casual to do the job of a permanent for a third of the money and then get a new one.' The Contract Labour (Regulation and Abolition) Act, 1970, doesn't allow this to happen. But shit always happens.
We legitimately worry about how India Inc could get dragged under by Soviet-era demands from trade unions. We should also worry about the casual workforce who may be exiled into the outer reaches of the galaxy if labour laws, ironically created for their 'stability', fail to provide the flexibility and basic benefits that India — and a vast number of its workers — may very soon be screaming for.