Government sector employs more Contract Labour than Private Companies
15. Mar, 2011 
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Equal pay
An article in The Economic Times made some interesting revelations on the outcome of Govt study regarding extent of Contract Labour engagement. The government was contemplating amending the Contract Labour Act whereby including provisions in the Act that would make it mandatory for Principal Employers to ensure that Contract Workers are also paid wages equal to those earned by permanent employees, including all other social security benefits.
Before amending the provisions of the Act, the Prime Misters Office, through VV Giri National Labor Institute conducted a study to analyze the spread of Contract Labour across the Country and the enhanced financial outgo.
The study brought out startling facts -
- 32% of the workforce in Govt offices are contract labour while only 30% of the Contract Labour form the workforce of private companies.
- The amendment would cost the Govt Rs. 11,000 crores annually against Rs. 5,500 crores for the private sector.
- The average wage of contract labour in public sector at 185.28 is higher than that paid by the private sector at 143.45
- 36 Million Contact Labour would benefit by the amendment
The Employers Associations feels that such a move would increasing push the Companies towards mechanization, but the Workers Unions, in response, quote what the Supreme Court once stated – ‘ if you cannot pay you have no right to run a business’.
While the Unions may want to push this law in their own interest demanding ‘equal work and equal pay’, it would be pertinent for them to understand that ‘unequal work cannot be treated equally’.
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