Informal Work and Labour Legislation in India: a

case study of conservancy workers of BMC

Shakti Hiranyagarbha
2012GL010
A dissertation submitted in partial fulfilment of the requirements for the
Degree of Master of Arts in Globalisation and Labour Studies
Shool of Management and Labour Studies
!enter for Labour Studies
"ata #nstitute of Soial Sienes
Mumbai
201$
i
DECLARATION
#% Shakti Hiranyagarbha% hereby delare that this dissertation entitled &Informal Work
and Labour Legislation in India: a case study of conservancy workers of BMC' is the
outome of my o(n study undertaken under the guidane of Dr) Srinath *agganathan%
Asst) +rofessor% !entre for Labour Studies% Shool of Management and Labour
Studies% "ata #nstitute of Soial Sienes% Mumbai) #t has not pre,iously formed the
basis for the a(ard of any degree% diploma or ertifiate of this institute or any other
institute or uni,ersity) # ha,e duly akno(ledged all the soures used by me in the
preparation of this dissertation)
0-th Marh% 201$
.........................
Shakti Hiranyagarbha
2012GL010
ii
CERTIFICATE
"his is to ertify that the dissertation entitled &#nformal /ork and Labour Legislation
in #ndia0 a ase study of onser,any (orkers of 1M!' is the reord of the original
(ork done by Shakti Hiranyagarbha under my guidane) "he results of the researh
presented in this dissertation ha,e not pre,iously formed the basis for the a(ard of
any degree% diploma or ertifiate of this or any other uni,ersity)
.........................
Dr) Srinath *agganathan
Assistant +rofessor
!entre for Labour Studies
Shool of Management and Labour Studies
"ata #nstitute of Soial Sienes
Mumbai
0-th Marh% 201$
iii
ACKNOWLEDGEMENT
2irst and foremost # (ould like to thank my teaher and guide Dr) Srinath
*agannathan for his humble and e3traordinarily tolerant approah and ritial
feedbak) # (ould also like to thank all the members and offie bearers of 4ahra
5ahatuk Shramik Sangha) Mr) Milind 6anade and Mr) Deepak 1halerao need a
speial mention) /ithout their support and guidane e,en the thought of this
dissertation seems impossible)
# must thank the teahers of the enter and the staff of "ata #nstitute of Soial
Sienes (ho in their diret and indiret (ays ha,e helped in ompletion of this
researh)
# (ould further like to thank friend and mentor Sumit "ripathi for going through the
initial draft and suggesting ,aluable hanges) Most importantly # must thank my
friends Ami% Ashish% 1al7eet% 6uhi% Sameer% Satya% Siddharth% Shruti% Sriram and all
others (ho ha,e been my pillars of support) #t (ould be un7ust not to thank the
de,elopers of Libre8ffie% Mo9illa and :buntu% it is for their support that this
dissertation has seen its ompletion)
Lastly% # thank all those people (ho remain ,isible and in,isible and silently (ork
to(ards reprodution of aademi labour by their hard (ork)
# dediate this researh to my family (ho has lo,ed me unonditionally and
espeially my parents (ho ha,e al(ays put faith in me and enouraged me to e3el)
CONTENTS
Delaration i
!ertifiate ii
Akno(ledgement iii
Abstrat 1
!hapter 10 #ntrodution 2
!hapter 20 Methodology $
2)1 Seletion of "rade :nion $
2)2 Data !olletion $
2); Analysis -
!hapter ;0 A 1rief History of #ndian Labour Legislation <
;)1 "he 2irst +hase <
;)2 "he Seond +hase =
;); "he "hird +hase 10
!hapter $0 "he #nformal Setor 12
!hapter >0 "he Mehanism of #nlusion and ?3lusion 1$
>)1 1ased on numbers 1$
>)2 1ased on Ati,ity 1>
>); 1ased on Ageny 1-
>)$ 1ased on /ages 1-
!hapter -0 *udiiary and the ,oie of (orkers 1@
!hapter <0 !onlusionAsB 2<
1ibliography 2=
C1D
ABSTRACT
Labour (elfare legislations in #ndia are entered around permanent (orkers) "he fate of temporary
or asual labour depends on the interpretation and e3pansion of the sope of these legislations by
the 7udiiary and the parliament) Sine the adoption of ne( eonomi poliies there has been a
ma7or shift in the attitude of the parliament as (ell as the 7udiial mahinery to(ards the toiling
masses) "he legislations ha,e been amended to pro,ide easy hiring and firing options to industries
and the same has been applied in its ,ery limited sense to further redue their sope of o,erage)
"his dissertation attempts to e3plore the launa manifest in #ndian labour legislations (hih lead to
informalisation of the (orkplae% ultimately resulting in marginalisation and stigmatisation of
(orkers engaged in informal (ork)
C2D
CHAPTER ONE
INTRODUCTION
Memos A200=B urges us to be angry about the situations (e are sub7eted to) He makes an engaging
plea for dignified rage and insubordination (hile desribing the e3periene of the oppressed people
of Greee) "he researher argues through this dissertation that the trade union 45SS (hih
organises ontrat (orkers in,ol,ed in onser,any (ork in the Muniipal !orporation of Mumbai
is one suh ritial spae for dignified rage)
"he adoption of ne( eonomi poliy and the onslaught of globalisation has resulted in
drasti hanges in the soiety and the (ay labour interats (ith the soiety) "he dignity of (orkers
is being snathed a(ay from them by 7eopardising their status as a (orkman) #n this onte3t the
e3istene of (orkersE olleti,e like 45SS beomes essential for asertaining the rights of (orkers)
#n MemosEs (ords A200=0 220B 45SS (ould be% Fa arni,al of the oppressed% a struggle against
apital and its state% a struggle for humanity and dignity)G
#n this dissertation the researher partiularly engages o,er the 7udiialised form of the state
and points out ho( it marginalises ,ulnerable (orkers by depri,ing them of their rights) 2or this
purpose the researher dra(s from the (ork of 1abu and Shetty A200<B (herein it is e,ident that the
apathy of the 7udiiary to(ards the plight of (orkers is an outome of the lass differene that
e3ists bet(een the 7udges and (orkers) "he 7udges belonging to an elite setion of #ndian soiety
are totally isolated from e,eryday struggles of #ndian (orking lass) "his isolation is manifested in
the orders that are passed by the ,arious High !ourts and the Supreme !ourt in #ndustrial Dispute
ases postHliberalisation) #t has made the 7udiial mahinery a prophesier of the neoHliberal% open
market poliies of the go,ernment)
"he researher further notes that although% there e3ists a (orkersE union of the permanent
onser,any (orkers of 1M!% 45SS has been the only spae (here these oppressed ,oies of
temporary (orkers has got any representation) Malo A200-B in (hat he alls a EnaturalE e3periment
amongst Spanish union% found that the ,oies of temporary (orkers reei,ed no or ,ery little
representation in the demands raised by the union of permanent (orkers as there (ere no inenti,es
for it) Same is the ase (ith the temporary onser,any (orkers employed in 1M!) "hey fae
apathy not only at the hands of their employers) "hey are also stigmatised by their olleagues (ho
are permanent employees and engage in similar (ork) Hene% the e3istene of an alternati,e
(orkersE union for the representation of these suppressed ,oies is neessary and it is this ,oid that
is being filled by 45SS)
Dra(ing from 6ai and Sel,ara7 A201;B the researher onludes that globalising ities (hih
C;D
are integrated into the international politial eonomy marginalise (orkers% partiularly migrants)
45SS is engaged in olleti,ising these marginal (orkers% many of (hom are migrants and lak an
effeti,e understanding of e,en the language spoken in Mumbai) "he finanial apital has been
infamous for its attak on outsiders) #t has been the poorest of the poor (ho ha,e al(ays faed the
brunt of suh attaks) "he efforts of 45SS are direted to(ards e3panding the demorati rights
a,ailable to these (orkers) 2ollo(ing 6ai and Sle,ara7 A201;B it is important to note that only the
efforts of trade unions suh as 45SS an help (orkers in asserting their rights pertaining to issues
of health% housing% food and (ork) "he olleti,isation efforts of 45SS therefore need to be
understood (ithin the larger paradigm of integrating (orkersE struggles (ith demands for
de,elopment premised on soial 7ustie)
C$D
CHAPTER TWO
METHODOLOGY
"he empirial basis of this thesis is deri,ed from a ase study of the trade union 4ahra 5ahatuk
Shramik Sangh) 45SS is a registered trade union under the "rade :nions A6egulationB At% 1=2-)
"he :nion (as started in 1==2 and its head offie is situated at Shramik% Dadar A?B) "he :nion is
affiliated to Ie( "rade :nion #nitiati,e% a federation of "rade :nions based out of Delhi)
"he :nion is a (orkers olleti,e of onser,any (orkers of 1M! (ho are employed on
ontrat basis for the 7ob of s(eeping% mopping% olletion% transpiration and dumping of (aste)
"he members of the :nion belong to the age group 2@ to $0) "he :nion has been fighting a battle
for the permaneny of its $000 odd members sine 1==-) "he researh (as onduted to probe into
the obstrutions that lie in the path of their permaneny)
2.1 Selectio o! T"#$e Uio
2or the ompletion of the degree of Master of Arts in Globalisation and Labour e,ery student has to
go for an internship of 1> (eeks in a trade union) "he researher hose to intern (ith 45SS for t(o
reasons) 2irst% the researher had aquired an interest in the soial seurity situation of ontrat
(orkers (ho (ere e3empt from most of the (elfare shemes of go,ernment) Seond% the researher
had been e3posed to the issues of onser,any (orkers of Mumbai during ,arious field ,isits and
guest letures organised during the first t(o semesters of the ourse) 45SS pro,ided easy aess to
(orkers engaged in informal (ork and go,ernment offies for gathering information)
2.2 D#t# Collectio
"he empirial material onsists of transripts from 1> inter,ie(s (ith 12 people% as (ell as notes
from partiipant obser,ation at different ourt hearings% protests and meetings organised by the
:nion) "he researher had aess to the ourt ase materials (hile (orking as an intern (ith the
:nion) ?ah transript is ,erbatim and unedited reord of the oral e,idene olleted by the
researher)
"he researher spent about 1> (eeks (orking (ith 45SS as an intern) During this proess
the researher had regular meetings (ith Mr) Milind 6anade and Deepak 1halerao (ho pro,ided
him (ith se,eral tasks onerning the :nionEs ati,ities) "he (ork of the researher inluded ,isits
to different (ards in (hih ontrat (orkers had been engaged by the muniipal orporation) #n
these (ards the researher arried out ,arious union ati,ities suh as gate meetings% protests%
engagements (ith muniipal orporation offiials and follo(ing up (ith the ases that the union
C>D
had filed in the ourts) "hus% the researher aquired the position of a partiipant obser,er (ithin
the trade union and engaged (ith the trade union mo,ement using the frame(ork pro,ided by
M!urdy and :ldem A201$B) #t (as important for the researher to engage in a refle3i,e sense (ith
the trade union mo,ement) 6efle3i,ity meant that the researher had to assess (hat different stake
holders assoiated (ith the trade union mo,ement thought about him)
"he researher had an o,ert approah to field(ork% this required% inter alia% establishing a
partiular le,el of trust and aeptane) "o garner the trust of the (orkers and other stakeholders of
the union mo,ement the researher delared his researher status early on during the field(ork)
Also% the researher had an insider status (ithin the :nion) "his% at times% obsured the ritial
approah of the researher) 1eing a part of the soial mo,ement and protests one tends to get arried
a(ay) +rotests an lead to dangerous en,ironments and there is a onstant possibility of strife (ith
the administration and polie) 1eause of his intimate assoiation (ith the (orkersE mo,ement at
times the researher found himself losing trak from the researh purpose)
1eing in lose ontat (ith the :nion ati,ities got the researher easy aess to members of
the union and other (orkers) "his led to a hassle free share of information bet(een the researher
and (orkers) "he researher tra,elled (ith the (orkers on the dumping truks and got a first hand
e3periene of the (orking onditions% this garnered the faith of (orkers in the researher)
After ompletion of field(ork the researher attained a ritial distane from the mo,ement
(hih pro,ided him the required outsider status (hih helped in reduing the risk of losing the
researh ob7eti,e and helped in ritial e3amination of the ati,ities of the :nio) A refletion of
the past helped the researher to target the blind spots (hih other(ise remained unnotied during
the field(ork)
"he o,ert and insider approah made the researher interested in asking questions about the
inseurities e3periened by (orkers and onditions of soial and eonomi e3ploitation in (hih
they (ere sur,i,ing) "he researher on,erted douments of the muniipal orporation% ourt
7udgements% interim orders% petitions% affida,its% narrati,es of (orkers and bare ats of the la( into
te3ts (hih formed the bases of researherEs engagement (ith the data% form a hermeneuti
perspeti,e) "he researher follo(ed +rasad A2002B to engage in a ritial understanding of the life
and (orld of respondents by interpreting the te3ts (hih the researher ould aess as a partiipant
obser,er in 45SS) "he researher ould regenerate the e3perienes of onser,any (orkers from a
ritial standpoint) His ob7eti,e (as not merely to desribe the e3perienes of (orkers but to
reonstrut these e3perienes to ad,ane the ritial understanding of administrati,e% 7udiial%
soial% and eonomi proess that marginalise onser,any (orkers)
C-D
2.% A#l&'i'
"he olleted information (as analysed on the basis of disourse analysis tehnique) +rimary
analysis of the data sho(ed that the stane of the 7udiiary has hanged o,er a period of time and
speially so sine #ndia opened its markets for global in,estors) "he sympathy of the ourts has
shifted from the (orkers to that of the orporations) A subsequent reading of labour (elfare
legislations brought to light ho( legislation (elfare legislation itself (as being used as a tool of
disrimination bet(een temporary and permanent labour)
C<D
CHAPTER THREE
A BRIEF HISTORY OF INDIAN LABOUR LEGISLATION
"he onept of la( (hen disseted aquires t(o broad sensesJ one relates to the legal system of the
state (hile the seond summari9es the la( of natural phenomenon% suh as the la( of gra,ity) 2or
the purpose of this paper the attention is limited to the first sense of la( i)e) the legal systems of the
state) #n this strit understanding of la( the same inludes legislations% regulations% poliy
instruments and 7udiial deisions) #n the light of the aforementioned% #ndian #ndustrial La( is
onstituted by the legislati,e enatments for (orkmen and the dispute ase la( as laid do(n by the
Labour ourts% "ribunals% the High !ourts and the Supreme !ourt)
"he e,olution of #ndian #ndustrial La( an be broadly ategorised in three broad phases)
"he first phase begins in 1@>= (ith the naseny of labour legislation in #ndia and ontinues till
1=$< (hen #ndia got her #ndependene) "he independene of #ndia and the besto(al of the
onstitution makes the seond phase (hen #ndia introdued numerous (elfare legislations for
protetion of the #ndian (orking lass) "his phase ends (ith the adoption of the liberal poliies in
the year 1==1 (hen #ndia started deregulating its market and allo(ed for foreign in,estments% thus
starting the third phase of labour legislations (hih is ontinuing till date) A brief history of #ndian
labour legislation is disussed as under)
%.1 T(e Fi"'t P(#'e
"he genesis of labour legislation in #ndia dates bak to 1@>= (hen the first #ndian labour legislation
the (orkmenEs 1reah of !ontrat At (as brought into effet during the erst(hile 1ritish 6a7) "he
legislation (as enated as the go,ernment felt the need to regulate the reruitment% for(arding and
employment of #ndian labourers under the indent system to ,arious 1ritish olonies) "his (as
follo(ed by the ?mployer and /orkmenEs ADisputeB At of 1@-0 (hih rendered labourers liable to
riminal penalties for breah of ontrat) "he #ndian +enal !ode of 1@-0 had pro,isions of similar
harater) 2ar from proteting the interests of #ndian labourers these legislations (ere aimed at
,esting the rights (orkers e3erise o,er their labour (ith the employer) "he primary harateristi
of these labour legislations (as to ensure the easy and hassle free a,ailability of (orkers in the
plantations and mines)
"he beginning of #ndustrialisation marked a hange in labour legislations in #ndia) Se,eral
,oies (ere raised on behalf of labour not out of empathy to(ards the poor (orking onditions of
the (orkers but% beause of tough ompetition that the 1ritish te3tile produes (ere reei,ing at the
C@D
hands of #ndian industries) "he first labour (elfare legislation (as brought into effet beause of
the lobbying of te3tile magnates of Manhester% Lanashire and other 1ritish interest groups)
Ie,ertheless% this lobbying played a pi,otal role in hanging the fae of #ndustrial La(s in #ndia
and the 2atories At (as enated in 1@@1) "he At had pro,isions for regulating the (orking hours
of (omen K hildren and also pro,ided for some health and safety measures for the adult (orkers)
Although% the legislation so brought about had a (elfarist outlook it (as protetionist in nature and
hene% inadequate in many respets) "hese inadequaies in the legislation and the rising pressure
from different interest groups for the betterment of (orking onditions in #ndian 2atories led to the
appointment of a ommission to reonsider the la( in the year 1@=0) 8n the basis of
reommendations of this ommission the 2atories At (as amended in the year 1@=1)
"he outbreak of 2irst /orld /ar brought (ith itself a rapid hange in labour legislations in
#ndia) //# resulted in rise of ost of li,ing% but the (ages remained unhanged) "his led to unrest
amongst the (orkers and the era (itnessed massi,e (orker agitation and strikes) "he byHprodut of
the //# and (orkersE unrest (as the passing of AaB #ndian 2atories At% 1=22J AbB the #ndian
Mines At% 1=2;J AB the /orkmenEs !ompensation At% 1=2;J AdB the "rade :nions At% 1=2-J AeB
the "rade Disputes At% 1=2=) #t is note(orthy that these legislations (ere brought about by the
labour mo,ement and not beause of the empathy of po(er groups% like in the past) "hus% these
legislati,e hanges not only represent the hange in the attitude of the 6a7 to(ards the (orking
lass but% they also mark the heightened onsiousness of the #ndian (orking lass to(ards the
politial eonomy of the nation and their aquaintane (ith the trade union mo,ement of other
ountries) During the same time another great hange took plae in the politial field% the
introdution of MontagueH!helmsford 6eforms and the assoiation of popular representati,es in
!entral Legislature and the go,ernments in the pro,ines) "his brought ,arious problems of the
ountry to publi attention A+a,askar 1=<$B)
"he ma7or ahie,ements of this era of legislati,e reforms an be notied in the repeated
amendments in the 2atories At) "he At (as first amended in the year 1@=0% then in 1=11 and
later in 1=22 to fi3 the (orking hours of adults to 11 a day and -0 a (eek% to pro,ide for payment
for o,ertime of (ork and to raise the minimum age of employment of hildren from = to 12 and to
redue their hours of (ork to - a day) Another ma7or ahie,ement of the (orkerEs mo,ement during
the era (as the enatment of "rade :nions At% before the enatment of (hih the formation of
(orkerEs organisation (as illegal and puniti,e) "rade :nion leaders (ere booked under the harges
of sedition and entiing publi unrest)
"he year 1=2= marks the beginning of state inter,ention in industrial relations) #t (as in this
year that the #ndian "rade Disputes At (as enated as a onsequene of the (idespread (orker
C=D
unrest and repeated strikes and lokHouts during the time) Although% the At didnEt reate any
standing mahinery for pre,ention and settlement of disputes by arbitration or oniliation it did
urtail the right to strikes and lokHouts by de,ising them illegal A1arot 1=<$B) Also% in the same
year% to re,ie( the hanges made in the industrial la(s and reommend some ne(% the 6oyal
!ommission of Labour (as appointed) "he reommendations of this ommission formed the bases
for the labour legislations that (ere passed 1=;1 on(ards) "hese legislations inlude the e3tension
of sope and o,erage of /orkmenEs !ompensation At and inrease in the sale of ompensation it
offered) "he ?mployment of !hildren At of 1=;@ (hih prohibited the employment of hildren in
ertain 7obs) "he +ayment of /ages At of 1=;- (hih pro,ided for the regular payment of (ages
at fi3ed inter,als and put a stop o,er dedution from (ages% e3ept for as speified in the At) A
further amendment (as brought in the 2atories At in 1=;$ (hih prohibited the employment of
(omen at night% pro,ided for a (eekly holiday and higher o,ertime payJ limited (orking hours to
10 a day and >$ in a (eek)
A further shift in the labour legislation and the ontrol mehanism of the nation as a (hole
(as e3periened during the Seond /orld /ar (hen #ndia emerged as an important supply base for
the Allied fores) "o ensure proper utilisation and e3ploitation of resoures both human and
material the 6a7 brought into effet the Defene of #ndia 6ules) 8ut of these legislations 6uleH@1 A
remains the most important one (hen e3amined from a labour perspeti,e) "his 6ule empo(ered
the go,ernment to prohibit strikesLlokHouts% to refer any dispute for oniliationLad7udiation% to
require employers to obser,e suh terms and onditions of employment as might be speified and to
enfore the deisions of ad7udiation) "his authoritarian approah to(ards fatories and
establishments ontinued e,en after the //## got o,er)
%.2 T(e Seco$ P(#'e
A blue print on labour poliy (as dra(n in the year 1=$- under the leadership of *ag7i,an 6am%
(hen the interim Iational Go,ernment ame into po(er) "his blue print had ,arious pro,isions for
betterment of (orking onditions of (orkers) "his blue print formed the bases for the labour poliy
of the ne(ly independent #ndia) Also% the onstitution that #ndians besto(ed upon themsel,es in the
year 1=>0 pro,ides in the Direti,e +rinipals of State +oliy that the State shall stri,e to promote
the (elfare of the people by seuring 7ustie% soial% eonomi and politial% shall inform all the
institutions of the national life) Artile $1 thereof% inter alia% pro,ides that the state shall% (ithin the
limits of its eonomi apaity and de,elopment% make effeti,e pro,isions for seuring the right to
(ork% to eduation and to publi assistane in ases of unemployment% old age% sikness%
disablement and other ases of undeser,ed (ant) Artile $2 states that the state shall make
C10D
pro,isions for seuring 7ust and humane onditions for (ork and for maternity relief)
2urthermore% !hapter ### AArtiles 1-% 2; K 2$B of the onstitution pro,ide for equal
opportunities for (ork to all irrespeti,e of gender% religion% rae or plae of birth and put a hek
on fored labour and employment of hildren in ha9ardous industries% respeti,ely) #t (as these
direti,es and the ompulsions of an emerging soialist state to ha,e a planned eonomy and
egalitarian soiety that led to the (elfarist model of labour legislations in the years follo(ing 1=>1)
As a result% #ndustrial La(% like ?mployeeEs State #nsurane At% 1=$@ (as enated) "he At
(as aimed at pro,iding a safety net to the (orkers in the time of ontingeny% sikness and
maternity) #t (as follo(ed by the +ayment of 1onus At% 1=-> and the !ontrat Labour A6egulation
and AbolitionB At% 1=<0 these legislations (ere aimed at entitling the (orkers of their due and
found their roots in aforementioned Artiles of the !onstitution)
Although% se,eral (elfare legislations (ere enated during this phase% a fat not to be
ignored is the adoption of ,arious #ndustrial Legislations as it is or (ith minor hanges from the
statute of erst(hile 6a7) "he legislations so inherited inlude the 2atories At% the "rade Disputes
At A(hih (as reHnamed as the #ndustrial Disputes AtB and the Mines At among many others)
Hene% #ndian #ndustrial legislation retained its harater of masterHser,ant relationship and its penal
attitude to(ards the (orkers) "he inheritane of #ndian +enal !ode supplemented the penal
harater of these legislations and ensured that the ondition of (orkers remained similar to that in
the preHindependent #ndia ASankaran 200<B)
Ho(e,er% the soialist ,eil of the state and its redo to be populist kept a hek on the
e3essi,e e3ploitation of (orkers% the emanipation of (orkers largely depended on the 7udiature
of the nationEs ourts and speially the 7udgements passed by Supreme !ourt of #ndia)
%.% T(e T(i"$ P(#'e
"he embraement of liberalisation and pri,atisation by the #ndian State in the (ake of balane of
payments risis of 1==1 marks the beginning of the third phase of labour legislation in #ndia) "he
/orld 1ank and the #nternational Monetary 2und A#M2B put the onus of this failure of the State
upon the proteti,e markets that pre,ailed in #ndian at that time) "hey further aused the State of
ha,ing rigid and proteti,e labour market (hih repelled foreign players from in,esting in #ndia
and suggested numerous reforms for making the markets in,estment friendly)
"he /orld 1ank in its !ountry Strategy paper for #ndiaH200$ mentioned that an a,erage
#ndian firm had 1<M more (orkers than it required beause of the rigidity in the retrenhment la(s
and the restrition on the employment of ontrat labour in aordane (ith the !ontrat Labour
At (hih limits the employment of ontrat labour to 7obs (hih are temporary in nature)
C11D
2ollo(ing this the Speial ?onomi Nones At (as passed in the year 200>) "he At has
pro,isions for speial e3emption for enterprises operating in the areas marked as Speial ?onomi
Nones and has made hiring and firing of (orkmen easier in suh areas)
"he 1retton /oods institutions further ad,oated for deregulation of ore setors and easing
out of la(s of losure for ompanies) "he nation (as in a state of embroilment and radial hanges
took plae) "he State proposed a ne( Ee3it poliyE (hih made entry and e3it easier for the
orporates in the market) "he 7udiiary hanged its stane aordingly and it refleted in the orders
passed by the Supreme !ourt post 1==1) #n the ase of Steel Authority of #ndia the Ape3 ourt order
losed the door for permaneny of ontrat (orkers) Similar apathy (as notied in the :ma De,i
ase (here the ourt order repealed the laim of (orkers for bakH(ages) #t beame quite lear that
the 7udiiary (as being used for the reinforement of politial agendas (hene,er the parliament
found it impossible to bring an amendment in an e3isting legislation or pass a ne( bill for fa,ouring
the apitalists) "he brunt of this shift (as faed by the informal setor) "he follo(ing hapter
e3plains the domain of informal setor and thro(s light on the dominant disourses through (hih
one an understand the same)
C12D
CHAPTER FOUR
THE INFORMAL SECTOR
"he term Einformal labourE (as oined in the year 1=<; by 4eith Hart in his artile on informal
inome opportunities in Ghana) Ho(e,er% the onept of informal eonomy or the ontrat labour is
quite old) #t dates bak to the era of surplus labour resulting from industrialisation and the gro(th of
the apitalist de,elopment during the early 1=
th
entury) "his surplus labour fore is (hat Mar3 alls
the Ereser,e armyE in !apital) Later% the gro(ing labour surplus has been defined as the marginal
labour% tertiary setor (orkers and naakaLba9aar type (orkers by Moser A1=<@B) "his understanding
of the term postulates that the said labour fore (ould e,entually merge in the market (ith the rise
of apitalism)
Ieolassial eonomists ad,oate a similar point of ,ie(J their assumption is based on the
faith in the Ein,isible handE (hih (ould ensure eonomi effiieny and predit that o,er time (age
differentiation and the di,ision of labour (ould tapper a(ay in aordane to eonomi
de,elopment) 1ut% that e,idently is not the ase) "he onslaught of globalisation has resulted in more
and more (orkers being pushed to the margins and has made it lear that the informal labour fore
and the informal eonomy is here to stay)
"hus% it is of utmost importane to this paper to make a onrete understanding of the term
and to trae the genesis of it) #nformal setor emerged as a bu99 (ord in the mid 1=<0s (hen #L8
started using it in the papers related to eonomy and employment opportunities in 4enya and other
Afrian ountries) 8,er time% the term has beome an umbrella e3pression for informal and
unorganised setor and the onnotations of the term ha,e beome omple3 and heterogeneous)
!enteno and +ortes A1==2B e3plain the term as those eonomi ati,ities (hih fall outside
the ambit of the eonomi regulation of the State and therefore% lak the soial protetions pro,ided
by the same) At this point it is important to note that being out of the pur,ie( of the regulation of
the State doesnEt mean that the informal (orkers or the informal setor is illiit) "here is a lear
demaration bet(een illegal eonomy and informal eonomy) "he informal eonomy is not an
illegal eonomy in the sense that it is not in,ol,ed in prodution or distribution of goods that are
defined as illegal by the soiety) #nformal enterprise deals (ith liit goods but% remains mostly
unregistered) "his also brings to light that the differene bet(een formal and informal is
independent of harater of the final produt% instead it depends on the mode of prodution and the
e3hange of the good so produed) 2or e3ample O food artiles% lothes sold by street ,endors are
C1;D
all liit goods and their sale as per the morality of the soiety is perfetly legal and onsented) 1ut%
it is their mode of prodution that matters) /hether the prodution arrangement (as regulated or
bypassed the offiial rules beomes the differentiating fator) "herefore% the relationship bet(een
the informal eonomy and the state is% by definition% one of ine,itable onflit) "he (hole point of
the state is to assert the monopoly of its authority (ithin a territory% but the (hole point of informal
entrepreneurs is to a,oid or to sub,ert that authority)
#n the #ndian onte3t the term has been used by ?onomists to mean manufaturing units
unregistered under the 2atories At) Soiologists and "rade :nionists ha,e used the term to denote
suh (orkers (ho are nonHunionised% (hile the Study group on :mbrella Legislation for /orkers in
the :norganised Setor defines unorganised (orkers as the residue of the organised setor and
omputes the same only the in fatories% mines and other enterprises (herein the employee density
e3eeds = (orkers ADESou9a 1==2B) Although% these understandings of the term are orret to some
e3tent% they fail to 7ustify the ,astness of the term) Also% this enterprise based understanding of the
term fails to inlude the ,ast number of (orkers engaged in agriultural (ork% ulti,ation%
onstrution (ork and selfHemployed ,endors% artisans and traditional raftspersons% home based
(orkers and traditional ser,ie (orkers)
A omprehensi,e definition of the term an be aquired from the statute) "he :norganised
Setor /orkerEs Soial Seurity At defines a unorganised (orkman as
AaB homeHbased (orker%
AbB selfHemployed (orker
AB a (age (orker in the unorganised setor and
AdB a (age (orker in the organised setor (ho is not o,ered under%
i) "he (orkmenEs !ompensation At
ii) "he #ndustrial Disputes At
iii) "he ?mployeeEs State #nsurane At
i,) "he ?mployeeEs +ro,ident 2und and Misellaneous +ro,isions At
,) "he Maternity 1enefit At
,i) "he +ayment of Gratuity At
1ased on the aforementioned and in the limited sope of this paper% it an be deduted that informal
(orkers are the (orkers of the unorganised setor and the (orkers of the organised setor (orking
as asual% (age and ontrat (orkers (ho for any reason fail to a,ail the benefits of soial
protetion and remain e3luded from the Soial Seurity La(s of the State)
C1$D
CHAPTER FI)E
THE MECHANISM OF INCLUSION AND E*CLUSION
?,ery setor of employment in #ndia is go,erned by a different set of la(s% these la(s offer
different standard of protetion as (ell as soial (elfare to different segments of labour fore) #n the
limited realm of this paper three legislations are of prime importane% the #ndustrial Disputes At%
1=$<% the !ontrat Labour A6egulation and AbolitionB At% 1=<0 and the 2atories At% 1=$@) "hese
three legislations pro,ide the outline for the basi standards of safety% (orking onditions of the
(orker and onede olleti,e bargaining rights to them) #nlusion or e3lusion in these legislations
i)e) to ha,e a (orker status as per these legislations is in turn the deiding fator for appliation of
other (elfare legislations% suh as legislations pro,iding for health benefits% payment of gratuity%
pro,ident fund et) As these la(s grant ,arious rights to (orkers% attempts are made by the State as
(ell as the employers% to e3empt ertain ategories of employments and keep the (orkers from
benefiting out of these legislations) 2urthermore% these e3luded (orkers are go,erned% in ertain
ases% by speial legislations as enated by go,ernment% but mostly this poliy tilted to(ards
e3lusion lea,es a ,ast ma7ority of (orkers outside the ambit of all or any legislati,e protetion)
"his method of inlusion or e3lusion of (orkers through the mehanism of la( an be
oiffed in the follo(ing fashion.
+.1 B#'e$ o ,-.e"' / "he appliability of se,eral legislations depends on the number of
(orkmen employed in the establishment) "he legislations are appliable only if the number of
(orkmen e3eeds a ertain minimum number) Although% this is true for most of the labour (elfare
legislation and speifially for the la(s mentioned abo,e ho(e,er% the ount is not uniform for all
of them)
#) "he !ontrat Labour A6egulation and AbolitionB At% 1=<0 is appliable if the establishment
of the +rinipal employer employs 20 or more (orkmen and if the ontrator also employs
20 or more (orkmen) 2or the at to apply both the onditions must e3ist)
##) 2or the 2atories At% 1=$@ to be appliable there must be 10 or more (orkmen employed% if
the establishment uses po(er and a minimum of 20 if it does not)
###) "he #ndustrial Disputes At 1=$< pro,ides different standards of benefits to establishments
employing >0 or more (orkmen than those employing 100 or more) "his differene in
standards of benefit is also notied in the types of benefits that are offered relating to
retrenhment% lay offs and losures)
C1>D
#5) "he #ndustrial ?mployment AStanding 8rders AtB 1=$-% is appliable only to those
establishments (here >0 or more employees are employed)
"he same Ainlusion or e3lusion on the basis of numbers mentioned in the at or as per the
2atories AtB holds true for other (elfare legislations suh as the +ayment of Gratuity At% 1=<2%
"he ?mployees State #nsurane At% 1=$@ or the /orkmanEs !ompensation At% 1=2;)
+.2 B#'e$ o Acti0it& / "he seond mehanism of segregating (orkers from the sope of inlusion
or e3lusion of labour (elfare legislation is based on the ati,ities performed by the (orkmen)
Se,eral legislations define an employee on the basis of the nature of (ork performed by them) "he
term (orkmen or employee is often defined using different yardstiks by different legislations)
"he #ndustrial Disputes At% 1=$< e3ludes all those (ho are in,ol,ed in (ork of super,isory
nature and those (ho hold managerial andLor administrati,e positions) Although% the sope of the
term is ,ast and o,ers all those (ho are in,ol,ed in manual% tehnial or lerial 7obs% the
definition still fails to o,er (orkmen in,ol,ed in field (ork% artisti or sales 7obs) "he segregation
based on ati,ity is not only based on the ati,ity of the (orkers but it also depends on the ati,ity
of the employer) "he At also defines #ndustry) :nder the At% the employer must be engaged in any
business% trade% undertaking% manufature or alling) *udiiary has al(ays found itself in troubled
(aters (hen it omes to the interpretation of term and to determine if a speifi employer is
engaged in any industry) #n Bangalore Water Supply and Sewerage Board vs !" #a$appa the
Supreme !ourt put forth three tests to determine (hether or not an employer is engaged EindustryE)
"he Ape3 !ourt postulated AaBthere must be systemati ati,ity AbBorganised by oHoperation
bet(een employer and employees AB for prodution andLor distribution of good and ser,ies) "his
put a number of institutions out of the ambit of industry like lubs% oHoperati,es% eduational
institutions et)
"he 2atories At defines (orkers on the basis of Emanufaturing proessE% a number of
employments are not o,ered under this limited definition) 2urther the At differentiates on the
basis of (orkers (ho are (orking on the premises of the fatory and those (ho are not) #t (as held
in the ase of Corporation of City of %agpur vs Its &mployees that a fatory should must ha,e
premises) "hus% the (orkers engaged in fatory (ork outside the fatory premises (ould not be
o,ered under the At) Also% the definition of (orker under the At is limited to those performing
manual and tehnial tasks and e3ludes lerial 7obs e,en if the lerial task forms a part of the
Emanufaturing proessE) As ob,ious this depri,es a massi,e (orkfore of their (orkman status
(ithin the premises of a fatory)
C1-D
+.% B#'e$ o #1ec& / Labour legislations in #ndia put the onus of (elfare of labour on the ageny
that employs them) "herefore% the prinipal employer and the ontrator are al(ays in a suttle to
pass the buk) "he ,alidity of the status of the (orkman as an employee or a ontrator hired to
render a speifi task is 7udged on the basis of ontrat of ser,ie or ontrat for ser,ie) #n this
regard the Supreme !ourt distinguishes bet(een Ea ontrat for ser,ieE and Eontrat of ser,ieE as
the former being a ontrat entered into by a person to deli,er a speifi result% (hile the latter is a
ontrat (hen a person undertakes to (ork under someone) #n the former ontrat the (elfare of the
(orker is not the liability of the employer (hile in the latter it is)
"he purpose of defining a (orkman is to establish the legal relationship bet(een the
employer and the employee) Ho(e,er% (hether or not a person is an employee has al(ays been qua
an employer) #n ase the ontratual nature of employment is established the (elfare legislations
hold the ontrator responsible for the fulfilment of duties enshrined in the statute) #t is also
important to note that all the other methods like the inlusion of (orkers on the basis of their
number or ati,ity omes later and their prerogati,e to be an employee ,isHaH,is a partiular
employer omes first)
"he ati,ity a ontrator is in,ol,ed in% loation of operation or the si9e of it and its
finanial apaity determine the liability it has to(ards the labour) 1ut% the same hanges on the
basis of employerHemployee relationship) A large industry might be required to pay (ages on the
basis of EindustryHumHregionE basis (hile the ontrator may be required only to pay the minimum
(ages as presribed under the Minimum /ages At% 1=$@) "he liabilities of respeti,e employers
(ill hange on the basis of their relationship (ith the employee irrespeti,e of their nature of (ork
or numbers) "he differene in the (ages an be quite substantial and if the ontrats are parelled
out to se,eral different ontrator none of them (ould fall under any regulations (hile the main
benefiiary of it (ill remain the prinipal employer) "herefore the segregation of (orkers on the
basis of their relationship (ith the employer remains one of the burning issues in #ndustrial
relations)
+.2 B#'e$ o 3#1e' / "he benefits of ertain legislations are sub7eted to the (ages earned by a
(orker) "he purpose of inlusion on the basis of (ages (as to ensure that the poorly paid (orkers
ha,e an e3tra ushion of soial seurity) 1ut% the inlusion tool% o,er the years% has been used
against the (orkers and mostly for their e3lusion)
"he ?mployees State #nsurane At applies to (orkers earning a ertain (age% the same is
true for +ro,ident 2und At and the 1onus At and se,eral others) "his only makes another
pro,ision for the employers to e3lude (orkers from a,ailing benefits of (elfare legislations) #f one
C1<D
onsiders the e3lusion riteria based on (ages in the light of other e3lusionary pro,isions as laid
in the 2atories At% a (orker might be o,ered under the definition of a (orker and his (ork may
fall (ithin the sope of Emanufaturing proessE) 1ut% 7ust beause his inome is marginally higher
than the presribed limit in the statute% heLshe (ill be e3luded from the benefits of the said At and
many others) "he deision for any employer then (ould be based on the omputation of the relati,e
osts of (elfare and the marginally higher pay% (hih (ill put the employee outside the sope of the
legislations dealing (ith health insurane and gratuity)
2urthermore% it is the prerogati,e of the go,ernment to inlude or e3lude a partiular setor
or industry or a part thereof% from the operation of the legislation e,en if the industry other(ise falls
under the sope of the la() "he ?mployees State #nsurane At ,ests in the go,ernment the po(er
to e3lude any partiular fatory or lass of fatories% in any speified area from the pro,isions of
the At for a period of one year) "he same holds true for the ?mployees +ro,ident 2und At and the
?mployment Standing 8rders At% the go,ernment has the po(er to e3lude any establishment
from all or any pro,isions of the At) "he go,ernment also has the right to further e3tend this
e3emption to speified periods from time to time) "his has been effeti,ely used by the S?Ns and
the !all !enter and 1usiness +roess 8utsouring industries in #ndia) #n ollusion (ith the
go,ernment ertain fatories and establishments a,ail these speial e3emptions to sa,e the apital
they (ould other(ise be liable to pay to(ards (orkerEs (elfare)
#t is disernible that there e3ist se,eral loopholes in urrent labour legislations) "hese
loopholes belittle the e3istene of said legislations and reate ground for e3lusion of (orking
masses) "he impat of this e3lusion forms the basis of the follo(ing hapter)
C1@D
CHAPTER SI*
4UDICIARY AND THE )OICE OF THE WORKERS
#n the (ords of 1angasser A200=B% F"he offiial reord of an institution is 7ust the skeleton of its
history) ?ah offiially reorded e,ent is done Aor left undoneB% supported Aor opposedB by real
people) An #nstitutional history% then% should also inlude this sometimes ollaborati,e and
sometimes onflitual but al(ays omple3 human interation of the people atually in,ol,ed in
these e,ents)G #t is speifially this aspet of #ndian 7udiial system that this hapter attempts to
e3plore)
As disussed earlier% the appliability of ,arious labour legislations is dependent on the
establishment of employerHemployee relationship) "he determinant of said relationship ,ary in
aordane to the la(s that one takes into onsideration and hene% it has been a reason for tussle
bet(een the !orporation and the :nion members for a long time)
#n the ases that are sub $udice in the Labour "ribunals% the 1ombay High !ourt and the one for
order has been passed by the Supreme !ourt the 1M! has denied that the (orkers (ere e,er employed by
them for any ontratual (ork and that the 1M! has ne,er been their prinipal employer) "he !orporation
further added in its affida,it to the Labour "ribunal that the (ork of olletion% mopping% s(eeping%
transportation and dumping of (aste has been allotted to IG8s) #t is the sole duty of the IG8s to arry on
the (ork at their behest and the !orporation is not responsible for the same sine 1==- (hen the Hyderabad
+attern (as first implemented in the ity)
As these ases are being pursued on the basis of the !L6A At% 1=<0 it is therefore% ruial
at this 7unture to larify the definitions of (orkman% ontrator and prinipal employer mentioned
therein)
"he !L6A At% 1=<0 aording to its lause $ applies0H
AeB "o e,ery establishment in (hih t(enty or more (orkmen are employed or (ere employed
on any day of the preeding t(el,e months ontrat labourJ
AfB to e,ery ontrator (ho employs or employed on any day of the preeding t(el,e months
t(enty or more (orkmen)
Also% aording to the At a ontrator in relation to an establishment% means a person (ho
undertakes to produe a gi,en result for the establishment% other than a mere supply of goods or
artiles of manufature to suh establishment% through ontrat labour or (ho supplies ontrat
labour for any (ork of the establishment and inludes a subHontrator)
!lause > AgB of the !L6A At defines a prinipal employer0H
i) in relation to any offie or department of the Go,ernment or a loal authority% the head of
C1=D
that offie or department or suh other offier as the Go,ernment or the loal authority% as
the ase may be% may speify in this behalf%
ii) in a fatory% the o(ner or oupier of the fatory and (here a person has been named as the
manager of the fatory under the 2atories At% 1=$@ A-; of 1=$@B the person so named%
iii) in a mine% the o(ner or agent of the mine and (here a person has been named as the
manager of the mine% the person so named%
i,) any other establishment% any person responsible for the super,ision and ontrol of the
establishment)
2urther in the same para lause AiB defines a (orkman as any person employed in or in onnetion
(ith the (ork of any establishment to do any skilled% semiskilled or unHskilled manual% super,isory%
or lerial (ork for hire or re(ard% (hether the terms of employment be e3press or implied% but
does not inlude any suh person0H
i) (ho is employed mainly in a managerial or administrati,e apaityJ or
ii) (ho% being employed in a super,isory apaity dra(s (ages e3eeding fi,e hundred rupees
per mensem or e3erises% either by the nature of the duties attahed to the offie or by reason
of the po(ers ,ested in him% funtions mainly of a managerial natureJ or
iii) (ho is an outH(orker% that is to say% a person to (hom any artiles or materials are gi,en out
by or on behalf of the +rinipal employer to be made up% leaned% (ashed% altered%
ornamented% finished% repaired% adapted or other(ise proessed for sale for the purposes of
the trade or business of the prinipal employer and the proess is to be arried out either in
the home of the outH(orker or in some other premises% not being premises under the ontrol
and management of the prinipal employer)
"he At also postulates that the status of a ontrat (orker and his relationship (ith the priniple
employer is not based on the prerogati,e of the kno(ledge of the prinipal employer) "he Supreme
!ourt in many of its 7urisditions has noted that the nature of (ork an not be the e3lusi,e test for
determining the employerHemployee relationship) "he said relationship is a omple3 one and not
only in #ndia but ourts in foreign ountries ha,e found it diffiult to base their deisions solely on
this test) #n Montreal v" Montreal Locomotives Works Ltd"% Lord /right held
'"""a single test( suc) as presence or absence of control was often relied on to determine w)et)er t)e
case was one of master and servant mostly in order to decide issues of tortious liability on t)e part
of t)e master or superior and t)at in t)e more comple* conditions of modern industry( more
complicated tests )ave to be applied"+
#t is in this light that one needs to e3plore the ,arious layers of employeeHemployer relationship and
e3plore ,arious tests that an be put to use for determining the same)
"he first and foremost test in this regard is the premises on (hih the (orker performs
C20D
hisLher task) Aording to !L6A At% 1=<0 any outH(orker is not to be onsidered a ontrat
(orker% the (ork has to be performed (ithin the premises of the prinipal employer) Ie3t arises the
question of monitoring and reord keeping of the (ork done) +ut simply% the at of monitoring and
reord keeping takes into onsideration as to (ith (hom lies the right to ontrol the manner in
(hih (ork an be e3euted) !an the (orker e3eute the (ork in the manner his o(n s(eet (ill
hooses to or the e3eution of (ork takes plae under the super,ision of the employer) "hird point
that needs to be onsidered is the tools used for performing the task or the material on (hih the
task is performed% the pro,ider of suh tools or material is to be onsidered the employer) 2ourth
ontention is that of lea,e and the hanes of profit) "hese tests (ere first laid do(n by the
Supreme !ourt in ,)rangad)ara C)emicals Ltd" v" State of Saurast)ra and reHaffirmed in
C)intaman #ao v" State of Mad)ya -rades) (here the ourt held as under0
'.)e prima facie test( t)erefore( for determining t)e relations)ip is t)e e*isting of t)e rig)t in t)e
master to supervise and control t)e work done by t)e servant not only in t)e matter of directing w)at
work t)e servant is to do but also t)e manner in w)ic) )e s)all do )is work+
#n the ase of Muniipal !orporation of Mumbai ,) 4 5 Shramik Sangh the +etitioner laimed that
the respondents (ere not at all the (orkers of the !orporation and (ere the ,olunteers of the IG8s
to (hom the (ork has been outsoured) "his laim of 1M! has been ontested in the ourt
primarily on the basis of the ontrat that the !orporation has entered into (ith the IG8s and the
definition of a ,olunteer)
Aording to the 83fordEs Ad,aned LearnerEs ditionary the term 5olunteer means O to
offer do something (ithout being fored to do it or (ithout being paid for it) #n the said ase the
(orkers are paid a minimum (age aording to the (ages set by the !entral +ay !ommission) "he
payment of these (ages although is made by the IG8 or the ontrator% the ontrators themsel,es
dra( this sum from the 1M!) "herefore% the laim that the said persons in question are not (orker
and ,olunteers stands nullified) 8n a further probe it beomes e,ident that there e3ists an indiret
employerHemployee relationship bet(een the !orporation and the (orkers) "he kind (hih Galais
and Moser A200=B all a triangular employment relationship (herein the ontrat (orkers are
employed by a staffing ageny (hih on request pro,ides human resoure ser,ies to a lient%
thereby forming a relationship triangle bet(een the ontrator% the lient and the (orker) As
disussed earlier% this is used to dodge the onus of responsibility of ost of (elfare of the (orkers
bet(een the ontrator and the prinipal employer)
2urther in the ase of :nion (orkers and the 1M! there e3ists a relationship in (hih the
employer not only ontrols the (orking hours% it also super,ises the quality of (ork and reser,es
the right to fine them in ase the performane is not found to be satisfatory) Anthony 1abu !hetty
a (orker employed in the 4L? (ard% Andheri suburb% in his statement before the ourt testified
C21D
"""my work is monitored everyday" I )ave to report to t)e motor loading station at / every morning in
order to be registered by t)e BMC supervisor w)o t)en decides w)et)er or not I get a ve)icle t)at
day" .)e supervisor signs my $ob card for t)e day """and marks my attendance in t)e muster" !t t)e
end of t)e mont) w)en I receive my c)e0ue( at times t)ere are cuts in my salary" .)e first time it
)appened I foug)t wit) t)e contractor" 1e t)en told me t)at t)e cut was made by t)e BMC officials
because my performance was not up to t)e mark"
"his learly defies the laim that these (orkers are ,olunteers) "he (ork performed by them is not
out of free (ill% is done for (ages and is super,ised by a 1M! offiial (ho is an employee of the
!orporation) #n reply to this and other similar depositions the !orporation filed its re7oinder and
stated that the IG8s (ere paying its ,olunteers e3Hgratia and the same an not be treated salary or
(ages) "he :nion then eduated its (orkers to not aept any (age payment in ash or in the
absene of 1M! offiials) "he payment of /ages At as (ell as the !L6A At makes it mandatory
for the agent of the prinipal employer to be present during the disbursement of (ages) Dadarao
1hosale% another member of the union (ho (orks in the 6LS (ard% 1ori,ali suburb% deposed
&arlier t)ere used to be irregularities in t)e payments" Some workers were being paid less t)an
minimum wages but( since Milind B)ai told us not to accept any payment in cas) and specifically
not in t)e absence of t)e BMC supervisor t)ere )ave been drastic c)anges" %ow( all t)e workers are
paid at par central minimum wages rate" !s t)e supervisor is )imself present( t)e contractor doesn2t
get to )old back our wages" &arlier )e )ad a consistent e*cuse t)at )e )as not got t)e funds from t)e
BMC for our payments"
2urthermore% it (as noted that the (orkplae on (hih this task (as being performed belonged to
1M!) "he assembly and (ork alloation point of these (orkers is in the !orporation offie
premises of the respeti,e (ards or any other area deided for the same) Also% the roads% house
gullies and other areas that ha,e been allotted to ,arious IG8s for the (ork of moping% s(eeping%
garbage olletion and transportation of (aste fall under the ambit of the !orporation and the
!orporation harges a fee in the form of ta3 from the residents of house gullies and the oHoperati,e
housing soieties) "hus% for the (orkmen employed on the premises of the 1M!% it Cthe
!orporationD has to be regarded as the prinipal employer)
#t (as further the ase of the :nion that the employment of ontrat labour (as illegal on
the part of the !orporation as the !orporation did not poses the required liense for employment of
the same under the !L6A At% 1=<0) Also% the At postulates that no ontrat labour an be
employed in an establishment (herein (ork remains of perennial nature and remains inidental to
the establishment) "he !orporation oneded that the task of (aste olletion and Solid /aste
Management is one of the primary task of 1M! and the same has been arried out by the
!orporation sine the establishment of 1M! and (ill go on in the future) #n a ross questioning
session Asst) ?ngineer ML? (ard Mr) 4amtekar deposed
"he (ork of leaning% s(eeping and (aste olletion is one of the primary tasks of the Solid /aste
Management department of 1M!) "his task has been arried out (ith the help of permanent and
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IG8 ,olunteers) "he (ork doesnEt seem to be easing any time soon and (ill remain under the
prerogati,e of the !orporation)
1ased on the abo,e fats the !ourt (hile hearing (rit petition Io) 21;>L=@ on 1@)11)1==@ ordered
.)e system of employing contract labour on t)e work in Solid Waste Management ,epartment s)all
be discontinued by t)e first #espondent3 Corporation wit) immediate effect"
"his order (as ontested by the !orporation in the Supreme !ourt on the bases that the abolition
and absorption of the ontrat labour (as the prerogati,e of the State Go,ernment and that the ourt
an not order the !orporation for the same) "he order of the High !ourt (as o,erruled by the Ape3
!ourt and the Supreme !ourt referred to its o(n 7udgement in the Steel !ut)ority of India Ltd" and
!nr" v" %ational union Waterfront Workers and 4rs (herein the onstitution benh held as under0H
'567 %eit)er Section 89 of t)e CL#! !ct !ct nor any ot)er provision in t)e !ct( w)et)er e*pressly or
by necessary implication( provides for automatic absorption of contract labour on issuing a
notification by t)e appropriate :overnment under Sub3section 587 of Section 89( pro)ibiting
employment of contract labour( in any process( operation or ot)er work in any establis)ment"
Conse0uently t)e principal employer cannot be re0uired to order absorption of t)e contract labour
working in t)e establis)ment concerned"
5;7 4n issuance of pro)ibition notification under Section 89587 of t)e CL#! !ct !ct pro)ibiting
employment of contract labour or ot)erwise( in an industrial dispute broug)t before it by any
contract labour in regard to conditions of service( t)e industrial ad$udicator will )ave to consider
t)e 0uestion w)et)er t)e contractor )as been interposed eit)er on t)e ground of )aving undertaken
to produce any given result for t)e establis)ment or for supply of contract labour for work of t)e
establis)ment under a genuine contract or is a mere rusecamouflage to evade compliance wit)
various beneficial legislations so as to deprive t)e workers of t)e benefit t)ereunder" If t)e contract
is found to be not genuine but a mere camouflage( t)e so3called contract labour will )ave to be
treated as employees of t)e principle employer w)o s)all be directed to regulari<e t)e services of t)e
contract labour in t)e establis)ment concerned sub$ect to t)e conditions as may be specified by it for
t)at purpose in t)e lig)t of para = )ereunder"+
"his makes it lear that the battleground bet(een the :nion and the !orporation in this ase and in
many other ases of permaneny of informal labour rests (ith the establishment of the employerH
employee relationship and the e3istene of (ork ontat bet(een the prinipal employer and the
ontrator or the ontrator and the (orkers)
"he e3istene of suh a (ork ontrat also brings to the fore another another issue% that is
the ,alidity of suh a (ork ontrat) #n many ases it has been notied that suh a (ork ontrat is
brought into pratie only to amouflage the e3ploitati,e (orking onditions that pre,ail (ithin the
establishment) #n the said ase Steel !ut)ority of India Ltd" and !nr" v" %ational union Waterfront
Workers and 4rs 5Supra7 the ourt held0H
'If t)e contract is found to be genuine and pro)ibition notification under Section 89587 of t)e CL#!
!ct in respect of t)e establis)ment concerned )as been issued by t)e appropriate :overnment(
pro)ibiting employment of contract labour in any process( operation or ot)er work of any
establis)ment and w)ere in suc) process( operation or ot)er work of t)e establis)ment and principal
employer intends to employ regular workmen( )e s)all give preference to t)e erstw)ile contract
labour( if ot)erwise found suitable and( if necessary( by rela*ing t)e condition as to ma*imum age
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appropriately taking into consideration t)e age of t)e workers at t)e time of t)eir initial employment
by t)e contractor and also rela*ing t)e condition as to academic 0ualifications ot)er t)an tec)nical
0ualifications"+
"his sho(ases a lassi e3ample of the apathy that the 7udiiary has to(ards the labour ases and
(orking lass as a (hole) *ustie 5) 4rishna #yer says% F2or nearly a deade% during the
liberalisation era% the #ndian 7udiiary has e3hibited a trend of insensiti,ity to(ards upholding the
pre,ailing politial eonomy of the ountry as far as the issues pertaining to labour rights are
onerned) 8f late% the Supreme !ourt has rendered ertain 7udgements pertaining to the primary
aspets of labour rights and industrial relations reognised o,er the years% leading to ertain
onerns)G A1abu and Shetty 200<B)
/hen seen in the light of (orking onditions and membership base of the ontemporary
:nions it is quite e,ident that the genuineness of the (ork ontrat to be pro,ed or dispro,ed is a
herulean task) "he (orkers are mostly illiterate and unskilled% they do not understand or ,alue the
paper(ork) Although% the top brass of the :nion tries to eduate the (orkers from time to time
there remains a lak of a(areness to(ards paper(ork amongst the (orkers) Deepak 1halerao% the
seretary of the :nion says%
.)e court cases are totally dependent on t)e evidence t)at we can get in paper form" #.I )as been a
boon in strengt)ening our cause but( t)e illiteracy of t)e workers works against us" .)e cunning
contractors )old t)eir salaries and t)en make t)em sign on blank s)eets" !t times in t)e name of
some benefit sc)eme or during festivals like ganpati t)ey make t)e workers fill forms and give t)em
petty sum of money" .)e workers do not understand t)is and fall for t)e trap" &ven t)e educated and
literate workers are lured by t)e money involved" It is 0uite dis)eartening to see t)e workers falling
prey to t)e un$ust system because of poverty"
Mohan +atekar% a (orker employed in the 4L/ (ard% Andheri suburb adds%
W)en t)e union asked us not to accept payment in cas) I was t)e first one in my ward to c)allenge
t)e contractor" .)e contractor )eld my salary for t)e mont) and t)rew me out of t)e $ob" I )ad to
borrow money from t)e ma)a$an at a )ig) rate of interest" I could not pay t)e sc)ool fee of my
c)ildren" I )ad to beg to t)e contractor to pay me in cas) ne*t mont)" 1e was not ready to take me
back on t)e $ob"
Another problem that plagues these (orkers is their migrant status) Most of the members of the
:nion are migrants from the states of "amil Iadu and Andhra +radesh) "hese (orkers are
threatened by the ontrators% loal goons and at times by petty party (orkers of the orthodo3 right
(inged parties in onni,ane (ith the polie) "he migrant (orkers are foribly made to toe the line
and kept under the thumb so that heap labour an be used for ma3imising profits) Sel,amai Hari7an
is a female (orker and :nion member (ho (orks and li,es in the slums of 6L! (ard% 4andi,ali)
she says0
I migrated from .amil %adu five years back" .)ere was no work for me over t)ere" I )ave got two
small c)ildren to feed )ow could I survive t)ere" So I came )ere( to Mumbai" I do not understand t)e
C2$D
language )ere" I am trying to learn but( t)ese people>party workers of a local son3of3t)e3soil party?
$ust do not understand our plig)t" .)ey )ave no )eart" .)ey t)row our articles out on t)e street and
)url abuses at us" .)ey beat our c)ildren and ask us to leave" .)e police says not)ing to t)em( t)ey
talk to us rudely( even wit) t)e women t)ey use foul language" .)ey call us t)e filt) of t)e city" I want
to tell t)em t)at we are t)e ones w)o clean t)e filt) of your city or t)is city would be unbearable to
live in for even one day"
6amabai She,le is a nati,e Marathi hailing from the distrit of Sholapur) Despite being a
Maharashtrian she has been e3posed to similar problems) She has been assoiated (ith the union
sine 2001 and (orks in the 4L? (ard% Andheri suburb% 6amabai says%
!ll t)is used to bot)er me in t)e beginning" I )ave become too used to it now" It is a routine t)ing"
.)ere is no difference between a marat)i poor and a migrant poor" .)ese ric) people kick us around
t)e city w)enever t)ey want to"
Apart from the disrimination that these (orkers fae for being migrants there is another gra,e
onern that lies belo( the surfae) "here e3ists a stereotypi imagery of temporary (orkers not
only amongst the employers but the permanent (orkers (hih re,ol,es around general inferiority%
lak of (ork ethi and skills A1oye et)al 200<B) "his stereotypial notion about the (ork of
temporary employees results in the apathy of permanent (orkers to(ards the plight of the former)
"his apathy stems from the inseurity that the permanent (orkers fae at the hands of the temporary
(orkers) 1oye et)al A200<B postulate that the moti,e of employing temporary (orkfore has a great
impat o,er the inseurity that the permanent (orkers perei,e and internalise) #n their study they
found that in ases (here the temporary (orkfore (as employed for ost utting purposes%
permanent (orkers (ere more apatheti and inseure and there e3isted a lear di,ide bet(een them
(hen ompared to establishments (here ontrat labour (as put to use for a speifi skilled task or
to attainLinrease organi9ational fle3ibility)
6a7u Hira(ale a (orker (ho got permaneny due to the efforts of the union realls his days of
struggle and says%
-ermanent workers t)ink t)at temporary workers do not perform and t)at is w)y t)ey remain
temporary" .)is is not true at all" In fact as a temporary worker one )as to work more because t)ere
is a constant fear of losing t)e $ob" !lso( as t)e permanent workers do not )ave any fear of losing
t)eir $ob and t)eir union )as more say in t)e office t)ey tend not to work as muc) and t)e burden of
t)eir work falls on our s)oulders"
"he problem also surfaes in the ourt proeedings) "he !orporation uses this as a tool to segregate
the ontrat (orkers from the permanent (orkers) During one ross e3amination session the
Asst)?ngineer of 2LI (ard deposed before the ourt0
"""t)e work is not at all t)e same" .)e permanent workers sweep an area of 8"@ km per s)ift
and t)eir s)ift lasts for @ )ours" W)ile t)e work of t)e temporary workers is only of four
)ours and t)ey sweep @99 mts"
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#t (as only after the union presented 6"# replies obtained from the 1M! offie and the opy of the
ontrat that the !orporation had signed (ith the IG8s that the truth ould be brought to light) #n
no (ay is the (ork performed by the temporary (orkers or ,olunteers as the !orporation labels
them% lesser than the (ork performed by the permanent (orkers) A probe into this matter (as
onduted by the State Labour Department and the Labour Seretary oneded that the (ork
performed by the temporary (as equi,alent to that of the permanent (orkers and an equal pay (as
deser,ed by them)
Sine% then it has reated another issue for strife bet(een the !orporation and the :nion as
(ell as the temporary and the permanent (orkers) "he salary of the permanent (orkers is
6s)1@000Lmonth (hile the same omputed on the basis of minimum (ages for the temporary
(orkers amounts up to 6s) =000Lmonth i)e) half the amount 1M! pays its permanent employees)
Also% as per the !L6A At% 1=<0 if the (ork of the ontrat labour is equi,alent to that of the
permanent (orker they should be paid an equal (age and all other benefits as en7oyed by the
permanent (orkers) "he !orporation% so far% has not omplied to it) "his disrimination has ad,erse
effets not only on their performane but% it also hampers their soial life) Aording to 1oye et)al
A200<B the interation of a (orker (ith his (ork plae and olleagues largely depends on the
,isibility of the (ork status of the (orker) #n this ase the (ork of temporary (orkers has learly
identifiable harateristis and hene% they remain stigmati9ed) Stigmatisation of (orkers has ma7or
impliations not only on their (ork life but also in their personal life) A stigmatised (orker suffers
from beha,ioural disorders% heLshe is prone to mood s(ings and their performane at times beomes
ounter produti,e) Also% their ommitment to(ards the organisation is affeted drastially) "he
stigma assoiated (ith being a part of asual or e3luded (orkfore also leads to 7ob dissatisfation
and affets the (orking apability of the (orkers) Suh (orkers also suffer from lak of (ork
entrality) /ork !entrality an be defined as degree of importane a (orker has regarding hisLher
(ork) #n a temporary 7ob (herein the (orker has less to e3press and remains under stress% there are
greater hanes of identity risis A#bidB)
?ffets of this stigmatisation (as learly obser,ed in the aounts of younger (orkers) Sonu
Sona(ane% aged 2; says%
I picked up t)is work after t)e deat) of my fat)er t)ree years ago" !s I was t)e eldest son I )ad to
start working in order to feed t)e family" I don2t like t)is $ob at all" &very morning w)en I wake up I
don2t want to go to work" .)ere is only filt) and dirt" If I were educated life would )ave been better" I
would not )ave to go to t)e dumping ground t)en" -eople would )ave treated me wit) respect"
"his (orkplae stigma is further ompounded (hen onsidered in light of already pre,alent aste
disparities in #ndian soiety) "he (ork of sa,enging is undertaken by the bak(ard astes or dalits
as they are ommonly referred to) "he (ork of sa,enging is onsidered to be highly degrading and
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filthy% hene the (orkers performing suh tasks are onsidered impure) Although% the parliament
passed a legislation for the betterment of dalits kno(n as the Sheduled !astes and "ribes
A+re,ention of AtroitiesB At% 1=@= ironially this At does not apply to the onser,any (orkers
of the !orporation) Hene% the poorest and the most e3ploited of the lot (ho are in,ol,e in the most
deHhumanising (ork keep on (orking in degrading onditions)
C2<D
CHAPTER SE)EN
CONCLUSIONS
'Law and order e*ist for t)e purpose of establis)ing $ustice and w)en t)ey fail in t)is purpose t)ey
become t)e dangerously structured dams t)at block t)e flow of social progress"+
3 Martin Lut)er Aing( Br"
"he ob7eti,e of this researh (as to e3plore the launa in labour legislations that lead to e3lusion
of informal (orkers from a,ailing benefits enshrined in labour (elfare legislations) "he field(ork
of the researher% personal aounts of the members of 45SS and the arguments presented in the
ourt ases filed by the :nion postulate that the key issue plaguing labour legislations is its demand
of establishment of employerHemployee relationship for its appliability) "he researh found that the
lak of eduation amongst (orkers and their inability to bargain made it easier for ontrators and
1M! to arry on (ith the ontrat system in the name of ,oluntary (ork by putting a bogus (ork
ontrat in plae)
Seondly% it (as noted on the basis of the ourt ases being pursued by the :nion in ,arious
labour tribunals and the Supreme !ourt that the 7udiiary has remained apatheti to(ards the plight
of informal (orkers) "he politial eonomy of the State has shifted a(ay from the (orkers) #n its
pursuit of reating an in,estment friendly% labour fle3ible market the State has eased the entryHe3it
norms for orporates) "he onus of soial protetion has been put on the (orkers themsel,es and is
determined by their partiipation in the labour market AStanding 2002B) "his shift in the go,ernment
poliy also reflets in the stand that the 7udiiary has aquired to(ard #ndustrial Dispute ases
pertaining to informal labour) *ustie 4rishna #yer says% F"he ,ie(s of the nation on ertain matters
may definitely hange and% unonsiously% 7udges interpret the la( to orrespond (ith the hanges
in national ,ie(s% irumstanes and progress)GA1abu and Shetty 200<B) "hus% in reent times the
sope of o,erage of labour (elfare legislation has been limited and the required e3ploration in the
understanding of the statute (hih ould lead to the inlusion of informal (orkfore has been
stalled)
#n sum% the researher finds the laim of neoHliberal eonomists regarding fle3ible labour
markets resulting in heightened produti,ity of an establishment and e3elling its gro(th is a fare)
During the ourse of this dissertation the researher found that informal (ork is highly degrading
and affets not only the professional but personal life of the (orkers) "here is a stigma attahed to
the (ork of informal (orkers and they fae disrimination not only at the hands of their employers
but their permanent employee ounterparts) Lak of any kind of soial protetion renders them
,ulnerable to e3ploitation in soiety) "herefore% the researher (ould like to onlude that there is
C2@D
an urgent need to amend labour legislations inherited from the ?nglish La( pratised during the
erst(hile 6a7 in aordane (ith the latest de,elopments in the labour market)
C2=D
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C;0D
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