The Contracts of Exploitation
Interviews of workers which I conducted recently made me conclude that the Society has issued the ‘Contract of Exploitation’ to all. Exploitation of labour is not a new subject to anybody. I had earlier interviewed ten young persons who worked as trainees and published my blog ‘Training to Exploit.’
I was discussing this subject with Arvind Shrouti. He advises more than a hundred unions in Pune area. Arvind mentioned that the extent of exploitation of labour was seen to be believed. The HR professionals, Union leaders, entrepreneurs and Government officials alike are not even aware of the ground realities, he said. I decided to investigate with his help.
Six young men met me. They worked at Hyundai Construction Equipment India Pvt. Ltd. Some worked through contractor, while others through NEEM. All were removed from service. None of them worked directly, that is to say, none of them was a permanent employee.
Very distraught and stressed they appeared. I introduced myself. Small talk between us helped them relax. They smiled and they said they trusted me. Obviously they were spoken to about me earlier. It served my purpose. I initiated discussion about their job.
“Saheb, we work as welders. At Hyundai Construction. But all of us have been removed from our job.”
“All?”
“Yes, all six of us.”
“Where did you learn the skill?”
“We enrolled at YIT.”
YIT or Yashaswi Institute of Technology launched a scheme of ‘Learn & Earn.’ This scheme was reportedly supported by an ex-Minister in the Govt of Maharashtra. ‘Learn & Earn’ caught of the imagination of employers because it fulfilled their need – to have ‘flexibility’ in manpower. The Contract Labour Law makes the employers vulnerable to the demand of permanency of job, or the threat of abolition of contract labour in a process by the Government. YIT positioned its scheme such that the persons working will be categorised as ‘Trainees’ and that too for three years. This period was later increased to four years. The payment is [or was then] Rs 8500 pm in the first year which increases by a thousand rupees every year. On its face, this scheme looks innocuous, but it allows gross exploitation. YIT gives a Diploma in Mech Engineering and other Diplomas as well. I was told that the Diploma was issued by Yashwantrao Chavan Open University, but the University no longer gives it for YIT ‘trainees’.
“What’s your name?” I asked a middle aged person.
“Rajendra Vighe”
“And your age?”
“I am thirty-seven now.”
“When did you come to Pune?”
“When I was about twenty, Saheb.”
“So seventeen years ago?”
He had come to Pune in search of job. Seventeen years ago, in 2000 or 2001. Initially he took up a job at Kinetic Engineering as Apprentice Welder, worked there for a year and then returned to his village.
Rajendra is the eldest son of his parents, and has responsibility to support them too. He returned to Pune four or five years later.
“Where were you employed?”
“At Tata Motors. I did three periods there.” Rajendra took out his service certificate from his bag.
‘Period’ is a term quite commonly used to denote a period of seven months. Tata Motors employs temporary workers for seven months and then terminates their service. They are re-employed later for another term of seven months.
Why seven months? It means 210 days. This is to ensure that they are not employed for 240 days – if you do, you have to pay retrenchment compensation. All employers fear that if they employ a worker for 240 days he can justify the demand for permanent job. This is quite a common practice in manufacturing industry. Though very exploitative, it is common and unchallenged. It can be challenged in the court of law, but nobody does it. Not even the unions.
“So you worked at Tata Motors for 21 months?”
“Yes. Then I enrolled at YIT for Diploma in Mech Engg.”
“It is a three years course, right? Where were you placed?”
“At Hyundai Construction Equipment”
“What work did you do?”
“Welding”
“Did you complete the Diploma in Mech Engg course?”
“I completed all the six terms [three years] successfully, and qualified for the Diploma, but they did not give me Diploma.”
“Why?”
“They extended the course by one year and made it a four year course. I was paid a salary of Rs 10,500 in the third year, but they [YIT] placed me at Sigma Company on a salary of Rs 5,000 pm. I told them that it was impossible to make a living for a family in that salary.”
The Diploma recognition of YIT was withdrawn by Yashawantrao Chavan Open University in 2012 or 2013. Was the ploy of extending course by one year thought of to avoid granting Diplomas? The six workers thought so.
“So what did you do?”
“Ten days later they called me and asked me to work with TeamLease. I was then appointed by TeamLease to work at Hyundai Construction. It was under NEEM. I worked there for two years.” Rajendra produced his pay slip.
TeamLease is a well-known staffing company. This is what it says on its website. [Excerpt]
TeamLease Services established in 2002, is one of India’s leading human resource service companies in the organized segment. A Fortune 500 company listed on both NSE & BSE markets, with eight offices and 1400 clients across the country. A one-stop provider of human resources services to various industries and diverse functional roles, offering staffing, payroll processing, recruitment, compliance and training services.
The company in partnership with the Government of Gujarat, set up TeamLease Skills University (TLSU), India’s first vocational university, at Vadodara. In FY2015, TeamLease rolled out NETAP (National Employability through Apprenticeship Program) to provide on-the-job training to apprentices. The company at present has about 125,000 associates/ trainees spread across the country and have till date given employment to 1.2 million people with an aim to hire millions more.
The pay slip shows that TeamLease of Gujarat had hired Rajendra. The place of work remained Hyundai, since TeamLease engaged him for Hyundai. It was a two year contract. This was a contract for NEEM trainee. TeamLease is a NEEM Contractor.
NEEM of National Employability Enhancement Mission is perhaps the most exploitative scheme ever launched officially by any Government in the world. I had blogged about NEEM:
The scheme is, like all schemes are, noble in its intention. A Neem Agent is required to be registered. A Neem Agent then can place a trainee [up to 10 Thousand] in industry. Who can they be? Read this:
A person who has completed graduation / diploma or a person pursuing studies leading to graduation / Diploma and registered under NEEM is called a Trainee under NEEM
A person seeking training under NEEM shall be at least 18 years of age and not more than 35 years of age as on the date of registration. [Note the outer limit!]
A person seeking training under NEEM may be either pursuing his or her graduation / diploma in any technical or nontechnical stream or may have discontinued studies of degree or diploma course
This has been interpreted by some to mean that even MBAs [typically from resource-starved institutes] can be engaged as trainees. Actually the definition allows practically anybody to be engaged as a trainee. The duration can be 24 months.
TeamLease repeatedly raises its voice against the archaic labour laws, and actively campaigns for change. The Contract Labour Act and The Industrial Disputes Act forces them to find circuitous routes to be in the ‘Temps’ business. Their anxiety for reforming labour laws stems from these concerns. Take a look at this is report in The EcoTimes:
‘In order to boost job creation process, the government should overhaul the “most regressive” labour laws in India, a TeamLease report says.’…..
…..”Our labour laws have remained dysfunctional, disharmonised, protracted and overreaching. This multiplicity of rules and procedural delays impose unreasonable legislations and transaction cost on businesses,” TeamLease Services Vice President Sonal Arora said.
[Overhaul of regressive labour laws essential: TeamLease report, The Economic Times, July 4, 2017 ]
“My service was terminated after two years. The Hyundai people then asked me to work with BSA.”
“What’s BSA?”
“Another contractor. They employed me for six months and then terminated my service in June this year.”
“Why?”
“They said there is no work, but actually there is more work now and they are also recruiting.”
“What was your last drawn salary at TeamLease?”
“Rs 15500. But at BSA they paid me Rs 11,000/-.”
“Were you covered under Provident Fund?”
“Nowhere. Because I was a trainee everywhere!”
“Hmmm…. Can you manage the expenses in eleven thousand rupees?”
Long silence followed this question. Rajendra shook his head. “What to do?” he said helplessly. “Sir, I also have to send some money for my parents. Their recent illness cost me a good chunk of money.”
“Does your family stay with you in Pune?”
“Yes, Sir. My wife and two kids. Son studies in the sixth, and my daughter in the third standard. I am thirty-seven now, Saheb. How to live here?”
Rajendra began his career as a YIT trainee. Anybody can see the façade of YIT. And NEEM serves as official vehicle of exploitation. [See my blog: NEEM does not redeem confidence]. In the last seventeen years his salary moved not just up but down as well in the range of Rs 8,500 to Rs 15,500 pm. And the last salary at Rs. 11,000/- ! Everywhere without social security benefit. That’s the ‘magic’ of working under NEEM contractor, TeamLease and YIT.
Watch Rajendra’s interview [Marathi] here.
A Bird’s Eye View of the Situation
Option Positive conducted a study of 113 establishments in Chakan, Ranjangaon, Pimpri-Chinchwad, Baramati region, covering all major industries. Here are some findings:
Out of the 1,03,882 workers employed in 113 organisations, workers in permanent employment were 39,125 [37.66%], Contract workers were 40,423 [38.91%], workers in temporary were 14,110 [13.58%] and Trainees are 10,224 [9.84%]. In other words, the ratio of permanent to ‘flexible’ manpower was approximately 38:62 or 1:1.63. In other words, for every two permanent workers, three ‘flexible’ manpower is employed. Their fate is no different from Rajendra Vighe’s!
Guess what is happening at the national level.
Average wage of permanent workers was Rs. 33688, while contract workers were paid on an average @ Rs. 9561/- p.m. The temporary and trainee workers were paid Rs. 8545 and Rs. 8780 per month respectively.
A permanent worker get three and a one half times the wages of a contract workman while he gets almost four times the wages of a trainee who does the same job in many cases.
Is that fair? The law says that the contract worker should be paid the same as a permanent worker if on the same job, but see the stark reality.
The Contract of Exploitation
Who is exploiting workers? Obviously the employers, or rather unscrupulous employers. The Government joins this gang rape by launching schemes like NEEM. Unions have no teeth, they do not even feel the pangs of conscience. They are onlookers in some cases. And passive conspirators in others. I have reliably learnt that in one of the MNC in Pune, four hundred ‘flexible manpower’ is employed supporting six hundred permanent workers. And out of the four hundred, one hundred and fifty are engaged under NEEM through contractors like TeamLease. All this with the knowledge and tacit connivance of the union!
Santosh Kanase is the new President of the Shramik Ekta Mahasangh. The Mahasangh is affiliated to IndustriAll which is a global union. They have a strong base in Pune. More than 100 unions are said to be affiliated to it. I asked Kanase what he plans to do to address this problem of gross exploitation.
“We will soon move the Court” he said.
“Unions move the court only as the last resort, when everything fails” I said, “You are beginning there!”
“What to do? Unions are powerless. Taking up cudgels on behalf of contract labour and trainees is not on their agenda. Even collecting statistics becomes difficult! However I am determined to take up their cause.”
There is an inferno in the minds of the young men. There are deep feelings of helplessness and frustration. The workers feel that all factors are loaded against them.
The exploitation journey is smooth and unchecked so far, but it could be strewn with landmines ahead.
Beware!
P S: A friend asked me this question after reading this story: “A man is available for exploitation. Does that mean we should exploit him?”
Vivek S Patwardhan
Very studied article by a veteran in HR
field . Calls for introspection by all of us……
It is the candor of all involved in the phenomenon that stand out. You may call this duty, whereas several make this exposure the line of courage. The consequence is a shared civic liability, and we are fools to blame the political class for this, at the cost of our own sanity.
It is the candor of all involved in the phenomenon that stands out. You may call this duty, whereas several make this exposure the line of courage. The consequence is a shared civic liability, and we are fools to blame the political class for this, at the cost of our own sanity.
All are contributing to the problem. Business wants low cost employees and flexibility. Govts wants to support them and turn a blind eye. Unions want to enjoy as their shortfalls are made good through the temps and trainees. And Society in General is oblivious to all such issues. Time ripe for new Messiah to take Avatar
A very thoughtful piece indeed; what makes this tragic is that the current situation is an ‘open secret’ and collective action continues to fall short! Useful for us to introspect on not only what is happening in our organisations, but closer ‘home’ in our housing societies (‘facilities management staff’) and at home (exploitation of domestic staff). The action needs to begin with us at the individual level as well. Many thanks Vivek.
“Trainee for ever”-is the reality of new globalised economy, very sad. a person started as trainee about 9 years back being rotated around in industries is still a trainee with 37 years of age. golden period of life is gone, with no social security benefits ensured by law.What we are producing in society ? A lot of frustrated and cheated youth,pushing them into a dark tunnel?
It is a established nexus between govt, employers and trade unions.Every body is getting its due.
But Who will bell the cat?
On Industrial relations front the problem, we face in the country is that – the exploration is done on cyclical basis by the Employers or Unions, whomsoever is stronger than other one……
Now it is a turn of Employers again like pre era of Dr. Samant. Later came the time of Dr Samant and other Unions……Whichever segment is powerful goes to extreme end to exploit opposit segment, who is weak and vis a vresa……
To avoid this what is required is the long-term Labor policy. But it may not come through so easily, till the time the Labour policies are driven by political parties, there also a cyclical phenomena exists…….
Nice article by Vivek sir. The 360 degree approach in this issue will enlighten us about the intention and motives of all the stakeholders involved. However can we make weaker section of the society to stand on their own feet in entrepreneurial way instead of following job as unique agenda for the lifetime. I mean to say they need to explore better options in life if badly beaten in earlier attempts of employments. But do they have knowledge, skill sets & risk taking abilities to prove their metal in life that’s the question. As a society, we can help them to develop and explore creative alternatives for better life. I also hope the same exploited employees should not fall prey to same business ethics once they become successful entrepreneurs. Ultimately, here the power sets the rules of the game and very few retains the ethics. The population & unemployment of youth in India will soon make this bomb nuclear.
More responses:
Dear Vivek,
The scene ahead is certainly “strewn with landmines” and your research was a “bomb” with statistics and processes of exploitation clearly shown. It seems certain that large numbers of intelligent, skilled and hard working Indians are being ‘pushed’ into turning violent at some time when they feel nobody cares or will speak on their behalf.
Thanks for ‘educating’ me !
Warm regards – Zahid
Satish Pradhan wrote:
JUST READ AND POSTD IT ON FB !
it is a eye opener even for so-called-knowledgeabble and concerned “labour dynamics watchers” !!
good investigative reporting sir !
warm regards
Satish
Syed Ahmed Saqi wrote:
Sir,
Through these real life case studies, your are awakening the consciousness of us all, may be its time to go back in time and appeal for some basic threshold. Organisations seem to be circumventing even the minimum wages in their aim to bolster better bottom line, thereby better shareholder value.
With the aim of current govt to increase the ease of doing business, may be some more laws ll be made liberal, and i fervently hope such stories don’t become the ‘new normal’ in the future.
There seems to be no moral compass in the market of demand and supply. While it is disheartening to know this, it’s getting truer by the day.
Regards, Saqi
Bitter truth of present IR scenario. This is very harmful for society in a whole. If poor people can not able to take care of basic needs of family , it will lead to increase of crime.
While defining schemes and policies pertaining to labors or for that matter anything impacting masses, necessary checks can be incorporated but I am not sure how it is being missed on most of the occasions.
Moreover if there are loop holes in the system, organizations should morally take right decisions, complementing both the parties of the employment contract, which is again missing on most of the occasions.
These are the reasons which is still fueling distrust between management and their employees, resulting in unproductive time and energy.
We and our function has to play very important and pivotal step in creating trust and harmony, among all stakeholders of organization.
Thanks Sir for bringing this up
Dear Vivekji,
Very well written piece backed by strong facts…..we all need to think as to what so many young energetic frustrated minds will do if they get angry and organized !?
You have been writing on the HR issues, which are not possible to be raised by an employed HR professional for the fear of not only losing the current job but also not getting employed thereafter anywhere. So, it creates awareness but we cannot get a remedial action initiative emerging from there. Can the HR Associations take this cause? May be but sounds difficult again as the active members are employed and also sponsored by their respective companies. Unions are almost dead or the leaders sold out or work for climbing political party’s ladders. From one quarter, though, there is still a possibility: the Left parties: say CPM. While most of us would not vote for them, including me, during the elections, they can mobilise the opinion towards changes in the law and fight for it with some credibility. They will need to work in this direction and perhaps can regain some lost lustre.
Really sad to read about the plight of trainee workers for years together. I hope some solution would be found by right minded people to get rid of the exploitative approach.
Hello Sir,
Your attack on NEEM/NETAP has been really packed with firepower!
While I definitely agree with the view points, just have a few questions to ask –
1. Can the union and the advisory system absolve themselves of this phenomena? LTA gains of Rs 17000, Rs 20000, to a handful of on roll employees do little to help people cost matters. Brick and mortar manufacturing setups across industries are facing the yo-yo of high and low volume, business dynamic etc. So how would manpower planning happen in a justifiable cost efficient fashion? Why would the unions not look at the bigger picture and increase the job pool, reduce their average wage and thereby ensure more direct employment?
2. Permanent employees in most cases are less productive while the operations are run by these CL and trainees… rather there is a work level exploitation done by the so called on roll employees on the others. Would that not be exploitation? And what is the role of union in this?
3. One who wants to be exploited can he be exploited… its a valid question, and I would say that the machinery is running on this. Once you are above 30 there is no permanent employment available in this belt. So people are in silent acceptance. Of course its incorrect. But if employment conditions, hygiene etc are taken care of and people are not hired and fired at will, is there some retribution?
Demands from a manufacturing unit are becoming tougher day by day. Whether its changes like GST or other legislation that changes unit strategy, expectations are changing over-night. The labour law framework isn’t conducive to them. And the average worker is well aware of his “rights” much more than his “duties”. Which might be the same for a manager but then his rights are few and far between. So running an operations is becoming tedious. Skills are getting more blunt, behaviors are plunging and then varied types of employees are interfacing to render an overall efficiency that’s not optimal. But ironically, no one is measuring
Sir good job. Very kind of you
keeps doing. Regards
Sir good job. Very kind of you
keeps doing. Regards
Extremely pathetic and deplorable.This sort of exploitation is going on for years together and it seems there is no light at the end of the tunnel.We are disengaging and discouraging available skills and investing hugely in “skill development programmes”involving”Thinkers” !
I read your blog a few days after reading an article in people matters on how the contract labour regulation and abolition act needs a change. The article largely emphasised that considering the petcentage of manpower employed as contract staff, it stated that probably abolition might not be a relevant objective in today’s era. Probably the focus should increase on regulation and ensuring the loopholes are reduced.( I can’t seem to find the link to the article. But will share once I get it.)
While the case you have highlighted is of manufacturing, have witnessed a similar practice is the sales function of the fmcg, retail and fmcd companies where the last mile fleet on street on the store associates are on contract. I guess one of the reasons companies do it and sadly so is to make the employee count and wage bill look lesser than it actually is. Also this number is prone to high attrition which means more administrative work for the HR. However, honestly I fail to understand how the work they are doing is not core to company’s operation.
While I do not disagree to the exploitation of the labour force, I do feel that abolition seems like an archaic concept now. What we need is a better regulation and governance mechanism. And sadly other than employees and the employer there is another stakeholder I.e. the state or the politicians who come up with schemes that only lead to further exploitation.
Thanks sir for sharing this article.
Really Sir..Excellent outcomes of the survey & findings from humanitarian point of view…Worth to go through it..
Indeed eye opener facts….very rightly mentioned that Govt Schemes come with noble intentions but flaws in execution defeat the purpose and poor employees become victims….
Thought provoking article by Mr Vivek Patwardhan with deep probe n study. The time has come the society needs to introspect and take a call as how long it can turn blind eye to this exploitation which is a blot on any civilised society and amounts to social evil. This will have long lasting repurcussions including social unrest and eventually a class struggle. I feel d day is not far away when this exploited class will have no option but to rebel against a society which ignore their exploitation. This my views can be considered as a ‘wishful thinking’ too. I admire Mr Vivek that despite contributing to field of HR on very senior positions he has emotional attachment for labour which reflects in this article.
This is a step towards uberization of workforce. This will grow faster in IT Industry
My comments are as below.
Before 1991, Indian economy was a highly regulated one where public sector played an important role. Government went in for economic liberalization in the year 1991. Gradually it opened up the economy for foreign players and by 1993 India started attracting substantial amount of FDI. After the entry of foreign institutional investors in the country, for the first time the focus had shifted from providing social security through jobs to profit making. All the companies started looking for different options available to them in terms of employment in order to decrease their labour costs.
And so, companies started hiring through contractors which resulted in sharp increase in the employment of contract workers. Organizations realized that using contract labour in non core areas was proving very efficient, as it provided them with the kind of labour flexibility required. Using contract labour not only made them price efficient, but also improved their productivity. Lack of guidelines in CLRA Act on usage or non-usage of contract labour in “core activities” prompted some organizations to use contract workers in core activities too.
The issue of usage of contract labour has been debated for long now. One of the main reasons for this debate parity of wages –wage differences that is observed between the permanent and the contract workers.
There have been many cases have involved sham and bogus contracts/contractors. But the current central act does not define or elaborate on these. Hence there have been lots of ambiguities and misunderstanding regarding what exactly qualifies as a sham and bogus contract and what are its implications. Hence the term “sham and bogus contract/contractors” should be clearly defined and included in the act.
I think we should be able to look at this subject with the perspective that , Do I want to be a good employer, if the answer is yes, then, I will adapt to fair employment practices and work within the preview of labor laws.Importantly, given the fierce competition, it is time to have a re-look on all the labor laws for inviting suggestion for amending the laws and whether we want to change with the time in this age of outsourcing & shared services as jobs of today no longer as the job as were few decades back. World is changing and so is technology, market dynamics because of which, the longevity of any industry / product cannot be guaranteed and so employment/engagement.
Rajeev Joshi
I have been working in a college for 8 years now as a part timer hoping that they will absorb me when there’s an opening… now that there is an opening they decided to overlooked…. is this exploitation?
Giving me false hope for years… they should have fired me a long time ago when i still had my age… now i am overage where do i go?