Rotational Employment of Temporary Workers Illegal
The recent Bombay High Court judgement striking down ‘rotational employment of temporary workers’ at Bajaj Auto is a welcome development. Call it an unfair labour practice if you think that exploitation is a rather bad word.
That temporary workers and contract workers are employed for seven months and then given a break only to be called again is well known. It is so common that many people think that it is a normal practice. The problem with anything becoming a common practice is that people stop worrying whether it is just and fair.
Long back I met a worker from Bosch in Nashik. In his mid-forties, he was a cheerful person. We discussed his career with the company. He said, “Sir, I worked as temporary worker here for sixteen years before they absorbed me in permanent position. The best years of my youth were spent with the Damocles’ sword of unemployment hanging over my head. I got married during those years, my children grew up and started their schooling. My wife would be uncomfortable and tense whenever I got a break. Your social status also drops if you do not have a job. It is embarrassing to meet relatives and tell them you are on a break!” (The Terrible Life of Temporary Workers )
I also pointed out this pernicious labour practice in my blog ‘The Contracts of Exploitation’ (Just a thought: Why is it called an unfair labour practice when it is actually an unfair management practice?). Here is what I wrote:
Rajendra is the eldest son of his parents, and has responsibility to support them too.
“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. All employers fear that if they employ a worker for 240 days, he can justify the demand for permanent job. In certain cases, the standing orders require making him permanent.
Employing for seven months and then terminating service is quite a common practice in manufacturing industry. Though very exploitative, it is common. There are industries in Pune where workers have been working in temporary jobs for fifteen to twenty years! And yet it is almost well accepted, and even unions have not raised much voice against it!
But hopefully things will change. In a recent judgment in the case of Bajaj Auto (Shri Sunil Pralhad Khomane & Ors. vs. Bajaj Auto Ltd., Akurdi, Pune) Justice Mr. SC Gupte has called ‘seven months work and break before re-employment’ an unfair labour practice. The Hon’ble judge has also granted sumptuous compensation to the temporary workers. Hopefully this case would be a deterrent enough to the unconscionable employers, and provide relief to the thousands of temporary workers.
Bajaj Auto had employed more than four thousand temporary workers. And they were given breaks and re-employed systematically. They went to the court against this practice. It has taken them more than twenty-five years to get justice!
Readers of my blog will also recall how Bajaj auto had suddenly closed down their Akurdi factory in September 2007 and had literally thrown hundreds of workers on street.
I remember this because of a recent statement of Rajiv Bajaj. Economic Times reports, ‘Bajaj Auto, has announced further support for its employees as the second wave of the COVID-19 pandemic continues to spread across the country.’ And goes further to quote him – read carefully ‘Rajiv Bajaj, managing director, Bajaj Auto, said “When asked how we should treat others, Ramana Maharshi replied, ‘There are no others’.
Hopefully, things are changing!
(I wish to thank Mr. Abhay Damle for his help in this matter.)
Vivek S Patwardhan
“What you leave behind is not what is engraved in stone monuments, but what is woven into the lives of others.” **** “Aroehan: Creating Dream Villages in Mokhada by 2025: “No Malnutrition Deaths, No Child ‘Out of School’, Reduction in migration by 50%.”
(Why is it called an unfair labour practice when it is actually an unfair management practice?).
You nailed it sir!
Bajaj ki bhi bajadi
Good judgment. But project companies have a genuine difficulty. Take current times of Covid. Suddenly the inflow of orders have stopped. It will show its impact after 6 months. What to do with surplus labour. I think the answer is in abolishing temp labour instead allow FTC with wages equal to 20% > Min Wage and another 10% towards an annuity fund and a severance of 45 days for every completed year of service and the min severance should be 135 days irrespective of FTC tenure. Employers have to pay for flexibility. Thoughts on the go. We can create a thread. Thanks
Very well written. And a judgment just before the Labour Codes are put into force. What is fixed term employment so conveniently drafted into the Labour Codes? This is another way of exploitation. At the whims and fancies of unscrupulous employers, employees will be terminated never giving them a feeling of security. It’s about security and not permanence.
Just referring to Sharad’s point on projects, the clause to terminate the employee co terminus with the expiry of the contract with any agency is a good measure and have been upheld by Courts, though many cases have yet to reach the highest court.
I have no hesitation to state that the FTC concept when put into practice will be challenged by the unions and like in Bajaj, the Courts looking into the patterns of termination of employees will strike this clause down by terming it exploitation. It’s only a matter of some years from now.
Termination by way of retrenchment started with surplus labour and then the Section 2(oo) was introduced in the ID Act, 1947. That’s the way surplus labour needs to be treated, ofcourse by giving employees’sizeable compensation or through a good VRS scheme.
Fixed term employment is no alternative is what I feel. I see a situation where there will be no permanent employees but all employees on fixed term employment.
May not augur well in a country like ours.
And what may be the statistics of litigants who take such grievances to court? And of cases that reach judgment stage? How long will language bind unconscionable employers to powerless, unprotected employees?
Who is binding whom and how?
can a farmer complain more at a court than an industrial worker?
Can a garbage collector or rag picker wail louder than a hotel kitchen cleaner at court? Will the scrap dealer outside these big factories be a stakeholder in this system?
In an unjust world, how do we measure ourselves on justice rendered? What’s performance like between statutory frames?
Glad you still voice for the unheard.
Dear Vivek
Thanks for sharing this news ?
1) This is welcome decision n should provide the much
needed clarity
I recall in the late 70’s whilst working at Pimpri n Chinchwad, we were growing n recruiting in a big way at
Telco. Whilst a major source for workmen were from BA, my Superiors n most Experts launded the excellent
productivity levels at BA …Being often at the receiving end, I went into details
Normally a fresh ITI would b taken as a trainee for 180 days and asked to touch 100% prod nos . He would then b taken for another 6 months and told that his previous nos were now 80% and can join only if he will deliver 100%
After achieving 100 now ..he would get a break
Thereafter after 10 days , he would get recruited on probation ..the 80/ 100 rule would continue for 2 periods
Of probation till he was made permanent ?
The saying was that these workers were permanently Temporary ‼️
Their well acclaimed MD and Industry leader was always
the Ideal for all ? We all applaud when they pull up the
Govt on some issues ?
Those days Telco would NOT have a single worker as temporary or beyond 3 months of probation
I agree n accept ….Times will n have changed
2) I agree the FTE piece can be misused …I have personally requested all Employer Organisations to respect
the spirit in which FTE provision was made in 2017 ..
Further in meetings before both Secretary and Jt Secy Union Labour Ministry ..have requested that there is a need to provide on the period or no of occasions that an employee can be FTE
Unions are right in complaining about the misuse ..
Hope this lacuna is addressed asap
Dear Vivek, A welcome judgement. I have always said that it has been exploitation. I am afraid that things will not change as they will be converted into FTCs. These will be for a period of six months or even a year but then the termination will not amount to retrenchment, given the changes recently made. I think legal provisions are the fig leaf that employers often use to cover their real intent. – Getting cheap and flexible labour. How can any business operate with 60 to 70 % uncertainty ? That is the ratio of temporaries to the overall workforce. I think it is indefensible.
FTE is not a matter for rejoicing for Employers. After State Bank Of India’s Case by the Supreme Court Sect 2 (oo ) bb was introduced under the ID Act 1947 for taking away the Employment for specific period from the Def. of “ Retrenchment “. IR Code 2020 just provided for the classification for FTE subject to certain conditions. However it is a well established Legal Position that FTE applies only when the Job itself is Of for a Fixed Period. and the Employer can not have set of FTEs for a job of continuous and Permanent Nature..
Needless to mention that Labour Relations in India needs to be Managed as a Socio/ Economic Issue. More Laws will not ensure more jobs or sustained Earnings. All the Stake holders do have issues particularly now in the Pandemic World with many uncertainties and challenges traditional Mindset of the Key Stake Holders need to Change. As mentioned by a famous English Jurist, Laws should reflect the Contemporary aspirations of the Society. Judicial Activism, Managerial Arrogance or Populistic or ideological overtones will not serve the
purpose.
Pragmatism , Matured and Balance Approach should be Pursued.
Aravamudhan
Dear Aravamudhan,
Good morning and was’nt the provision for temporaries introduced for temporary increase in work load? And see where we have gone with that!!
Dear Vivek Sir.
Thanks for sharing the news and your views.
In Pune, this practice is a permanent feature of employment. All stakeholders had taken it as an accepted practice and employees are taking it as ‘Fate accompli’.
A good decision by Bombay High Court, albeit very late.
This should be taken by State Government in good spirit and appropriate remedial amendment be done to both MRTU & PULP Act and ID Act. Engaging temporaries and FTEs should not a matter of rejoicing by the Employers. A need based and proactive socially responsible approach by Employers is need of the hour. Hope for the best.
It is a good judgment delivering justice to permanently temporary workers .Am sure the judgement would be challenged further. In the era of global competition, employers would find other ways such as FTC to remain competitive. Thanks for sharing the important judgment.
Regards
Very well captured sir!!! Truly Appreciate the Judgement.
“Law Stems when Ethics Fail”
I can proudly share our best practices pertaining to contract workforce management which has already been captured by your good self in one of yours blog. Out of the total workforce (6000 Pax.), more than 20% are of the contracted workforce without having any discrimination to their remuneration in comparison to the permanent workforce inclusive of all the benefits, perks along with voluntary PF Coverage. A big no to rotational 7 month play around!!!!
We are following the same despite being part of the manufacturing sector. When there is a will then there is always a way provided it is intended by the genuine leadership…
Fantastic…. Thanks for reminding us that there are such practices which are unfair…. We have assumed it as a way of life.
Hopefully with the new labour codes, the concept of FTC/FTE will bring a fairness in this practice.
Mehernosh Mehta writes (Posted with his permission):
Dear Sir,
Read your article and couldn’t agree more! Hard-hitting and factual as always.
The sheer hypocrisy of corporates boggles the mind. We can spend crores on CSR activities to align the local police, village communities and the village head, but deny genuine rights of our workers citing costs as a major constraint!! And now they are spending crores on rolling out ‘Compassionate Benevolent Funds’ for their permanent employees who are affected by COVID!! As if others will never get infected by the disease!! I see such hubris everyday and wonder what is my role as the CHRO??
Do I show spine and take a risk of being called a union lackey or like most of my colleagues put my head down and be an obedient soul??
For me the case for a ‘Spine’ can never be over-emphasised but wonder for the others. Some serious questions for which there are no clear answers.
The problem with anything becoming a common practice is that people stop worrying whether it is just and fair….. you said it. Also, the usual attitude of Indian employers is not to follow laws, but to see how to get away with breaking them. In this process anything goes. Even globally, ask, “Who gets retrenched when a business realizes that it has too many people?” Who SHOULD get retrenched? The person who hired too many people. After all, those people didn’t just walk into the business one day and declare, “From today I work here.” They were recruited in ‘good times’ when nobody was thinking about cost and then when times change, they are thrown out without a thought about the havoc that is created in their lives. Employing temporary workers to do regular work inculcates sloppy practices and is a clearly exploitative practice. It is high time that we see businesses from a moral standpoint also and not merely in terms of ROI. This must be taught in BS’s and must be practiced on the shop-floor – not merely be a postscript or sign-off note in the Annual Report.
HI SIR I AM ONE OF THEM I MOST APRECHIT YOUR POST NOW WE ARE IN SUPRIM COURT
I WANT TALK WITH YOU FOR FEW MINUITS
MOB NO 9421439221