Contract Lbour and Its Implications

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Management Development Institute, Gurgaon

Post Graduate Program- Human Resource Management (PGP- HRM)

A report on

Contract Labour and its Implications

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Contract Labour and its implications

Executive Summary
The report is aimed at taking a wholesome view of all the aspects that surround the arena of contract labour in the present scenario. Also taking a leaf out of the past events and happenings, how those have led to an improved yet developing contract labour laws with their implications. Contract Labour includes those workers which work in a manufacturing plant not on a permanent employment but on a daily wage scheme. There is a marked difference between the workers that are the permanent employees and a contract labour in terms of remuneration, facilities and benefits and above all a job security. Other aspects of contract labour like the characteristics involving the advantages of contract labour in terms of cost saving and flexibility is discussed. The Indian legislature had laid down certain acts and laws for the welfare of these contract labourers but unfortunately the laws of 1970’s have started to lose out on their shine in the present day business environment which is truly depicted by the increase on an exponential level the numbers of contract labour in any major manufacturing hub of the country either it may be the metros of the ports, Gujarat or even Pune. These labour laws have their international counterparts in terms of laws of many more developed and developing countries which have been amended and made more robust and implementable. Best practices for the contract labour management illustrates the business groups study involving the strategies and steps that re implemented so as to look after the handling and retention of contract labour which ultimately is a economic asset of any manufacturing plant which is looking to save on costs. Besides these best practices, there is bound to be unrest due to the lassies faire approach of the government in terms of adapting the long established laws for the dynamic changes that the business goes through. This results in rifts, strikes in the manufacturing plants and of which the one at Maruti Suzuki results in a violent outbreak causing about 26 senior officials to be injured leaving the GM (HR) dead (burnt alive). Such a condemning act of frustration is bound to have implications not only on the other competitors in the same industry but also to the entire system including sounds to be felt inside the deaf ears for law reforms and change to archaic labour laws.

MDI, Gurgaon

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Contract Labour and its implications

Table of Contents
I. II. 1. 2. 3. 4. 5. 6. 7. 8. 9. III. IV. Acknowledgement........................................................................................................02 Executive Summary.....................................................................................................03 Introduction to contract labour.....................................................................................05 Characteristics of contract labour.................................................................................06 Contract Labour Statistics............................................................................................10 Contract Labour Act, 1970...........................................................................................11 International comparison of Labour Laws...................................................................14 Best practices for contract labour.................................................................................16 Contract Labour insights from Maruti Udyog Limited................................................30 Implications on other rivals of the Maruti rift..............................................................37 Other implications regarding contract labour...............................................................38...
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