Contract Labour and Industrial Relations
The large scale emergence of contract labour has a major impact on industrial relations. The impacts are both positive (for official side) and negative in nature. Large scale employment of contract labour has added one more player between the labour and the government viz. the contractor. This phenomenon has given rise to many other issues like rent seeking behaviour and favouritism.

Positive impacts:
1: Weakening of Unions: Unions though a constitutionally recognised forums representing the labour side and putting their views forward at times become a issue in labour relations. By their sheer number strength they can put pressure on the administration to vow to their demands. Threat of large scale strike by the unions have halted many big ticket reforms in the past eg; the labour reforms. Since the contract labourers are not covered under the unions so this has led to the weakening of unions. This is the reason why time and again unions protest against the contractualisation.

2: Less Resistance to Change: As brought about by Frederick Taylor, the unionised workforce can be a resistance to change because of the threat to their own positions. In this way large scale reforms can be introduced with lesser resistance because contract labourers are less prone to protest to any kind of reform activity.

3: More focus on the Core Area: Although it’s not related to industrial relations but by contracting out the non core activities governments can focus on the their core areas of functioning. This also helps in the vision of lean government.

Negative Impacts:
1: No avenue for Labour Management negotiation: Because of large scale contracting out the space for unions is shrinking. This has led to lesser avenues being available for labour management negotiations. Famous thinker M P Follet remarked that negotiation is an important tool the conflict management. However contracting out is taking away this tool. This has led to many conflicts arising in the industrial space. Case study of Maruti Plant Manesar (Gurgaon): On 18 July 2012, Maruti’s Manesar plant was hit by violence as workers at one of its auto factories attacked supervisors, engineers and other management personnel and burnt and killed a senior HR executive, injured 100 managers, including two
Japanese expatriates. The mob also injured nine policemen. The company’s General Manager of Human Resources had both arms and legs broken by his attackers, unable to leave the building that was set ablaze, and he was charred to death. The incident is the worst-ever for Suzuki since the company
began operations in India in 1983 and one of the most heinous of industrial crimes in the history of India. This violence happened mainly of contract labour issues and differences in wages.

2:No Equal pay for Equal Work: As per the directive principles of state policy equal pay for equal work is and important feature of employee-employer relationship. However due to contractualisation this principle is being violated , eg their were two drivers in NAIR one being Government employee other being on contract. There was a huge pay difference between the two. This problem has not only given rise to feeling of injustice but also it has led to conflicting situation between the permanent workforce and the contract workforce.

Contractualisation in Indian Railways and its impact on Industrial
Relations:
Indian Railways is a huge organisation which in involved in production and operation activities. Due to multitudes of activities and pan India working industrial relation in railways has become a complex phenomenon. Also the management of industrial relations in modern times has become complex because of multitudes of factors. This can be depicted through following diagram.

According to government data, over 90,000 contractual labourers work with the Indian Railways. They are employed in multiple fields like Cleaning, Linen management etc. This makes the task of managing the industrial relations quite tedious as the problems of PSUs are quite different from the open line.

Areas of Contracting Out in Railways:
Master circular No 26 deals with the contracting out in Indian Railways. The act is the consolidation of major circulars and the Contract Labour Act 1970. Based on various circulars and orders the major basis of contracting out are as under:
1: If the work is non perennial in nature then it can be contracted out. For perennial nature of job regular workforce should be preferred.
2: If the work is related to safety category then it should not be contracted out. Non safety category works can be contracted out.
3: The major works that are being contracted out are cleaning of railway stations, linen management, managing the rest house and holiday homes, canteens for railway employees etc.

Emerging issues in the field of Contractualisation:
There are multiple emerging issues due to coming up of large scale contractualisation. Few of these are the product of contracting out and others are the product of IT revolution. Rising complexity in the society and the competition for resources due to rising population has made the matter even worse. Few of them are explained as under;

1: Absorption in Jobs: This has become a contentious issue because now the contract labour is being involved in more perennial nature of jobs. Due to the perennial nature of job they keep on working in the same job for a long period of time. And on this basis they demand a permanent job. This is not only a contentious issue from the side of contract workers but also from permanent workers as permanent workers think that contract workers are taking away their jobs. Based on this perennial nature idea there have been multiple litigations in the courts previously. Supreme Court has also given regularisation to certain labourers on a case by case basis in the past.

2: The issue of equal pay: As per the constitution, equal pay for equal work is one of the founding features of industrial relations. However the employment of contract labour along with permanent labour violates this principle as discussed earlier. Also as per the Workmen Compensation Act the contract workers should be given equal wages as the regular workers. However this is not being enforced properly. This has created pay related issues in contract labour.

3: Issue of Discipline and Accountability: Employment of large scale contract labour has created the issue of discipline, as the immediate disciplinary authority is the contractor but they work under the railways. On the accountability side they are working for the railways but are accountable to their contractor. Also the contract labourers are not bound by conduct rules of Railways or any other organisation. At the same time the pay is quite less on which they can get job elsewhere as well. So ensuring accountability and discipline has become an issue. Here this thing also needs to be kept in mind that this situation has created an issue of blurred line of accountability.

4: Impact on Work Culture: Due to contracting out the working space is no longer homogeneous space where only one type of labour viz permanent labours work. Due to presence of both permanent and contract labour the work culture is also getting affected. The permanent labourers at times look down towards the contract labourers, which impacts their morale. Also contract labourers feel that for the same work they are being paid less which creates a feeling of injustice towards the administration. This has a direct impact on the productivity of the workforce.

5: Involvement of National Unions like INTUC and AITUC in Contract labour issues: As the contract labour keeps on rising these national level unions are also taking up the fight against the contractualisation. This has creates the issue of labour unrest at the national level.

Contracting: A view of Unions:
On a telephonic interview, the unions raised following issues regarding the contractualisation.
1: The number of vacancies are reducing due to contracting. This is giving rise to overburdening of regular staff. Here the union leader Said that whenever we ask for increasing the vacancies officers say that we will contract out the work and won’t put the fresh indent.

2: The quality of work has been hugely affected due to contractualisation. He cited the example of Pune railway station where he said that the cleanliness has become bad after contractualisation.

3: The problem of ownership has arised due to contracting as the contract labour doesn’t consider the railway resources as his own. This has led to bad handling of railway resources.

4: There is a problem of fixing of responsibility among the contract labour as they are not directly responsible for the railway administration.

5: Union leader also said that the contact labourers are not being paid as per the Workman Compensation Act which has created a wage difference among the regular and contract workers.

6: Contracting is being done in perennial kind of jobs like AC attendant which is against the spirit of the act and this will also create problems of regularisation of these labourers in future.

Workforce Productivity:
Workforce productivity is one of the most important aspects defining the developmental level of an economy or organisation.Workforce productivity is the amount of goods and services that a group of workers produce in a given amount of time. It is one of several types of productivity that economists
measure. Workforce productivity, often referred to as labor productivity, is a measure for an organisation or company, a process, an industry, or a country. Workforce productivity is to be distinguished from employee productivity which is a measure employed at individual level based on the assumption
that the overall productivity can be broken down to increasingly smaller units until, ultimately, to the individual employee, in order be used for example for the purpose of allocating a benefit or sanction based on individual performance.In a simple mathematical formula workforce productivity can be defined as;

Workforce Productivity = Total amount of production at constant prices/ Total number of workforce employed.

Labour Productivity: A brief history
Industrial revolution led to production being concentrated in factories. In the factories the production happened on a mass scale with the help of labourers. However initially there was no much focus on productivity of labour. In these times there was a saying that firms were surviving solely based on their luck and there was no much contribution of labour in that. However things started to change from late 1890s when thinkers like Taylor and Fayol came into the picture. These practitioner cum thinkers started talk about labour productivity. Taylor came with the tools like work study, time study and motion study which were essentially meant for measuring the labour productivity. Later on the Human relation thinker Mayo linked the productivity with the social dynamics at the workplace. Next in line the behavioural thinkers tried to link the labour productivity with the behavioural aspects like motivation, morale etc.. These thinkers tried to study the human behaviour and found out that different people respond differently to the same situation. Based on these researches different theories of leadership came up. The latest addition in this aspect was the systems theory which tried to establish an equilibrium between the human and technological sub system in an organisation to maintain the motivated workforce.
Based on the above it can be easily said that labor productivity has remained the most important aspect of improving productivity in any organisation. There is also a very famous saying in this regard that: “ if you take care of your own people, people will take care of your organisation”.

Determinants of labour productivity
Labour productivity depends upon multiple factors, some of which are as under;

1: The monetary assistance that the labour is receiving from the organisation.
2: Workplace characteristics like the illumination, feeling of justice, homogeneity etc..
3: The level of motivation of employees which itself is dependent on above two factors as well as several other factors.
4: The level of technological advancement which a firm possesses.
5: Social dynamics at the workplace like feeling of belongingness, ownership at the workplace etc..

Contracting Out and Labour Productivity
The idea of contracting out came for promoting economy, efficiency and effectiveness in the projects. Here the term economy means promoting cost effectiveness. It is because of this reason that large scale contract staff was started getting employed in the working. The term efficiency means doing the work in less time. And the term effectiveness means improving the quality of work. Contracting out has both positive and negative relationship with the labor productivity.

Positive Relationship
1: Due to contract labour the labour mobility from one organisation to other organisation has improved. This has led to coming up of fresh blood in the organisation.
2: Contracting has led to more competitiveness in the labour market. This has also led to skill improvement and better price discovery of labour force in the market.
3: Contracting out has made it easy to make changes in the organisations. Changing the structure and functions has become more flexible in resent times due to contracting out.
4: Contracting out of labour has made the task of manpower planning much more easier.
5: Contracting out has helped in saving a lot of monetary resources of the organisation on those areas which are unnecessary. This has also helped in improving the overall productivity of the organisation.

Negative Relationship
1: Contracting has resulted into exploitation of labour. In reality the contracting of labourers has led to coming of labour practices of early 1900s which was mainly identified by large scale exploitation of labour.
2: There is no focus on skilling of the contracted workforce. This has resulted into a situation where a worker becomes the jack of all but the master of none.

3: There is no ownership of the organisation by the contracted labour. This results into low morale and motivation among the employees. This has hugely reduced the productivity often contracted staff.
4: There is no union looking after the contracted staff so there is at times a neglect of their welfare.
5: Employing the contract staff at the frontline like in catering services in railways has resulted into a situation where the soft value of the organisation is being eroded due to the contracted labour.

Overall one view has emerged that the contracting is to be done in non core areas of Work like Cleaning, Security and Linen management in Railways. However the core areas like train running, track maintenance and signalling systems are to be under the control of permanent employees.

• HR & Industrial Relations