Study finds scant regard for labour laws in units under Gujarat Industrial Development Corp estate

Counterview Desk

A recent case study in one of India's richest districts, Anand, has found the existence of large-scale casualisation of the workforce, with factories situated in a state-owned Gujarat Industrial Development Corporation (GIDC) premises opening flouting labour laws, even as paying scant regard to the laws that make it obligatory to pay minimum wages. Titled “Labour Under Stress in Gujarat”, the study by Atulan Guha of the Institute of Rural Management, Anand (IRMA) says that the GIDC estate in Vallabh Vidyanagar, situated just outside the Anand township of Central Gujarat, only “confirmed” the macroeconomic picture of dormant earnings of the urban workers in Gujarat.
On-the-spot inquiry by the scholar suggested that “most employees were hired on a contractual basis even in the big companies.” In fact, he came across “not one factory worker ... who was not contract-based. Permanent employees were to be found only in the higher echelons (highly skilled professionals) of the big companies.”
What makes the situation of the workers in the GIDC estate particularly precarious, the scholar suggests, is that “while the contractors would change every 2 to 3 years, the workers continued with their same jobs in the same companies.” Pointing out that this shows how “temporary workers” continue to “work permanently in the same factories”, the scholar says, “Behind the facade of outsourcing, jobs of a permanent nature are given to temporary workers who work more or less permanently in the same factory.”
Pointing out how this suggests that “regular workers are used for permanent jobs but under the terms and conditions governing temporary workers”, the scholar regrets, “The labour market inflexibilities applicable to the industrial labour market through the Industrial Dispute Act are non-existent” in GIDC estate. “Factories employing over 100 workers are not employing workers under a permanent contract”, he adds. “In the GIDC estate, the smaller factories that employ less than 100 workers too do not employ workers under permanent contract.”
Worse, the scholar says, “These contractual workers often obtain marginally less than the minimum wages pertained to skilled labour -- between Rs 210 and 230 per day.” Suspecting that the that “big companies” may be paying to contractors at the minimum wage scale, he says, as for the workers, they get less than minimum wages because of the “cut taken by the contractors.”
As for workers’ wages outside the big factories within the GIDC estate, the scholar says, these “have been generally found to be lower than the prescribed minimum wage with a high degree of variation”. He adds, “For skilled workers it ranges between Rs 80 and 200 per day. Workers who have graduated from ITIs receive higher wages with a minimum of Rs150 per day.” The current minimum wages in Gujarat, even for unskilled workers outside the municipal corporation limit and in towns of more than 1 lakh population is more than Rs 200. Anand falls in this category.
In fact, the scholar says, “The latest figure pertaining to the minimum wages for skilled workers in the state varies between Rs. 210 and Rs 253 – linked to sector, geographical location, and inflation. Overtime work does not merit compensation in the form of double wages. Generally speaking, single wages are paid for the overtime period.” Actually, he adds, “overtime has become something of a rarity with a slowdown in industrial growth.”
The scholar found during his inquiry in the Vallabh Vidyanagar GIDC that “workers who, having worked on higher wages in factories closed down due to recession, now work at almost half the wages of previous job.” The scholar adds, in Vallabh Vidyanagar GIDC, he “did not come across any trade unions. The workers informed us that factory owners disallowed the formation of workers’ unions and any attempt in this direction was thwarted by terminating the job contract.”
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Also see: http://www.counterview.net/2014/07/labour-under-stress-gujarats-lag-in.html