A large percentage of the working population in our country is either temporary, casual, daily wagers or contractual. There are many misconceptions with respect to rights. Such workers too are entitled to minimum wages, Provident Fund, ESI, bonus, etc. as applicable. In case such employees work for five years continuously, they are also entitled to gratuity.
Another popular category of employees are contractor workers, that is workers employed though contractors/service providers/manpower agencies. They too are entitled to minimum wages, PF, ESI and all other statutory benefits. In case a contactor fails to comply with these provisions, principal employer becomes liable for the same. For gratuity and bonus, principal employer shall be liable only if the contract is found to be sham, camouflage or namesake.
With respect to termination laws, in case temporary, daily or casual workers have completed 240 days of continuous service, the employer shall have to comply with retrenchment laws while terminating them, which includes giving 15-day wages for every completed year, notice/notice pay, intimating government or taking permission from government where applicable. Last come first go will also have to be complied with, apart from other conditions.
In case of contractual workers—those engaged on fixed-term contracts with companies—their contract ends on the completion of contract period. In such cases, provisions of retrenchment are not required to be complied with, unless the contracts are found to be malafide. It is best to engage such kind of employees if the work is temporary or project-based.
In case of workers through contractor, provisions of retrenchment are required to be complied with by the contractor. If the contract, however, is found to be a sham by a tribunal, on a case being filed, the principal employer can be saddled with the responsibility of non-compliance.
Apart from above compliances, such unorganised category of employees, if engaged on a regular basis, shall also be entitled to leaves, holidays, close days, etc. as provided under various statutory provisions of the country such as the Shops and Establishment Act, Factories Act and others depending upon the organisation structure they work under.
Though above categories of employees are entitled to various statutory benefits, they lag behind regular employees when it comes to job security, higher pay scales, better perks, conditions of service, promotions, etc.
With a large population and scarce resources, providing employment—even unorganised, but with complete statutory benefits—to as many as possible may be incumbent. We, however, need to create more permanent jobs. The practice of engaging workers in unorganised employments and camouflaging arrangements for years together need to be checked and curtailed. Along with it, what is required is a review of termination laws. Companies are sometimes forced to engage contract labourers because terminating them is easier compared to regular employees. While it is easy to open a company in our country, it is extremely difficult to downsize or close it down, especially if it is a big one. Further what we also require is implementation of disciplinary laws. Apart from downsizing difficulties, another reason for companies to engage unorganised category of employees is that generally on becoming permanent, employees become less efficient. This is felt even more in the government sector. Inefficiency, insubordination, indiscipline and other misconducts are some of the root causes for depleting economy.
In a nutshell, while we need to have more regular and organised employments, we also need to amend certain laws, thus providing flexibility to companies.