Dear Sirs,

Could you plz clarify the matter/grievance of contract labour--
A contractor is engaging manpower since 10 years. Few have gone, and few have newly joined. Contractor is paying minimum wages correctly. Now contract labour is asking increments apart from minimum wages (unskilled category) which are being revised for every six months based on the revision of cost of living index by AP state. Contract labour is asking increment to those who have 5 years or above service.

How to deal this issue. Kindly help me.

From United States, Cambridge
Industrial Relations And Labour Laws
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This is a very sensitive issue. As a principal employer you should never step into any such negotiation with the contract workers because becoming part o any wage settlement will mean that the contract is sham and in future these contract workers shall demand for regularisation which you will have to do. This will defeat the very purpose of outsourcing. Note that if the contract is not genuine, I will not say that the employer should be protected but I will stand for the workers.

It is quite obvious that an employee who has been with an employer for the last 5 years and above may expect to get some amount over and above the statutory minimum wages. The productivity of such workers would be higher also. In minimum wages notifications of the state (at least in Kerala) there exists a provision to give weightage or increment to those who have 5 years of experience. If we accept it, then you can consider giving an increment to workers. But that should not be given directly but should be routed through the contractor only. For that you can talk to the contractor and the contractor will negotiate with his workers and finalise an increment. Afterall, the cost is yours only. But there should not be any record to show that negotiation took place between you and the workers. That will protect you from both ways, ie, will not make a picture that the contract is sham and will solve a dispute by increasing the wages.

From India, Kannur
Dear Madhu sir, Thank you for your valuable reply. Will act as guided. Once again thanks. Regards
From United States, Cambridge
If you are paying minimum wages correctly. thats good. Minimum wage should be paid. But this is not necessary to give increment to them. This will become a practice in future. Depends on your complay policy.
From India, Mumbai
Thanaku Sri Tanwar Ji It is a valuable advice. Regards
From United States, Cambridge

If I understand the situation correctly, the contract labour wants increment for those who have worked for more than 5 years, beyond the minimum wages applicable. And the contractor is asking you to pay him that much more.

As Mr. Madhu says, you can't be involved in the negotiation.
However, the outcome affects you very much so you can't ignore it either.
So basically, you need to decide how important are the experience and skills of those who have worked for more than 5 years (the ones asking for the increase) and therefore, how much more are you willing to pay the contractor for keeping them employed. You need to then give him the maximum ceiling and he will negotiate on it.

However, your discussion with him or your contract / letter / mails should talk of what he gets and not what he pays and should not show that you are a part of the discussion.

From India, Mumbai

Contract employee as on date is not only restricted to Workers but also supervisors, engineers, commercial/admin officers and including managers. For higher category of employees question does not arise to pay minimum wages only, the candidate will not be available at market with minimum wages.

If you go to organized sector - Steel Plant, Power Plant, Big/Medium MNCs etc. where contract workers are paid more than minimum wages.

There is a tendency of some organizations including HR fraternity to pay only the legal portion and to find out loop holes to deprive the contract labor. Even there are organizations who are treating contract labor in such a way ( by changing contractors etc.) to deprive them from gratuity.

In one hand the poor guy gets less salary ( only minimum wages and there are cases even not paid minimum wages ) , getting poor PF accumulation, poor pension , no gratuity / less gratuity after working more than 30 years in the same organization.

To my opinion where the organizations have capacity to pay, should pay increment every year and should have an intention to pay more than the minimum wages - fare wages / living wages if possible. For scheduled employment there is minimum wages but there are non schedule jobs where also minimum wages is paid. The minimum wages for those organizations may be the minimum wages of the last permanent employee / close to that who has been joined the organization.

Some times we should think about putting ourselves in the position of contract labor before taking any call.

S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531

USD HR Solutions – To Strive towards excellence with effort and integrity

From India, New Delhi

Let it be understood clearly that contract labour is not equal to cheap labour. When the contract labour also works for long years, they become much frustrated comparing their earnings with the regular workforce. So this would give rise to such demands.
I have had the occasion to deal with such a demand. We provided certain extra benefits in the name of service benefit, provided uniform and its maintenance allowance etc., which helped us much in containing an otherwise volatile IR situation.
Now that the demand has come, try to involve the Labour Department and settle the matter in a conciliation proceeding between the contractors and the contract labour representatives in the presence of the principal employer and Labour Department officials. This worked well for us.

From India, Mumbai
Thank you sir for yr suggestion.
From United States, Cambridge
Thanks to Be neeku sir and KK sir for yr tips in dealing the issue.
From United States, Cambridge

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