How Should HR Handle Strikes When Contractors Aren't Paid Due to Lack of Work?

I am Srikanth. Recently, I attended an interview in Hyderabad. There, the GM-HR asked me a question, "The company hired 10 contractors, each with 30 contract laborers, but was unable to start the work due to some issues. Consequently, all the contract workers went on strike because their contractors had not paid them salaries for 3 months. As the principal employer, management is not providing funds to the contractor due to the lack of work."

He asked me, "In that situation, what would you do?" I provided him with several responses, but he was not satisfied. After the interview, I approached him personally. However, he just smiled and walked away from the cabin. Can anybody please let me know what actions HR can take to handle this situation?

Dear Srikanth, Had you mentioned the various answers you actually gave, we could have understood why the GM-HR was not satisfied and why he simply smiled away when you asked him personally later. From your narration, the management was not able to start the work due to certain issues even though the hiring of the contractors was finalized. Probably when the work was about to be started, the contractors could not mobilize the labor as they refused to work because of the non-payment of wages pertaining to the past 3 months. As the dues were not for your work, naturally the management would not provide any monetary help to the contractors. Therefore, the only option available before the management is to cancel the contracts and look for other contractors.

Your narration is not clear. Do you mean that all 10 contractors are new? Is the labor mobilized by them new labor or transferred from old contractors to the new one?

Why does the organization bear the total hired cost for a contract if there is no work in the factory for contractor employees?

The employer also breaches the contract, or he will try to pay half the salary or suppose to give some monetary help to contract employees. But in this situation with no work, the contractor bears all costs for his workers.

The Issue of Umbrella Contracts

The questions raised by Mr. Stephen are appropriate in the backdrop of the ubiquitous practice of "Umbrella Contract" adopted by most of the Principal Employers under the CLRA Act, 1970, and hence deserve appreciation. It is similar to the alleged Puranic practice of Devlok, where although Indra is replaced, Indrani never gets replaced.

Challenges with Contract Labor

The alleged delay in the commencement of the fresh contract works due to "some issues" and the strike attempt of the entire contract labor on the ground of non-payment of wages for 3 months confirm that they have been contract labor in the same establishment through some other contractors, and there is a change of contractors only and not the contract labor. "The some issues" mentioned may be the abrupt exit of the previous contractors due to the failure of the Principal Employer (PE) to pay their bills, culminating in the strike of the contract labor soon after the engagement of new contractors. The solution, therefore, rests with the PE both statutorily and ethically by immediately paying the unpaid wages and resolving all other issues, if any.

Interview Strategy

Perhaps the continued silence of the poster of the thread indicates that he failed to elicit certain vital information leading to the question from the interviewer. In my opinion, there is no harm in politely seeking further information by the interviewee when tricky questions are asked in an interview. Such appropriate questions from an interviewee would indicate his ability to understand the perspective of the question and enliven the very course of the interview, as the main objective of any interview is to ascertain exactly what the candidate knows and not otherwise.