National Tripartite Meeting on the Employment Relationship 1 Speech of the Governor of Karnataka Bangalore, 22 October 2007 Mr K.G. Baalakrishnan, Chairman, Council of Indian Employers Mr I.P. Anand, Member, ILO Governing Body Member Mr N.M. Adyanthaya, Member, ILO Governing Body Ms Leyla Tegmo-Reddy, Director, ILO Subregional Office in Delhi Mr Giuseppe Casale, Chief, Social Dialogue, Labour Law and Labour Administration Branch in ILO Geneva Representatives of the Government of India Representatives of the state governments, workers and employers, ILO officials Ladies and Gentlemen, millions in number and generally belong to the unorganized sector. They are engaged in agricultural It is my pleasure to address this distinguished audience operations, plantations, the construction industry, ports and welcome you to the State of Karnataka and the and docks, oil fields, the manufacturing industry, city of Bangalore, with ancient temples, historical railways, airways, road transport, and in many other monuments, and a fast growing industrial sector. fields. They belong to the vulnerable sections of society Let me thank the International Labour Organization and and have very little bargaining capacity. They are mostly the Council of Indian Employers for having chosen the engaged in hazardous occupations and areas of city of Bangalore to hold this important meeting. I would operations which endanger their health and safety. The also like to congratulate all those present for engaging vast majority of these workers, men and women, are in such a relevant discussion, the employment not covered by any social security scheme. They are relationship. often denied minimum wages by the contractors, and due to their illiteracy and low bargaining capacity, they During the last 30 years, enormous political, economic, are not even paid wages regularly. Many are exploited and social changes have taken place in the world, which by the contractors due to lack of proper supervision by have resulted in a more open and liberal global economy. the principal employers. Previously distinct national economies have become increasingly integrated into international marketplaces. At the national level also, there are important Increased international competition has put pressure on implications to the increased use of atypical employment the economies and on their main actors – workers and situations. As more workers are forced out of formal employers. employment and into more casual or temporary arrangements, there are more possibilities for workers As is the case worldwide, contract labour has become and employers to avoid payment of income tax, social a prominent feature of the labour market in India. A security and employment-related insurance trend has emerged whereby traditional employment contributions. Ultimately, the reduced payment of these patterns based on long-term or open-ended employer– social contributions is to the detriment of the national employee relationships are being replaced by non- society as a whole. standard arrangements. Increasingly large numbers of the workforce are now engaged in atypical work Limited access to skills and training might imply for a arrangements and many of these workers are contract nation, failure to invest in the skills of future generations labourers. of workers and have long-term effects on both the quality and sustainability of our industries. Workers who In India, the issue of contract labour has been subject understand their work are more likely to devise and to long debate. In our country, contract workers are 2 National Tripartite Meeting on the Employment Relationship implement strategies to improve the sustainability of their where the system cannot be abolished, the working industry and thus safeguard their own future income and conditions of labour should be regulated so as to ensure prospects. Lack of training might also lower industry payment of wages and provision of essential amenities. standards of skills and quality. In the course of these two days, the participants will We must also recognize ‘employment flexibility’ as a benefit from senior international expertise that might genuine need of a dynamic and versatile economy. We inspire change in our own country. cannot any more expect from every employer that he I am sure the conference will also highlight and provide or she take responsibility for the lifelong employment of for a meaningful dialogue on the approaches adopted workers. by the State of Karnataka, with reference to the achievement, not of only economic growth, but also of The abolition of the contract labour system has been concurrent employment generation, ensuring a positive under the consideration of the Government of India for industrial relations scenario and also the competitiveness a long time. In the 2nd Five-Year Plan, the Planning of enterprises. Commission made certain recommendations, namely, undertaking of studies to ascertain the extent of the Ladies and gentlemen, the ILO offers the social partners problem of contract labour, progressive abolition of the the chance to discuss, understand each others’ views, system, and improvement of the service conditions of and build up sound social dialogue. Let us take this contract labour wherever abolition was not possible. opportunity and engage in true and effective social The matter has been discussed at various meetings of dialogue for the benefit of all the workers and industries tripartite committees at which the state governments of this State and the country. were also represented and the general consensus of I wish you a fruitful meeting. opinion was that the system should be abolished wherever possible and practicable, and that in cases National Tripartite Meeting on the Employment Relationship 3 Welcome remarks by Leyla Tegmo-Reddy Director, ILO SRO-New Delhi Bangalore, 22 October 2007 Shri Oscar Fernandes, Honourable Minister for Labour and Employment Shri K.G. Baalakrishnan, Chairman, Council of Indian Employers Shri I.P. Anand, Member, ILO Governing Body Shri N.M. Adyanthaya, Member, ILO Governing Body Shri B.C. Prabhakar, President, Karnataka Employers’ Association Shri S.K. Srivastava, Joint Secretary, Ministry of Labour and Employment, Govt. of India Representatives from the employers and workers’ organizations Ladies and Gentlemen, adopted, highlighting the extent to which the subject Good morning. could be misunderstood and how controversial it was. It is a great pleasure for me to welcome you all to the Other debates have since taken place at the ILO, National Workshop on the Employment Relationship, including a meeting of experts on workers in situations organized by the ILO (International Labour needing protection in 2000 and a discussion on the Organization) in cooperation with the Confederation of employment relationship at the 2003 ILC, during which Indian Employers. ideas were aired and allowed to take shape. On the basis of various dialogues and in-depth studies, the ILO We are very honoured to have among us the Honourable engaged in a new discussion to adopt a recommendation Minister of Labour and Employment to inaugurate a at the 2006 International Labour Conference. meeting on such a relevant topic for the social partners and the Government of India – the employment The many different forms of contract labour, the very relationship. divergent views of workers and employers on the issue, and variations in national employment law and practice For those who are not familiar with the work of the made it very difficult to arrive at a simple, single solution ILO, let me recall that the issue of the employment to find an international standard to address the concerns relationship has, in one way or another, been under of the workers and a number of governments. Eventually, discussion at the ILO for more than a decade. the ILC adopted the ILO Recommendation on the Since the 1950s, the ILO has been aware of the growing Employment Relationship, 2006 (No. 198), under strong phenomenon of the lack of protection for a large number criticism from the employers’ group. of workers, in particular employees of subcontracting During the discussions, the Government of India enterprises. Discussions on ‘contract labour’ have supported the proposed ILO Recommendation, already taken place during the International Labour claiming that it would protect the interests of workers Conference (ILC) in 1997 and 1998 (at its 85th and and provide them with access to social security, while 86th sessions, respectively). At the 1997 ILC, a encouraging employment opportunities and increasing discussion was held on private employment agencies, productivity. The Government also acknowledged that touching on the situation of workers employed by such changes in the labour market and the workplace, as agencies. During the latter discussions, the Private well as globalization, had led to flexible work Employment Agencies Convention (No. 181) and the arrangements and those new forms of the employment Private Employment Agencies Recommendation (No. relationship were giving rise to difficulties in providing 188) were adopted. However, against the usual practice protection for all workers. As such, an employment of the ILC, no instrument on contract labour was relationship would be the legal basis for workers’ and employers’ rights and obligations. 4 National Tripartite Meeting on the Employment Relationship The ILO, which is a tripartite organization, has always contents of the ILO Recommendation, and engage in focused strongly on supporting