Contract labour
Topic: Employment, Unemployment and Informalisation · NCERT: Beyond NCERT
Meaning
Contract labour means workers hired through a contractor to work for another firm, called the principal employer. The worker does the principal employer's work but is on the contractor's rolls. Contract workers usually get lower wages and little job security. The Contract Labour Act 1970 regulated it and is now part of the OSH Code. The OSH Code raises the threshold for its contract-labour rules to 50 workers.
Example
A large factory gets its loading and cleaning work done by workers supplied by a local contractor. These workers work inside the factory every day. Still, they do not get the benefits of the factory's permanent staff, and the contractor can replace them at any time.
Don't confuse with
- Fixed-term employment: here the firm hires the worker directly, on a written contract for a fixed period. Wages and benefits must be on par with permanent staff. Contract labour comes through a middleman.
Related concepts
- Casualisation of workforce
- Informalisation
- Informalisation of the organised sector
- Social discrimination in the labour market
- Informal employment
- Formal employment
- Formalisation of the economy
- Decent work