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Soon, government will offer pan-India licence to firms providing contract workers - The Contract Labour (Regulation and Abolition) Act, 1970

New Delhi :- The labour ministry will soon launch a national licence for staffing firms supplying contract workers across industries, a move that seeks to make doing business easier for them. Since staffing firms typically operate from multiple locations, a national licence will help increase formalisation of the workforce. The licence will be based on a set criteria and renewed every three years. It can be obtained on payment of fees and a bank guarantee as security for due performance of their obligations. At present, staffing firms are required to make a small deposit as security to the government. They are required to seek approvals for hiring contract workers at every location or premises and for every new person hired. A senior government official told ET that the ministry will hold its first round of tripartite consultation on January 16 on the draft Contract Labour (Regulation & Abolition) Amendment Bill.

"This is a non-controversial bill and we hope to arrive at a consensus at the upcoming tripartite meet," the official said requesting anonymity. "Following this, we will go to the Cabinet for approval and hopefully present the amendment bill in the upcoming budget session of parliament." The ministry had put out the draft bill for stakeholder comments last September. Niti Aayog's recent report based on IDFC survey of 3,276 manufacturing enterprises had flagged compliance with labour-related regulations particularly onerous and the reason they avoided labour intensive sectors. The government is aiming at 90 reforms, including some related to labour, to achieve a higher ranking in the World Bank's annual listing. India jumped a record 30 places to the 100th spot in the World Bank Doing Business ranking last year. It is now aiming to be in the top 50.

 Staffing firms have welcomed the move. "Adherence to existing requirements is not only cumbersome but also unproductive and adds no value to either employer or to the contract worker," said Suchita Dutta executive director at Indian Staffing Federation. "Introduction of a pan-India licence will significantly improve the ease of operation for staffing firms." A large number of contract workers in the country operate under traditional contractors who often not only deny them the minimum wages, but also do not pay pension and death and disability benefits. The government and the corporate sector employ a large number of contract workers, who now account for 55% of public sector jobs and 45% of those in the private sector. Furthermore, their numbers are on the rise in the country because they can be paid less than permanent workers and retrenched more easily.


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