Time for HR to learn once again from Wistron Episode

Anil Kaushik

Wistron Episode of violence and sabotage of facility property by contractual workers recently has once again brought in to the light the manner in which manufacturing industry and man power service provider agencies manage the contract labour engagement process and take the compliances very lightly thus leading such a damaging incident which has tarnished the image of Indian management and workforce. Without repeating the details of what has happened in this facility situated in kolar district of Karnataka State engaged in assembling of Apple iPhones, as it is already in public space, I would like to draw the attention of HR professionals and Business leaders:

1-   You cannot simply sideline or wipe out the importance of acquiring the skills of managing industrial relations and knowledge of employment regulations. HR professionals and Business leaders cannot afford to take it as one time incident. Also it would be mistake to take IR as second grade discipline and not strategic which can be outsourced.

2-   One episode ruins the prospects of hundreds of future opportunities in terms of industrial growth and jobs, so should not be brushed aside by terming as an isolated incident.

3-   Running the operations by majority of contract labour in manufacturing facility is a reality which is nothing but creating a kind of live -in relationship between principal employer and contract labour without any obligations towards each other and ownership which ends either with crime or tragedy.

4-   It is high time to stop abuse of contract labour law. This is one of finest and employer friendly law enacted by the Govt., provided it is used and implemented fairly in right spirit by principal employer and man power service provider( Contractor).

5-   Contract labour should not be deprived from sense of security in job( Be it either with the principal employer or manpower service provider) all the time and also pay him less for working more in terms of quantity and quality under the guise of Contract labour law.

6-   HR of the principal establishment has to own the moral and legal responsibility to take care of contractual workforce because they are working for principal establishment and not for agency who are nothing but a mere name lender and many times act like commission agent, and get royalty(Service Charge) for use of their name by principal employer. There is no scope of blame game between the man power provider agency and principal employer when it comes to compliance or paying wages or welfare of contract labour or paying their terminal statutory dues. The problem is of ownership which both has to take.

7-   The root of the problem lies in two factors- One- Job Security and second timely and correct payment. Why can’t principal establishment engage the contractual workers on their own rolls under fixed tern employment category? What stops them from doing so and bring an end to an era of contract labour disputes. This one solution will resolve both the issues mentioned above. The moment worker gets the appointment under Company establishment, he gets the sense of pride that makes him secure and create bond with establishment/ company. The Fixed term engagement though may be for some years but still instill a feeling among worker that he will get fair treatment in terms of wages and payment. The biggest benefit principal employer can draw from such workers is commitment towards their quality of work and establishment.

8-   The principal establishment has to adopt a pro- active approach in handing its employees issues, be it own employees or employees engaged by manpower agency. Problem comes when HR of principal employer says (or thinks), you are not my man, why should I hear and resolve your issues? you go the contractor, your employer and contractor first of all is not accessible and even if contract labour gets him through some supervisor deputed at site (which is neither skilled in handling people issues not that sensitive or emphatic towards workers) says that talk to factory HR, you work there under them, why come to me, I simply pay you on their behalf. They pay me and then I pay you, if they don’t pay how I will pay you? In this shifting of goal post and blame game, contractual worker finds himself nowhere, gets frustrated and ultimately resort to those acts which ultimately brand him as offender, criminal, undisciplined, and what not that spoil his job prospects and life.

9-   It can be learnt from history of labour unrest and violence in Indian manufacturing industries that exploitation in terms of extracting more work and paying less coupled with malpractices and avoidance of contractual labour issues has been in the center of disputes. The fact is that manpower service provider no matter how big name or brand he carries, is nothing but a commission agent in many cases and finishes his job, once handover the manpower to the principal establishment. The real job of such manpower service provider is to hold the hands of his workforce as their babies, make himself available all the time to help them in times of distress, pay them regularly and correctly from their accounts irrespective of the fact whether manpower agency gets payment from principal employer or not in time. Why should contractual labour feel the heat and suffer because of any dispute or difference lying unresolved between principal employer and man power agency?

10- Even if the principal employer still intends to continue with the contract labour system may be due to certain ingrained fear or misconceptions, then he has to deal with man power service provider agency with tough hands. The agency cannot be allowed to let go free in case of dispute or unrest or pending grievances or non compliances. The arrangement should be fully and fairly documented, implemented and complied with in accordance with the words and spirit of law and HR should keep deep overview on the functioning of service provider in terms of compliance.

11- This is my apprehension as also many courts have spelled in many judgments, that if the veil is lifted from the arrangement made between principal employer and manpower agency in respect of contract labour employment, most of such arrangements would fall into the category of sham and camouflage arrangement which may lead to declaration of such contract labour as employees of principal establishment.

 So, time for HR to pull up socks, learn from this episode, use it as an opportunity to review your own contract labour deployment process and system and take corrective actions if so require. You cannot afford to do fire fighting all the time.