Firms retrench about 700,000 temporary workers: industry body

Every time a worker’s contract is not renewed or is terminated, the person is taken off TeamLease’s rolls

Poornima Mohandas

Bangalore: In a slowdown, the axe typically falls first on temporary workers.

Some 700,000 casual and contract labourers have been estimated to have lost jobs in India, mainly in sectors that include export-oriented garment and auto parts manufacturing, banking, and realty, according to an industry association.

Anil Bharadwaj, secretary general of New Delhi-based Federation of Indian Micro and Small and Medium Enterprises, an association of small and medium enterprises (SMEs), said these jobs have been lost “from September to November across sectors such as garments, textile, jewellery, auto components, handicrafts, realty and leather across SMEs all over India”. The federation has links to 100,000 SMEs across the country. An SME is classified as a firm with less than Rs10 crore invested in plant and machinery.

Even though few companies admit to these job cuts, there is substantial evidence from industrial clusters such as Faridabad near New Delhi and Peenya, among the largest such clusters in the country, located near Bangalore.

While there is no organization in the country that tracks casual and contract workers, Bhardwaj claimed to have extrapolated the job losses figure based on feedback from his members.

Manish Sabharwal, chairman and co-founder of TeamLease Services Pvt. Ltd, India’s largest firm in organized contract labour, also said the number of job losses could be around 700,000. But he was quick to add, “The data is hard to come by because 92% of India’s workforce is in the unorganized sector.”

While only a small fragment of job losses are in the organized contract labour market in which TeamLease operates, the majority are migrant labourers with no social security such as provident fund or gratuity. “These people are not highly skilled... They just pack their bags and go back home,” said Bhardwaj.

Sabharwal said his contract labour workforce of 85,000 has been cut by 1-5% every month for the last four months. Every time a worker’s contract is not renewed or is terminated, the person is taken off TeamLease’s rolls.

India’s 80-million-strong contract labour market is dominated by local contractors and middlemen who provide workers to factories and industrial units. Of the 80 million workforce, only 300,000 are in the organized space.

Blue-collar workers are being fired in garments and auto components with exports floundering; banking and realty are following suit with liquidity being tight.

Courtesy: Mint (December 4, 2008 )