Gurgaon: Contractual workers, who form the backbone of manufacturing and garment units, have taken to the streets amid a deepening cost-of-living crisis. Hired for 7-11 months through labour contractors or third-party agencies, these workers receive only the govt-mandated minimum wage and make up most of the shop-floor workforce.Companies rely on them to avoid direct responsibility, often shifting blame to contractors whenever disputes arise. Under labour laws, a worker completing one year of continuous service becomes entitled to benefits enjoyed by permanent employees, including gratuity, leave, insurance coverage, notice-period protection and annual increments. But contractual workers rarely reach that threshold. They face job insecurity, fixed minimum wages without increments, and payment only for days actually worked.Many also alleged underpayment and abrupt termination for raising grievances. With companies distancing themselves and contractors in full control, workers said they remain vulnerable, underpaid and unheard.The Contract Labour (Regulation & Abolition) Act, 1970, defines a contractual worker as one employed through a contractor and not on the company’s direct rolls. In Haryana’s industrial belt, such workers make up 80-90% of the workforce. Permanent employees, by contrast, are a small group in mid- and senior-level roles, usually with engineering, MBA or technical qualifications. Contractual workers are largely unskilled or ITI-trained.Most are paid minimum wages that are far lower than permanent employees’ salaries. By hiring through contractors, companies avoid DA (dearness allowance)-linked increments, performance incentives, allowances and higher bonuses, creating a stark dual wage system within the same factory. Permanent workers receive long-term benefits such as gratuity, retrenchment compensation, leave encashment and pension. “By rotating contractual workers every 7-11 months, companies avoid building these liabilities. Tenure is kept deliberately short so workers never qualify,” said labour researcher Rekha Sehgal.Outsourcing labour also eliminates recruitment and training costs. Hiring, paperwork, recordkeeping and workforce replacement are entirely handled by contractors, giving companies complete flexibility to scale up or down based on production cycles.Avoiding legal obligations is another motivation. Since contractual workers are technically not company employees, firms bypass compliance with standing orders, paid leave, canteen subsidy and maintenance of wage records. Contractors bear legal responsibility, keeping companies insulated. Despite legal restrictions on deploying contract labour for core production, many units routinely place them on assembly lines, paint shops, packaging, quality checks and, in the garment sector, almost the entire production chain.Workers’ groups said the protests stem from basic legal and economic demands, higher minimum wages, an 8-hour workday, double-rate overtime and abolition of the contract labour system. “Workers are also fighting exploitation such as black-marketing of LPG, non-payment of overtime and non-implementation of minimum wages,” said Santosh Kumar of Mazdoor Adhikar Sangarsh Samiti.The Haryana govt this week announced a 35% rise in minimum wages. “Even this brings wages only to around Rs 15,200, starvation-level in today’s inflation,” said Satvir Singh of CITU, noting expenses on rent, education, medical care and food.Somnath of Jan Sangarsh Manch said overtime violations remain rampant. “The law clearly requires double wages for extra hours, but companies often pay nothing or pay at normal rates. It is open plunder of workers’ labour.”Labour groups are also demanding permanent status for workers doing permanent jobs. “People who have worked for years are kept on contract, denied PF, ESI, gratuity, leave and job security,” said Rekha.
