Contractual Workers – A Saga of Neglect by Indian Railways

About 77% of close to one lakh contractual workers in Indian Railways are not even paid minimum wages, a Comptroller and Auditor General (CAG) report released earlier this month revealed. The central auditor revealed that various statutory provisions in relation to contract labour are undermined by both the railways administration and its contractors.

The audit covered a period of three years from 2014-15 to 2016-17 reviewing 463 contracts out of total 4,430 contracts under different departments of railways including mechanical, engineering, operating, commercial, administration, accounts, personnel, medical, safety, and security departments, among others.

According to government data, over 90,000 contractual labourers work with the Indian Railways. Despite existence of numerous laws ensuring protection for contractual workers such as the Contract Labour (Regulation and Abolition) Act, 1970, and the Minimum wages Act, 1948; minimum wages were paid in only 23% contracts reviewed by the CAG. That is, of the 463 contract cases examined, compliance to provisions for payment of minimum wages was found in just 105 contracts. The audit assessed such non-payments of minimum wages of about Rs. 26.14 crore in 312 contracts.

Adverse Impact on Contractual Labour

During 2016-17, the Railways made contractual payments of Rs. 35,098 crore. Based on the audit results, in some 312 contracts, CAG estimated the “adverse impact” on contract

labour at 4.02% of total contractual payments. The estimated adverse impact on contractual payments in Indian Railways would thus be 4.02% of Rs. 35,098 crore, which is Rs. 1,410.94 crore. This suggests that the Railways are burdened to pay an extra Rs. 1,410 crore towards its contracts during 2016-17.

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Furthermore, the CAG found that in numerous contracts, the workers have even been denied basic facilities such as rest rooms, drinking water, urinals, etc. Of the contracts reviewed, the audit found that the contractors did not adhere to provisions of rest rooms in at least 15% contracts. Similarly, provisions of drinking water and urinals were not available in 21% contracts.

Missing Records

In its report on the ‘compliance to statutory requirements in the engagement of contractual labour by Indian railways’, CAG stated that while maintenance of  records is vital for any entity to regulate compliance to laws and rules for protection of rights of contract labour, records in relation to large number of contracts were unavailable.

Every contractor is mandated to maintain a number of important records on muster roll, register of wages, register of deductions, register of overtime, register of fines, register of advances, wages slips, etc. However, the CAG revealed that documents like wage register and overtime register were maintained only in 26% and 1% contracts, respectively. Similarly, the wage slips were maintained in only 4 per cent of the contracts reviewed in the audit.

“Non-maintenance of necessary records makes the monitoring of compliance of the statutory provisions impractical by not only the railways but also by other monitoring agencies,” concluded the CAG.

Furthermore, the audit found that the contractors failed to adhere to several welfare norms including registration with the labour department, Employees Provident Fund Organisation (EPFO) and Employees State Insurance Corporation (ESIC). “There were instances where the contractors did not pay employee’s contribution of EPF and ESI as required,” the CAG stated.

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