A change in the Contract Labour (Regulation and Abolition) Act, 1970 may be in the pipeline. According to news reports, the government may amend the 1970 Act to safeguard the interest of contract workers. The proposal is to bring parity between permanent and contractual workers in wages and other benefits. The Contract Labour Act, 1970 regulates the employment of contract labour in establishments which employ 20 or more workmen. It excludes any establishment whose work is intermittent or casual in nature. The appropriate government may require establishments to provide canteens, rest rooms and first aid facilities to contract labourers. The contractor shall be responsible for payment of wages to each worker employed by him. There are penalties listed for contravening the Act. According to the Report of the National Commission on Enterprises in the Unorganised Sector (NCEUS), more than 90% of the workforce is part of the unorganised sector. Contract labour is found in certain activities in the unorganized sector such as in stone quarrying, beedi rolling, rice shelling and brick kiln. The Commission recommended some measures to protect the workers in the unorganized sector such as ensuring minimum conditions of work, minimum level of social security and improved credit flow to the non-agricultural sector. The Report of the Working Group on “Labour Laws and other Regulations” for the 12th Five Year Plan, also proposed that the 1970 Act should be amended. The amendment should ensure that in case of contract labour performing work similar to that performed by permanent workers, they should be entitled to the same wage rates, holidays, hours of work and social security provisions. Furthermore, whenever a contract worker is engaged through a contractor, the contract agreement between the employer and the contractor should clearly indicate the wages and other benefits to be paid by the contractor. However, other experts such as Bibek Debroy, Kaushik Basu and Rajeev Dehejia have recommended broad reforms in India’s labour laws to allow for more flexibility in the labour market. According to them, these laws protect only a small portion of workers in the organized sector.
The last few months saw a number of allegations of corruption in issues such as contracts for the Commonwealth Games, allocation of 2G Spectrum, and the building of the Adarsh housing society. Professor Kaushik Basu, the Chief Economic Adviser to the Ministry of Finance, has proposed a modification in order to make the anti-corruption law in the country more effective. The Prevention of Corruption Act, 1988 penalizes both bribe giving and taking. Bribe giving is punishable under the Act with imprisonment ranging between six months to five years. He argues that bribe giving should be legalized. Professor Basu distinguishes “harassment bribes”, which he defines as “bribes that people often have to give to get what they are legally entitled to” from the remaining, “Non-Harassment Bribes” which would involve illegal benefits accruing to the bribe giver at a potential cost to the public interest. He argues that legalization of harassment bribes would reduce the nexus between the giver (victim) and the taker of a bribe. Giving complete immunity to the bribe-giver would ensure higher reporting and co-operation of the giver in bringing to justice the bribe taker. The present law acts as a deterrent to reporting of bribery. Courts have also highlighted this issue. The High Court of Delhi in the Bharadwaaj Media Case (2007) observed that a “bribe giver is normally on the mercy of the officials and babus who compel him to pay bribe even for lawful work.” The Court further observed that “Instead of expressing gratefulness to the persons who expose corruption, if the institutions start taking action against those who expose corruption, corruption is bound to progress day and night.” It can be inferred from the judgement that steps ought to be taken to provide protection to those exposing bribery. The proposed legalization of bribe-giving may result in increased reporting of bribery and co-operation of the victim during prosecution. The fear that a bribe giver may report the public official could reduce corruption, at least in terms of harassment bribes. However, this proposal may reduce the stigma attached to bribe-giving and result in corrosion of morality. Much of the recent debate around corruption and the Lok Pal Bill revolve around effective prosecution. This paper looks at the incentive structure for reporting bribe-giving, and merits public debate.
