The Government of India is considering introducing labour reforms that will have a significant impact on the hiring of contract workers, providing these workers with  a firm legal backing, reports the economictimes.indiatimes.com

The Contact Labour (Regulation & Abolition) Act denies adequate legal protection to contract workers and is seen as discouraging the formalisation of the labour force. The Government is considering a proposal to drop the word 'abolition' from the law, as it contradicts the regulation of the sector, and giving staffing firms a national licence.

The licence for the staffing firms will be based on set criteria and renewed every three years. This would provide better social security for contract workers and help create more jobs in the organized sector. 

If accepted, the government will move an amendment to the Contact Labour (Regulation & Abolition) Act to rename it.

The number of contract labourers in the country is on the rise, primarily because they can be paid less than permanent workers and it is easier to fire them, if need be.

"Currently, staffing firms have to go for approvals for hiring contract workers at every location/premises and for every change in number," Rituparna Chakraborty President of the Indian Staffing Federation, said.  “A single licence would be a boon. One national licence, which could be given based on the financial credibility and past record of staffing firms, will make it easier for us to operate, besides reducing informalisation.”

"Such a sweeping change in legislation will see small staffing firms either close shops or start being compliant,” Chakraborty said. “For big listed firms, we see this as a direct push to job creation."