Off-Shored Services Workers: Labour Law and Practice in India

By Penfold, Carolyn | The Economic and Labour Relations Review : ELRR, July 2009 | Go to article overview

Off-Shored Services Workers: Labour Law and Practice in India


Penfold, Carolyn, The Economic and Labour Relations Review : ELRR


Introduction

This article (1) is the third in a series reporting on research conducted by the author in India and Australia between 2005 and 2008. The first part, published as 'Trade union responses to white collar off-shoring' (Penfold 2007) discussed the methods used by trade unions in both developing and developed nations to deal with the movement of services work as a result of globalisation. The second part, published as 'Off-shoring and decent work: Worlds apart?' (Penfold 2008) evaluated work in the Indian off-shored services sector against the ILO's 'decent work' agenda. This third part examines labour law and practice in off-shored services in India, explaining the legal regulation of employment in this sector, and comparing it with labour protection in practice.

The opening up of world markets and the development of information and communications technology have led to a huge increase in the purchase by organisations, in North America, Western Europe and Australia, of business processes and information technology-enabled services (BPO/ITeS), primarily from places such as Eastern Europe, Central America, and Asia (Farrell et al. 2005). This 'off-shoring' is occurring in disparate fields such as banking and finance, health, insurance, IT, sales, human resources, public relations, and trans port. The work itself varies widely, ranging from the most basic telephone sales work, to booking travel, assessing insurance claims, or even creating animations. Arrangements for purchasing off-shored services also take many forms. A firm may, for example, set up its own off-shore operations, buy services from an offshore operation, or buy services locally from a provider which off-shores. The common thread in all of the above is that the work is performed remotely, or 'off-shore,' enabled by modern information and communications technology. (2)

With the advantage of a large, well-educated, English-speaking work force, India has been the recipient of much of this work from countries such as the USA, the UK, and Australia. India's services exports rose by over 30 per cent per year during the five years 2001 to 2006, during which time they rose from 29 per cent to 38 per cent of total exports (Department of Foreign Affairs and Trade 2008). While not at the forefront of the off-shoring phenomenon, Australia is now steadily increasing its service imports from countries such as India (ibid). In fact, Australia's services imports from India have grown solidly since 2002-03, averaging a growth of around 13 per cent per year, and up almost 20 per cent between 2005-06 and 2006-07.

As a result of this growth of services off-shoring, research into the area has proliferated. Studies abound regarding off-shored work from perspectives such as the globalisation of labour (Farrell et al. (eds) 2005), decent work (Sasikumar and Varma 2004; Penfold 2008), human resource management (Chatterjee 2007), and trade union participation (Penfold 2006; Taylor et al. 2007). Much of this work has looked specifically at call centres within this sector (Taylor and Bain 1999, 2000, 2005; Ramesh 2004; Batt et al. 2005; Pradhan 2005; Nornoho and d'Cruz 2006, 2007). (3)

While labour law and practice are central to the conditions under which off-shored work is performed, studies relating to off-shoring have not focused on its legal aspects. This article thus discusses labour law and practice in the off-shored services sector, in order to complement existing work on BPO/ITeS, to offer another perspective from which to view the topic, and to allow a fuller understanding of the context within which this work is undertaken. The article examines relevant Indian labour laws from the highest level--the Constitution --down to State legislation, rules, and policies. Where appropriate, it compares these laws with those covering comparable workers in Australia. It then examines employment practice in the sector, noting the gaps between formal legal protections and the practical realities for workers in BPO/ITeS. …

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