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Theres no legal framework for flexi staffing

Organised flexi staffing in India is likely to employ 9 million by 2025, according to the Indian staffing industry. This is against the current size of 1.3 million.

By enabling companies to focus on the core activity of profit generation without spending much time on staffing, flexi staffing enhances their competitive strength.

However, one of the critical issues faced by the flexi staffing industry is to align labour law reform to its requirements.

Legal challenge

The evolving tripartite employment relationship between the worker, user companies and flexi staffing intermediary poses a challenge to the legal system, which is designed for a bipartite direct employer-employee relationship. The responsibilities of the flexi staffing agency and the user company are not clear.

With changing labour market dynamics and a prolonged recessionary environment, an increasing number of companies are trying to maintain a flexible layer in their organisations, leading to a growth in organised flexi staffing. The law is yet to create the environment necessary for this to evolve.

Flexi staffing calls for a demarcation of the responsibilities of both the staffing intermediaries and the user company. It should ensure that the user companies follow certain minimum standards, like not replacing regular positions with flexi jobs, and following occupational health and safety standards for the flexi workers.

India’s job market is still struggling for recognition of the tripartite agreement framework in favour of flexi staffing. Countries such as Germany, Spain, the Netherlands and Finland have, however, adopted a tripartite relationship model.

The flexi staff in these countries are able to enjoy the same pension rights, sick pay and annual holidays as permanent employees under their employment Act.

However, the Indian labour laws have failed to adapt to this recent labour market development, leading to a disconnect between the emerging reality and the legal provisions.

Need for clarity

India has one of the largest flexi staffing workforces across the world, besides China and the US.

It is high time that we took a closer look at the labour law reforms that need to be initiated to cater to the needs of all the three stakeholders involved -- the industry players, staffing companies and the workers.

Due to an absence of clear regulations, a large part of the flexi staffing activity is shaping up in unorganised sector, leading to an adverse impact on the welfare of the workers.

There is a need to develop a mechanism to specify the responsibilities and obligations of the user company, perhaps at the time of signing of the contract between the agency and user company.

Hence it is advised to set up a comprehensive legal ecosystem after taking note of the interests of the workers, the flexi staffing agencies and the user company. This would include legal recognition to the flexi staffing business, specification of conditions to be fulfilled for engaging in such employment services and adequate provisions to protect the interests of the workers.

With its mantra of & lsquo;flexibility with security’, the flexi staffing industry has the potential to grow as it is increasingly being accepted by both workers and employers. Once the legal provisions which affect the flexi staffing activity across industries are codified, it is important to ensure uniform application of conditions across all categories of workers.

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