‘You are not my employee’

The trajectory of labour employment in the manufacturing sector—from formal to unorganized—has deepened worker insecurities and raises questions about the quality of work that a younger, newly minted generation of workers can aspire to

Rosey Mukherjee

A file picture of workers’ unrest at the Wistron factory in Kolar, Karnataka in 2023. Picture courtesy Rosey Mukherjee

Mahesh, 45, had been a permanent employee in a cement manufacturing company for 10 years when his company merged with another. The new management disassembled the old way of working and overnight, Mahesh, along with other regular workers, became a contract worker for the company.  “I continued doing the exact same job I was doing as a regular employee, but my salary was slashed, and I lost all benefits, including my medical insurance. Every year the contractor would change, keeping the constant threat of job loss hanging over our heads. To survive in a city like Bangalore, I had to take up additional work just to support my family,” he said.

Contractualization, or informal labour, has become a serious challenge for workers like Mahesh, who are now part of a complex supply chain. 

At one time, the Hindustan Motors factory in West Bengal rolled out an end-to-end factory-produced, ready-to-drive Ambassador car from under its roof. Today, a Maruti Suzuki car, available in a Mumbai showroom, is a jigsaw of components manufactured across various states—engines might come from Manesar in Haryana, electrical parts from Pune in Maharashtra, and interiors from Sanand in Gujarat, assembled at plants like the one in Gurugram, Haryana. 

This fragmented supply chain model is evident in other industries: garment factories in Tirupur, Tamil Nadu, produce fabric and stitching, while finishing and packaging happen in nearby Coimbatore. Similarly, mobile phone components such as display panels and batteries are sourced from factories in Karnataka and Andhra Pradesh, with final assembly in Tamil Nadu. 

This model comes at a cost to workers, where many enter the workforce with just basic training. They are given small, repetitive tasks within a single step of the production. Over time, this leads to deskilling, and their work experience does little to help them grow or qualify for better jobs. This system, designed for industrial efficiency, systematically sidelines worker growth. It also makes them easily replaceable. 

India aims to raise the manufacturing sector’s contribution to GDP from 12% to 23% over the next two decades. Will this growth in GDP result in better living standards for the people who make it happen? 

Global economic policy and its impact on labour

After the First World War and the Great Depression of 1929, economist John Maynard Keynes proposed an economic model that emphasized increased government intervention in the economy, full employment, wage increment and social welfare of workers. This Keynesian model strengthened workers' rights, unionization, and the introduction of policies like minimum wages in many countries across Europe and North America.   Workers in industries like automobile manufacturing began earning enough to afford the very products they manufactured. 

But by the late 1970s and into the 1980s, many developing nations were nudged, by the International Monetary Fund (IMF) and World Bank, toward neoliberal policies emphasizing market deregulation, reduced government intervention, privatization, and free trade. 

In 1991, under the conditions set by the IMF and World Bank, India adopted the New Economic Policy of liberalization, privatization, and globalization; the Indian state began to withdraw from industrial production and started relaxing labour and environmental regulations for ease of foreign investment. The dilution of labour protections led to the weakening of unions, decline in wage standards, and outsourcing of labour. 

In 2019, new labour codes were introduced in Parliament, aiming to subsume 29 central labour legislations into four labour codes. One significant change was the introduction of fixed-term employment, allowing workers to be hired on contract for limited periods, without the protections that come with permanent jobs.  Not only had work become increasingly contractual but also temporary. 

Then, in the wake of COVID-19, several state governments—including Uttar Pradesh, Rajasthan, and Karnataka—proposed extending working hours to 12 per day, a sharp departure from the eight-hour workday mandated by the Factories Act, 1948 and upheld by the ILO's international labour standards. The passage of the new labour codes in 2020 marked the culmination of a long process of weakening labour protections, delivering the final blow to decades of hard-won workers’ rights.

The rise and rise of contract labour

In 1970, the Contract Labour (Regulation and Abolition) Act (CLRA) was enacted to prevent the exploitation of contract workers and for gradual abolition of contract work altogether. The Act prohibited contract labour in cases where the work was perennial, part of core production, and essential to the enterprise. 

In practice, the exact opposite is seen to occur. Companies are increasingly hiring contract workers through third-party contractors, who routinely obtain licenses from state labour departments to employ contract workers for regular, perennial core production work, despite this being in clear violation of the CLRA. Contractors sub-contract the engagement of workers, creating multiple layers of informal employment, resulting in the workers often not knowing who their actual employer is. When workers demand accountability in cases of termination, wage theft, or non-payment of provident funds, they are tossed back and forth between the principal employer and contractors, each denying responsibility by claiming, ‘you are not my employee’. 

By distancing themselves from the employer-employee relationship and its obligations, employers circumnavigate legal accountability; evade obligations such as social security, fair wages, and job security, effectively stripping workers of their rights under the guise of outsourced employment. 

The worker pushback

Wistron, a Taiwanese multinational corporation, assembles iPhones for Apple at a plant in Narsapura, Kolar district of Karnataka. It employs more than 16,000 workers, of which 80% are contract workers, hired from surrounding villages and other districts in Karnataka, and from other states such as Tamil Nadu, Andhra Pradesh, and Bihar. Many of the local workers, especially those from nearby villages, come from extremely poor backgrounds and a significant number are from the Dalit community. 

The workforce comprises engineering graduates, ITI diploma holders, and high school graduates. The Kolar Gold Fields (KGF), located about 50 km from Narsapura, has an engineering college, making the Wistron plant an appealing employment destination for local youth like Vignesh, whose grandfather too was a migrant worker, transported from Tamil Nadu to KGF by the British, to work in the Kolar Gold Mines.  

“At the time of joining, we were told we’d be paid 22,000 rupees- per month, including overtime,” Vignesh recalled in a conversation with the author. “The conditions were harsh—compulsory 12-hour shifts every day with no days off, no grievance redressal system, and frequent irregularities in wage payments. Despite being promised 22,000 rupees, we received significantly less. Repeated pleas to the HR department yielded no results, and the growing frustration finally erupted into a large-scale protest.” 

Another former worker, Sagar, described the work as so stressfully repetitive that his hands mimicked machine movements even in his sleep, as if his subconscious mind had internalized the routine. 

In December 2020, a major workers’ protest broke out at the Wistron Narsapura plant. It was alleged that workers vandalized parts of the factory and looted iPhones and over 100 workers were booked for cognizable offences. 

A similar grim picture repeated at Foxconn, a Taiwanese multinational electronics manufacturer, which has an iPhone manufacturing unit in Sriperumbudur, Tamil Nadu. In 2021, thousands of young women at Foxconn’s iPhone assembly plant blocked the Chennai–Bangalore highway, demanding better working and living conditions. The protest was sparked by a food poisoning incident in the company-provided hostel, hospitalizing hundreds. 

The plant employs around 16,000 workers _ most below 23 years of age and many migrant contract workers hired through third-party agencies, lacking contracts, identity cards, or proof of employment at the company. 

The segregation and isolation of workers

Following the 2020 unrest, Wistron re-strategized its hiring, choosing to recruit migrant workers from distant, less-developed states like Odisha and Bihar, rather than locals. Companies find migrant labour much more submissive: being in a foreign land, fear of losing a job, the lack of legal awareness, without family or local social support, unfamiliar with the local language, migrant workers are more compliant, voiceless. 

Alienation by segregating and isolating workers is a similar strategic move. When a second wave of worker unrest broke out in Wistron in 2023 over low wages, I visited the area to speak with workers.

As the afternoon shift ended, a convoy of over 100 buses began transporting workers directly into the factories—clearly designed to prevent any interaction or external communication. Workers were segregated along assembly lines, each line monitored by supervisors, eliminating chances of networking and building solidarities. Workers operate in different shifts each day, rarely interacting with the same co-workers. 

“I work different shifts on different days. The person working next to me today won’t be there tomorrow. We get a 10-minute break for tea and 20 minutes for lunch. After the 12-hour shift, we run to catch the company bus. When is the time to talk, socialise amongst each other, leave alone talk about forming a union,” explained Manjunath, a 24-year-old from KGF. 

Permanent workers do not necessarily have a stronger say.  The Trade Union Act of 1926 grants every regular worker the right to form a union. But when workers form unions, the response of company management is often hostile. 

Krishnappa, 35, works at an agri-vehicle manufacturing company. “In May 2024, 59 members of our union were transferred to locations outside Karnataka, violating the company’s own standing orders,” he recalled. “Union members were threatened with suspension if they didn’t leave the union and leaders were under constant pressure to dissolve the union. When we protested peacefully, 116 union members were suspended, accused of working in ‘go-slow’ mode, allegedly causing crores in losses to the company.” 

The new labour code states that a single union with 51% members will be recognized as the sole negotiating union in the company. Companies often form unions with workers sympathetic to them and this clause in the new labour code will encourage the creation of company-backed unions, ultimately rendering unions which are truly dedicated to the working-class powerless in collective bargaining. 

Moreover, contract workers are often excluded from trade unions, though they make up most of the workforce.

Dignity of labour and distribution of wealth

Is job creation truly meaningful if the employment generated offers workers no upward socio-economic mobility? The harsh realities faced by workers in the sector raise another critical question: Can an extractive form of employment genuinely address the country’s deep-rooted unemployment crisis, especially among the youth? 

The Directive Principles of State Policy in our Constitution emphasize the protection of workers' rights, ensuring their dignity, fair wages, and labour welfare. Adhering to it, corporates must provide fair wages—at minimum enough to cover basic living expenses such as housing, education, and healthcare. At the same time, the government must guarantee job security by regularizing contract employment and ensuring access to essential entitlements like overtime pay, paid leave, health insurance, provident fund, gratuity, and maternity benefits. 

Without these safeguards, GDP growth will merely concentrate wealth in the hands of a few, while leaving a large, young, vulnerable population open to exploitation, economic stagnation and wealth inequality.

Edited by Meetu Desai

Rosey Mukherjee is a Bengaluru based activist and lawyer