LA SYSTEM IN FCI
1. Types of labour system working in FGI
lnitially, the food handling operations were being carried out in major ports/port
godowns through outsourcing (Contract) by the Ministry of Food, Govt. of lndia. During
1964-1967 the ex-contractor's workers at Bombay, Kandla, Nladras and Vishakapatnam
ports and Godowns at Bombay, Vizag and Madras were departmentalized by the
Government of lndia through respective Regional Director of Food i.e. before the
inception of FCl. When FCI came into existence, labour unions launched agitation for
departmentalization of Contract workers on the plea that said labour system already
exists in major ports and certain godowns. Due to labour agitation contract worker were
departmentalized in Calcutta complex and 22 depots in Delhi, Bihar, Odisha, Uttar
Pradesh and Assam by the FCl.
Appropriate Authority i.e. IVlinistry of Labour, under Contract Labour (R&A) Act, 1970
during the period w.e.f. 1985-2011 abolished Contract Labour system in FCI's 290
owned and hired depots. Contract workers have been engaged directly by the FCI
under different labour systems due to (i) Court orders (ii) Settlements with the unions
(iii) To implement the notifications issued by the tMinistry of Labour prohibiting the
employment of contract labour under Contract Labour (R&A) Act, 1970.
The labour strength as on 31.03.20'19 is as under:
Labour system Depots In position (31.03.2019)
Departmental 54 1 1610
Direct Payment System (DPS) 152 20407
No Work No Pay system (NWNP) 88 6725
Total 294 38742
2. The salient features of the labour systems
(i) Departmental Labour Svstem - Under this system, regular time scales of pay is
given. The following scales of pay are applicable to the Departmental workers and
average basic pay of labour is around Rs. 30,000 per month:-
S.NO DESIGNATION Revised pay scales
w.e.f. 1.1.2017(Rs.)
1 Sardar/[tlukadam 24200-58600
2 tVandal/Tindal 231 00-54600
3 Hand ling labour/Loader 22300-51 000
4 Ancillary 2'1800-50200
La bou r/God own [Vlazd oo r/t\Iod iaStitcher
of ex-gratia
Apart from the above pay scales and dearness allowance, statutory benefits
in lieu of Bonus, pLI, CPF, Gratuity and Welfare benefits of various types of leaves,
uniform, LTC, HBA, Festival Advance, medical facility, LTCiBharat Darshan, Children
Education Allowance etc. are also extended to the departmental workers.
ln the light of
Union vs.
Supreme Court order dated 20.07.1990 in Food Corporation of lndia Workers
Food Corporation of lndia (Wp No. 222of 1984), the Departmental labours working
in
FCI were entiled for wages at par with pay scales of Port & Dock workers and their
wages are revised every five years.
(ii) Direct Pavment svstem: The workers are paid piece rates on Above
schedule of Rates(ASOR) o/o"ga basis subject to tt/inimum Guaranteed wage.
tMinimum wages and piece Rate Wages of the DPS category workers are revised on
1't
.1=tOctober of every year. At present DPS labourers are entitled to get
April and
following wages w.e.f. 0'1 .04.2019 :-
DPS labour Wages
Sardar Rs. 632/
It/andal Rs.619/-
Handling labour Rs. 6141
Ancillary labour Rs. 5841
The DPS workers have also been given the benefits of CPF in addition to the
benefits of Ex-gratia, PLl, Gratuity, Workmen's Compensation, Paid Weekly Off,
National Holidays, Sick Leave, Medical First Aid and tVledical Facility (lndoor/Outdoor)
under ESI Act.
(iii) No No Pav Svstem (NWNP) Under this NWNP labour system,
the payment for the actual quantum of work done is made to the workers, on the basis
of ASOR ohage (which is being revised after every two year on the basis of % increase
in All tndia Consumer Price lndex). Workers are entitled for piece rate earning or daily
tilinimum Wages, whichever is higher, only for the days when there is work. When there
is no work in the depot, no payment is made to NWNP workers. ln addition, the benefits
of EPF, gratuity, Ex-Gratia in lieu of Bonus, three national holidays paid weekly off
under tVlinimum Wages Act, [Medical Facility (indoor/outdoor) under ESI Act are given by
FCI to these workers. At present NWNP labourers are entitled to get following wages
w.e.f. 1.04.2019 :-
AREA Rates of Wages plus VDA per day
(inclusive of Weekly off)
5B4l
D 4B7l
390/
(iv) Contrac!-La-boglsys Private Handling & Transport contractors are
(E-tender) for
a*arOeO th" .".tt""t=f *t'""lly f"r 02 years) through open tender
labourers from open
handling of foodgrains in a particular depot. The contractors bring
marketind engage them in FCI depots. FCI pays the remunerations to the contractor
piece rates in the
for the actual volume of work done in bags etc. and on the basis of
per contract. There exists no
shape of 'Above schedule of Rates'(ASOR) percentage as
direct employer-employee relationship between FCI and the contract labourers
and
therefore, FCI does not have any administrative and disciplinary control over them'
However, contractor has to ensure minimum wage to the Labour engaged
and FCI
ensures it being principal employer. The contractor has to bear the losses, if
any, on
account of demurrage and wharfage due to non-completion of work of handling
and
transportation of food grains in prescribed time. At present maximum number of depots
in FCI operate under this system.
This system is governed by the contract Labour (Regulation & Abolition) Act, 1970.
The
contractors so appointed are required to fulfill all the statutory obligations under the
contract Labour (R&A) Act, 1970 and other Labour Laws. As per the contract Labour
(R&A) Act, 1970, the contractor is not bound to engage same labourers on all the
working days and is free to bring any Labour from open market according to his choice
'Principle
and suitability for the work available on day to day basis. FCI is considered as
Employer' as defined under the said Act.
3. Cost of Handling under different labour systems
Quarterly Handling Cost for Quarter 3, 2018-19
Labour Quantity Total Cost per MT
Handled (in Cost(Salary+OTA+
MT) incentive Amount (Rs
ln Crores)
Dept 2221150.20 190.1174 855.9412
DPS 4723327.1 149.7764 317.0994
NWNP 1669558.92 13.686"1 81.9745
/ of High Level Committee
Steps taken to implement the recommendations
h-eaded by Shri Shanta Kumar for restructuring
of FCI
and Employment has issued
After great efforts, Govt of lndia, Ministry of Labour
letter No. s-16012/05/20rr-iw oateo 26.06.2018
for publication.in Gazette Notification
wherein lhe 226 notified depots-a of FCI have be-en exempted under- Section 31 of
nooritlon) Act 1g70 from the purview of said Act
for a
contract Labour (Regulation
furtherperiodoftwoyearsw.e't.oo.oz.z0lSincontinuationtoearlierexemption
notification dated 06 07.2016.
Accordingly,glg3labourershasbeenre-positionedoutoftotal45009labourers,
29284 contract labours
ih"*nv ,irt"ti.g t+s oepartmental depots and 72 Rail Heads.
Heads. As a result, the likely
have been given employml.t i" tr.]" vacated depots/ Rail
annual saving is Rs.600 crores.
lnpursuancetoawardpassedbyCGIT,Karkardooma'Delhion050720'16'thedatum
per day resulting in
of departmental labour revised irom 105 to 135 Bags per worker
reduction of incentive by about 30%
TheearningbydepartmentallabourershasnotexceededRs.l.5lacandearningbythe
DPS workers has not exceeded Rs 1 lac in the recent past
was sought Ld
For declaring departmental labour as dying cadre opinion of Ld ASG
ASGopinedthatasthedepartmentallaboursystemisenormouslycostlierSystem
directed
than existing directly engaged DPS/NWNP labour. MoCA,F&PD has already
FClinNovember20l3toinductregularlabouronlyunderNWNPsystem.LdASG
expressed the opinion that the departmental labour is already a dying
cadre for all
it
practical purposes as no recruitment as departmental labour is being done. However,
approval of
would be advisable to issue formal orders making such declaration with the
MoCA,F&PD. With the approval of the Board of Directors matter has
been referred to
Ministry seeking final approval. Same is under consideration'
Proposal for the introduction of voluntary Retirement scheme for Departmental
Labourers duly approved by Board of Directors has been referred to Ministry
of
CAF&PD vide No lR(Ly1 3(1)A/RS-DL/2o18i317 dated 22t26.11.2018 for final
approval'
5. The Periodicity of the revision of the Pay scale of Departmental labour
After 5 years, recently their payscales have been revised w e f 01 01 2017 The
DA is being revised quarterly beginning from 1't of January of every year'
6. The periodicity of the revision of the Pay scale of DPS and of NWNP labour
As and when Basic Daily wages for unskilled labour working in warehouses is
being revised under the Minimum wages Act by the Ministry of Labour (Govt of lndia).
r-:cently,itwasrevisedw.e.f.19.01.2017afteraperiodof07years'DAisbeing
Evised on 1"t April and 1"t October of every year'
7. The steps taken to economize the handling cost
exemptionnotificationwasissuedbytheMinistryofLabourandEmploymenton
06.07.2016 exempting all 226 depots/railheads from the applicability
of section 10 of
'1970 for a period of 2 years This exemption had been
Contract Labour (R&A) Act
(i e upto
extended for another two years vide Notification dated 26.06.2018
-Inp,*.ncetotheorderpaSSedbyBombayHighCourt,NagpurBench,the
05.07.2020)
Various petitions were filed before Hon',ble Delhi High court against exemption
notification dated 06.07.2016. Therefore the mafter is subjudice'
IBI De-notification of alreadv notified de
Hon'ble Bombay High Court, Nagpur Bench directed Government of lndia to decide the
denotification of all the notified depots within 6 months The time limit of 6 months
has
to
elapsed long back. Matter is being pursued with the tMinistry of Labour & Employment
de-notify the notified dePots.
tcl Rationalization of labour stre nqth.
Hon'ble Bombay High Court, Nagpur Bench passed the order as under:-
"We clarify that respondent/Food Corporation of lndia would be entitled to transfer the
serylces of depaftmental labourers from one depot to another subject to protecting their
salary and all other service conditions".
Therefore, 91 93 labourers has been re-positioned out of total 45009 labourers,
thereby vacating 149 departmental depots and 72 Rail Heads. 29284 contract labours
have been given employment in the vacated depots/ Rail Heads. As a result, the likely
annual saving is Rs.600 crores.
tDl nqe in existinq incentive scheme.
C ha
lncentive scheme for handling of 50 kg bags was held valid by the central
Government lndustrial Tribunal, Delhi vide award dated 05.07.2016.
The above award was challenged by the labour unions before the High court of
Delhi but the same has been held valid by the Hon'ble High Court of Delhi vide
judgment dated 16.05.2019 in WP(C) No. 8495/2016, 926012016 and 9412t2O16.
However, court has disallowed the recoveries of the excess incentive paid to the
workers w.e.f . 01.12.2005 (proposed date of implementation of the scheme) to July
scheme was implemented in
(award was passed on 05 07.2016)' And the said
i-16
August 2016.
Thematterrelatingtomakingrecoveriesoftheexcessincentivepaidtodepartmental
court of India.
gt-.oz.zoto is subjudice before the supreme
rabour w.e.f. 01 .12.2005to
TheimplementationoftheschemehasresultedinthesavingsofRs200croreper
annum.
labour unions
I The steps taken to settle the demands raised by the
revised w e f
(i) Payscales of the Departmental Labour has been
01.01.2017 .
DPS and NWNP workers have been given one set
(ii) of uniforms in a year
under Swachh Bharat AbhiYaan'
(iii)TheDepartmentallabourhavebeenallowedleaveforjoiningperiodontheir
process for their
intra/inter Regional and lnter Zonal transfers under rationalization
gainful utilization.
(iv) DPS and NWNP workers have been allowed Transfer GranUPacking
R egional and lnter Zonal
Allowance and Leave for the ioining period on their intra/inter
transfers under rationalization process for their gainful
utilizatio n.
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