Outsourcing The idea of outsourcing is not a

Outsourcing : Ø The idea of outsourcing is not a new. It started way back in the 1700 A. D during the Industrial Revolution following the precepts of Adam smith in his book “Wealth of Nation”. Ø The History of outsourcing to India is an interesting story even after over a decade of Competitive Global outsourcing most of it still goes to India reaching this pinnacle in outsourcing has been a long journey. As land, Sea and later Air routs developed between the 15 th and 21 st Centuries. More Nations started to outsource trade to other nations eventually leading to outsourcing to India and other Nations. 1

What is outsourcing? Ø Outsourcing is hiring someone to do services for you rather than doing it yourself. Ø The main reasons for outsourcing are saving money, saving time, reducing risk and benefiting from the someone else – Expertise. Ø Outsourcing is commonly thought of as way to reduce costs by eliminating or laying off staff. Ø Outsourcing is also the practice of handing over control of Public services to private enterprises. -1 - 2

Ø Outsourcing services started in India in 1980 and rapidly accelerated in 1990 -90 s. The meaning of outsourcing has undergone a drastic change over the years. Ø The concept of outsourcing has developed significantly in the last few years and it is only expected to become more and more of a business standard. Ø The greatest progress of outsourcing has made in recent times is the elimination of risk. -1 - 3

Reasons for Outsourcing Ø Streamlining or increasing efficiency for time consuming. Reducing and controlling of operating cost. HR Management – HR. II Ø The subject of Human Resource management is the strategic approach to the effective management of organisation so that they help to business gain in competitive advantage. Ø The HR is primarily concerned with management of people within organisations focusing on policies and systems and consequent to reducing the risk of loosing. -1 - 4

Guidelines for contracting and outsourcing the services in Government Departments Ø The Andhra Pradesh Government outsourcing of certain services in Government Departments – Comprehensive guidelines – Orders – Issued vide G. O. Rt. No. 4271, Finance (SMPC) Department, dt. 01. 11. 2008. 1. The A. P government has been permitting the appointments on contract as well as an outsourcing basis to cater the needs of the departments. In case of contract appointments, appointments are being made by the concerned Departments as per the terms of the contract. Whereas, under outsourcing the responsibility of the supplying required man power is through different outsourcing agencies duly identified. 5 -1 -

2. The government have issued certain guidelines or instructions from time to streamline the Contract/Outsourcing appointments and requested all the Departments to follow the guidelines/ instructions scrupulously and to release wages/salaries by 1 st of every month. 3. However instances have come to the notice of the Government not withstanding the above that this categories of employees are facing hardship in some cases by not getting their salaries by 1 st of every month. In order to ensure payment of remuneration to the Contract/outsourcing persons, by 1 st of every month and to address the difficulties if any, it is now decided to issue comprehensive guidelines in case of Outsourcing appointments. -1 - 6

Selection of outsourcing agencies The Head of the Office or Department who is the Principal employer should get permission from the Government in Finance Department to engage for outsourcing the services. -1 - 7

Secretariat and Heads of Department Ø In order to finalise the outsourcing agencies for supply of man power, a committee headed by the Principal Secretary/Secretary to Government in respect of Departments of Secretariat and Head of the Department in respect of Heads of Department may be constituted for selection of outsourcing agencies by the respective Special Chief Secretaries / Principal Secretaries / Secretaries. The Secretary to Government (Services &HRM), General Administration Department is the Nodal Officer for guidance and for redressal of grievances etc. For the purpose of grievance redressal a grievance cell 8 shall be constituted. -1 -

Districts Ø As per the G. O. Rt. No. 4459, Finance (SMPC) Department, dt. 27. 12. 2006 the district Committee with the following officers is constituted for selection of outsourcing agencies at the district level to be headed by the district Collector since most of the outsourcing of the functions/functionaries arise in the Districts. District Collector – Chairman Dy. Director T&A – Member. . District Labour Officer – Member Ø District Employment Officer – Member – Convener. Ø The District employment officer at the District level is the officer responsible to move the proposal for outsourcing of the functions and take the orders of the Collector and other 9 Members concerned. -1 -

Payment of remuneration Ø As per the G. O. Rt. No. 2501 Finance (SMPC) Department, dt. 13. 07. 2006, Government fixed remuneration to certain categories. Ø In respect of the categories which were not covered in the above G. O the Departments are advised to propose the remuneration based on and not exceeding the minimum time scale attached to the equallent category for which they are proposed to be contracted/outsourced and send necessary proposals to Finance Department without giving raise to any anomalies. Ø. As per the Circular Memo No. 28346 -C/958/A 2/SMPC/2008, dt. 30. 09. 2008, Government have issued instructions to pay the remunerations to all the persons covered by the outsource/contact services as well as aided institutions on the 1 st of every month prompltly. 10

Ø If there is any short fall of budget for payment of remuneration to the contract/outsourcing persons, the concerned Departments shall submit necessary proposals to the finance Department for sanction of additional funds with full details as per the agreed manpower requirements covered by implementation Committee proceedings. Ø Expenditure sections in Finance Department are already permitted to give quarterly relaxation for this purpose. Ø As per the Circular Memo No. 30766/A/896/A 1/BG. I/2008, . dt. 23. 10. 2008, the government directs the DTA/PAO and DWA to admit the bills into audit under the following detailed heads without insisting upon 80% of the expenditure of earlier Quarters subject to limiting the expenditure to the extent of provision available so as to facilitate prompt payment modification of instructions if any already issued. 11 -1 -

Deduction Ø As per the circular memo No. 8999 -A/319/A 2/SMPC/2007, dt. 21. 04. 2007 instructions were issued to pay the remuneration to the contract/outsourcing persons as fixed by the Government in full duly deducting the Employees Contribution towards EPF, ESI and Profession Tax. The outsourcing agency shall produce a remittance certificate towards EPF and ESI contributions at the time of submitting bill for the following month. Continuation of Contract/outsourcing persons Ø As per the Circular Memo No. 14863 -F/547/A 2/SMPC/2007, dt. . 14. 06. 2007, Government have issued instructions to all the Departments to extend the contract /outsourcing agency contract beyond one year as long as posts are outsourced within the sanctioned strength of the Department. All the Departments shall obtain concurrence of the Finance Department at the initial time of contract/outsourcing. 12

Grievance Cell Ø All the Departments shall create a Grievance cell to attend to the complaints received from the contract / outsourcing persons regarding payment of remunerations. If any violation of instructions noticed, it should be brought to the notice of the Collector in the Districts and to the Secretary to Government, General Administration(Services) Department. Ø If the complaints are found to be true the agency will be kept under black list. -1 - 13

Government Orders Ø G. O. Rt. No. 2501, Finance (SMPC) Department, dt. 13. 07. 2006 speaks about the outsourcing of Data Processing Officers & Data Entry Operators and other Supporting Services in government departments through an agencies. Ø According to this GO enhanced remuneration to this categories Junior Assistant Rs. 4, 900/- p. m Typist Rs. 4, 900/- p. m Junior Steno Rs. 4, 900/- p. m. . Senior Steno Rs. 6, 200/- p. m Driver Rs. 4, 500/- p. m Attender/Class IV Rs. 3, 900/- p. m Lift Operator Rs. 4, 400/- p. m Data Entry Operators Rs. 5, 500/- p. m Data Processing Officers Rs. 6, 500/- p. m 14

Ø Government Circular Memo No. 25928 -A/1046/A 2/SMPC/2006, dated. 23. 10. 2006 related to enhancing the remuneration to the personnel being taken through outsourcing agencies on certain categories as indicated therein. It has also been ordered that the Departments shall strictly monitor and ensure that the remuneration specified in the said G. O reach the individuals employed invariably. If any violation in payment of remuneration the departments are requested to take action against the outsourcing agency. The Departments are informed that they are equally held responsible for less payment if they do not monitor. Ø G. O. Rt. No. 4459, Finance (SMPC) Department, dt. 27. 12. 2006 related to supplying the required manpower to the private agencies. Accordingly government have permitted several departments to outsource certain functions and functionaries for 15 support services.

Ø It also speaks the method of outsourcing and the qualifications for the outsourcing agencies. Ø It also speaks principal employer should get permission from the government in Finance Department to engage for outsourcing the services. Ø The principal employer for outsourcing Agencies shall have to register his office or department as per the provisions of Contract Labour (Regulation and adoption) Act, 1970 to engage the outsourcing services. Ø The outsourcing Agency shall renew its license every year. 16

Ø As per the above said responsibility of the outsourcing agency to bear out of its commission, the Employers contribution towards Provident Fund, ESI, Service Tax etc. Ø In later stages Government have issued separate guidelines regarding the outsourcing services in Government Departments. Finally, among one of the GOs issued vide GO Ms. No. 151, Finance (HR. I plg & policy) Department, 08. 2016 regarding the enhancement of the remuneration to the functionaries through out sourcing in category –I category -II and category-III. 17

OUT SOURCING AND LABOUR LAW- RECENT TRENDS Ø There are certain procedures to ensure compliance with labour laws in India concerned in labour law. while economic factors like cost effectiveness may justify system of outsourced labour , consideration of social justice has called for its abolition or regulation. Ø The contract labour act 1970 is the primary labour law in india dealing with employment of outsourced labour. now the trade unions are filing applications in labour courts and tribunals seeking permanency fore out sourced workers. A number of representations /petitions have been received by concerned authority under Rule 25(2)(v)(a)&(b) of Maharastra contract Rules 1971 alleging that the outsourced workers are performing the same or similar work as performed by the workmen employed by the principal employer. 18

SUGGESTION §By seeing the recent trends of out sourcing agencies there are terrific incidents have been found, that they are collecting huge amounts of Rupees in lakhs for appointing the candidates on out sourcing basis. The spirit and philosophy of the outsourcing agencies has been diluted due to unethical approach of the agencies. §For ex: SARVA SIKSHA ABHIYAN-C. M. O” enquired. Regarding the corruptions of Recruiting Agency. §In such circumistances to avoid the exploitation of unemployed youth who are eagerly waiting for the employment on out sourcing basis, there is a need to constitute separate committee to discuss the possibilities of handovering responsibilities to the A. P. P. SC/DSC for conducting the out sourcing recruitment then the skilled persons may be appointed to the needy departments by Amending the Rules and Regulations. Then only justification will be reached to the unemployed youth and the prestigious of the government will be uphold for ever. 19 -1 -