CONTRACT LABOUR (REGULATION & ABOLITION) ACT

The Contract Labour Act seeks to regulate the employment of contract labour in
certain establishments and to provide for its abolition in certain circumstances. In
most states, it applies to establishments employing 20 or more contract workers
and to contractors employing 20 or more workers. The appropriate can decide on
prohibition of contract labour on the basis of any of the five tests: whether (a) the
process or work is incidental or necessary for the industry, (b) it is of perennial
nature, (c) if it is done ordinarily by regular workers, and (d) it is sufficient to
employ considerable number of full-time workers (Section 10 of the Act). The
principal employers should register their establishments and the contractors should
obtain license to be eligible to execute work through contract labour. The Act also
seeks to promote the health and welfare of contract labour.
The Contract Labour (Regulation and Abolition) Act, 1970 (the Contract Act)
As the preamble states it is an Act to regulate the employment of contract labour
in certain establishments and to provide for its abolition in certain circumstances
and for matters connected therewith. It applies to establishments employing 20 or
more contract workers and to contractors employing 20 or more workers. The
appropriate Government can extend the application of the Act to establishments or
contractors employing less than 20 contract workers or workers. It is not applicable
to establishments performing intermittent work, i.e. work performed for less than
120 days and seasonal work performed for less than 60 days. The principal
employers should register their establishments and the contractors should obtain
license to be eligible to execute work through contract labour.

The state

government may constitute an Advisory Board (Board) to advise it on matters

relating to administration of the Act.

According to the Rules made by the

Government of Maharashtra (in October 1971) the Board shall consist of a

Chairman, Commissioner of Labour, one person representing the government, five
persons (three representing the principal employers and two representing
contractors), and five representatives of workers; all the constituents of the Board
will be appointed by the government. The tenure of all save the representative of
the government will be three years; the government representative shall hold office
during the pleasure of the government. The most controversial clause of the Act is
Section 10 (1) which empowers the state government to prohibit after consultation
with the Board employment of contract labour in ay process, operation or other
work in any establishment. The law prescribes four criteria to be considered while
deciding on prohibition: whether (a) the process or work is incidental or necessary
for the industry, (b) it is of perennial nature, (c) if it is done ordinarily by regular
workers, and (d) it is sufficient to employ considerable number of full-time
workers.

The Act also seeks to promote the health and welfare of contract labour (Chapter
V). Canteen has to be established where the contract work is scheduled to continue
for some time and more than one hundred contract labourers are employed. Rest
rooms with sufficient ventilation and lighting will have to be provided if contract
labourers are required to stay at night at the workplace. Some social security
provisions apply to contract labourers also and they have been mentioned under the
appropriate laws in this chapter. The contractor should provide drinking water and
a sufficient number of toilets, washing facilities and first-aid facilities.

The

contractor should pay wages to her workers in time. The liability in these matters
ultimately falls on the principal employer.

The Maharashtra Rules specify

fulfillment of certain conditions for grant or renewal of license to the contractor

such as compliance with stipulated minimum rate of wages and hours of work
under the Minimum Wages Act, payment of same wages for same work,
employment of contract labourers not exceeding the maximum number specified in
the license, provision of some facilities like the use of children, crches etc.