Regulation of Contract Labour

12/4/2020 Regulation of Contract Labour - LawOrdo
Regulation of Contract Labour

By admin - August 20, 2020
https://www.lawordo.com/
Author: Shreya Wadhwa
Law Graduate (Amity Law School, Noida)
Shreya
INTRODUCTION
In present situation globalisation and liberalisation is making rapid strides at a very rapid
rate and has led to changes in business environment, growth & profit oriented economics
&this has led to a fierce competition among various industries grappling to survive. Top
MNC’S all around the world have started investing in India because the market capability
has improved and the workforce available. Labour relations deal with the relationship that
exists between the employees of an organization and the management. It is generally about
the shop floor and a typical factory environment. Business environment has changed due to
Economic, technological, political and social aspects of the environment putting increased
pressure on the environment and demands on the enterprise and its workforce also must
respond to the rapid changes which are happening. And response to changing business
environment causes stress and tensions at times among the parties to the Industrial
relations. The workers, the trade union and the management are the basic constituents of
it. Business Environment keeps on changing and throws newer challenges. The market
keeps on changing rapidly. What is relevant today becomes obsolete tomorrow.
https://www.lawordo.com/regulation-of-contract-labour/ 1/21
Business change environment is caused due to many factors. These are
1. Political,
2. Economic
3. Social
4. Technological
5. Environmental
6. Legal.
All these aspects have put greater pressure on the enterprise and the workforce which is
employed in the company. And this change in social environment in industries becomes a
big contributor to industrial relations which plays a vital role in achieving the key objective
of the enterprise.
These companies have started setting up increasing their presence in India by opening
offices in India, in turn proving to be a tough competition to their Indian counterparts. To be
able to compete in this fast-moving world and market that is increasingly becoming
customer oriented, the companies and industries require a lot of flexibility in managing their
manpower to address the occasional rise and fall in demand. But the old rigid Indian Labour
Laws which came into existence decades back are creating problems for the proper
functioning of these companies.
Due to this factor many companies are employing more and larger number of contract
labourers to adjust the workforce and to have flexibility to achieve economic efficiency,
better optimum utilisation of the resources, optimum profit, greater output and to have cost
efficiency despite prevailing risk of lesser worker loyalties.
Hiring or employing contract labour in India has become a very crucial form of employment,
engaged in different occupations across the skilled, semi-skilled and unskilled jobs across all
the sectors. While hiring contract labourers the companies should exercise caution and
should understand the laws that govern their relationship with them (the company).
Click me to submit an article
The government plays a very role in industrial relations, be it through its policies or its
representatives like the labour commissioner etc. In the present-day scenario, IR is losing
its relevance because of the advent of information technology and the service sector
becoming dominant. Its dispensability still can’t be questioned as it clearly showcases the
success of HR policies at the grass root level.
HISTORICAL BACKGROUND
Contract labour has been in existence since time immemorial. During the early phase of
industrialisation, the industrial establishments were always faced with the difficulties of
having to recruit labour. The British employers or be it their representatives were not
familiar with some basic problems of the employees like the low status of workers, lack of
mobility of labour, caste and religion taboo prevalent, etc. They were not able to get rid of
these problems. Therefore, they depended on the middlemen who helped them to hire and
control workers. These middlemen and contractors were known by different names in
different parts of the country.
Contract labourers have been exploited section of working class mainly due to lack of
organisation. Due to this, the Whitely Commission (1860) also recommended the abolition
of contract labour by implication. Much before 1860, in addition to the various
disadvantages the contract labour had to undergo, the Workmen’s Breach of Contract Act
1959 was operating in holding them criminally responsible in the form of vent of a breach of
a contract service. Subsequently, Many Committees came into existence to study the
socioeconomic conditions of contract labour likewise the Bombay Textile Labour Enquiry
Committee. Because of these findings, the scope of the definition of “Workers” in the
Factories Act, 1948, The Mines Act, 1952 and The Plantations Labour Act, 1951 was
subsequently enlarged to able to include contract labour. Also in the case of Standard
Vacuum Refinery Company Vs. Their Workmen, the Supreme Court observed that the
contract Labour should not be employed where
a) The work is perennial and must go on from day to day
b) The work is incidental to and necessary for the work of the Factory
c) The work is sufficient to employ considerable number of whole time workman
d) The work is being done in most concerns through regular workmen
Subsequently, in the 2nd Five-year plan, the planning commission also stressed upon the
need for improvement in the working conditions of contract labour and thus, recommended
for a special treatment to the contract labour to ensure that their continuous employment
was there wherein it was not possible to abolish such type of labour.
Overview of Contract Labour Regulation & Abolition Act:

Before this act came into existence there was no specific legislation which dealt with the
issue of contract labour but there was legislation like Industrial Disputes Act, 1947,
Payment of Wages Act, 1936 etc which also dealt with problems of the workers but these
enactments were not specifically designed to solve the problem of contract labour.
Therefore, it was felt to have a specific legislation to stop the exploitation of contract
laborers by Contractors and Establishments.
Contract labour is a very popular and a form of employment which has grown. Prevalent in
almost every sector of the employment, industries, allied operations and the service sector.
Generally, refers to the workers engaged by a contractor for employment in other
organisation. Exploitation of contract labour in employment has been the biggest concern of
the government as contract labour have little bargaining power, less social security and are
often engaged in hazardous industries with no to less facilities and security. To regulate this
system the government enacted the Contract Labour (Regulation & Prohibition) Act,
1970 to secure the status of the contract labourers and to abolish them from establishment
and it came into existence on 10.2.1971.
The main objective of the Act is to provide for regulation of the employment of contract
labour and its abolition under various circumstances. The Object of the Contract Labour
Regulation and Abolition) Act, 1970 is to prevent exploitation of contract labour and bring
about better conditions at work.
The Contract Labour (Regulation & Prohibition) Act, 1970 extends to the whole of
India.
It applies—
(a) To every establishment wherein20 or more workmen are in employment or were in

employment on any day of the preceding 12 months as contract labour.
(b) To every contractor who employees or who have been employed on any day of the
preceding 12 months 20 or more workmen:
(c) Not applicable to establishments in which work only of an intermittent or casual nature
is carried out.
Explanation. — For this sub-section, the quantum of work performed in an establishment

shall not be deemed to be of an irregular nature– (I) if it was performed for a period of
more than 120 days in the preceding 12 months, or (ii) if it is of a periodic character and is
due to be performed for more than 60 days in a year.
MEANING OF CONTRACT LABOUR

A workman is deemed a contract labour when he/she is hired about work or “contract for
service” of an establishment by or through the services of a contractor. They are indeed
indirect employees; persons who have been hired, supervised and remunerated by a
contractor who, in turn gets compensated by the establishment. In either form, contract
labour is neither borne on pay roll or wages paid directly to the labour.
Contract workmen are not the employees of the companies. They are generally indirect
workers or they are not directly related to the companies
Contract Labour is different from Direct Labour in terms of the relationship of employment
with the establishment and method of wage payment that has been adopted. Contract
Labour, are not borne on pay roll nor is paid directly. They are usually hired for limited
amount of time. The Contract Workmen are hired, supervised and remunerated by the main
contractor, who in turn, is paid by the company hiring the services of the Contractor.
Companies engage contract labour to keep an eye on the no of the workforce and flexibility
it provides in management of workforce to achieve the work efficiency
“Contractor”, in relation to an establishment, means a person who undertakes work to

achieve a given target or goals for the establishment, other than a mere supply of goods of
articles of manufacture to such an establishment, through the contract labour or who
supplies contract labour for any work of the establishment and it also includes a sub-
contractor;
Labour regulation is one of the most important tasks of an enterprise. To face the problems
various companies and organisations are now hiring or employing contract labourers which
are governed by the contract labour (regulation and abolition) act 1970.It has been seen
that the contact between the entrepreneur and the inspector has aide din violation of the
laws. This legislation was enacted to provide better working conditions for the labourers and
to reduce their sufferings and the problems. Due to the lack of awareness the labour
workers are not able to avail their benefits available to them and receive their wages. They
must work according to the will or according to the instructions of the principal employer
otherwise they are unable to continue with thief jobs or work which in turn makes it difficult
for them to find a new job in the market. Hence the problems of the contract labourers
should be heard by the company engaging contract labourers, their demands should be
heard of and they should be given the same allowances, perks and other benefits which a
regular employee of a company receives. Recently all the sectors like education, hospitals,
hotels, transport, construction, railways etc all employ contract labourers.
They should be regulated at the levels and should receive all the benefits and perks which a
regular employee of an organisation receives.
The Contract Labour (Regulation & Abolition) Act, 1970 (Act) allows companies and
establishments prevalent in the manufacturing and services sectors to engage contract
labour with the help of contractors. Such a company can be only for work that do not form
part of the core operations, which has been guided by the memorandum of association of
the company. Prior to the Act, in the case of Standard Vacuum Refinery Company vs
Their Workmen (1960) the Supreme Court of India had indeed observed that contract
labour shouldn’t employed where:
(I) The work is everlasting and must go on from day to day;
(ii) The work is incidental to and is necessary for the work of the factory;
(iii) The work is sufficient to employ considerable number of whole time workmen;
(iv)The work is being done in most concerns through regular workmen.
Therefore, contract labours are generally engaged for support services like gardening,
housekeeping, maintenance, catering, transport, security etc.
KINDS OF CONTRACT LABOURERS-

1. LABOUR CONTRACTS OR LABOUR ONLY CONTRACTING-
In the above kind of workers, the intermediary supplies labour to the principal employer.
These kinds of workers work at the site and are under the control of the entrepreneur or the
main employer. Such kind of labour workers are paid by the third person i.e. the
intermediary and they have no direct kink with the principal employer.
2. SERVICE CONTRACTS OR JOB CONTRACTING-
When the third person undertakes to complete a task in form of a service rather than labour
then it is known as service contracts or job contracting, they are of two types one which is
purely commercial contracts where two companies come together and one party promises
to supply other with the goods etc. The second type of service contracts is the one which is
included under the aspect of contract labour and need legislation this kind of contracts the
work is done by the individual contractors or by sub-contractors. Such kind of workers have
a position like that of a regular employer.
REASONS FOR HIRING OF CONTRACT LABOURERS-

Some of the reasons for hiring or employing contract labourers are-
It helps in the problem of the ever-growing population on the market by creation of the
employment opportunities.
Makes the availability of labour easily
Helps in the minimisation of the overall costs of the company
The unwillingness to perform less skilled jobs on the part of educated youth is also said
to be a reason for the increase in contract labour system.
Migration of people from one place to another is also one of the main reasons as they put
extra pressure on the workers.
Advisory Boards:
The Contract Labour Act provides for setting up of Central and State Advisory Contract
Labour Boards by the central and state governments to advise the respective governments
on matters arising out of Act administration.
Registration & licenses:

The establishment covered under this Act are required to be registered as principal
employers with the appropriate authorities. Every contractor needs to obtain a licence and
not undertake or execute any work through contract labour, except under and in accordance
with the licence that has been issued in that behalf by the licensing officer. The licence
granted is also subject to conditions relating to hours of work, wages fixation and other
essential amenities as prescribed in the rules. in respect of contract.
Prohibition of employment of contract labour.

Notwithstanding anything which is contained in this Act, the appropriate Government may,
after engagement with the Central Board or a State Board, prohibit, by notification in the
Official Gazette, contract labour employment in any process, operation or other work in any
establishment in any process, operation or other work. The guidelines for deciding upon the
abolition of contract labour in any process, operation or other work in any establishment are
–
Conditions of work and benefits provided to the contract labour
(I) Whether the work is of a perennial nature;
ii) Whether the work is incidental or necessary for the work of an establishment
iii) Whether the work is sufficient to employ a considerable number of wholetime workmen;
(iv) Whether the work is being done ordinarily through regular workman in that
establishment or a similar establishment.
Compliances under the Act

The Act mandates that the principal employer should be registered and the contractor have
a valid license prior to engaging contract labours. In Workmen of Best & Crompton
Industries Ltd. vs. Best & Crompton Industries Ltd., the Madras High Court has held that
the principal employer must engage contract labour through a contractor who has a legally
valid license, because an illegal license of a contractor would imply direct employment of
contract labour by the principal employer. Further, such a license of the contractor is also
job specific, non-transferable for any other kind of job and indicative of the most number of
contract labours that can be engaged.
The Act also puts onus on the contractor for providing all the statutory benefits to contract
labour with the rider in place that in case the contractor fails to do so, the obligation would
directly fall on the principal employer. This position has been clarified by the Supreme Court
in People’s Union for Democratic Rights v. Union of India, wherein it was held that in
case the contractor fails to fulfil its duties under the Act then the principal employer shall be
under an obligation to provide all the amenities and benefits that are prescribed under the
law to contract labour that has been deployed at its establishment. Therefore, it also
becomes necessary for the principal employer to also witness disbursement of wages to the
contract labour by the legal contractor, collect all the necessary documents that establishes
that the statutory benefits are also being made available to the contract labours by the
contractor.
Click me to submit an article
Precautions while engaging contract labour

Before hiring contract labourers it is imperative for the company to register with the
authority and it also verifies the licences of the contractor. After that the principal employer
should execute a contract with the contractors with the terms of engagement specified. The
contract labour should not be allowed to work on the major aspects and the main areas of
the establishment. The contractor should not be an employee of the principal employer.
Principal employer should not exercise direct control (including matters of payments,
discipline and removal/termination) and supervision. The chief employer has the right to
check the skills and the capabilities of the labourers which have been hired by the
contractor to ensure if the work is being carried out correctly or not. This is done to
maintain the quality of the work and to see if they aren’t any problems in the company. The
establishment generally is not directly linked to the contracted labourers. The labourers are
usually controlled and overlooked upon by the contractors.
In Haldia Refinery Canteen Employees Union & Others v. Indian Oil Corporation
Limited, the apex Court laid down certain guidelines for engaging contract labour:
1. Principal employer must not interfere with the contractor for engaging contract labour
and contractor must have free hand;
2. Wages should be paid out by the contractor; principal employer must only be a witness;
3. Contractor is liable to pay all statutory benefits such as leave salary, provident fund
contribution, medical benefits, and observe statutory working hours for its employees
and maintain records thereof;
4. Contractor is also responsible for proper maintenance of registers, records and accounts
for compliance with statutory provisions/obligations;
5. Principal employer should avoid managing the contract labour;
6. Contractor is liable to compensate the principal employer from any liability or penalty
which may be imposed by authorities for any violation by the contractor of such laws,
regulations and against all claims, suits or proceedings.
Rights of Contract labour

The act also enlightens the rights of the contract labour to make them safe from any
potential problems which might occur. These rights ensure the equality of status for the
workmen and the violation of which is enforceable in court of law. In terms of the wages,
hours of work, welfare, health and social security contract labourers interests are protected.
Any Agreement that has been entered between the Parties and if there are any clauses
there in the agreement which are not in conformity with the benefits and other allowances
under the Act and which are not favourable for the labourers will be treated as invalid.
The contract labours are entitled to their wages which are inclusive of overtime wages
and allowances as is stipulated for their work at the establishment. It should be paid
without delay whenever the wage period is over. It also should be in accordance with the
Minimum Wages Act.
The contract labours also have the right to be provided the safety measures at the
establishment and immediate health service in case of any injury to the labour.
They are entitled for facilities like rest rooms, canteens, washing facility, first aid facilities
and many more. The women labours are entitled for the separate washrooms, restrooms.
They are entitled not to be employed in any work which is prohibited under any law.
Facilities to contract labours:
Rest-rooms
1. Every establishment is also required to provide restrooms or other suitable

accommodation for the workmen to which the act would directly be applicable in which
hiring of contract labour will continue for a period of 3 months or more within 15 days of
the coming of force of the rules in case of existing companies and 15 days of the
commencement of contact labour in new companies.
1. If the amenity referred to in sub-rule (1) has not been provided by the contractor within
the period prescribed, the principal employer shall be providing the same within a period
of fifteen days of the expiry of the period laid down in the said sub-rule.
1. Separate rooms shall be also provided for women employees on contract.
1. Effective and suitable provisions shall also be made in every room for securing and
maintaining adequate ventilation by the circulation of fresh air and there shall also be
provided and maintained sufficient and suitable natural or artificial lighting.
1. The rest-room or rooms or other suitable alternative accommodation shall be of such

dimensions to provide at least a floor area of 1.1 sq. meter for each person making use
of the rest-room.
Canteens
(1) In every establishment to which the Act applies and wherein work regarding the
employment of contract labour is likely to be in existence for six months and more wherein
contract labour in number of 100 or more are ordinarily employed in the due course, an
adequate canteen shall also be provided by the contractor for the use of such contract
labour within 60 days of the date of coming into force of the rules in the case of the existing
establishments and within 60 days of the commencement of the employment of contract
labour in the case of new establishments.
(2) If the contractor also fails to provide canteen within the time that has been laid down
the same shall also be provided by the principal employer within sixty days of the expiry of
the time allowed to the contractor.
(3) The canteen shall be maintained by the contractor or principal employer, in an efficient
manner.
Dining-hall
(1) The dining-hall shall at a time accommodate at least 30 percent of the contract labour
working at a time.
(2) The floor area of the dining-hall, excludes the area occupied by the service counter and
any furniture except for tables and chairs shall be not less than one square meter per diner
to be accommodated as has been prescribed in sub-rule (1).
(3)
(I) A portion of the dining-hall and service counter shall be partitioned off and reserved for
women workers, in proportion to their number.
(ii) Washing places for women shall be separate and screened to secure privacy.
(4) Sufficient tables, stools, chairs or benches shall be available for the number of diners to
be accommodated as prescribed in sub-rule (1).
Furniture and utensils

(I) There shall be provided and maintained sufficient utensils, crockery, cutlery, furniture
and any other equipment necessary for the efficient running of the canteen.
(ii) The furniture, utensils and other equipment shall be maintained in a clean and hygienic
condition.
(iii) Suitable clean clothes for the employees serving in the canteen shall also be provided
and maintained.
(iv) A service counter, if provided, shall have top of smooth and impervious material.
(vi) Suitable facilities, including an adequate supply of hot water shall be provided for the
cleaning of utensils and equipment.
Books of Accounts
The books of accounts and registers and other documents used in reference with the
running of the canteen shall be produced on demand to an Inspector.
Audit
The accounts pertaining to the canteen shall be audited once every 12 months by registered
accountant and auditors:
PROVIDED that the Chief Labour Commissioner (Central) may approve of any other person
to audit the accounts, if he is satisfied that it is not feasible to appoint a registered
accountant and auditor in view of the site or the location of the canteen.
Latrines and urinals
Latrines shall be provided in every establishment coming within the scope of the Act on the
following scale, namely:
(a) where females are employed, there shall be at least one latrine for every 25 females;
(b) where males are employed, there shall be at least one latrine for every 25 males;
Washing facilities
(1) In every establishment coming within the scope of the Act adequate and suitable
facilities for washing shall be provided and maintained for the use of contract labour
employed therein.
(2) Separate and adequate screening facilities shall be provided for the use of male and
female workers.
(3) Such facilities shall be conveniently accessible and shall be kept in clean and hygienic
condition.
First-aid facilities
In every establishment coming within the scope of the Act there shall be provided and
maintained to be readily accessible during all working hours first-aid boxes at the rate of
not less than one box for 150 contract labour or part thereof ordinarily employed
Regulation of Contract Labour: –

For regulation of contract labour an appropriate government by an order notified in the
Official Gazette may appoint persons being Gazetted officers of Government, as it thinks fit
to be licensing officers for the purposes of this Act that is for the regulation of contract
labour. The appropriate government also defines limit, within which a licensing officer shall
exercise the powers conferred on licensing officers by or under the Act. Further with effect
from such date as the appropriate Government may, by notification in the Official Gazette,
appoint, no contractor to whom this Act applies, shall undertake or execute any work
though contract labour except under and in accordance with a license issued in that behalf
by the licensing officer. The license given to the contractors includes, conditions as to hours
of work, fixation of wages and other essential amenities in respect of contract labour as the
appropriate Government may deem fit to impose in accordance with the rules, if any, made
under Section 35 and shall be issued on payment of such fees and on deposit of such sum,
if any, as security for the due performance of the conditions as may be prescribed.
Judicial interpretation on abolition and absorption

There are number of judgments in which the court delivered its opinion in relation to the
status of contract labour being abolished under the notification as it is one of the disputed
social issues in relation to government reforms. Therefore, every time the judiciary is more
conscious to determine the status and security to be provided for such type of labour and to
ensure that they won’t be exploited by the industrial class of the society.
In Gammon India Ltd. vs. Union of Indianumerous provisions and rules under the
contract labour act, 1970 were interpreted by the judiciary broadly. Various facilities,
wage payment manner, duty of contractor and principal employer were broadly
interpreted. Also, this case defined the constitutional validity of the contract labour
statute as constitutionally valid.
In Deena Nath caseSupreme Court held that the principal employer cannot be required
to absorb the contract labour which is abolished.
But after that there were constant complaints that the contract labours are being thrown
out from the employment. So, the questions arose as to the status of abolished labour
under the act. On this crucial question of the after effect of the abolition of contract
labour, the Supreme Court in Air India Statutory Corporation vs. United Labour
union, overruled the two-member bench decision in Deena Nath Case holding that the
high court may direct the principal employer to absorb the contract labour who have
been abolished under the government notification. The court also ruled that the linkage
between the contractor and the labour stood snapped and the direct relationship stood
restored between the principal employer and contract labour as its employees.
Later in the landmark case namely Steel Authority of India vs. National union of
Water Front workers and others, the Supreme Court overruled the decision delivered
in the Air India Statutory Corporation Case holding hat neither section 10 of the act
nor any other provision of the act whether expressly or by necessary implications
provides for the automatic absorption of the contract labour. Consequently, the principal
employer cannot be required to absorb the contract labour working in the establishment.
RECENT DEVELOPMENTS IN THE REGULATION OF

CONTRACT LABOUR
Inspire of the numerous enactments enforceability has always been a hurdle in India, thus
preventing the main aim or the objective. Labour flexibility is a very important tool for the
inflow of FDI in India. Hence a need was there for having laws for having better output,
improved performance and greater efficiency. All this has helped India to become one of the
easiest nations of doing business which in turn has also helped in the “Make in India”
campaign of the prime minister Mr Narendra Modi. Since 2014 many initiatives have been
undertaken by the government in relation to the various labour laws in the country that
deal with the safety of the workers, their wages, benefits, working hours, there relations
with the companies etc. All this is done to make India an easy and business friendly nation
which would also lead to an increase in employment of the people including the youth of the
country.
The Maternity Bene t (Amendment) Act, 2017-
Many reforms have brought about in the maternity benefit bill that came into force on 28
March 2017 which received assent from the president on 27 March 201.Some of the
changes brought about under this act are as follows
Establishments with 50 or more workers have now provided with creche facilities in which
4 visits in a day are allowed.
The act has now allowed the woman to work from home after the maternal leave for time
which is mutually decided.
The established should from now onwards should inform the woman of the maternity
benefits that will be available at the time of the appointment itself.
The establishment would from now on would also provide maternity leave for the
adoptive mothers and Commissioning mother as well.
Establishment would now have to pay full wages for 26 weeks
The Child Labour (Prohibition and Regulation) Amendment Act, 2016-
The changes brought about are as follows
A person between 14 to 18 years called as adolescent would not be allowed to work in

any hazardous area.
A child means a person who is below 14 years of age or of age given under the Right of
Children to Free and Compulsory Education Act, 2009, whichever is more.
Employment of a child is not allowed except in cases where the child helps his or her
family after school.
Prohibition is only on occupations related to mining and explosives/inflammable
substances
The Payment of Wages (Amendment) Act, 2017
This act has now changed the mode of payment of wages to the employees of the company.
Now the company can pay to the employees without obtaining authorisation by the
following methods
By cheque
By currency notes or coin

By transferring to their bank account
Compilation rules-
Earlier separate registers had to be maintained but after the amendment of 2017
maintained of combined registers was introduced to save time and effort and to avoid
overlapping. This resulted in better efficiency and this done to make India one of the
friendly nations of doing businesses of the acts to which it applies are as follows
Payment of wages act ,1936

Equal remuneration act 1946
Contract labour (regulation and abolition)1970
It was recommended by the second national commission that the contract labour should not
be hired for core production/services activities. However, they should be paid as much a
regular employee of the entity who’s doing a work of a similar nature. It would be the duty
of the employer to ensure that there is not any shortcomings and no misuse of any of the
suggestions and to ensure that the work is being done effectively and the contract labourers
are paid accordingly or not. It was also suggested that a worker should not be hired as a
temporary worker or a casual worker in a company.
The commission also recommended for the creation of centre and state labour boards to
control and manage the contract labourers and to supervise them and for their registration
and supervision.
Biometric smart card have also been provided to the contract labourers which indicate their
name, address, skills, nature of work, photograph etc. This smart card helps the contract
labourers to avail the various perks and benefits like cash allowances, pay benefits and
other social security benefits.
It is expected that the central government will continue to bring about changes or reforms
in labour laws in 2018 and in the run up to the 2019 elections as well.
Also, it is the organisations duty to inform the worker or the labourer about the right of
compensation available to him/her under the act. Which should be informed at the time of
the employment. The information provided should be in an electronic form and in writing in
any language which could be English, Hindi or in any other language which the workers
understand.
Conclusion
Essentially, the company hiring the labourers needs to be smart and exercise precautions
while it planning to hire contract labours. In case the compliances specifically in relation to
the mandatorily perks and payments haven’t been done by the contractors, the onus of
making payments falls on principal employer. Contract labours are also employed to make
the process easier with the intention of managing the workforce in an easier way. However,
lack of due diligence creates a lot of problems for the companies. Though engaging contract
labours should always be done by way of executing a contract with the contractor,
exercising due diligence is of great importance as contractual safeguards may not offer
sufficient protection to principal employers. Although employment of contract labour in
India has led to many wide-ranging discussions and raised conflict of interest among the
social partners, it has become as one of the most popular and growing form of employment
wherein engaged in different occupations including skilled, semiskilled and unskilled jobs.
The system of employing contract labour is prevalent almost in all sectors, in agriculture,
manufacturing, and high GDP yielding service sector.
The contract labour (regulation and abolition) act 1970 provides protection and security to
the workers employed on contract. On the one hand, it seeks to provide contract workers
minimum wages through licensing of contractors and by holding principal employers
answerable for enforcement of the law. On the other hand, it empowers state and central
governments to prohibit the conduct of certain kinds of work through contract labour. The
appropriate government can issue a notification in the official gazette to prohibit
employment of contract labour in any process, operation or other work. The central
government has taken various steps and abolished contract labour practices in a number of
jobs in different industries and has issued notifications for this. But in the absence of any
labour law reforms over the past so many years, even the courts have taken contradictory
positions in the recent past. Many changes have been bought up in the labour laws like
maternal leave till 26 weeks, full payment of wages till the completion of the maternity
leave, prohibition of the children in hazardous occupation and areas except in cases where
the child helps his or her family after school. The mode of payment has also been changed.
Now the workers can be paid either by currency, coins, by cheque or by crediting or
transferring the amount in the workers bank account. It is expected that the central
government will continue to bring about changes or reforms in labour laws in 2018 and in
the run up to the 2019 elections as well.
1
Received assent of the President on 5.9.1970; Published in Gazette of India on 7.9.1970
2
. (Report of the National Commission on Labour, 1969)
3
Section 3 and section 4
4
Section 7 and section 12
5
Section 10
6
Regulatory Overview of Contract Labour In India
7
1974 SCC (L&S) 252
8
AIR 1991 SC 3026,
9
AIR 1997 SC 645
1
0AIR 1991 SC 3026
1
1AIR 2001 SC 3527
1
2 Section 11A
1
3 Biological mother who uses her egg to have a surrogate child
1
4 Section 2 (IA)
1
5Section 3
1
6 Section 6
1
7Industrial Relations and Contract Labour in India, All India Organisation of Employees)
Author: Shreya Wadhwa
Law Graduate (Amity Law School, Noida)
Shreya
Disclaimer: These guides/articles are not legal advice, nor a

substitute for a lawyer. These articles are provided freely as general guides. While we do
our best to make sure these guides are helpful, we do not give any guarantee that they are
accurate or appropriate to your situation, or take any responsibility for any loss their use
might cause you. Do not rely on information provided here without seeking experienced
legal advice first. If in doubt, please always consult a lawyer.
admin

Regulation of Contract Labour - LawOrdo

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Regulation of Contract Labour - LawOrdo

Uploaded by

Copyright:

Available Formats

12/4/2020 Regulation of Contract Labour - LawOrdo

Author: Shreya Wadhwa

Law Graduate (Amity Law School, Noida)

Business change environment is caused due to many factors. These are

Click me to submit an article

a) The work is perennial and must go on from day to day

c) The work is sufficient to employ considerable number of whole time workman

d) The work is being done in most concerns through regular workmen

Overview of Contract Labour Regulation & Abolition Act:

(a) To every establishment wherein20 or more workmen are in employment or were in

Explanation. — For this sub-section, the quantum of work performed in an establishment

MEANING OF CONTRACT LABOUR

“Contractor”, in relation to an establishment, means a person who undertakes work to

(I) The work is everlasting and must go on from day to day;

(iv)The work is being done in most concerns through regular workmen.

KINDS OF CONTRACT LABOURERS-

2. SERVICE CONTRACTS OR JOB CONTRACTING-

REASONS FOR HIRING OF CONTRACT LABOURERS-

Registration & licenses:

Prohibition of employment of contract labour.

Conditions of work and benefits provided to the contract labour

(I) Whether the work is of a perennial nature;

Compliances under the Act

Click me to submit an article

Precautions while engaging contract labour

Rights of Contract labour

Facilities to contract labours:

1. Every establishment is also required to provide restrooms or other suitable

1. Separate rooms shall be also provided for women employees on contract.

1. The rest-room or rooms or other suitable alternative accommodation shall be of such

Furniture and utensils

Latrines and urinals

Regulation of Contract Labour: –

Judicial interpretation on abolition and absorption

RECENT DEVELOPMENTS IN THE REGULATION OF

The Maternity Bene t (Amendment) Act, 2017-

The Child Labour (Prohibition and Regulation) Amendment Act, 2016-

The changes brought about are as follows

A person between 14 to 18 years called as adolescent would not be allowed to work in

The Payment of Wages (Amendment) Act, 2017

By currency notes or coin

Payment of wages act ,1936

Author: Shreya Wadhwa

Law Graduate (Amity Law School, Noida)

Disclaimer: These guides/articles are not legal advice, nor a

You might also like