Post Graduate Programme in Human

Resource Management (PGPHRM)

1

EMPLOYMENT LAW – I
(EL – I)

Prof. Parul Gupta

PhD (Faculty of Law-JMI, New Delhi), LL.M., PGDBM

Dr. Parul Gupta

 SESSION 9
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Contract Labour
(Regulation and
Abolition) Act, 1970
REMINDER
QUIZ TEST THREE–SESSION 6 t0 8
Due in the next session
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 BACKGROUND OF ENACTMENT
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Contract Labour - Workers engaged by

a contractor for user enterprise
 a significant and growing form of employment.
 exploitation of workers under the contract labour
system
 very little bargaining power,
 have little or no social security and
 are often engaged in hazardous occupations
endangering their health and safety
the Contract Labour (Regulation and Abolition) Act, 1970 was
enacted to regulate the employment of Contract Labour
in certain establishments and to provide for its abolition
in certain circumstances
Dr. Parul Gupta
 The Contract Labour (Regulation and
Abolition) Act, 1970
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SCOPE AND APPLICATION (Section 1(4))

a) to every establishment
a) twenty or more workmen are employed or were
employed on any day of the preceding twelve
months as contract labour;
b) to every contractor
a) who employs or who employed on any day of the
preceding twelve months twenty or more workmen.

Power of The appropriate Government

 Notice of not less than two months
 Notification in the Official Gazette,
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 EXEMPTED ESTABLISHMENTS
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Section 1(5) – Non Core Activites

 Establishments in which work only of an intermittent
(without a regularly scheduled tour of duty) or casual
nature is performed.
 Work performed for not more than 120 days in a
year
 Seasonal work performed for not more than 60 days
in a year
 Question of qualification for the section
 the appropriate Government shall decide that
question after consultation with the Central Board or,
as State Board, as the case may be,
 its decision shall be final.

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 IMPORTANT DEFINITIONS
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(b) Contract Labour [Section 2(1)(b)]

 A workmen when is hired in or in connection with
such work by or through a contractor, with or
without the knowledge of the principal employer.

© Contractor [Section 2(1)(c)]

 a person who undertakes to produce a given result
for the establishment, other than a mere supply of
goods or articles of manufacture to such
establishment, through contract labour or
 who supplies contract labour for any work of the
establishment and includes a sub-contractor.

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 IMPORTANT DEFINITIONS
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Principal Employer [Section 2(1)(g)]

i. In relation to any office or department of the
Government or a local authority, the head of that
office or department or such other officer,
ii. In a factory, the owner or occupier of the factory
and where a person has been named as the manager
of the factory under the Factories Act, 1948,
iii. In a mine, the owner or agent of the mine and where
a person has been named as the manager of the
mine,
iv. in any other establishment, any person responsible
for the supervision and control of the establishment.

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 IMPORTANT DEFINITIONS
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Workman [Section 2(1)(i)]

“Workman” means any person employed in

or in connection with the work of any
establishment to do any skilled, semi-
skilled or unskilled, manual, supervisory,
technical or clerical work for hire or
reward, whether the terms of employment
be expressed or implied.

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 IMPORTANT DEFINITIONS
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Workman [Section 2(1)(i)]

but does not include any such person
 Who is employed mainly in a managerial or
administrative capacity, or
 Who, being employed in a supervisory capacity
draws wages exceeding five hundred rupees per
mensem or exercises, or
 who is an out-worker and the process is to be
carried out either in the home of the out worker
or in some other premises not being premises
under the control and management of the
principal employer.
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 THE ADVISORY BOARDS
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Section 3 - a Central Advisory Contract

Labour Board

Section 4 - State Advisory Contract Labour

Board

Board to advise the Central Government/

State Government on such matters arising
out of the administration of the Act as may
be referred to it and to carry out other
functions assigned to it under the Act.
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 REGISTRATION OF ESTABLISHMENTS
EMPLOYING CONTRACT LABOUR
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Registration of certain establishments
(Section 7)
 twenty or more persons through a contractor
 an application to the registering officer
 A registration fee varying from Rs. 20 to Rs. 500
 a certificate of registration
Revocation of registration in certain cases
(Section 8) – Notice & approval of Govt.
i. Registration obtained by mis-representation or
suppression of any material fact, or
ii. Registration has become useless and become
ineffective for any other reason and, therefore,
requires to be revoked
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 EFFECT OF NON-REGISTRATION
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Section 9
No principal employer of an
establishment to which the Act applies
can employ contract labour, if
i. he has not obtained the
certification of registration; or
ii. a certificate has been revoked
after being issued.

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 Wage parity between regular and
contract workers
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Case 1 :Uttar Pradesh Rajya Vidyut Utpadan

Board versus Uttar Pradesh Vidyut Mazdoor
Sangh
While the CLA requires wage parity between
regular and contract workers for similar kind of
work, the principal employer can take various
factors in to consideration such as skill, reliability
and responsibility of workers in deciding whether
similar work done by the two categories of
workers can be considered to be at par or
otherwise for payment purposes

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 PROHIBITION OF EMPLOYMENT OF
CONTRACT LABOUR
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Section 10
 Consultation with central/state advisory board
 the conditions of work and benefits provided for
the contract labour in that establishment and other
relevant factors such as:
i. whether the process, operation or other work
incidental to, or necessary for the industry
ii. whether it is of perennial nature,
iii. whether it is done ordinarily through regular
workmen in that establishment similar thereto;
iv. whether it is sufficient to employ considerable
number of whole time workmen.
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 Automatic Absorption of Contract
15 Labour
Case 9.1: Vegoils Private Limited vs The
Workmen

Discussion Point
(i) Whether the contract system of employing the
labour under the circumstances mentioned in the
case, should be abolished?
(ii) Whether the workmen employed by the
contractor should be treated as the appellant's
regular employees with all the benefits of service
conditions that are available to the regular
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employees of the Company?
 Automatic Absorption of Contract
Labour
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Judgment
The feeding of hoppers in the solvent extraction
plant was an activity closely and intimately
connected with the main activity of the
appellant, namely, crushing oil cakes and oil
seeds for extraction of oil and other chemical
production. Excepting for a few days this work
should not have been done by employing contract
labor – Contract labor cannot be engaged.
Work of loading and unloading - can be done by
contract labor
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 Automatic Absorption of Contract
Labour
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Case 2: Steel Authority of India v. National Union

of Water Front Workers and others

Neither Section 10 of the Act nor any other

provision in the Act whether expressly or by
necessary implication provides for automatic
absorption of contract labour on issuing a
notification by the Appropriate Government
under Section 10(1) prohibiting employment of
contract labour in any process or operation or
other work in any establishment.

Dr. Parul Gupta

 APPOINTMENT OF LICENSING OFFICER
AND LICENSING OF CONTRACTORS
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 Section 11 - Gazetted Officers to be licensing

officers
 Section 12- the license issued in that behalf by the
licensing officer
 Grant of license (section 13)
 An application
 after necessary investigation by the licensing officer.
 Fee and security deposit.
 Validity (12 months under the Central Rules)

 Renewal & transferability

 Revocation, suspension, forfeiture of security deposit,
of license (Section 14)
 Appeals (Section 15) - within 30 days
 WELFARE AND HEALTH OF
CONTACT LABOUR
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(i) Canteens (section 16) - contract labour numbering 100
or more is ordinarily employed by a contractor
(ii)Rest rooms (Section 17)- halt at night in connection
with the work of an establishment sufficiently lighted
and ventilated and shall be maintained in a clean and
comfortable condition
(iii) Other facilities (Section 18) -to provide and maintain:
(a) a sufficient supply of wholesome drinking water for the
contract labour at convenient places;
(b) a sufficient number of latrines and urinals of the
prescribed types conveniently situated and accessible to the
contract labour; and
(c) washing facilities.
(iv)Dr.First Aid facilities (Section 19)
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 20

Liability of the principal

employer in certain cases (Section
20)

Responsibility for payment of

wages (Section 21)

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 Payment of Wages to contract Labour
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Rule 63- 73 of Contract Labour (Abolition &

Regulation) Central Rules, 1971

 63. The contractor shall fix wage periods in respect of

which wages shall be payable.
 64. No wage period shall exceed one month.
 65. The wages of every person employed as contract
labour in an establishment or by a contractor where less
than one thousand svich persons are employed shall be
paid before the expiry of the seventh day and in other
cases before the expiry of tenth day after the last day of
the wage period in respect of which the wages are
payable.
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 Payment of Wages to contract Labour
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 66. Where the employment of any worker is

terminated by or on behalf of the contractor the
wages earned by him shall be paid before the
expiry of the second working day from the day on
which his employment is terminated.

 67. All payments of wages shall be made on a

working day at the work premises and during the
working time and on a date notified in advance and
in case the work is completed before the expiry of
the wage period, final payment shall be made
within 48 hours of the last working day.
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 Payment of Wages to contract Labour
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 68. Wages due to every worker shall be paid to him or to

other person authorised by him in this behalf.

 69. All wages shall be paid in current coin or currency

or in both.

 70. Wages shall be paid without any deductions of any

kind except those specified by the Central Government
by general or special order in this behalf or permissible
under the Payment of Wages Act, 1936 (4 of 1936).
 71. A notice showing the wage period and the place and
time of disbursement of wages shall be displayed at the
place of work and a copy sent by the contractor to the
principal employer under acknowledgement.
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 Payment of Wages to contract Labour
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 72. The principal employer shall ensure the
presence of his authorised representative at the
place and time of disbursement of wages by the
contractor to workmen and it shall be the duty of
the contractor to ensure the disbursement of wages
in the presence of such authorised representative.
 73. The authorised representative of the principal
employer shall record under his signature a
certificate at the end of the entries in the Register
of Wages or the 1Register of Wages-cum-Muster
Roll] as the case may be, in the following form:
 “Certified that the amount shown in column No. ...
has been paid to the workman concerned in my
Dr. Parul Gupta
presence on ..... at .....”
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NEXT SESSION - 10

GROUP FIVE
Case10.3: MOS v K Singh

CASE ANALYSIS REPORT

SUBMISSION DUE IN SESSION 11
Dr. Parul Gupta
 NEXT SESSION
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SESSION 10
The Industrial Disputes Act, 1947
(IDA)
Background of IDA,
Objectives & Scope of IDA
Important Definitions of the Act
Quiz Test Two- Session 6 to 9

Dr. Parul Gupta

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Dr. Parul Gupta