ContractAct labour & abolition

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THE CONTRACT LABOUR (REGULATION AND ABOLITION)

ACT, 1970Team Members: | 2 Devender Anand | 9 Prasad Dangle |10 Shrusti Desmukh | 

|11 Neetu Dhoot | |12 Gautam Ghosh | 14 Harish Nagarajan |

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About the Act

The contract Labour (Regulation & Abolition) Bill was passed on 5th September 1970 (37 of 

1970) The contract Labour (Regulation and Abolition) (A Amendment) Act, 1986 (14 of 1986)

The delegated Legislation Provisions (Amendment) act, 2004 (4 of 2005)

Objective:

To regulate the employment of contract labor in certain establishments and to provide for itsabolition in certain circumstances and for matters connected therewith.

Whom does it Apply to?

The Act applies to every establishment in which 20 or more workmen are employed or were

employed on any day on the preceding 12 months as contract labour To every contractor who employs or who employed on any day of the preceding 12 months

20 or more workmen. The Act also applies to establishments of the Government and local

authorities as well.

It does not apply to establishments where the work performed is of intermittent or casual

nature.

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Who is a Work a (contract 

laou

r)?A work an shall be dee ed to be e ployed 

as "contract labour" in or in connection with

the work of  an establishment when he is hired in or 

In connection with such work by or through a 

contractor, with or without the knowledge of  the 

principal employer;

A workman is Any person employed in or inconnection with the work of  any establishment 

to do any skilled or semi-skilled or unskilled, manual, supervisory, technical or clerical work 

f or hire or reward whether the terms of  the 

employment be expressed or implied but does 

not include:

a. Persons employed mainly in a managerial or 

administrative capacity

b. Persons being employed in a supervisory capacity 

draws wages exceeding Rs.500/ per month.

c. An out worker.[Section 2 (i)]

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Registration of Establishments, Licensing of 

Contractors & Revocation Establishment to be registered as principle employer with the appropriate authorities

Every contractor required to obtain a license and not to execute or undertake any work through contract

labour except under and in accordance with the license issued by the licensing officer

License issued is subject to conditions as to hours of work, fixation of wages and other essential amenities

as laid in the rules

Revocation, suspension and amendment of licences.-

(1) If  the licensing officer is satisfied, either on a reference made to him in this behalf  or otherwise, that--

(a) a licence granted under section 12 has been obtained by misrepresentation  or suppression of  any 

material fact, or

(b) the holder of  a licence has, without reasonable cause, failed to comply with the conditions subject to 

which the licence has been granted or has contravened any of  the provisions of  this Act or the rules made 

thereunder, then,without prejudice to any other penalty to which the holder of  the licence may be liable 

under this Act, the licensing officer may, after giving the holder of  the licence an opportunity of  showing 

cause, revoke

 or

 suspend

 the

 licence

 or

 forfeit

 the

 sum,

 if 

 any,

 or

 any

 portion

 thereof 

 deposited

 as

 security

for the due performance of  the conditions subject to which the licence has been granted.

(2) Subject to any rules that may be made in this behalf, the licensing officer may vary or amend a licence granted 

under section 12.

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Payment of   ages,  elfare and Health of Contract 

Labour- To be provided by Contractor

Canteens: Shall be provided by contractor if  100 or 

more contract labour provided.

Rest Rooms:  herein contract labour is require to

halt at night in connection with the work of  an 

establishment

Other Facilities: Supply of  drinking water, latrines, 

urinals & washing facilities

First aid Facilities: Readily accessible equipped with 

prescribed contents

Responsibility for payment of  wages: The contractor 

is required to pay wages and a duty  is cast on him to 

ensure disbursement of  wages in the presence of  theauthorised representative of  the Principal Employer.

I n cases of failure on the part of the contractor to

 provide the above mentioned facilities, the

Principal Employer is liable to provide the same.

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Registers

Principal Employer: To maintain a register of  contractor in respect of  every establishment in Form XII

Contractor

1. To maintain register of  workers for each registered establishment in Form XIII

2. To issue an employment card to each worker in Form XIV

3. To issue service certificate to every workman on his termination in Form XV

4. Maintain Muster Roll  and a register of  wages in Form XVI  & XVII resp and combined in Form 

XVIII

5. Maintain a Register of Deductions for damage or loss, Register of Fines and Register of  

Advances in Form XX, Form XXI & Form XXII respectively

6. Maintain a Register of  Overtime in Form XXIII

7. To issue wage slips in Form XIX, to the workmen at least a day prior to the disbursement of  wages.

8. Obtain the signature or thumb impression of  the worker concerned against the entries relating 

to him on the Register of  wages or Muster Roll-Cum-Wages Register

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Penalties and Procedure Obstructions: In the work of inspector result in imprisonment of 3 months or fine of Rs. 500/-

or both

Contravention of provision: Punishable with imprisonment of 3 months or fine of Rs. 1000/- or

both. Additional Rs. 100/- every day in case of continuation

Offences by companies

Laws, Agreement or standing orders inconsistent with the Act-Not Permissible

Unless the privileges in the contract between the parties or more favorable than the prescribed

in the Act, such contract will be invalid and the workers will continue to get more favorable

benefits

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Some Important Cases:

Effect of  absence of  registration or licence:

Dena Nath v. National Fertilizers Ltd. 1992 IC.L.R. 1 (S.C.)

Held: The contract labour do not become 

direct employees of  the principal employer. The only consequences provided in the Act in 

such circumstances is the penal provision as envisaged under the Act for which reference 

may be made to Ss.23 and 25 of  the Act.

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Some Important Cases:

Bonus, Gratuity and Wages:

Cominco Binani Zinc Ltd. v. Pappachan 1989 I

CLR 151 (Ker. H.C).Held: The wages due to the workmen does 

not include Bonus or Gratuity. While defining 

the term wages, the Industrial Disputes Act 

and Payment of  Wages Act specifically 

excludes bonus and gratuity from its purview. 

The petitioner is therefore liable to pay arrears 

of  wages and nothing more. 

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Other Important Cases:

Equal Wages to Contract Labour:

Investigating and Security Services (India) (P)Ltd. v. Commissioner of Labour 1996 I LLJ 1049(A.P. D.B.).

Liability of  new contractor:

Bijli Mazdoor Panchayat v. State of Gujarat 

1996 II CLR 721 (Guj. H.C.) Direct employees if  canteen is statutory

Hari Shankar Sharma v. M/s. Artificial Limbs

Manufacturing Corporation of India 1997 IIC.L.R. 631 All. H.C. .