Contract Labour Regulation and Abolition Act 1970 |
Introduction of the Act |
The Contract Labour (Regulation and Abolition) Act, 1970 is an Indian legislation that regulates the employment of contract labourers in establishments where 20 or more workmen are employed or were employed on any day of the preceding 12 months as contract labourers. The Act was enacted to provide better working conditions and welfare measures for contract labourers. This Act came into force on 7th September, 1970. It extends to the whole of India. There are a total 35 Sections in this Act. Under this Act, a "principal employer" is defined as an employer who engages or employs contract labourers in his establishment. A "contractor" is defined as any person who undertakes to produce a given result for the principal employer and who supplies contract labour for the same. |
Objective and applicability of the Act |
The main objective of the Act is to regulate the employment of contract labourers and ensure that they receive basic amenities and working conditions. The Act requires the contractor to obtain a licence from the appropriate government authority before employing contract labourers in any establishment. The principal employer is also required to register with the government and provide information about the contractor who has been engaged in providing contract labour. The Act also provides for the abolition of contract labour in certain circumstances. For instance, if the work performed by the contract labourers is of a perennial nature, the principal employer is required to absorb them as regular employees after a certain period of time. The Act also prohibits the employment of contract labour in certain hazardous occupations. The Act provides for various welfare measures for contract labourers, such as providing suitable working conditions, welfare facilities, and other benefits as may be prescribed. It also requires the principal employer to ensure that the contractor complies with all the provisions of the Act, failing which the principal employer can be held responsible for any violations. Applicability: a) To every establishment, in which 20 or more workmen are employed or were employed on any day of the preceding 12 months as contract labour. b) To every contractor, who employs or who employed on any day of the preceding 12 months, 20 or more workmen. Provided that the appropriate government may, after giving not less than 2 months’ notice of its intention to do so, by notification in official gazette, apply the provisions of this Act to any establishment or contractor employing such members or workmen less than 20 as may be specified in the notification. Not applicable to : a) Not applicable to establishments in which work only of an intermittent or casual nature is performed. b) If a question arises whether work performed in an establishment is of an intermittent or casual nature, the appropriate government shall decide that question after consultation with the Central Board or, as the case may be, a state board and its decision shall be final. Explanation: For the purpose of this subsection, work performed in an establishment shall not be deemed to be of an intermittent nature. i) If it was performed for more than 120 days in the preceding 12 months, or ii) If it is of a seasonal character and is performed for more than 60 days in a year. |
Definitions | |
Section | Description |
Section 2(1)(a) | Appropriate Government |
Section 2(1)(b) | Contract Labour |
Section 2(1)(c) | Contractor: Contractor in relation to an establishment, means 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. The contractor covered under this Act is required to: (i) Obtain a licence under this Act. (ii) Maintain Muster Rolls and Register of Wages. (iii) Provide facilities like canteen facilities, rest rooms, first aid, drinking water, toilers, etc. (iv) Pay wages to workmen in time and in presence of an authorised representative of the principal employer. |
Section 2 (1)(e) | Establishment: Establishment means any office or department of the Government or local authority or any place where any industry, trade, business, manufacture or occupation is going on. |
Section 2(1)(g) | Principal Employer |
Section 2(1)(e) | Workman: 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. |
The Advisory Boards | |
Central Advisory Board [Section 3] | Chairman to be appointed by the Central Government, Chief Labour Commissioner (Central) shall be the ex-officio. Note: Total Number of members of the Central Advisory Board other than the Chairman and the Chief labour commissioner: Maximum member :17 Minimum members:11 |
State Advisory Board [Section 4] | Chairman of the State Advisory contract labour board is appointed by the State Government and The labour commissioner shall be the ex-officio. Max members: 11 Min members : 9 |
Registration of Establishment | |
Every principal employer of an establishment to which this act applies, shall make an application to the registering officer. | |
Appointment of registering Officer [Section 6] | The Appropriate Government may appoint persons being Gazetted Officers to be Registering Officers by notification is the Official Gazette. |
Registration of certain establishment [ Section 7] | Every principal employer of an establishment to which the Act applied shall make an application to the Registering Officer in form 1 for registration. |
Prohibition on Employment of Contract Labour [Section 10] |
Appropriate Government may, after consultation with the Central or State Board, prohibit by notification in the Official Gazette, employment of contract labour in any process, operation or other work in any establishment. Government will consider following factors before issuing such order: a) Conditions of work and benefits provided to contract labour; b) Whether process, operation or work is incidental or necessary for the industry, trade or business; c) Whether such process, operation, or work is done ordinarily through regular workmen or contract labour in other similar establishments. Note: There is no provision in the Act, which requires the employer to absorb the contract labour as a regular employee. (SAIL vs. National Union of Water Front Workers) |
Miscellaneous Sections |
Appointment of licencing Officer [ Section 11]: The AG appoints Gazetted Officers to be licensing officers. Appeals [Section 15]: The aggrieved person may within 30 days from the date on which the order is communicated to him prefer an appeal to an Appellate Officer who shall be a person nominated in this behalf by the AG. The Appellate Officer may entertain an appeal even after the expiry of 30 days, if he is satisfied that there was sufficient cause for the delay. |
Welfare, Health & Payment of Wages | |
Canteens [ Section 16 ] | Applies where 100 or more contract labour are employed. |
Rest-rooms [Section 17] | Shall be sufficiently lighted and ventilated, shall be maintained in a clean and comfortable condition. |
Other facilities [ Section 18] | Supply of wholesome drinking water, sufficient number of latrines & urinals, washing facilities. |
First-Aid Facilities [ Section 19] | First aid boxes should be maintained and be readily accessible during working hours. |
Liability of principal employer in certain cases [ Section 20] | If the prescribed amenities are not provided by the contractor then such amenities shall be provided by the principal employer. |
Responsibility of payment of wages [ Section 21] | A contractor shall be responsible for payment of wages to each contract labour, every Principal Employer shall nominate a representative who shall be present at the time of payment of wages by the contractor. Note: If the contractor fails to make payment of wages 21(4) within the prescribed period or makes short payment, then the principal employer shall be liable to make payment of wages and recover the amount so paid from the contractor. |
Applicability of Other Laws to Contract Labour |
1. Factories Act 2. Industrial Dispute Act 3. Workmen’s compensation Act 4. Employees State Insurance Act 5. Payment of Wages Act 6. Employees Provident Fund Act |
Some important points to remember with examination point of view |
1. Minimum contract labourers to provide a canteen: 100 2. The Act excludes from the definition of Contractor one who: Supplies goods and articles of manufacture to an establishment. 3. No court shall take cognizance of an offence under the Contract Labour (Regulation and Abolition) Act, 1970, except on a complaint by or with the previous sanction in writing of :The Inspector 4. Under the provisions of the Contract Labour (Regulation and Abolition) Act 1970, statement is true relating to the appointment of the Chairman of the State Advisory Board: a) The chairman is to be appointed by the State Government b) The labour Commissioner of the State shall be the ex-officio chairman 5. “Controller Industry” means any Industry the control of which by the union has been declared by any Central Act to be expedient in the public interest. 6. Principal Employer in relation to a factory is – Owner, Occupier or the manager of such a factory. 7. Who registers the establishment under the Contract Labour (Regulation and Abolition) Act, 1970 and provides the Certificate of Registration? : Registering Officer 8. Section 8 of the Contract Labour (Regulation and Abolition) Act, 1970 deals with Revocation of Registration 9. Section 11 Contract Labour (Regulation and Abolition) Act, 1970 empowers the appropriate Government to appoint Gazetted Officers to be “Licensing Officers” and define the limits of their jurisdiction. 10. The licence issued to the Contractor under the Contract Labour (Regulation and Abolition) Act, 1970 is:- Non transferable 11. The licence of contractors under the Contract Labour (Regulation and Abolition) Act, 1970 is valid for “12 Months” after which it needs the renewal from time to time. 12. Who is required to provide the facilities of canteen or rest rooms etc. under the Contract Labour (Regulation and Abolition) Act, 1970? Ans: The Contractor 13. Which is not included as important provisions to be provided and maintained by the Contractor under the Contract Labour (Regulation and Abolition) Act, 1970? Ans: Maternity home and creche for the female employees. 14. The rules under the Contract Labour (Regulation and Abolition) Act, 1970 provides the no wage period shall exceed: One Month 15. 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. 16. As per the Contract Labour (Regulation and Abolition) Act, 1970, obstructing an inspector in discharge of his duties is punishable with – “Imprisonment extending to 3 months or fine extending to Rs. 500 or both”. 17. Who can take cognizance of offence under the Contract Labour (Regulation and Abolition) Act, 1970? Ans: A court of Presidency Magistrate or a Magistrate of the first class and above. 18. The Contract Labour (Regulation and Abolition) Act, 1970 provides that the provisions of the “Code of Criminal Procedures” small, so far as may be, apply to any search or seizure by the Inspectors. 19. Court can take cognizance of any offence committed under the Contract Labour Act, 1970 only if the complaint is made by an Inspector. 20. An out worker, General Manager, Administrative Manager cannot be treated as ‘Worker’ under Contract Labour Act, 1970. 21. Person employed in a supervisory capacity draws wages not exceeding Rs. 500 per mensem can be treated as ‘Worker’. (Skilled Worker, Semi-skilled worker, Technician, Unskilled Worker) 22. The sole jurisdiction for abolition of contract labour in any particular operation vested with the Appropriate Government and therefore tribunals have no jurisdiction to abolish contract labour. This was held in Vegolis (P) Ltd. Vs. The Workmen. 23. An application for the grant of licence has to be made by a contractor in Form IV. 24. The License is issued in Form VI after necessary investigation by the licensing officer. 25. The licence issued to contractors is valid for 12 Months under the Central Rules and may be renewed from time to time. 26. Chairman of the Central board constituted under the Contract Labour Act, 1970 is appointed by the Central Government. 27. The Registering Officer with the previous approval of Appropriate Government has power to revoke the registration under this act. |
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