Documente Academic
Documente Profesional
Documente Cultură
SUBJECT-Labour Law ii
NAME- SONAM
ROLLNO:-2013114
SEMESTER-V
Acknowledgement
I am greatly thankful to Ms Madhu Rana, Faculties labour law), DSNLU for her guidance
and constant supervision as well as for providing necessary information regarding the project.
I would like to express my gratitude towards my friends & member DSNLU for their kind cooperation and encouragement which helped me in completion of this project.
Table of Cases
Ors
Gujarat State Electricity Board Vs Union of India
Sports Authority of India vs. Labour Commissioner, Delhi Admn. & Ors
Steel Authority of India Ltd. (SAIL) & Others Vs National Union of Waterfront
Workers and Others
Abbreviations
Table of Contents
Contents
Page No.
Table of Cases
Abbreviations
Introduction
Research Methodology
Historical Background
10
11
12
12
14
Conclusion
15
Bibliography
16
Introduction
Research Methodology
Object
The main object of the project is to deal with The Contract Labour Act, 1970 and analysis of
the concept whether it is a boon or bane to the emerging Industries.
Sources
The following sources have been used in the project
Books
Articles
Journals
Websites
Method of Study
In this project both Doctrinal study and Empirical Study has been followed.
Historical Background
Before we move on, a quick look at the historical feature of the contract labours in India
would certainly give a picture of how the system of employing contract labour came into
being. Contract Labour has its root from time immemorial but the size of contract labour in
India has considerably extended in the post-independence period with the growth of
construction activities. During the early period of industrialization, the industrial
establishments were always faced with the glitches of labour employment. Poor status of
factory workers, lack of labour flexibility, caste and religious reasons, language, etc., were
some of the problems with which most of the employers in general and British Employers, in
particular were not aware. Therefore, they had to depend on middlemen who helped them in
recruitment and control of labour. These middlemen were known by different names in
various parts of the country.
Contract Labourers were considered as oppressed section of the working class mainly due to
lack of administration on their part. Due to this, the Whitley Commission (1860)
recommended the abolition of contract labour by implication. Before 1860, in addition to the
many drawbacks suffered by the contract labour, the Workman's Breach of Contract Act 1859
operated in holding them criminally responsible in the event of a breach of contract service.
Following this, the Government constituted various committees to study the socio-economic
conditions of contract labours.
The Bombay Textile Labour Enquiry Committee 2 (1938) stated that if the
management of the mills did not assume responsibility for such labour, there was
every likelihood of its being sweated and exploited by the contractor; it also
recommended the abolition of the contract system of engaging labour as soon as
possible and that workers for every department in a mill should be recruited and paid
in their charge.
The Rega Committee (1946) found that the system of contract labour are very much in
vogue.
Salient Features of the Contract Labour (Regulation & Abolition) Act, 1970
The Contract Labour (Regulation and Abolition) Act, 1970 provides regulation of
the employment of contract labour and its abolition under certain circumstances.
It covers every institution in which 20 or more workmen are employed on any day of
the preceding 12 months as contract labour and every contractor who employs or
who employed on any day of the preceding 12 months, 20 or more contract employee.
It does not apply to establishments where the work is of irregular and casual nature
unless work performed is more than 120 days and 60 days in a year respectively
(Section1).
The 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 the administration of the Act (Section 3 & 4).
The establishments covered under the Act are required to be registered as principal
employers with the appropriate authorities. Every contractor is required to obtain a
licence and not to undertake or execute any work through contract labour, except
2 Bombay (Presidency). Textile labour inquiry committee, Bombay (India : State), Report of the
Textile Labour
Inquiry Committee, Government Central Press, 1938.
3 Sinha, Industrial Relations, Trade Unions, and Labour Legislation, Pearson Education India.
under and in accordance with the licence issued in that behalf by the licensing officer.
The licence granted is subject to conditions relating to hours of work, fixation of
wages and other essential amenities in respect of contract as prescribed in the rules
1995
Gujarat State Electricity Board Vs Union of India4
Facts: The appellant board runs a Thermal power station at Ukai in Gujarat where it generates
and distributes electricity to the consumers. At these time board deployed through various
contractors 1500 skilled and unskilled labourers to work. It appeared that these workman
hailed from the Adivasi area and many of them had lost their land on account of their
41995 AIR 1893, 1995 SCC (5)27.
1996
Air India Statutory Corporation Vs United Labour Union & Others5
Facts: The appellants engaged, as contract labour the respondent unions members, for
sweeping, cleaning dusting and watching of the building owned and copied by the appellant.
The Contract Labour (Regulation & Abolition) Act, 1970 regulates registration of the
establishment of the principle employer. The contractor engaging and supplying labour to
every establishment in which 20 or more workmen are employed. The appellant had obtained
on September 20, 1971 a certificate of registration from regional labour commissioner under
act. (Under sec 10). The abolition of contact labour has been done in sweeping, cleaning and
dusting. The appellants did not enforced and abolished the contract labour. The respondents
filed a writ petition for relief.
Issues: The abolition of contract labour in the Industry and absorption of workers.
Reasoning: In Air India Statutory Corporation case, the Supreme Court held that though there
exists no express provision in the Act for absorption of employees in establishments where
contract labour system is abolished by publication of the notification under Section 10(1) of
the Contract Labour (Regulation & Abolition) Act, 1970, the principal Employer is under
statutory obligation to absorb the contract labour. The linkage between the contractor and
employee stood snapped and direct relationship stood restored between principal employer
and contract labour as its employees.
5(1992) 94 BOMLR 238
2001
Steel Authority of India Ltd. (SAIL) & Others Vs National Union of Waterfront Workers and
Others6
Facts: The appellants, a Central Government Company and its branch manager, are engaged
in the manufacture and sale of various types of iron and steel materials in its plants located in
various States of India.The business of the appellants includes import and export of several
products and bye-products through Central Marketing Organisation, a marketing unit of the
appellant, having network of branches in different parts of India. The work of handling the
goods in the stockyards of the appellants, was being entrusted to contractors after calling for
tenders in that behalf. The Government of West Bengal issued notification dated July 15,
1989 under Section 10(1) of the CLRA Act (referred to in this judgment as the prohibition
notification) prohibiting the employment of contract labour in four specified stockyards of the
appellants at Calcutta. On the representation of the appellants, the Government of West
Bengal kept in abeyance the said notification initially for a period of six months by
notification dated August 28, 1989 and thereafter extended that period from time to time. It
appears that the State Government did not, however, extend the period beyond August 31,
1994. The respondent-Union representing the cause of 353 contract labourers filed Writ
Petition.
Issues: (i) what is the true and correct import of the expression appropriate government as
defined in clause (a) of sub-section (1) of Section 2 of the CLRA Act;
(ii) Whether the notification dated December 9, 1976 issued by the Central Government
under Section 10(1) of the CLRA Act is valid and applies to all Central Government
companies
Reasoning: In the case of Steel Authority of India Ltd. (SAIL) the Supreme Court, over-ruled
the judgement on Air India Statutory Corporation and held that neither Section 10 of the Act
nor any other provision in the Act expressly or by necessary implication provides for
automatic absorption of contract labour on issuing a Notification by the appropriate
Government under sub-section (1) of Section 10 prohibiting employment of contract labour
in any process or operation or other work in any establishment. The Principal employer
10
cannot be required to order absorption of the contract labour working in the concerned
establishment.
2011
Bhilwara Dugdh Utpadak Sahakaris Ltd. Vs Vinod Kumar Sharma Dead by LRS & Ors7
Excerpt:
Labour statutes were meant to protect the employees/workmen because it was realised that
the employers and the employees are not on an equal bargaining position. The Labour Court
has held that the workmen were the employees of the appellant and not employees of the
contractor. Here the finding of fact of the Labour Court is that the respondents were not the
contractor's employees but were the employees of the appellant
Reasoning:
In a recent judgment on Bhilwara Dugdh Utpadak Sahakaris Ltd. the Supreme Court of India
dismissing the appeal of the appellate hold that, the workmen employed through a contractor
are the employees of the Principal Employer and not of the: Contractor and added that the
judgment on SAIL Vs. National Union Waterfront Workers (2001) has no application in the
present case.
2014
Sports Authority of India vs. Labour Commissioner, Delhi Admn. & Ors8
Facts: It is the case of the petitioner that it is a society registered under the Societies
Registration Act, 1860 and is under the administrative control of the Department of Sports,
Government of India. The main objective for the formation of the petitioner is as a Care
Taker/Manager of the various stadiums built for Asian Games in Delhi. For the purpose of
maintaining the day to day checking of these stadiums, the petitioner has on its rolls,
regularly employed watch and ward staff who had come on the strength of the petitioner as a
7 legalcrystal.com/920881
8 Judgement on 12th March, 2014. Supreme Court of India.
11
result of amalgamation of SNIPES Board with the erstwhile Sports Authority of India.
Central Government had issued a notification dated December 09, 1976 under Section 10 of
the Contract Labour (Regulation and Abolition) Act, 1970 whereby they had prohibited
employment of contract labour for sweeping, cleaning, dusting and watching the buildings
owned or occupied by the establishment in respect of which the appropriate Government
under the said Act, is the Central Government. On July 06, 1990, the Sports Authority of
India Kamgar Union, the respondent No. 3 herein sent a charter of 17 demands which
included the regularization of the services of the claimants. Aggrieved by this alleged
disengagement by the respondent No. 4, the Sports Authority of India Kamgar
Union/respondent No. 3 herein invoked the conciliation machinery as provided therefor under
the provisions of the Industrial Disputes Act, 1947.
Issues: Whether the Contract Labours will get the wages as per the work they engaged.
Reasoning: In this case harmonious interpretation of the law has been taken by the judges, the
benefit of the labour was taken to get his wages as per the work he engaged. The contract
worker was employed as ward who maintains the Stadium, later he was terminated from the
work without giving the wages. The worker moved to the court for relief. Though there is a
clause which says prohibition of contract labour in sweeping and cleaning according to
section 10 of the contract Labour (Regulation and Abolition) Act, 1970.
9Contract Labour: Govt Gains More; The Economic Times, August 10, 2015.
12
addition to it, firms would be expected to include this information in their annual financial
statements. With these provisions the proposed guideline has been made mandatory.10
The Ministry of Labour and Employment in 2011 had proposed to provide contract workers
same salary and other benefits as regular workers but the proposal was kept on hold by the
Cabinet Secretariat, looking at its implications. The proposed amendment would have entitled
contract labour to the same wage rate, holidays, hours of work and social security provisions
as that given to regular employees doing similar jobs. The only difference between contract
and regular workers would have been security of tenure.11
The issue of contract labour was widely discussed in the 42nd and 43rd session of the India
Labour Conference. In the 42nd Session of the Indian Labour Conference a Tripartite Task
Force was constituted to examine the provisions in the Contract Labour (Regulation and
Abolition Act, 1970 and to suggest amendment to the Act. But due to wide divergence of
views, the Task Force could not arrive to a consensus. 12 However, in the State Labour
Ministers Conference held on 22nd January, 2011, it was proposed to amend the Act and
introduce the follow in provisions as part of the Act.
Apart from the above, it also needs to be mandated that whenever a contract is given to a
contractor, the contract agreement between the principal employer and the contractor should
clearly indicate the wages contribution towards social security schemes and other benefits
that are to be paid by the contractor to the contracted workman. But until now, the
Government has not come to compromise.13
13
Maharashtra has taken a decision to order payments to all labourers, including contract
workers through cheque so that the full amount as stated on their pay record actually reaches
them and the government is able to monitor the same. Madhya Pradesh has proposed for a
bill to amend the Act to incorporate the Special Economic Zones (SEZs) under the purview of
the Contract Labour (Regulation and Abolition) Act, 1970.14
The Government of Andhra Pradesh has moved a step ahead by amending the Contract
Labour (Regulation and Abolition) Act, 1970 in 2003. The legislation provides for
employment of contract labour not only in the peripheral, but also in the Core areas under
certain circumstance. The legislation has defined 12 employments as non-core activities.
14
15
unrest is related to increased contractualisation, however, the violent stand-off at the Maruti
Suzuki ltd factory at Manesar was unprecedented, assault and brutality under any
circumstances cannot be condoned and the loss of life is inexcusable. It is important to
understand that contract workers; are protected under several provisions of, labour laws,
swhile there may be company and region specific variations in implementation across the
country, it will be presumptive to as contract labour is the cause of labour unrest. CII strongly
feels that a convergence needs to be built on the perception gaps that exist around contract
labour. It is necessary to revisit the labour laws in India. Currently we have over 50 central
laws and many more state laws.17
16
Conclusion
Even though, employment of contract labour in India has involved considerations and raised
conflict of interest among the social associates, it has become a important and growing form
of employment, engaged in different occupations including skilled, semi-skilled and unskilled
jobs.
17
The system of employing contract labour is widespread in almost all sectors; in agriculture,
manufacturing and high GDP yielding service sector. Liberalisation of market economy in
early nineties has demanded greater flexibility of employment for the industries to compete in
the comprehensive perception and old labour laws have forced industries to hire contract
labour to address the cyclical demands and creating business friendly submission mechanism
to survive and compete in the globalised economy. Connected changes in the Industrial
Disputes Act, 1947 would be necessary to reduce dependence on contract labour system.
Therefore, addressing the issues of contract labour through a justifiable method avoiding
future industrial unrest is the need of the time.
Bibliography
List of Statutes
Books
Dr. V.G. Goswami, Labour and Industrial laws, Vol 1, 9th Ed., 2011, Allahabad:
Agency.
Dr. H.K .Saharay, Labour and Industrial Law, Ed., 5th, 2011, New Delhi, Universal
Journals
18
Web Sources
www.westlaw.in
www.manupatra.com
www.jstor.org
www.timesofindia.com
www.haineonline.com