Contract Labour Regulation Act,1970IR Gyaan session: FIRE@X27 Sept09

Objective of CLRA
To regulate the condition of employment of contract labour To provide for its abolition under certain circumstances

Why CL?
Why is contract labour needed?
For non perennial jobs Cost factor More control over the workers

Parties involved
PE Contractor Contract Labor

Sec 1
1(4) Applicable to
Every est. with 20 or more CL (are/were employed in the preceding 12 months) Every contractor who employs /employed >= 20 workmen in preceding 12 months Proviso clause: Can be applied Est/contractor with less than 20 CL if Appropriate Govt gives minimum 2 months notice by notification in the Official Gazette

1(5) Not Applicable to

Section 2 : Definitions Appropriate Govt.

If AG under ID act is Central Govt-thus, CG Otherwise, State Govt where est is situated

Workman deemed to be CL if
Hired by or through contractor in/in connection with work of establishment With or without the knowledge of the PE

For defining workman, predominant nature of work is important, nothing else Workman does not include Managerial/admin capacity or out-worker

Section 2 : Definitions Contractor:

Undertakes to produce a given result for the establishment other than a mere supply of goods or articles for manufacture through CL/supplies CL for est. work and includes a sub-contractor

Principal Employer:
Govt office/deptt/local authority: Relevant Head specified Factory: Owner/Occupier/Manager under Factories Act,if named Mine: Owner/Agent of Mine/manager Any other est: person responsible for supervision and control

Section 10
Most important section Prohibition employment of of CL
Appropriate govt. can prohibit CL in an est Before prohibition takes into account: Conditions of work, benefits and relevant factors like:
Process or operation is incidental/necessary for est Whether of perennial nature If done ordinarily using regular workmen Whether sufficient to employ considerable number of whole time workmen

Consequences of Prohibition
GESB case
If the contract between the C and the PE is a sham, then it shall be treated as null and void and CL will be treated as the permanent employee of the PE: take into a/c Nature of contract

Air India Case

Says Absorption mandatory( Objecta Scripta)

SAIL 2001 Case No where has it been said that prohibition will lead to automatic absorption. So it is entirely the prerogative of the PE whether he wants to absorb or not. If yes, then some reasonable rules need to be set by the management for the same.(Litera scripta)

S10, Relevant cases

NTPC 2003, Mishra Dhatu
If canteen is statutory obligation under S-46, then PE needs to absorb canteen workers.

A.P.S.R.T.C ,2006
CL abolition is sole discretion of AG.(S 10) HC cannot issue writ of Mandamus

Ch 5 : Welfare and Health of CL

Sec 16 : Canteen
AG can make rules If 100 or more CL in an establishment Provide a Canteen Specifies date, no. of canteens, standards, charges

Sec 17: Rest rooms

If CL is required to halt at night In connection with the work of establishment Provision and maintenance of rest rooms/alternative accommodation by Contractor

Ch 5 : Welfare and Health of CL

Sec 18: Other facilities
Duty of every Contractor Provision of Drinking water, urinals, washing facilities

Sec 19: First Aid facilities

By contractor at every place where CL is employed by him

Ch 5 : Welfare and Health of CL

S 20:Liability of the Employer
If basic amenities as cannoned by the Act are not provided to the CL by the C, then it is the responsibility of the PE to do so.(s 16-19) The PE may recover the amount spent from the C as deduction from the contract payment or as debt.(Doctrine if Indemnity)

S 21
S 21: Responsibility for Payment of Wages
Payment of wages to CL is contractors responsibility. Duty of contractor to ensure disbursement of wages in presence of authorized representative of PE In case C doesnt pay the CL, then responsibility of the PE to pay and recover the amount from the C as deduction from the contract payment or as debt.

Thank you!
All the best!! May all your dreams come true