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Current scenario under C L (R & A) Act

Need for flexibility of labour has increased in the changed environment. Today most businesses are opting for business process outsourcing (BPO) There is need to relax laws and courts to view the matter in the global scenario.

In this area business is facing restrictions.

Core activities Outsourcing is not allowed.

Legal approach Even in the case of engagement of Contract Labour the various judgments of the Supreme Court has created new rights for the Contract Labour. The position has become so overlapping and confusing that even the engagement of Contract Labour is giving rise to complicated questions of law. At times even the proper interpretation of the provisions of Contract Labour Act and judgments becomes difficult.

OBLIGATIONS OF PRINCIPAL EMPLOYER. 1.To obtain registration of the establishment.

2.Amenities like canteen, rest rooms, drinking water, latrines, urinals, washing and first aid facilities not provided by the contractor then these shall be provided by the principal employer. 3.If contractor fails to make payment of wages or makes short payment then the principal employer is liable to make payment of wages in full or the unpaid balance due to the contract labour and recover the amount so paid from the contractor.

4.Shall nominate a representative to be present at the time of disbursement of wages by the contractor to contract labour. The representative has to certify the amounts paid as wages.

5. Shall maintain a register of contractors in form xii. 6. Shall send annual return in form xxv before fifteenth February. 7. Shall within fifteen days of the commencement or completion of each contract work under each contractor submit a return in form xxvi. 8. Notice showing rate of wages, date of payment, name and address of inspector shall be displayed in kannada and English. 9. Shall furnish information relating to contract labour to the inspector when called upon to furnish the same.

OBLIGATIONS OF THE CONTRACTORS. 1. Shall obtain license 2. Shall provide canteen to contract labour whose strength is more than hundred where work is likely to continue for six months. 3. Shall provide rest rooms for night halt where work is likely to continue for three months or more. 4. Shall provide drinking water. 5. Shall provide latrines one per twenty-five workers.

6. Shall provide urinals one per fifty workers. 7. Shall provide washing facilities. 8. Shall provide first- aid facilities under charge of trained persons.

9. Shall be responsible for payment of wages.

10. Shall fix wage periods not exceeding one month. 11. Shall pay wages before the expiry of seventh day. 12. Wages shall be paid on a working day at the work premises and during working time and final payment be made within forty eight hours of the last working day.

13. Shall pay wages to worker on the second working day from the date of termination. 14. Wages shall be paid in currency. 15. Notice shall be displayed showing wage period and place and time of disbursement of wages. 16. Disbursement of wages shall be made in the presence of the representative of principal employer. 17. Shall maintain register of persons employed in form xiii, muster roll in form xv, register of wages in form xvii, register of deduction in form xx, register of fines in form xxi, register of advance in form xxii, register of to in form xxiii.

18. Shall issue employment card in form xiv to each worker within three days of employment. 19. Shall issue wage slips in form xix. 20. Shall issue service certificate in form xv to terminated worker. 21. Shall display abstract of act and rules in Kannada and English. 22. Shall display notice showing rate of wages, name and address of the inspector, date of payment of wages in English and Kannada. 23. Shall send half early return in form xxiv after thirty days from close of half year i.e. June and December. 24. All registers, records shall be maintained complete and up to date and shall be kept at the work place and shall be produced on demand before the inspector and all information regarding contract labour demanded by him shall be furnished to him.


Steel Authority of India Vs. National Union Water Front Worker 2001 LLR 961

no automatic absorption of the contract labour on its prohibition /abolition appropriate government determination and identification of. notification dated 09.12.1976 for abolition of contract labour cannot be sustained. contract labour to be absorbed when the principal employer has engaged them to discharge statutory duties. when the adjudicator holds a contract as sham or camouflage the contract workers will be automatically absorbed. when a contract agreement is a ruse/camouflage the contract laboureres to be absorbed and/or given preferences while recruiting regular workers by relaxing recruitment conditions. contract workers already absorbed will not be affected by this judgement.


That the contract should submit the printed bills and sign under the Rubber Stamp. That the contract should maintain records through his staff and not by the staff of principal employer. That the Contracts labour should do only the specific work agreed by the contractor. That the Contractor should issue the photo identify card to his workers under his name, trading style and signature. That the contract should not be a clock suppressing the facts and contractor should not be treated as commission agent. Contractor shall issue appointment order provide the copy to the Company.