Difference between Workman and contract Labour
For any person to be a workman it is necessary that he should be in the employement of the
employer. Merely a contract to do some work is not enough. Unless the relationship of master
and servant which is implied in the term “employed” is admitted or established.
WORKMAN
Section 2(s) of Industrial Disputes Act, 1947 ("ID Act") defines workman as:-
Any person (including an apprentice) employed in any industry to do any manual, unskilled,
skilled, technical, operational, clerical or supervisory work, for hire or reward, terms of
employment is express or implied and includes any such person who has been dismissed,
discharged or retrenched in connection with, or as a consequence of dispute.
The Courts have interpreted this definition and have identified various determining factors to
know whether a person is "workman" or not. The factors which should be considered are
whether there is a Master-Servant relationship;1
when a person is performing various functions which overlap in their characteristics, the
nature of main function for which the claimant is employed should be considered;2
work is either manual, skilled, unskilled, technical operational, clerical or supervisory in
nature, the mere fact that it does not fall within the exception would not render a person
to be workman; and
That the exceptions are not applicable.3
CONTRACT LABOUR
The term ‘contract labour’ under Sec. 2 (b) of Contract Labour (Regulation and Abolition) Act,
1970 (“CLRA“) a workman shall be deemed to be employed as "contract labour" in or in
1
ChintamanRao v. State of Madhya Pradesh AIR (1958) SC 358
2
John Joseph Khokar v. Bhadange B. S. &ors 1998 (1) LLJ 447 (Bom)
3
Kirloskar Brothers Ltd. v. Respondent: The Presiding Officer, Labour Court, Delhi and Anr. [1977(34)FLR206]
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;
Means a workman who is hired in or in connection with the work of an establishment by or
through a contractor. It is important to note that the word, ‘hire’, as used in the Act, has a
significant connotation and it is not equivalent to an employer-employee relationship.
Scope of Work
A workman is deemed to have been employed as contract labour when he is hired in, or in
connection with a particular work of the principal employer. The determinative factor, here, is
whether a workman was hired in or in connection with work of an establishment. Where a
workman is ‘hired’ specifically for the work of an establishment, his scope of work does not
extend beyond the work of that establishment and he is considered to be a contract labour.
In State of Gujarat vs. Vogue Garments and Ors.4, where workers of a firm were doing
considerable work for other concerns as well, and not only for the (alleged) principal employer,
the Hon’ble High Court of Gujarat held that such workers were not ‘contract labour’.
Supervision and control
Dharangdhra Chemicals Works Ltd. v. State of Saurashtra5
In this case the appellant Company took from the State Government on lease certain salt work at
Kudain in the state of Saurashtra. Salt was manufactured from rainwater which soaks down the
surface and becomes impregnated with Saline matter. The entire area was divided into small
plots called ‘Pattas’. The ‘Pattas’ were let out to aghiaras at Rs. 400 a year. The point for
determination was, whether these “aghiaras” were workman or contractor. It was proved that the
“aghiaras” were free to engage extra labour at their own cost. They were paid Rs. 0-5-6 per maud
for the salt produced by them. They were free to work when they liked, as no hours of work was
prescribed and no muster roll was maintained. In rainy season when they were free from this
work they returned to their villages and became engaged in their agricultural work. The
4
(1982)2GLR449
5
1957 AIR 264
management exercised supervision and control at all stages of manufacture. The following
priciples were laid down:-
“…the test of supervision and control can be taken as prima facie test for determining the
relationship of employment. The greater the amount of direct control exercised over the persons
rendering services by the persons contracting for them, the stronger would be the presumption
for holding it to an employer-employee relationship.…”
The test for establishing an employer-employee relationship as laid down by the Apex Court
in BalwantRaiSaluja vs. Air India Ltd. is 6, complete administrative control, which is decided by
several factors, including, among others-
1. who appoints the workers;
2. who pays the salary/remuneration;
3. who has the authority to dismiss;
4. who can take disciplinary action;
5. whether there is continuity of service; and
6. extent of control and supervision i.e. whether there exists complete control and
supervision.
In Vogue Garments7, Gujarat High Court observed that the employer firm had the complete
supervision and control over the workers who were working on the employer’s premises. The
Court used this as one of the factors to eventually decide that the workers were not contract
labour.
In J.k. Cotton Spinning and weaving Mills Co. Ltd. v. LabourApellate tribunal of India 8, the
mill provided to its officers under terms of the contracts the bunglows with attached gardens in
the colony of the mills and some “mails” was determined by the mill. Their work was supervised
and controlled by the mill. Their work was supervised and controlled by the mill. Payment was
6
MANU/SC/0732/2014
7
(1982)2GLR449
8
AIR 1964 SC 737
also made by the mill. The Supreme Court held that the “mails” must be held to be engaged in
operations which are incidentally connected with the main industry carried on by the mills and
are, therefore, workman within the meaning of Sec. 2(s)
In Shining Tailors v. Industrial Tribunal, U.P9., it was held that test to determine the
relationship of employer and the workmen was the test of control and not the method of
payment. Therefore, where payment was made on piece rate basis to workers of a tailoring
establishment, they cannot be said to be independent contractors only on this ground.
CONCLUSION
This write up tries to differentiate “workman” and “contract labour” the first criteria is
interpretation of their definition, the definition of workman says that a person (including an
apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational,
clerical or supervisory work, for hire or reward, terms of employment be express or implied and
includes any such person who has been dismissed, discharged or retrenched in connection with,
or as a consequence of dispute, whereas a contract labour is the one who has been employed via
a contractor.
Next, comes the scope of work, it is determined by looking at whether a workman was hired in
or in connection with work of an establishment which is if he has been ‘hired’ specifically for the
work of an establishment and his scope of work does not extend beyond the work of that
establishment then he is considered to be a contract labour.
Last, comes the most important criteria which is who is supervising, speaking briefly the more
the quantum of control and supervision is there the more chance that the labour is a “contract
labour” and does not comes into the ambit of “workman” it is also affected by the factors like
who is appointing them, paying them, promoting them, who has the authority dismiss and take
disciplinary actions.
9
(1983)II LLJ 413 ()SC
