Labour laws
Contract labour generally refers to “Workers employed by or through an intermediary on work of any
establishment”. Such labour can be distinguished from the directly employed workers in terms of employer-
employee relationship and the method of wage payment.The contract labour system depends on triangular
relationship between the Principal employers, the contractors including the subcontractors as middle man, and the
labourers.
In India, the Contract Labour (Regulation and Abolition) Act 1970 was established as a Central law aimed at
regulating the conditions under which contract labourer’s work and also provide for the gradual abolition of the
contract labour system as and whenever possible.
Objective and scope of the Act
The objective and scope of the Act are:
To prevent exploitation of contract labour.
To provide proper and habitable working conditions.
To regulate the functioning of the advisory boards.
To lay down the rules and regulations regarding the registration procedure of the establishments employing
contract labour.
To state the necessary requirements and the procedure of licensing of contracts.
To provide the penal provisions in case of violation of offences under the Act.
The term ‘contract labour’ under Contract Labour (Regulation and Abolition) Act, 1970 means a workman
who is hired in or in connection with the work of an establishment by or through a contractor. It is pertinent
to note that the word, ‘hire’, as used in the said Act has a significant connotation and it is not equivalent to
the employee-employer relationship.
Applicability
The act is applicable to: every establishment in which twenty or more workmen are employed or were
employed on any day of the preceding twelve months as contract labour;
every contractor who employs or who employed on any day of the preceding twelve months twenty or
more workmen
Non applicability
The Act does not apply to any organisation or establishments where any work of intermittent or casual
nature is performed.
The Act states that a work is deemed to be of intermittent nature if it is performed for less than 120 days in
the preceding twelve months or it is of non-seasonal character and is performed for less than 60 days in a
year.
The Act is not applicable to a person who is appointed in an advisory or managerial capacity.
What are the duties of the Principal Employer?
It is the duty of the Principal Employer to provide the essential amenities like Canteen (above 100 contract labours),
rest rooms, drinking water facilities and first aid facilities if the same is not provided by the Contractor (Sec 16 to
19).
The expenses incurred on amenities by the Principal employer may be recovered from the contractor either by
deduction of any amount payable to the contractor under any contract or as a debt payable by the contractor (Section
20).
The Principal employer must ensure the disbursement of wages through Contractor within the expiry of prescribed
period by nominating a representative.If the Contractor fails to make payment or makes short payment then, the
principal employer shall be liable to make payment of wages in full or the unpaid balance and recover the amount so
paid from the Contractor either by deduction from any amount payable to the contractor under any contract or as a
debt payable by the contractor. (Section 21).
There are some other duties of the Principal employer which are mentioned below:
To get the registration of the Establishment To engage workers only through licensed contractors
To retrieve the expenses involved from the contractor through bills payable ,Maintain a register of
Contractors (Form XII), To submit returns for each contractor within 15 days of start or completion of
work (Form VIA)
What are the duties of a Contractor under the Act?
The following are the duties to be carried out by the contractor are explained below:
To get approval from the Employer
To obtain a License from the Licensing Authority
To submit the monthly printed bill to the firm for payment of the work done by him starting from the day of
the month
To present the Name of the Inspector, Wages paid & abstract of the Act
To maintain Muster roll, Wages, Deductions, Overtime, Fines, Advance, Wage slips, Registers under
Section 29 of the Act
To provide Welfare and Health facilities such as Canteens, if labour is above a hundred members restrooms
has to be compulsorily provided and also drinking water, urinals, latrines, first aid under section 19 of the
Act
To be responsible for the payment of wages before the 7th of each month under Section 21 of the Act
To disburse the salaries in the presence of the representative of the employer
To distribute employment cards to all the workers by three days of the start of work
To send the half early return in form xxiv after 30 days from the close of the half year, i.e. June and
December
