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Monday, 30 August 2021

A NOTE ON CONTRACT LABOUR ACT 1970




 THE CONTRACT LABOUR ACT (REGULATION AND ABOLITION) 1970

 

An Act to regulate the employment of contract labour in certain establishments and to provide for its abolition in certain circumstances, in simple terms - it is to prevent exploitation of contract labour  

The primary entities in this act are

a.   PRINCIPAL EMPLOYER:  The owner or occupier of the factory and where a person has been named as the manager of the factory under the Factories Act, 1948 

b.   CONTRACTOR: Is the one who supplies contract labour for any work related to the establishment.

c.   CONTRACT LABOUR (CONTRACT WORKER):  Workers hired by or through CONTRACTOR and who take up work of any establishment with or without the knowledge of the principal employer.    

d.   BOARDS: These are the advisory boards called the CENTRAL BOARD constituted by CENTRAL GOVERNMENT and STATE BOARD constituted by STATE GOVERNMENT, their role is to advise the Central/State Government on matters arising out of the administration of this Act and to carry out other functions assigned to it under this Act.

 

APPLICABILITY AND NON-APPLICABILITY OF THIS ACT

The act applies 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.

·     As per the amendment in Maharashtra the Threshold for applicability of the Contract Labour (Regulation and Abolition) Act, 1970 increased from 20 to 50 in Maharashtra.

The act does NOT apply to:

·     Establishments in which work only of an intermittent or casual nature is performed.

o  Casual / Intermittent work means If the work is performed for less than 120 days in the preceding 12 months for perennial establishments

o  Casual / Intermittent work means If it is performed less than 60 days in a year related to seasonal establishments

o  Apart from the above two conditions, the state government in consultation with the central board can decide the no of days to be taken for intermittent depending upon the nature of work and type of establishment


OBJECTIVES OF CONTRACT LABOUR ACT 

The Objectives of the Contract Labour (Regulation and Abolition) Act, 1970 is to 

1.   Prevent exploitation of contract labour and also introduce better conditions of work. 

These Contract labourers are associated with the organization as indirect employees. Contract labour (indirect labour) are different from direct employees in terms of 

·     Employee – Employer relations ship

·     Wage payment

 

The Contract Workmen are hired, supervised and paid by the Contractor, who in turn, is paid by the Establishment hiring the services of the Contractor.

2.   To regulate the employment of contract labour and to provide a healthy workplace environment, healthy working conditions, to ensure timely payment of wages and payment of full wages.

WELFARE PROVISIONS OF CONTRACT LABOUR ACT 

This act is made of 7 chapters and 35 sections, CHAPTER – 5 Specifically deals with WELFARE AND HEALTH OF THE CONTRACT LABOUR, there are 6 sections (sections 16-21) 

SECTION – 16: Provision of canteens for contract labour 

SECTION – 17: Provision of Rest-Rooms.

SECTION – 18: Other facilities like Drinking water and washing facilities.

SECTION – 19: First Aid facilities.

SECTION – 20: Liability of Principal employer to provide Welfare provisions

SECTION – 21: Payment of wages.

 

IMPORTANCE OF SECTION 21 AND 22

 

SECTION 20: LIABILITY OF PRINCIPAL EMPLOYER

 

·     If any requirement as per the provisions required to be provided under Section 16, Section 17, Section 18 or Section 19 for the benefit of the contract labour employed in an establishment is not provided by the contractor within the time prescribed, under such conditions the required amenities shall be provided by the principal employer within the stipulated time prescribed.

 

·     All expenses incurred by the principal employer in providing the required amenities can be recovered by the principal employer from the contractor 

 

    SECTION 21. RESPONSIBILITY FOR PAYMENT OF WAGES.

 

·     A contractor shall be responsible for payment of wages to each worker employed by him within the stipulated period as prescribed

 

·     Every principal employer shall nominate a representative duly authorised to be present at the time of disbursement of wages by the contractor and ensure that the prescribed amount is paid and the same should be ensured by the contractor also that a representative is present

 

·     In case the contractor within the time fails to make the payment or pays short of wages, then the principal employer shall be liable to make payment of wages in full or the unpaid balance due and recover the amount paid from the contractor.

 

 

REGISTRATION AND LICENSING

·     The employer is responsible for obtaining the certificate of registration if this particular act applies to the establishment and must comply with all the necessary provisions for registration of the establishment and furnish all the particulars as demanded by the authority at times.

·     The principal employer must maintain a register of contractors in Form – XII.

·     The contractor is responsible to obtain the license from the licensing authority and furnish to them all the particulars and documents as are necessary for the license. This license is valid for one year and it has to be renewed before the due date

·     He is responsible for maintaining the register of workers (Form XIII) which shall contain all necessary particulars related to each contract labour.

·     He is responsible for displaying the license  

 

CRITERIA AND CIRCUMSTANCES OF ABOLISHING CONTRACT LABOUR

If the work for which contract labour is employed is incidental to and closely connected with the main activity of the industry and is of perennial and permanent nature, the abolition of contract labour should be justified.

 

 

THE CONTRACT LABOUR (REGULATION AND ABOLITION) CENTRAL RULES, 1971

SOME IMPORTANT RULES :

1.     In every establishment if the contract labour work is likely to continue for more than six months and if 100 or more are employed, then an adequate canteen facility shall be provided by the contractor within 60 days of the commencement of the employment of contract labour in the case of new establishments.

2.     The dining room shall accommodate at a time at least 30 per cent of the contract labour working at a time.

3.     A first aid box shall be distinctively marked with a red cross on a white ground, these boxes should be readily available to all during working hours at a rate of not less than 1 box per 150 contract workmen


Disclaimer:  The information represented above is only guidance for students for getting some information relevant to the subject. The information represented above does not constitute professional advice and cannot be quoted or used for any application purpose (or) statutory requirements (or) dispute resolution


Article by PJ Mohan

  Sr.Faculty, NIFS



 

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