j ¯



   :
The establishment needs to be registered for employing contract labor through contractor. The
procedure for registration of establishment is as follows,

i. îf the Act is applicable to an establishment, the principle employer or the establishment

has to make an application in the prescribed form (Form î according to rule 17 (1))
accompanied by prescribed fees to the Registering Officer.
ii. îf the application is complete in all the respects the Registering Officer will register the
establishment and issue a certificate of registration in the prescribed form to the principle
employer.

The principle employer of an establishment who has not obtained the required registration under
section 7 or whose registration has been revoked under section 8 is prohibited from employing
any contract labor in his establishment.

j ë 

 :
The contractor who is going to apply for contracts from principle employer has to get the license.
The procedure for obtaining a license is as follows,

i. The contractor has to make the application in the prescribed form (Form î , according to
rule 21 (1)) accompanied by the necessary fees and security deposit to the Licensing
Officer for grant of a license under the Act.
ii. The licensing Officer after making the necessary investigation may issue a license in the
prescribed form containing the conditions subject to which the same is granted.
iii. The license will be valid for the period specified therein and will have to be renewed
from time to time.

îf a contractor to whom the Act is applicable does not have a license under the Act, he is
prohibited from undertaking or executing any work through contract labor.

c



 Ãvery worker who works for a principle employer to whom the provisions of the Contract Labor
Act are attracted is to be treated as the worker of the principle employer unless it is satisfied that,
the establishment has secured a certificate for registration for the relevant period under section 7
and it had employed contract labor through a licensed contractor under section 12.

j ^ 
    ë :
The benefits which the contract labor enjoys due to contract labor are as follows,

i. A contractor is required to provide canteens, rest-rooms, latrines, urinals, drinking water,

washing facilities and first aid boxes for the use of contract labor. He is also required to
make prompt and proper payment of wages to contract labor. The contractor has to do all
these things in conformity with the relevant provisions of the Act or the rules made
thereunder.
ii. îf the contractor fails to provide the amenities or to make payment of wages, the principle
employer will be liable to provide the amenities or to make payment of wages to the
contract labor. The principle employer can recover expenses from the contractor.

j 

 :
i. îf any person obstructs an inspector or willfully refuses to produce any document
demanded by him, he would be punishable with imprisonment upto 3 months, or fine
upto Rs. 500/-.
ii. îf any person contravenes any provision of the Act or of any rules made there under
prohibiting, restricting or regulating the employment of contract labor or contravenes any
condition of a license granted under the Act, he would be punished with imprisonment
upto 3 months, or fine upto Rs. 1000/- or with both. îf such contravention is continued
after conviction the fine would be upto Rs. 100/- per day.
iii. îf any person contravenes any other provision of the Act or of the rules made thereunder,
he would be punished with imprisonment upto 3 months, or with fine upto Rs. 1000/- per
day or both.

c



 j   
    ë  
   

 :
An inspector appointed under act has powers as under,

i. To enter any premises or place where contract labor is employed, for the purpose of
examining any register, record or notices;
ii. To examine any workman employed in such premises or place;
iii. To require any person or workman to give information regarding work or payment for
work;
iv. To seize or take copies of any register, record of wages or notices.

Moreover a contractor is responsible for the payment to contract labor. în an employment to

which the Payment of Wages Act or the Minimum Wages Act, as the case may be, apply, wages
of contract labor shall be paid in accordance with the provisions of the Payment of Wages Act or
the Minimum Wages Act as the case may be. în any other case they shall be paid in accordance
with the provisions of Rules 45 to 51 of Contract Labor Rules.

c









CONTRACT LABOUR SCENARIO IN ONGC, MUMBAI REGION

On 14th August 1956 Oil and Natural Gas Commission (ONGC) was formed by an act of the parliament.
For that a special recruitment drive was launched through Union Public Service Commission (UPSC) to
recruit around 150 geoscientists. Some of the geoscientists were also taken on deputation from other
governmental departments like geological survey of îndia. The support staff was recruited directly and
also required numbers of technical and non-technical personnel were taken from various departments of
Central Government.

Thus, in initial years of ONGC all the activities were carried out in house, through departmental personnel
of ONGC. Until then no need for contracting any job/work was felt.

în 1974 oil was struck for the first time in Bombay. Again in 1975 a bigger reservoir of oil was
discovered in Bombay high. So various processes for supply of oil and gas started, which led to demand
for services like loading-unloading, transport, etc.

Availing such services by employing regular employees was not viable since such regular employees are
required to be given more compensation, more facilities, etc but are less efficient. Also direct supervision
was required on them, which was not possible due to shortage of supervisory staff. Also the tenure of the
project was not fixed, so to recruit and employ permanent labour on ONGC scale was not feasible.

On the other hand availing such services from contractors was a valid option. Such contractors were
available on abundance and at much cheaper cost with comparatively more efficiency. Also Bombay
being a metro-city support services were available easily. Therefore for the first time in ONGC, some

£



services like loading-unloading on dock and tourist taxi were taken on contract basis. înitially loading-
unloading was not a job of perennial nature so contract labour proved to be most economical and efficient
alternative. Same was true for tourist taxi. Since the requirement was not big and continuous, so tourist
taxi proved more economical than company owned vehicles and drivers.

After the seemingly success of use of contract labour in these areas, now services of certain specialized
areas like canteen, house keeping, security, etc. were awarded to the contractor.

Soon this process of engaging contract labour for different types of jobs was carried on large scale. Also
this was undertaken by other offices in different locations of ONGC. So slowly and shortly contract
labour became a non-separable part of ONGC working.

A order called ³Certified Standing Orders ³ was issued by ONGC, dated 15th July 1962 and these orders
were applicable to all contingent employees employed in the various units of the ONGC. They were not
applicable to regular employees.

Again a circular was issued on 17th June 1989, in order to bring uniformity in the service conditions of the
contingent labours. This circular was based on the instructions of the Certified Standing Orders.
So the services condition of contingent labour in the ONGC is now governed by these instructions. These
instructions are as follows,

 
  
 

   ë :-

Contingent Labour:-
The labours which are engaged on short term casual term jobs and not for perennial type of work
including white collar jobs like assistants, typists and steno-graphers, etc are termed as Contingent
Labour.

The Contingent Labour should be engaged on ³Term Appointment´ basis and an appointment letter
should be issued, in the format enclosed, particularly in those cases where duration of the job for

£




 which contingent labour was to be engaged could be easily predicated, viz. in case of field parties,
building construction work, rig foundation, etc.
The contingent Labour of ONGC have been classified as under,

i. Temporary:
A Workman who has been on the rolls of ONGC and has put in not less than 180 days of
attendance in any period of 12 consecutive months shall be a Temporary workman.

Also a temporary workman who has put in not less than 240 days and who possess the
minimum qualification prescribed by the ONGC may be considered for conversion as
regular employee.

ii. Casual:
A workman who is neither temporary nor regular shall be considered as casual workman,
i.e. those contingent employees who have put in attendance upto 179 days in 12
consecutive months are termed as casual workmen.

îî. r
:-

The wages of the contingent labour in the ONGC are regulated as under,

i. The minimum wages on contingent / workcharged employees are regulated by the

notifications issued from time to time by the Minister of Labour, Govt. of îndia,
prescribing minimum rates of wages for the scheduled employment of construction and
maintenance of roads or any building operations and maintenance of the buildings. This
notification, interalaia provides that if in any area the wages fixed under central
notification, are lower than state government for corresponding scheduled employment,
higher rate fixed by the state govt. would be payable as minimum wages by the îndustrial
Ãstablishments Under Central Jurisdiction.
ii. Over and above, the above mentioned existing rates of minimum wages for the said
scheduled employment fixed by the Central / State Govt. whichever is higher, the
Corporation pays 20 % more of such minimum wages.

£c



 iii. The contingent workmen who are not covered within the scope of Scheduled employment
referred to above, are also to be paid the applicable corresponding rates of wages, as
stated above.

îîî.  
   

   :
ît should be regulated under section 13 of The Minimum Wages Act -1948 read with the rule 23 (4)
of the Minimum Wages Rules - 1950.

The provisions if this rule shall not operate to the prejudice of more favorable terms, if any, to
which an employee may be entitled under any other law or under the terms of any award,
agreement or contract of service, and in such a case, the employee shall be entitled only to the more
favorable terms aforesaid.

î . r
:
As per provisions in the Circular, the Working Hours of the contingent employees are governed by
the provisions of Mines / Factories / Shops and Commercial Ãstablishment Act, whichever is
applicable to such employees.

.   
  :
For payment of overtime, contingent employees are governed by the relevant provisions of the
Mines / Factories / Shops and Commercial Ãstablishment Act, whichever is applicable to the centre
where they are working.

î. ë   r
:
Leave with Wages would be admissible to the contingent employees as provided for in the Mines /
Factories / Shops and Commercial Ãstablishment Act, whichever is applicable to the centre where
they are working.

The other employees who are not governed by the either of these enactments should be allowed
leave with wages in accordance with the orders issued by the Commission, as elucidated
hereunder:-

££



 i. As per the provisions under the Mines / Factories / Shops and Commercial Ãstablishment
Act, and relevant orders of the commission, all contingent employees who have
completed a calendar year¶s service in the commission shall be allowed, during the
subsequent calendar year, leave with wages calculated at the rate of one day every 20
days work performed by him.
ii. A calendar year¶s service shall be deemed to have been completed if during the calendar
year he has put in not less than 240 days attendance. Any day of µLay Off¶ by agreement
or contract or as permissible under the circular and the leave earned in the year prior to
that in which leave is enjoyed, shall be treated as attendance for the above purpose but no
leave shall be earned for these days.
iii. Any contingent employee whose services commenced otherwise than on the first day of
January shall be granted leave with wages in the subsequent calendar year if he has put in
attendance for not less than 2/3 of the total no. of days during the remaining calendar
year.
iv. The leave can be accumulated by the employee at any time upto 30 days in all. Leave
applied for but refused can be carried forward without any limit.

îî. :
All contingent employees are entitled for three National Holidays with wages viz. Republic Day,
îndependence Day and Mahatma Gandhi Jayanti¶s Birthday (2nd October) provided they are on duty
or on leave with pay on the immediate preceding working day.

Besides if they are governed by provisions of Shops & Commercial Ãstablishments Act, they would
also be entitled for holidays, if any, provided in the said Act.

îîî. ^  
:

A contingent employee is entitled for payment of Bonus / Ãxgratia if he has worked for not less
than 30 days in an accounting year. Such payment of Bonus / Ãxgratia is governed by the terms and
conditions as paid down in the Payment of Bonus Act ± 1965, orders issued by corporation on the
subject every year. Where a contingent employee has not worked for all the working days in an
year, the Bonus / Ãxgratia payable to him shall be proportionately reduced.

£



 î
. [   :
i. For contingent employees, and members of their families, who have been in employment
for less than one year:
a Free treatment at the ONGC¶s dispensaries / Hospitals wherever they exists.
b At places where ONGC¶s dispensaries / Hospitals are not available, consultation /
treatment may be permitted from State Govt. dispensaries / Hospitals and in such
cases reimbursement to the extent admissible to the regular employees of the
corporation of the lowest rung will be made, subject to counter signature of the
ONGC¶s Medical officer whenever available and the usual audit.
ii. For contingent employees, and members of their families, who have put in continuous
service of not less than one year:
Such employees and members of their families will be entitled to the medical facilities on
the scale mentioned under îîî ( i ) above.

For continuous service of not less than one year, medical facilities will be as given in
section 25-B of The îndustrial Disputes Act-1947.

.   
:
The payment of gratuity to the contingent employees is to be governed by the provisions of The
Payment of Gratuity Act ± 1972, which provides for payment of gratuity to an employee on the
termination of his employment after he has rendered continuous service for not less than 5 years on
retirement (i.e. termination of service of an employee otherwise than on superannuation)
resignation, superannuation and death or disablement due to accident or disease provided that the
completion of continuous service of 5 years shall not be necessary where the termination of the
employment of the continent employee is due to death or disablement. For every completed year of
service or part thereof in excess of 6 months gratuity shall be payable at the rate of 15 days¶ wages
(7day¶s wages for each season for those employed in Seasonal Ãstablishments and who are not
engaged throughout the year) for each year continuous service based on rates of the wages last
drawn. The terms & conditions of payment of gratuity will be those contained in the Payment of
Gratuity Act ± 1972 and Rules made therunder.

£




î. 6  
 :
When a contingent employee who has rendered 180 days service or more upto 239 days in the last
12 consecutive months is to be discharged, 7 days notice should be given to him or wages in lieu
thereof should be paid to him as compensation prior to dispensing with his / her services. This is a
mandatory provision under the circular issued by ONGC. Likewise in the case of retrenchment of
contingent employee who has worked for 240 days or more during a period of 12 calendar months,
preceding the date with reference to which calculation is to be made, prior compliance of the
provisions of section 25 ± F of the îndustrial Dispute Act- 1947, has to be ensured.

  :
Not withstanding anything stated above, the provisions of Circular for contingent employees shall
continue to prevail and their compliance should invariably be ensured.

This went on for about 15 years. All services availed through Contract were working efficiently. There
was absolutely no problem, no complaint, and no grievances.

But problem started when same contractors were awarded same type of jobs at the end of each term.
These contracts were extended term after another, according to the requirement, as the exact duration of
the work was not known. So the question of employing regular employees by ONGC for getting these
works done did not arise. Also the workmen acquired almost expertise in their field of work as they used
to do similar job, for years together. Now the situation is that a workman is doing same type of job,
irrespective of whether the Contractor is changed or not. But the contractors started exploiting contract
labour employed by them in ONGC. The contractors gave short and delayed payment to the contract
labours. Also contract workmen were deprived of social security benefits such as provident fund, gratuity,
insurance, etc. This led to formation of organized labour (unions), which started agitating against the
exploitation of contract labour by the contractors. So in turn the industrial relations situation in the
corporation started becoming unhealthy, unharmonious. Unions have filed different petitions in High
Court and îndustrial tribunal. Management have signed different Memorandum of Understanding with
different unions, representing contract labour, to bring these industrial relations to cordial and
harmonious.

£



 LITIGATIONS OF CASES IN COURT/CGIT

6  
  
  
¯     
 [  ¯


! 6 r¯6 66
!!"

 !6 6"!
# CGîT-2/77 of 1997 Dispute raised by B.C.D.Roy,workman of pearless Disposed
shipping,the contractor of ONGC for reinstatement with off
back wages
$ CGîT-1/32 of 2000 Benefit of MOU, dated 12.07.1995 to Sh.Abdul Disposed
Kayum,A.C.Operator and 6 other employed at off
asundhara Bhavan.
% CGîT-2/44 of 2000 Dispute raised by employees of contractor for Disposed
reinstatement with full back wages off
& CGîT-2/206 of 1999 Demand of payslips to direct employees and contractual Disposed
worker-raised by Petroleum Ãmp and Genaeral Ãmp off
Association
' CGîT-2/107 of 2001 Strike Notice-Dispute raised by General Ãmployee Disposed
Association relating to demand of contract workmen off
vide notice dated 03.08.2000
( CGîT-2/108 of 2001 Strike notice-Demands raised by Transport and Dock Pending
workers union vide strike notice dated 07.08.2000
) CGîT-2/129 OF 2001 Dispute raised by superintending Ãngineer who retired pending
under RS,for reinstatement with full back wages.
* APPL..CGîT-2/73 of Demand for reinstatement of with full wages of Shri Pending
2001 Prakash L.Kamalapure Ãx-worker of M/s OCS
consultant & services Pvt..Ltd.
+ Comp ULP No.CGîT- Dispute raised by workmen of contractor for Pending
2/22 of 2002 reinstatement with full back wages(Shri Jagdish
K.Gupta,Ãx-Security Guard)(uran}
#, îDA.CGîT-2/2 of W.P.s No. 509 of 2001 Pending
2003 513 of 2001
## CGîT-2/10 of 2003 W.P.s No. 401 of 1996 Pending

£



 1240 of 1996
#$ APPL..LC.CGîT-2/2 W.P.2426/03, 965/05-Application filed by workmen of Pending
of 2003 sagar services for recovery of dues from the contractor
and ONGC.
#% CGîT-1/19 of 2004 Deducting the amount of Rs.2000/- each from contract Pending
workmen¶s revision arrears towards TDS(income tax)
#& CGîT-1/64 of 2004 Strike Notice-Demands raised by Transport & Dock Disposed
Workers union vide strike Notice dated 21.06.2003 off
#' CGîT-2/30 of 2004 Wp.No.920/04-îssue of retrenchment of 21 contract Pending
workmen of DBG Stores,Nhava supply base.
#) CGîT-1/16 of 2005 Wp.2982/04 in WP.1393/96 Pending
#* CîGT-1/17 of 2005 Wp.2981/04 in 1345/96 Pending
#+ CGîT-1/18 of 2005 Wp.2983/04 in wp.1024/96 Pending
$, CGîT-1/19 of 2005 Wp.2980/04 in wp.2185/91 Pending
$# CGîT-2/65 of 2005 For absorption of workmen employed for stevedoring at Pending
Nhava.
$$ CGîT-2/91 of 2005 Wp.4681/98-Dispute over regularization and Pending
permanency of 24 gardeners working at Nhava supply
base.
$% CGîT-2/18 of 2005 W.P.s Pending
2410/96,1239/96,402/96,2741/92,857/97,928/97,545/96,
4042/97,5847/98,929/97,306/01,4681/98,2476/98,4236/
2002,
240/1996
$& CGîT-2/82 of 2005 Alleged dispute in appointing Shri K L.Keswani in the Pending
post of lower grade.
$' CGîT-2/5 of 2006 (Arising out of CGîT-2/18 of 2005)complaint under Pending
section 33-A of the industrial disputes Act.1947.

$( CGîT-2/2 of 2006 (Arising out of CGîT-2/10 of 2003)Anant sitaram Disposed

Bhosale and Santosh Anant Bhosale Off
$) CGîT-2/54 of 2006 Wp.8406/04-Dispute over regularization of contingent Pending
workmen working at panvel.

£



$* CGîT-2/38 of 2006
$+ CGîT-2/31 of 2006
%, CGîT-1/24 of 2007
%# Misc.Appl.No.8
2007
%$ CGîT-2/13 of 2008
%% CGîT-2/14 of 2008
%& CGîT-1/35 of 2007
%' CGîT-1/36 of 2007
%( CGîT-2/19 of 2008
ù
   
W.2244/97-Dispute over the demand for pay and Pending
priveleges at par with permanrnt workmen and demand
for absorption.
Dispute over termination of Shri R.B Patil Jr. Pending
Draftsman(mech)
Demand for extension of golden jublilee gift/incentive Pending
to the tenure base /Term based employees at par with
regular employees
of Arising out of compt.CGîT-01 of 2002 in Ref.No. Pending
CGîT-34/96-(Ankleshware asset)
Pending
Pending
Pending
Pending
Pending

  



 
 

 







 































 

 


 





 

 










































  








  





 



 
 









 

 




  



 








 





 
 










 




 










 








 




  



 







 











 

 




 
 

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CONTRACT ABOLITION ACT 1994(13 CATEGORIES)




 
  












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ORDER

Upon hearing counsel the court made the following order-










  










 





   









 






 


 

CURRENT STATUS-













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Detailed Overview of The Disposed of Case 2/44 of 2000

Involving The Contract Labours




 




 


 










 
















 















  




 


 










 





 


 

 






 


 
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 î 


Ãvery organization has some sort of industrial problems. However, it is the îR section in its HR
department, which is responsible for maintaining the harmonious labour relations in the organization. And
on this ground the îR section of ONGC, Mumbai is quite successful in handling all these problems and
still maintaining proper industrial relations with workmen. One of the reasons of this is that the Contract
Labour Management System in ONGC is working properly. All the grievances of contract workmen are
properly dealt with and they are given suitable response.

The major findings during the course of training are-

ONGC has a unique Contract Labour Management System in its WOU, Mumbai.
i)Firstly, the jobs in which the contract labours are engaged are of low tech auxiliary jobs for maintenance
of establishments and machine/equipments.Some jobs are also of operation and maintenance of machine/
activities.
ii)Secondly,contract labors here are unionized,so they can stress more on their demands.
iii)Thirdly,through MOU ,as guidelines,ONGC ensures that the labour engaged by contractors in ONGC
,WOU are extended much better wages and other service conditions by their employers.
iv)Fourtly,the contract labours of ONGC are enjoying more benefits compared to their counterparts
employed in a Pvt Sector Organization.
v) ONGC had got rid of certain contract labours, who had preferred to litigate against ONGC for various
reasons, through Goodwill Package Scheme to strike a cord of balance and head towards a more
harmonious industrial relations while reducing the expenditure on litigations.
vi)While going through various cases it is observed that the unions of contract labours file cases before
the High Court/Tribunal/Conciliation officers against ONGC on behalf of contract workers leaving the
real employers aside and in many cases even the authorities ignore the fact that ONGC is not the
employer in the case of contract labours.

£



îî  
  


1) ONGC should adopt latest computer technologies to store îR related data.paper work should be
minimized.
2)ONGC should adopt measures to increase communication with unions to avoid misunderstandings.
3)Contract laborers should be given an introduction of the company and the rules and regulations so that
in case any problems or complaints they know whom to approach,the company or the contractor.





 ^

1 ONGC ± Industrial relations manual.

3 ONGC - ³HR Manual´
4 ONGC Reports (www.ongcreports.com) ± Company profile (dated
16/11/2005), ONGC Structure, Manpower etc.
5 ONGC ± ³Annual Report 2008-2009´