CONTRACT LABOUR ( REGULATION AND ABOLITION ) ACT

Objective of the Act

The objective of the Act is to regulate and to improve the conditions of service of contract labour and not merely to abolish contract labour. The contract Labour (Regulation and Abolition) Act, 1970 is an importance piece of social legislation and seeks to regulate the employment of contract labour and where necessary to abolish the same.

 Primary object of the Act is to prevent the exploitation of the contract labour by the contractor or the establishment. For achieving this objective, statutory restrictions and responsibilities have been imposed on the contractor as well as on the principal employer.

 If any expenses are incurred for providing any amenity to the contract labourers or towards the payment of wages by the principal employer he is entitled to deduct the same from the bill of the contractor.

Applicability of the Act

The Act applies to establishments and to the contractors wherein twenty or more workmen are employed or were employed even for one day during the preceding twelve months as contract labour. Establishments in which work of only an intermittent or seasonal nature is performed are not covered under the Act.

 It is the aggregate contract labour employed in an establishment, though for different purposes or through different contractors, which has to be taken into account for determining the applicability of the Act. As per the scheme of the Act, it will apply to both the principal employer and the contractor, whereby the principal employer will seek the registration under the Act and the contractor will obtain the licence.

Essential Ingredients of Contract Labour

The essential ingredients of the contract labour are as follows: That the employment may be by or through a contractor as defined in the Act. That he must be employed, in or in connection with, the work of the establishment. It follows that any person who is in some manner or other connected with the work of the establishment would be a contract labour.

 That he is hired where he is employed, in or in connection with the work of the establishment. In connection with the work of an establishment includes wide variety of workmen who may not be employed in the establishment but may be engaged only in connection with the work of the establishment. That the employment may be with or without the knowledge of the principal employer. That workmen employed even by a contractor not holding a valid licence would be contract labour.

 The Contract Labour (Regulation and Abolition) Act does not provide for permanency of employment of contract labour. A succeeding contractor is not obliged to absorb the workers of a previous contractor.

Registration of Principal Employer and Licence by Contractor

Every establishment covered under the Act will have to be registered by the principal employer. In case of non-registration of an establishment which should have been registered, the employment of contract labour is prohibited and in case of breach could be visited by penal consequences. Likewise, every contactor to whom the Act applies, shall obtain a licence and shall not undertake or execute any work through contract labour except under and in accordance with the licence issued.

Registration of an Establishment Procedure

If the Act is applicable to an establishment the principal employer of the establishment has to make an application in the prescribed form, accompanied by prescribed fees to the Registration Officer for registration of the establishment under the Act. Every certificate of registration granted under the act shall contain the following particulars, namely: the name and address of the establishment; the maximum number of workmen to be employed as contract labour in the establishment; the type of business, trade, industry, manufacture or occupation of contract of labour in the establishment.

Responsibility of Payment of Wages to the Contract Labour

A contractor is required to pay wages and a duty is cast on him to ensure the disbursement of wages in the presence of the authorized representative of the principal employer. In case of failure on the part of the contractor to pay wages either in part in part or in full, the principal employer is liable to pay the same.

Equal wages to Contractors Workers Workers through contractor under Contract Labour (Regulation & Abolition) Act will be entitled to equal wages which were being paid to the regular employees .

Appointment of Inspecting Staff The Act provides for the appointment of an inspecting staff, for maintenance of register and records, for penalties for the contravention of provisions of the Act.

Prohibition of Contract Labour

The Act empowers the appropriate Government to prohibit, by notification in the Officail Gazette, employment of contract labour in any process, operation or other work in any establishment after giving due consideration to the condition of work and benefits provided for the contract labour in that establishment and other relevant factors provided for in section 10 of the Act.

 The Supreme Court has also confirmed that only the appropriate Government can abolish/prohibit the contract labour system and its decision can be challenged before the industrial Tribunal. It is only the appropriate government which has the authority to abolish genuine labour contract in accordance with the provisions of the said section. No court including the industrial adjudicator has jurisdiction to do so.

 If the contract is sham or not genuine, the workmen of the so called contractor can raise an industrial dispute for declaring that they were always the employees of the principal employer and for claiming the appropriate service conditions. When such dispute is raised, it is not a dispute for abolition of the labour contract and hence the provisions of section 10 of the Act will not bar either the raising or the adjudication of the dispute.

 When such dispute is raised, the industrial adjudicator has to decide whether the contract is sham or genuine. It is only if the adjudicator comes to the conclusion that the contract is sham, then he will have jurisdiction to adjudicate the dispute. If the labour contract is genuine, a composite industrial dispute can still be raised for abolition of the contract labour and their absorption. However, the dispute will have to be raised invariably by the direct employees of the principal employer.

 Even after the contract labour system is abolished, the direct employees of the principal employer can raise an industrial dispute for absorption of the ex-contractors workmen and the adjudicator on the material placed before him can decide as to who and how many of the workmen should be absorbed and on what terms.

Welfare and Health of Contract Labour

Chapter V deals with the welfare and health of contract labour. There are provisions made for the establishment of canteens and rest houses and to provide other facilities to the contract labour by the contractor.

 Section 20 casts a liability on the principal employer to provide the amenities referred to under sections, 16, 17, 18 and 19 for the benefit of the contract labour employed in his establishment, if the contractor fails to provide those amenities. The act allows and recognizes contract labour and framers of the Act never purported to abolish it in its entirety.