CHECK LIST UNDER CONTRACT LABOUR (REGULATION & ABOLITION) ACT, 1970

In view of the judgment of Hon ble Supreme Court in a case of Haryana State Electr
ic Board, while engaging contract labour through contractor following suggestion
s are given:
· The establishment in the first instance, must ensure that they have got
a registration certificate from the competent authority as provided under Sectio
n 7 of the Contract Labour (Regulation & Abolition) Act, 1970 before proceedings
to engage the contract labour;
· The establishment must ensure that they issue certificate in Form-V to t
he contractor for obtaining license as provided must Section 12 of the Act ibid:
· It must be ensured that the contractor who is employing more than 20 per
sons has a valid license issued in his name by the competent authority as provid
ed under the Act
· The payment of wages to the employees employed by the contractor is disb
ursed to his employees by the contractor himself or his nominee and principal em
ployer has to depute his representative to be resent and sign the payment regist
er in token of having disbursed the salary in his presence by the contractor
· There should not be any supervision and control by the principal employe
r in respect of employees employed by the contractor to fulfill the obligation o
f the contract
· The work for which contract labour is engaged is not of perennial nature
;
· Discipline of the employees of the contractor in the discharge of duties
must be regulated by the contractor and not by the principal employer;
· Contract should not specify the number of persons required but must quan
tify the work itself;
· Leave to the employees of contractor must be sanctioned by the contracto
r and not by the principal employer;
· No advance should be paid by the principal employer to the contractor s em
ployees directly. Only contractor must regulate the same;
· Maintenance of all type of record in respect of the employees employed b
y the contractor should be his own responsibility and principal employer should
not intervene in such matter;
· Dictum of Supreme Court judgment in Hussainbhai s case (supra) must be adh
ered to in drafting the agreement for the contract.
· If the establishment is covered by the employees Provident Funds & Miscel
laneous Provisions Act and the Employees State Insurance Act, 1948 then the refer
ence should be given to those contractors who have their own code numbers under
these Acts
· To ensure compliance of the obligation pertaining to the various provisi
ons regarding, amenities and benefits as prescribed under the Act.
· To ensure to submit annual return to the prescribed authority the prescr
ibed from under the Act.
AN AGREEMENT BETWEEN THE CONTRACTOR AND THE PRINCIPAL EMPLOYER IS SAID TO BE A S
HAM CONTRACT UNDER THE FOLLOWING CIRCUMSTANCES.
· When the agreement does not disclose the name and address of the contrac
tor.
· When the agreement does not disclose the exact nature of job to be assig
ned
· When the agreement narrates the nature of job other than actually to be
performed
· When the agreement is against the norms of judicial pronouncement/ statu
tory provisions
· When the agreement is a tool or device to deprive the right of livelihoo
d or as a tool for victimization or unfair labour practice
· When the agreement does not ensure and disclose the obligations to pay t
he minimum wages or agreed wages.

THE PRINCIPAL EMPLOYER SHOULD ENSURE:-

· That the contractor should submit the printed bills and sign under the R
ubber Stamp
· That the contractor should maintain records through his staff and not by
the staff of principal employer
· That the contractor s labour should do only the specific work agreed by th
e contractor
· That the contractor should issue the photo identity card to his workers
under his name, trading style and signature
· That the contract should not be a cloak for suppressing the facts and co
ntractor should not be treated as commission agent.

ESSENTIAL INGREDIENTS OF AN AGREEMENT BETWEEN PRINCIPAL EMPLOYER AND THE CONTRAC

TOR
· That the agreement should be drafted and executed on non-judicial stamp
paper
· That the agreement must disclose the names, addresses of the contractor
and the principal employer
· That the agreement should contain the rights and obligations of both the
parties
· That the agreement must disclose the place of work, time of working, rat
e of compensation (towards consideration) and consequences arising out of breach
contract and procedure of termination by either of the parties to the agreement
· That the agreement carry out the objectives of statutory provisions and
judicial pronouncements
· That the agreement must disclose the scope of work, deployment of manpow
er in number, period of validity, compensation, security deposit and terms of pa
yment of bills
· That the agreement should be between the contractor and the principal em
ployer and should be witnesses by two witnesses.