The Contract Labour Regulation & Abolition Act, 1970

The backdrop
Rationale for contract labour :

Flexibility Specialized services for a short span Effects of the use of contract labour : Deprives workers of protections under normal legislation & international standards Deprives them of several social security benefits Prevents continuity of employment Denies access to redundancy payments Limits the availability of industry training & appreniceship First national commission (1969) : abolish contract labour 1970 : The Act enacted Second National Commission (2002) : contrary views

Introduction
Applicability :

All establishments where 20 or more workers are or were employed as contract labour in the preceeding 12 mth Every contractor who employs 20 or more workmen. Appropriate Govt. can issue an order making this Act applicable on any establishment employing less than 20 contract workers by giving 2 months notice of its intention to do so.

Computation : aggregate of contract labour employed in

different parts of the establishment under different contractors.

Establishment : Govt. or privately owned , any place where work

is carried on except where work performed is of intermittent or casual nature.

Introduction
Work is NOT considered of intermittent or

casual nature if :

It is carried on for more than 120 days in the preceding 12 months It is of seasonal character & performed more than 60 days in a year

Purpose : to regulate the employment of

contract labour in certain establishments & to provide for its abolition under certain circumstances.

 Contract Labourer : One who is hired through

a contractor with or without the knowledge of the principal employer Contractor : A person who undertakes to produce a result , for an establishment, through contract labour or who supplies labour to an establishment. Principal employer :Owner or Head of the Deptt (in case of govt. establishment) or Factory manager , responsible for supervision & control.

Liabilities of the principal employer

Registration of the establishment Ensuring the provision of : canteen rest rooms sufficient supply of drinking water urinals washing facilities By asking the contractor to provide such

amenities OR Make deduction from the amount payable

Liabilities of the contractor

Obtain a licence

Ensure timely disbursement of wages in the presence

of a representative of the principal employer Pay the rate of wages fixed for the type of establishment Issue wage slips Provide a canteen (if employing 100 or more contract labourers) , first aid facilities, rest rooms, drinking water, latrines & washing facilities

Liabilities of the contractor

Display notices showing the rate of wages,

hours of work, wage period, date of wage payment and names & addresses of the Labour inspector Retain a copy of the notices & report any change to the inspector Display the abstract of the Act & rules in English, hindi and in the language spoken by the majority of workers

Prohibition of contract labour

Sec. 10 : Appropriate Govt. can prohibit the

employment of contract labour in any process of an establishment , after consulting an Advisory Board and considering the conditions of work & benefits provided to the contract labour Factors considered :

Whether the process is incidental to or necessary for the manufacture , trade or business that is carried on by the establishment Whether the process is of perennial nature Whether it is ordinarily done through regular workmen in that establishment or other similar establishments Whether it is sufficient to employ considerable number of whole time workmen

Who has the authority to abolish contract labour in certain circumstances ?

Courts ?

Govt ?
BHEL Haridwar Vs. Union of India 1000 workmen working in various capacities

were engaged in multifarious activities identical with work done by workmen directly employed by BHEL, so why should they be treated as contract labour & not directly employed by BHEL?

SC Judgment
It is not for the court to enquire into the

question, & to decide whether the employment of contract labour in a process should be abolished or not . This is a matter for the decision of the Govt. after considering the matter required to be considered u/s 10 of the Act.