123 contract labour act-final

8/3/2019 123 Contract Labour Act-Final

http://slidepdf.com/reader/full/123-contract-labour-act-final 1/14

I. Legislation : Background & where it stands

III. Present Scenario of the Contract Labour

IV. Wages of Contract Labour

II. Necessity of Contract Labour

VI. Conclusion / Inference

V. Contract labour Scenario in AAI

1 May 2012 1



1 May 2012 2

i. Facts about Contract Labour:

Engaged in almost all industries (Pvt,Public-Sector & Govt. Unertakings)

Govt. is the largest employer of contract labor.( Rlys.,Airports,PSU’s, etc.)

ii. Consequences-lead for legislation of CL Act.

Pre-Independence:

Recommendations of Royal Commission, Labour Parliament & Pitboys Commission.Post-Independence:

Demands made before Tribunals.

Recommendations during second 5 year plan.

Standard vaccum refining case(1960 2 LLJ 233)

Labour management is one of the most crucial task of an entrepreneur. In order to surpass the stringent labour regulations, the industry sector in India is

largely resorting to contract laborers, who are governed by the “Contract

Labour Regulation and Abolition Act of 1970”



I. Contract Labour Regulation & Abolition Act, 1970

Introduction

1 May 2012 3Abstract of Contract Labor Act

The main objective of this act is to regulate the contract labour

and abolish it in certain cases.

The Act came into force on 10th Feb,1971 & Act has 35 Section into 7 Chapter

Sec.7(1) – Registration of certain establishments

Important provisions of Contract Labour (R&A) Act,1970

Sec.10(1) – Prohibition of Employment of contract labour.

Sec.12(1) – Licensing of contractors

Sec.21 – Responsibility for payment of wagesRule 25 – Condition of License

http://f/ed%20PROJECT%20on%20Cl%20Act%2015.08.2011/17.08.2011-final/CL%20Act.doc

http://f/ed%20PROJECT%20on%20Cl%20Act%2015.08.2011/17.08.2011-final/CL%20Act.doc



II. Why Contract Labour is required:

Necessity of Contract Labour:

Undisputedly engagement of contract labour is necessary for the following

reasons:

1. Principal employee relieved of-direct supervision & control over the

employees.

2. Contract labour will ensure speedy completion of the assigned work according to specification and requirement.

3. Relieves principal employee form burden of looking non-essential things and

allows concentrate only on main business activity.

4. The employment of contract labour would be comparatively cheaper withlesser liability of supervision and control.

5. Less IR Problems in respect of such contract labour.

Employment of contract is very common for works related for a short while or

period.(non repetitive works)

1 May 2012 4



1 May 2012 5

III. Present Scenario of Contract Labour

The Group of Ministers (GoM) proposal considered of amending CL(R&A),1970

The GoM, identified, which are in nature of supportive services of an establishment

exemption:

Employment permitted by the Central Govt for employment of Contract Labor

Housekeeping

• Horticulture

• Loading & Unloading

• Material Movements

• Canteen Employment

• Security & Vigilance

Type of jobs Percentage (%)

Gardening 0.55

Canteen 2.75

Security 8.79

Technical 10.99

Loading, unloading, packaging 12.64House keeping 19.78

Helper 39.01

Others*

5.49

* Others include tailoring, painting etc



1 May 2012 6

AAI Scenario Contract Labour

Main function & Contract labour in AAI:

1.To manage the airports, civil enclaves and aeronautical communication stations efficient

2. To provide air traffic services and air transport services at airports & civil enclaves

To fulfill the mission and objectives of the Authority, besides regular employees, number

of contract workers, are employed for the jobs which are not perennial in nature.

Such Contract labour force is around 20% of the total work force.

Jobs performed by Contract labour in AAI: (As per MoL G.O dated 16.11.99)

Project work

Loading & Unloading

Palletizing & Packing of Cargo

Bird Scaring

Trolley retrieval

Civil,Electrical & Electronic maintenance etc.,

All these jobs are not perennial in nature & required to be done as and when necessary


http://slidepdf.com/reader/full/123-contract-labour-act-final 7/141 May 2012 7

Prohibition of employment of contract labor

The Government can prohibit the employment of Contract Labor by a notificationin the following areas: The process, operation is the main business of theestablishment

• Continuous Manufacturing

• Perennial nature of work

• Where the work should be done by whole – time workmen.

S.NoDepartment

Cargo Security Horticulture Engg(E) Engg(C ) Terminal Operation Others TOTAL

Region / Airport

1 NORTHERN

0 18 0 488 240 0 42 37 825

2 EASTERN 3 19 0 156 16 78 14 1 287

3 SOUTHERN 0 230 0 289 104 175 45 59 902

4 WESTERN 0 33 8 257 3 210 18 0 529

5 CHENNAI 688 41 0 161 22 0 28 0 940

6 KOLKATA 80 0 0 973 0 0 99 108 1260

TOTAL 771 341 8 2324 385 463 246 205 4743

% 16.26 7.19 0.17 49.00 8.12 9.76 5.19 4.32 100.00

Contract Manpower status as on 01.01.2010.



WAGES – Contract Labour

1 May 2012 8

In general, it has been found that there are three

categories of firms as far as wage payment is concerned.

1. The large private firms -pay more than market wages as

efficiency wage. The efficiency wage hypothesis in economics states

that if the work effort depends positively on the wage level, a profit

maximizing firm would find it profitable to pay above the market

clearing level

2. The second category of firms are those which strictly adhere

to the prescribed minimum wage norms. Public sector firms

fall in this category

3. The third category comprises the large number of small private firms

who prefer to employ uneducated workers who can be paid even less than

minimum wages. Much of migrant laborers from the eastern and north eastern

regions of India and also from Nepal, fall in this category.



Contract labour wages in other PSU’s

S.N

oORGANISATION

WAGE COMPONENTSINCREMENT

TOTAL SALARY Entitled

for

BASIC D.A H.R.A

ALLOW

ANCE OTHERS MIN. MAX.

1 RCF,MUMBAI1,540 [47%] 30% 6% 34% 7,422 12,413 6,251

2 ONGC-INDIA

Paying at par with regular workers

3 NALCO

4 RINL,VSKPPaying randomly.

5 AAI

Contract labour Wages in Airports Authority of India.

In most of PSU’s pay more then minimum wages and almost equal to permanent

workers for the same nature of category.

Reason being…



Advantages of Paying better wages aligning with statutory compliances:

1. Money is considered as a powerful motivator

2. Paying wages more that minimum wages gives more efficiency

3. Better wages reduces to think about other alternatives

4. Paying aligning with statutory guidelines free principal employees for many worries

5. Attract talented people into contract employment

6. Satisfied labour – less IR problems & less complication reg. statutory compliance.

7. Better wages leads to high productivity.

8. Ultimately payment of better wages have a long term Advantage



1 May 2012 11

AAI and cases related with Contract Labour Act,1970

No case as on dated related to payment of wages



POSITIONS AND INTERESTS OF DIFFERENT STAKEHOLDERS ON THIS LEGISLATION Trade Unions: Trade Union Section 10 should not be amended to the disadvantage of contractworkers. It will ensure following favors for workers.•Ensure due wages to workers. 2.Job security 3. Get benefits of labour laws.

Employers: Employers want amendment in Section 10 to facilitate of activities without anyrestrictions. It will help them in•Reducing costs. 2Getting more flexibility at work place 3.Power and control at work place.•Saving from legal battles. 5.More flexibility leads to better outputs and a more competitiveworking environment.Political parties: There is lack of consensus among different key personnel in political parties.They have to make balance between the two diametrically opposite interests,

•Political support of workers•Financial support of employers to meet election expenses.Government: It varies with the political party in power; NDA government seemed more inclinedto allow outsourcing and engaging workers on contract. It is the responsibility of government tobring requisite amendment in this act so that more money can flow in India in form of ForeignDirect investment.POSSIBLE ALTERNATIVE SUGGESTIONS Though there are significant conflicts in the interests of the trade unions and employers, thecontact workers are quite freely changed by employers owing to high vulnerability of thoseworkers. The high job insecurity and unemployment in the country virtually forces the contractworkers to insure compliance to employers. It enhances the control of the employers at theworkplace. Hence, the trade unions are keen to develop strict norms of employing least numberof contract labour and higher number of regular employees. In such scenario, it is a challenge to

both the employers and trade unions to reach to a common ground to get solution to the presentsituation.

Current Scenario of CL Act Imp. Provision of Sec(10)



Conclusion:

Wages play a crucial role .

Wages develop a considerable relationship

between employees & employer.

The contract Labour Act deals with both abolition & regulation

of the contact workers. While engaging contract workers

through contractors in AAI, It is always ensured it is done with

conformity of the Law

123 contract labour act-final

Documents