contract labour regulation act

8/6/2019 Contract Labour Regulation Act

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Contract Labour RegulationAct,1970IR Gyaan session:FIRE@X27 Sept’09



Why CL?

● Why is contract labour needed?

– For non perennial jobs

– Cost factor – More control over the workers

• Parties involved

– PE– Contractor

– Contract Labor



Sec 1

● 1(4) Applicable to

○ Every est. with 20 or more CL (are/were

employed in the preceding 12 months)○ Every contractor who employs /employed >= 20

workmen in preceding 12 months

• Proviso clause: Can be applied –Est/contractor withless than 20 CL if Appropriate Govt gives minimum 2months notice by notification in the Official Gazette

●1(5) Not Applicable to



Section 2 : Definitions● Appropriate Govt.

○ If AG under ID act is Central Govt-thus, CG

○ Otherwise, State Govt where est is situated

● Workman deemed to be CL if

– Hired by or through contractor in/in connection with work of establishment

– With or without the knowledge of the PE

○ For defining workman, predominant nature of work is important, nothing else

○ Workman does not include Managerial/admin capacity or out-worker



Section 2 : Definitions● Contractor :

○ Undertakes to produce a given result for the establishment

○ other than a mere supply of goods or articles for manufacture

○ through CL/supplies CL for est. work and

○ includes a sub-contractor

● Principal Employer :

○ Govt office/deptt/local authority: Relevant Head specified

○ Factory: Owner/Occupier/Manager under Factories Act,if named

○ Mine: Owner/Agent of Mine/manager ○ Any other est: person responsible for supervision and control



Section 10

● Most important section

● Prohibition employment of of CL

○ Appropriate govt. can prohibit CL in an est

○ Before prohibition takes into account: Conditions of work, benefits and relevant factors like:

■ Process or operation is incidental/necessary for est

■ Whether of perennial nature■ If done ordinarily using regular workmen

■ Whether sufficient to employ considerable number of whole time workmen



Consequences of Prohibition

● GESB case

– If the contract between the C and the PE is a sham, then it shall

be treated as null and void and CL will be treated as the permanentemployee of the PE: take into a/c Nature of contract

• Air India Case

– Says Absorption mandatory( Objecta Scripta)

• SAIL 2001 Case

– No where has it been said that prohibition will lead toautomatic absorption. So it is entirely the prerogative of the PE

hether he wants to absorb or not. If yes, then some reasonablerules need to be set by the management for the same.(Literascripta)



S10, Relevant cases

● NTPC 2003, Mishra Dhatu

○ If canteen is statutory obligation under S-46, then PEneeds to absorb canteen workers.

● A.P.S.R.T.C ,2006○ CL abolition is sole discretion of AG.(S 10)

○ HC cannot issue writ of Mandamus



Ch 5 : Welfare and Health of CL

● Sec 16 : Canteen

○ AG can make rules

○ If 100 or more CL in an establishment

○ Provide a Canteen

○ Specifies date, no. of canteens, standards, charges

● Sec 17: Rest –rooms

○ If CL is required to halt at night

○ In connection with the work of establishment

○ Provision and maintenance of rest rooms/alternative

accommodation by Contractor



● Sec 18: Other facilities

○ Duty of every Contractor

○ Provision of Drinking water, urinals, washing facilities

● Sec 19: First Aid facilities

○ By contractor at every place where CL is employedby him




● S 20:Liability of the Employer

• If basic amenities as cannoned by the Act are not

provided to the CL by the C, then it is the responsibility

of the PE to do so.(s 16-19)

• The PE may recover the amount spent from the C as

deduction from the contract payment or as debt.(Doctrine

if Indemnity)




S 21

● S 21: Responsibility for Payment of Wages

○ Payment of wages to CL is contractors responsibility.

○ Duty of contractor to ensure disbursement of wages in

presence of authorized representative of PE○ In case C doesn’t pay the CL, then responsibility of the

PE to pay and recover the amount from the C asdeduction from the contract payment or as debt.



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contract labour regulation act

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