labour law 2 final project

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FINAL RESEARCH PROJECT OF LABOUR LAW-1 ON THE

TOPIC:-

“LICENSING A CONRACTOR”

PRESENTED BY: - KUMAR MANGALAM

B.A.LLB, 4TH SEMESTER, 2nd YEAR

ROLL NO.:- 936

SUBMITTED TO: - SUBHASH CHANDRA ROY SIR

Date:-

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ACKNOWLEDGEMENT

I am feeling highly elated to work on the topic “GIFT UNDER Hindu LAW” under

the guidance of my FAMILY LAW-2 faculty. I am very grateful to her for her

exemplary guidance. I would like to enlighten my readers regarding this topic and I

hope I have tried my best to pave the way for bringing more luminosity to this

topic.

I also want to thank all of my friends, without whose cooperation this project

was not possible. Apart from all these, I want to give special thanks to the

librarian of my university who made every relevant materials regarding to my

topic available to me at the time of my busy research work and gave me

assistance. And at last I am very much obliged to the God who provided me the

potential for the rigorous research work.

Thanking you

Kumar Mangalam

936

C.N.L.U.

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TABLE OF CONTENTS

SL.NO. CONTENTS PAGE NO.

1. ACKNOWLEDGEMENT 2

2.

RESEARCH METHODOLOGY, OBJECTIVE and CHAPTERISATION

4

3. INTRODUCTION

5-8

4.

TYPES OF CONTRACTOR 8-9

5.

LICENSING OF CONTRACTOR

10-12

6.

CASE STUDY

13-15

7.

ANALYSIS AND CONCLUSION

16-18

BIBLIOGRAPHY 19

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OBJECTIVE OF THE RESEARCH

The main objective of this research work to:-

1. To know about different types of contractor,

2. Licensing of contractor,

3. Penalties and procedure.

Hypothesis

The hypothesis of the researcher is as follows:-

1. There is no special procedure for licensing the contractor.

2. All types’ contractors are the same and have same work to do.

Research methodology

The researcher has used doctrinal method to do this research. The researcher has

relied upon books, documents, and online databases.

Primary sources: - Labour and Industrial laws, S.N.Mishra, 27th edition, Central Law

Agency.

Secondary sources: - journals, documents and online databases.

Chapterisation

1. Introduction

2. Types of contractor

3. Licensing a contractor

4. Case laws

5. Analysis and conclusion

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1 Introduction

Contractor is a person who is hired to perform work or to provide goods at certain

price or within certain time. Contractor is an independent entity that agrees to

furnish certain number and quantity of goods, material, and equipment, personnel

services that meet or exceed stated requirements or specifications at a mutually

agreed price within specified time to another independent entity called as contractee

or principal. Contractor means, “A person who undertakes to produce a given result

for the establishment, other than a mere supply of goods and articles of manufacture

to such establishment, through contract labour or who supplies contract labour for

any work of the establishment and includes sub contractor.”1

Licensing is permission granted by competent authority to exercise a certain privilege

that without such authorization would constitute an illegal act. The certificate or the

document itself confers the permission to engage in otherwise prescribed conduct.

The granting of permission to use intellectual property rights such as trademarks,

patents or technology under certain conditions.

There are some legislations under “The Contract Labour (Regulation and Abolition)

Act, 1970:-

1. Central Advisory Board—

The Central Government shall, as soon as may be, constitute a board to be called the

Central Advisory Contract Labour Board to advise the Central Government on such

matters arising out of administration of this act as may be referred to it and to carry

out other functions assigned to it under this act.

The Central Board shall consist of:-2

a. A chairman to be appointed by the central government.

b. The Chief Labour commissioner(Central)

c. Such number of members, not exceeding seventeen but not less than eleven,

as the Central Government may nominate to represent that government, the

railways and any other interests which, in the opinion of the Central

Government, ought to be represented on the Central Board.

1 Section 2(c), The contract labour(Regulation and Abolition) Act, 1970

2 Section 3 of The contract labour(Regulation and Abolition) Act, 1970

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2. State Advisory Board3

This board could be constituted by State Government. The State Board shall consist

of:-

a. A chairman to be appointed by the State Government

b. The labour commissioner

c. Such number of members, not exceeding eleven but not less than nine.

Power to constitute committees4

1. The central Board or the State Board as the case may be may constitute such

committees and for such purpose or purposes as it may think fit.

2. The committee constituted shall meet at such times and places and shall

observe such rules of procedure in regard to the transaction of business at its

meetings as may be prescribed.

3. The members of a committee shall be paid such fees and allowances for

attending its meetings as may be prescribed:

Provided that no fees shall, be payable to a member who is an officer of Government

or of any corporation established by any law for the time being in force.

REGISTRATION OF ESTABLISHMENTS EMPLOYING CONTRACT LABOUR

Appointment of registering officers:- 5

The appropriate Government may, by an order notified in the Official Gazette—

(a) Appoint such persons, being Gazetted Officers of Government.

(b) Define the limits, within which a registering officer shall exercise the powers

conferred on him by or under this Act.

Registration of certain establishments.- 6

1. Every principal employer of an establishment to which this Act applies shall,

within such period as the appropriate

Government may, by notification in the Official Gazette, fix in this behalf with respect

to establishments generally or with respect to any class of them, make an application





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to the registering officer in the prescribed manner for registration of the

establishment.

2. If the application for registration is complete in all respects, the registering

officer shall register the establishment and issue to the principal employer of

the establishment a certificate of registration containing such particulars as

may be prescribed.

Revocation of registration in certain cases:-7

If the registering officer is satisfied, either on a reference made to him in this behalf

or otherwise, that the registration of any establishment has been obtained by

misrepresentation or suppression of any material fact, or that for any other reason

the registration has become useless or ineffective and, therefore, requires to be

revoked, the registering officer may, after giving an opportunity to the principal

employer of the establishment to be heard and with the previous approval of the

appropriate Government, revoke the registration.

Prohibition of employment of contract labour.- 8

(1) Notwithstanding anything contained in this Act, the appropriate Government

may, after consultation with the Central Board or, as the case may be, a State

Board, prohibit, by notification in the Official Gazette, employment of

contract labour in any process, operation or other work in any establishment.

(2) Before issuing any notification under sub-section (1) in relation to an

establishment, the appropriate Government shall have regard to the

conditions of work and benefits provided for the contract labour in that

establishment and other relevant factors.



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2 Types of contractor

There are different types of contractors and contracting services, and if I had to

categorize them, I would define three major categories. The differences in these

three categories of contractor largely account for the differences in price, and have a

very large impact on the amount of work the investor will be required to exert

himself. As you might suspect, as you move from the more expensive to the less

expensive contractor solutions, the amount of effort that the investor must exert

increases quickly.

1. GENERAL CONTRACTOR

The term “general contractor” is used in two ways, in my experience. From now on, I

am going to differentiate “general contractor” from “General Contractor”. A general

contractor is someone who has the ability to tackle a lot of different aspects of a

rehab project; most general contractors are good at carpentry, sheet-rock, basic

electrical, basic plumbing, basic HVAC, and other general areas of home renovation

and rehab. This type of general contractor might be referred to as a “handyman,”

though if he is licensed and highly experienced, he’s likely a lot more than just that.

The term General Contractor refers to someone who has all the skills of a general

contractor, but also manages all the aspects of the renovation that he doesn’t

actually execute himself. A General Contractor will often hire sub-contractors

(contractors with specific skill-sets) to come in to handle the work that he is either

not skilled enough to complete or too busy to complete. Not only does a General

Contractor hire the necessary sub-contractors, but he will often manage the

schedule, the project budget, and all the payments as well. For big projects, the

General Contractor might spend all his time managing schedules, budgets, and sub-

contractors, and therefore might not have time to do any of the work himself. The

General Contractor is also responsible for ensuring that his subs are properly licensed

and insured, to protect you and your investment (as well as to protect himself).

2. TURN-KEY (SPECIALTY) SERVICES

Most specialty contractors, they include those popular businesses such as Terminex (pest/termite) and plumbing; of course, there are likely thousands of these kinds of companies in your area that you’ve never heard of, but are just as reliable and hold the necessary credentials license, insurance, Better Business Bureau Rating, etc. These contractors may not be the cheapest contractors as they spent a lot of time

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and effort getting the experience necessary to get their licenses and credentials, and want to get paid for their efforts, they will likely get the job done without you having to keep an eye on them or watch their every move.

3. FREELANCE WORKERS

The cheapest, but most time intensive for you avenue for getting a rehab done is to hire what I call “freelance workers.” These are guys who might have some experience in some aspects of rehab (they might even be general contractors), but don’t have enough expertise and experience to trust them to complete even individual parts of a project without management. Whereas a turn-key dry-waller can be trusted to finish up a room while you head to lunch, you probably would want to stick around to manage and instruct a freelance worker who was doing the same thing. Freelance workers are often called “unskilled contractors,” because while they work very hard, they don’t have the expertise to know how to solve tough problems themselves. They’ll look to you to do that, so it’s required that you would have the knowledge and expertise to solve those problems. Freelance workers are by-far the cheapest contractor costs for a rehab, but will require the most time, effort, expertise and patience from you.

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3 LICENSING OF CONTRACTOR

Who may apply for contractor?

The basic requirements for becoming a contractor:-9

At least 18 years old with a high school diploma or the equivalent. Proof of Indian citizenship or legal residency. Documentation on any other occupational license you hold in the state. Two passport-size photos. Explanation of citations, violations or liens resulting from construction work. Corporations doing business in any state must be registered with the

Secretary of State. Bidding for work on state projects usually requires prequalification.

THE PROCEDURE FOR LICENSING A CONTRACTOR IS AS FOLLOWS:-

1. APPOINTMENT OF LICENSING OFICERS10

The appropriate Government may, by an order notified in the Official Gazette:-

A. Appoint such persons, being Gazetted Officers of Government, as it thinks fit to be licensing officers for the purposes of licensing a contractor,

B. Define the limits, within which a licensing officer shall exercise the powers conferred on licensing officers in accordance of this act.

2. LICENSING OF CONTRACTORS11 1. The appropriate Government may, by notification in the Official Gazette,

appoint, no contractor to whom this Act applies, shall undertake or execute any work through contract labour except under and in accordance with a licence issued in that behalf by the licensing officer.

2. License may contain such conditions including, in particular, conditions as to hours of work, fixation of wages and other essential amenities in respect of

9 http://www.contractors-license.org/cna03.htm



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contract labour as the appropriate Government may deem fit to impose in accordance with the rules, if any, made under section 35 and shall be issued on payment of such fees and on the deposit of such sum.

3. GRANT OF LICENSE12 1. Every application for the grant of a licence in accordance of Section 12 shall

be made in the prescribed form and shall contain the particulars regarding the location of the establishment, the nature of process, operation or work for which contract labour is to be employed and such other particulars as prescribed in the application.13

2. The licensing officer may make such investigation in respect of the application received under sub-section (1) and in making any such investigation the licensing officer shall follow such procedure as may be prescribed by this act.14

3. A licence granted under this Chapter shall be valid for the period specified therein and may be renewed from time to time for such period and on payment of such fees and on such conditions as may be prescribed.15

4. REVOCATION, SUSPENSION AND AMENDMENT OF LICENSES16

If the licensing officer is satisfied, either on a reference made to him in this behalf or otherwise, that:-

A. A licence granted under section 12 has been obtained by misrepresentation or suppression of any material fact, or

B. The holder of a licence has, without reasonable cause, failed to comply with the conditions subject to which the licence has been granted or has contravened any of the provisions of this Act or the rules made there under, then, without prejudice to any other penalty to which the holder of the licence may be liable under this Act, the licensing officer may, after giving the holder of the licence an opportunity of show cause, revoke or suspend the licence or forfeit the sum, if any, or any portion thereof deposited as

12

Section 13 of The contract labour(Regulation and Abolition) Act, 1970 13

Section 13(1) of The contract labour(Regulation and Abolition) Act, 1970 14


Section 13 (3) of The contract labour(Regulation and Abolition) Act, 1970 16

SECTION 14 of The contract labour(Regulation and Abolition) Act, 1970

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security for the due performance of the conditions subject to which the licence has been granted.17

C. The licensing officer may vary or amend a licence granted under section 12.18

5. APPEAL19

A. Any person aggrieved by an order made under section 7, section 8, section

12 or section 14 may, within thirty days from the date on which the order is

communicated to him, prefer an appeal to an appellate officer who shall be a

person nominated in this behalf by the appropriate Government. Provided

that the appellate officer may entertain the Appeal after the expiry of the said

period of thirty days, if he is satisfied that the appellant was prevented by

sufficient cause from filing the appeal in time.20

B. On receipt of an appeal under SECTION 15(1), the appellate officer shall, after

giving the appellant an opportunity of being heard dispose of the appeal as

expeditiously as possible.21

17

Section 14 (1) of The contract labour(Regulation and Abolition) Act, 1970 18


Section 15 of The contract labour(Regulation and Abolition) Act, 1970 20


Section 15(2) of The contract labour(Regulation and Abolition) Act, 1970

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4. Case laws

1. G.M., O.N.G.C., Silchar v. O.N.G.C. Contractual Workers Union22

FACTS: The O.N.G.C. workers union demanded regularisation of services of

labourers of contractors. A reference for the same was given to the government

and government referred it to the Industrial Tribunal.

HELD:- The Industrial Tribunal gave an award that the labourers are the workmen

of the O.N.G.C., Silchar, and not the contractors and were entitled for regularisation.

This award was challenged in the high court (single judge bench), and the decision of

the tribunal was reversed. The division bench of high court reversed the decision of

the single bench high court.

An appeal was made in the Supreme Court. Supreme Court held that since industrial

tribunal has reached to the conclusion that there is presence of master-servant

relationship and no contractor is appointed then the workmen were the only

employees and was entitled for the regularisation.

2. Food Corporation of India Worker’s Union v. Food Corporation of

India and others23

In this case, Gujarat High Court held that under Section 7 of the Act, the principal

employer is required to obtain a certificate of registration issued by the appropriate

Government and under section 12, the contractor is required to obtain license. The

workman could be employed as contract labour only through licensed contractor. In

the situation wherein either of these two conditions are not satisfied a workman

employed by an intermediary would be deemed to have been employed by the

principal employer.

22

2008, Law Library Journal, 1071 (S.C.) 23

1992, I L.L.J 257 (Guj.)

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3. Philips Workers Union v. State of Maharashtra and another 24

In this case it was HELD that “where this act applies to an establishment, it is for

the appropriate government under section 10 to prohibit the employment of

contract labour and no reference under section 10 of industrial dispute act, 1947 can

be sought for absorption of contract labour by principal employer and for payment

of all benefits available to permanent employees of principal employer.

4. H.D. CHOWDA v. STATE OF ANDHRA PRADESH25

In this case a notification was issued under section 10(1) of this act, 1970 by the State

Government prohibiting contract labour in the following process of operations:

Watch and Ward personnel

Routine sweeping and scavenging

Boiler house workers

Workers of routine maintenance of plants and machinery

Persons engaged in automobile garages and workshops.

5. GENERAL LABOUR UNION(Red Flag) v. K.M.DESAI AND

OTHERS26

In this case it was held that there is no provision in this act whereby it can be

constructed even by remote possible way that in the case of failure on part of

contractor to register his contract under section 12 of the act, the employees

employed in the factory through contractor will become the employees of the

company. But the contractor will be legally penalised for such failure.

24

(1987) II L.L.J. 91 (Bom.) 25

(2003) II L.L.J. 814 (A.P.) 26

(1990) II L.L.J. 259 (Bom.)

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6. UNITED LABOU UNION AND OTHERS v. UNION OF INDIA

AND OTHERS27

In this case it was held that mere existence of penal provisions does not detract from

the positions that there can be no deemed contract labour if the two conditions

related to registration of principal employer and obtaining a valid license by the

contractor are not satisfied.

27

(1991) I L.L.J. 89 (Bom.)

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5 Analysis and conclusion

After doing the research work, the researcher has made the analysis, is as follows:

There are several pros and cons of the contract labours as well as

contractors(licensed).

PROS:-

2. Freedom

As a contractor, an individual have the freedom of picking which jobs you want to work on and setting your own schedule. If you need time off to handle personal matters, you can adjust your schedule without seeking permission from your clients. You can work for as many clients as you see fit, work from your home in whatever clothing you want and travel to your clients’ premises only as required. The limitations on how successful you can be are up to you, as you control your

professional destiny.

3. Higher Pay

Along with paying employees’ wages and salaries, employers often provide competitive benefits to retain quality workers. They must also pay Social Security, Medicare and unemployment taxes plus carry workers’ compensation and disability insurance when applicable. Contract labourers can often command a higher hourly rate than employees, because for the employer, they cost less than employees.

4. Tax benefits

Employers must withhold taxes from their employees’ pay checks, but independent contractors generally pay their own taxes quarterly. This allows you to hold onto your full pay longer. You might be able to deduct business-related expenses on your tax return that employees cannot deduct. This includes deductions for home office,

meals, entertainment, travel, equipment and insurance expenses.

DEMERITS OF CONTRACTORS

1. Job security

A contractor you have less job security than a premise. As employment law has

lessened this may not be as true as it was. Many contracts include one month

get “out clauses” in which case both you and the permit that sits next to you

could be gone in 4 weeks.

2. LESS SAY IN THE AFFAIRS

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3. CONTRACTORS HAVE TO PROVE THEM AGAIN AND AGAIN

4. LOSS OF KEY SKILLS

CONCLUSION

After completing the research work, the researcher has came to the following

conclusion:

Contractor means, “A person who undertakes to produce a given result for the

establishment, other than a mere supply of goods and articles of manufacture to

such establishment, through contract labour or who supplies contract labour for any

work of the establishment and includes sub contractor” Licensing is permission

granted by competent authority to exercise a certain privilege that without such

authorization would constitute an illegal act. The certificate or the document itself

confers the permission to engage in otherwise prescribed conduct. There are several

legislations in “The Contract Labour (Regulation and Abolition) Act, 1970 that have

been discussed earlier.

The licensing of the contractor includes some basic requirement that a contractor

has to fulfill to convince employer that he is a contractor.

The basic requirements for becoming a contractor:-

At least 18 years old with a high school diploma or the equivalent. Proof of Indian citizenship or legal residency. Documentation on any other occupational license you hold in the state. Two passport-size photos. Explanation of citations, violations or liens resulting from construction work. Corporations doing business in any state must be registered with the

Secretary of State.

There is a particular procedure to provide license to a contractor

1. Appointment of licensing officer 2. Licensing application by the contractor has to be submitted to licensing

officer. 3. Grant of license. 4. Revocation, suspension, and amendment in the license 5. Appeal

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At last, the hypothesis of the researcher has been proved wrong. There is a particular procedure for licensing a contractor. There are also different liabilities and duties of the licensed contractor and non-licensed contractor.

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BIBLIOGRAPGHY

1. S.N.MISHRA, LABOUR AND INDUSTRIAL LAWS, 27TH EDITION, CENTRAL LAW PUBLICATIONS, PAGE NO.- 1063-1092

2. http://www.contractors-license.org/cna03.htm 3. http://www.ehow.com/info_8233943_pros-cons-contract-labor.html 4. http://www.firstpointgroup.com/pros-and-cons-of-using-contractors

http://www.contractors-license.org/cna03.htm

http://www.ehow.com/info_8233943_pros-cons-contract-labor.html

http://www.firstpointgroup.com/pros-and-cons-of-using-contractors

labour law 2 final project

Documents

licensing of contractor

introduction contractor

sub contractor

busy research work

rigorous research work

different types of contractor

research methodology

g e objective