Contract Labour Act.
Contract Labour Act.
Contract Labour Act.
By
HighQ- The HR Club
It applies
Provide that appropriate government may, after giving not less than 2 months
notice of its intention to do so, by notification in Official Gazette, may apply the
provisions of this Act to any establishment or contractor employing even less than
20 workmens.
It shall not apply to establishments in which work of only an intermittent or
casual nature is performed.
EXPLANATION:
For the purpose of this subsection, work performed in an establishment shall not
be deemed of an intermittent nature if it
● Was performed for more than 120 days in the preceding 12 months, or
● Is of seasonal character and is performed for more than 60 days in a year.
Registration Vs. Obtaining License
REGISTRATION LICENSING
● Contractor
● Principal Employer
● Renewable on yearly basis
● Not renewable
● License is to be displayed
● Cert. of Reg need not be
prominently at premises
displayed
● Issued on payment of Fees and
● Issued on payment of Fees only
Security Money
● Only Bank draft req.
● Bank draft and cert by PE req
● No conditions
● There is full Annexure containing
conditions for fulfillment by
contractor.
Definitions
APPROPRIATE GOVT.: (i) in relation to an establishment in respect of which the
appropriate Government under the Industrial Disputes Act, 1947 (14 of 1947), is the
Central Government;
(ii) in relation to any other establishment, the Government of the State in which that
other establishment is situated.
(ii) in a factory, the owner or occupier of the factory and where a person has
been named as the manager of the factory under the Factories Act, 1948 (63 of
1948), the person so named.
Prohibition on employment of Contract Labour
Appropriate government can prohibit employment of contract labour in any
process, operation, or work in any establishment by issuing a notification.
● Factories Act;
● Industrial Disputes Act;
● Workmen’s Compensation Act;
● Employees State Insurance Act;
● Payment Of Wages Act;
● Employees Provident Fund Act.
Recent Amendments
● The Contract Labour (Regulation and Abolition) (Amendment) Act, 1986.
● The Delegated Legislation Provisions Act, 2004.
Parliament does not make delegated legislation, instead they delegate that
power to another.
Can the employees engaged by the contractor make a demand upon the
employer to take them on the muster roll? Whether the appropriate government,
on a dispute raised by such employees, can make a reference to the labour court
or the industrial tribunal for adjudication to this effect?
Whether workmen engaged by a contractor not holding a valid licence under the
Contract Labour (Regulation and Abolition) Act, 1970, can be treated as workmen
of principal employer?
Workmen of Best & Crompton Industries Ltd. VS. Best & Crompton
Engineering Ltd.
New Delhi General Mazdoor Union and Delhi Offices and Establishments
Employees Union vs. SCOPE
Sections 7 & 12
CONTRACTOR’S EMPLOYEE AND EPF
Are the employees engaged/employed through the contractor coverable under the
Employees Provident Fund and Miscellaneous Provisions Act?
Past : By amendments to the scheme in 1958 and 1960, the persons employed by or
through ,contractor or in connection with an establishment to which the Act applied were
brought within the purview of the scheme and principal employer was made responsible
for compliance with the provisions, of the Act and the scheme in respect of such
employees.
Now : The defect pointed out by the Supreme Court has now been removed by the
Amending Act 28 of 1963. Accordingly, contractor's employees have become eligible
for the provident fund benefits w.e.f. 30th November, 1963.
CONTRACTOR’S EMPLOYEE AND ESI
Will the principal employer be liable to pay gratuity and bonus to the employees
employed by the contractor?
The gratuity and bonus will not be payable by the principal employer since these
do not come within the definition of 'wages'
IMPLICATIONS OF CONTRACT LABOUR ACT
Section 2(3)(b) of the Contract Labour (Regulation and Abolition) Act, 1970,
implies that if the workman is not hired through contractor holding a valid licence
under the Act, he would be a workman employed by the management itself.
ABSORPTION AS A REGULAR EMPLOYEE
Will the principal employer be liable to absorb the contract labour which has been
abolished by the appropriate Government?
There is no provision in the contract labour (Regulation and Abolition) Act, 1970,
which requires the employer to absorb the contract labour as a regular employee,
if the contract labour has been abolished by the government in such
organisations.
PROCEDURE FOR PROHIBITING CONTRACT LABOUR
What are the formalities in prohibiting contract labour by the appropriate government?
Gujarat Electricity Board and Thermal Power Station vs. Hind Mazdoor Sabha
The Orissa High Court has held that the appropriate Government is bound to
consult Advisory Board before issuing notification under Section 10 of the
Contract Labour (Regulation and Abolition) Act, prohibiting the employment of
contract labour in any process, operation or other work.The decision regarding the
prohibition of employment of contract labour is no doubt with the appropriate
Government but this decision is subject to judicial review. It was further held that
when the appropriate Government failed to place material before the Court to indicate
the nature of the condition, the appropriate Government had with the Advisory Board
and the relevant factors that weighed with the appropriate Government in issuing the
notification abolishing the contract labour, the notification is liable to be quashed.
Common Interview Questions
► What Are The Differences Between Contract Labour And Outsourcing? Which Is A Better Option And Why?
► Is Contract Labour Act Applicable When Jobs And Services Are Outsourced?
► What Are Non-Perennial And Non-Permanent Jobs Which Can Be Assigned To Contract Labor?
► Each Contractor Engaging Less Than 20 But Together They Engage More Than 20. Will The Provisions Of Registration,
Licensing And Other Statutory Provisions Apply?
► Can And Should Employer Have A Say In The Number And Selection Of Contract Labour?
► Can We Engage Contract Labour In Place Of Permanent Employee?
► Can And Should We Engage Contract Labour In Manufacturing Jobs? What Is The Risk Involved?
► Is It Necessary And Desirable To Issue Employment Card/Gate Pass/Identity Card To Contract Labour? If So Under
Whose Authority/Signature? What Are The Safeguards Required?
► Can We Have Permanent Employees And Contract Labour Working Side By Side On The Same Job?
► What Is The Best Ratio Between Permanent Employees And Contract Labour? Can We Engage 100% Contract Labour?
► Can We Have Different Wages And Other Terms For Permanent Employees And Contract Labour Doing The Same Or
Similar Job?
► Application And Implication Of P.F., ESI, Bonus, Gratuity And Other Benefits To Contract Labour And How To Ensure
Compliance?
► How To Ensure Submission Of PF And ESI Returns By The Contractor?
► Security, Housekeeping, Drivers, Canteens, Horticulture Etc. On Contract/Voucher Payment. Sustainability? Case Laws?
► What Is The Liability Of Principal Employer For Injury, Illness, Disability, Death Etc.
► Who Is To Take Disciplinary Action Against Contract Labour? Under What Rules? Are Standing Orders Applicable To
Contract Labour?
► Is it permissible to deploy Contract labour even in Core activity under certain conditions ?
LINKS
https://www.citehr.com/354347-35-interesting-questions-related-contract-labour.html
https://www.google.co.in/amp/s/interviewquestionsanswers.org/__Contract-Labour-Based-Job-
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