Sneha Chavan

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Module 6. The Contract Labour (Regulation and Abolition)Act 1970
PYQ
1. Explain the procedure of registration of establishment under the
contract labour (Regulation and Prohibition Act,1970 ( 2022) (15 marks)
2. Discuss in detail the provisions for welfare and health of contract labour
under the contract labour (Regulation and Abolition) Act, 1970. (2022)
(15 marks)
3. Explain the object of contract labour (Regulation and Abolition)Act 1970
Elaborate the process for registration for establishment? (2019) (15
marks)
4. Write a detail note on licensing of contractors under the contract labour
(Regulation and abolition Act) 1970? (2019)(15 marks)
5. Short note on penalties and procedure under the contract labour
(Regulation and abolition Act) 1970? (2022) (5 marks)
6. Short note on labour problems (2019) (5 marks)

Contract Labour (Regulation & Abolition) Act, 1970

SYNOPSIS
• Introduction
• Objective and scope of the Act
• Applicability of the Contract Labour (Regulation & Abolition) Act, 1970
• Essential provisions of the Contract Labour (Regulation & Abolition) Act, 1970
o Composition of the advisory boards
▪ Central Advisory Board
▪ State Advisory Board
o Registration procedure of establishments employing contract labour
▪ Registration of certain establishments
▪ Revocation of registration
▪ Prohibition of employment of contract labour
o Licencing of contractors
▪ Appointment of licensing officers
▪ Grant, revocation, suspension and amendment of licences
o Procedure for appeal
o Payment of wages
o Welfare and health of contract labour
o Infringement of provisions concerning employment labour
▪ Cognizance of offences
• Constitutional validity of the Contract Labour (Regulation & Abolition) Act, 1970
• Conclusion
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Introduction
Contract labour is the system of employing labourers through a contract by a
contractor for a specified period. A workman is known as a contract labourer
when they are assigned to a work of an establishment for a specific period
through a contract by a contractor with or without the knowledge of the
principal employer. Contract workmen are indirect employees; a contract
worker is a daily wager or the daily wages are accumulated and given at the end
of the month. It is the responsibility of the contractor to hire, supervise and
remunerate contract labourers.

In India, contract labourers are used in various industries varying from skilled to
semi-skilled jobs. Before and after independence the status and condition of
contract labour were analysed by numerous commissions, committees, Labour
Bureau Ministry of Labour, etc. and it was found that the major characteristics
of contract labour are poor economic conditions of the workers, casual nature
of employment, lack of job security, etc. Therefore the legislature enacted
the Contract Labour (Regulation & Abolition) Act, 1970 (which came into force
on 10th February, 1971) to regulate the adequate functioning of the contract
labourers and to prevent the exploitation of contract labourers by the hands of
management.

Objective and scope of the Act

The objective and scope of the Act are:

• To prevent exploitation of contract labour.

• To provide proper and habitable working conditions.
• To regulate the functioning of the advisory boards.
• To lay down the rules and regulations regarding the registration
procedure of the establishments employing contract labour.
• To state the necessary requirements and the procedure of licensing of
contracts.
• To provide the penal provisions in case of violation of offences under
the Act.
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Applicability of the Contract Labour (Regulation & Abolition) Act,
1970
Section 1(4) mentions the establishments where the Act will be applicable:

• Any establishment where twenty or more workmen are employed or

were associated as contract labour on any day during the preceding
twelve months.
• Any contractor who employs or employed twenty or more workmen as
contract labour on any day of the preceding twelve months.
• The Act is also applicable to every establishment if the workmen are
employed in the establishment as ‘contract labour’. Section 2(b) of the
Act states that a workman is deemed to be employed as contract
labour when he is hired in or in connection with such work by or
through a contractor with or without the knowledge of the principal
employer.
• The Act does not apply to any organisation or establishments where
any work of intermittent or casual nature is performed. The Act states
that a work is deemed to be of intermittent nature if it is performed for
less than 120 days in the preceding twelve months or it is of non-
seasonal character and is performed for less than 60 days in a year.
• The Act is not applicable to a person who is appointed in an advisory or
managerial capacity.

Composition of the advisory boards

Chapter 2 of the Contract Labour (Regulation & Abolition) Act, 1970 mentions
the establishment and composition of the Central and State Advisory Boards.
The functions of these boards are to advise the Central and state governments
respectively on the matters concerning the administration of the Act, and also
to carry out all the necessary functions assigned under the Act.

Central Advisory Board

The Central Advisory Board consists of a Chairman appointed by the Central
government, the Chief Labour Commissioner, and the Central Government may
nominate eleven to seventeen members to represent the government, railways,
coal industry, mining industry, contractors, workmen and members from any
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other fields which, in the opinion of the Central Government ought to be
represented on the Central Advisory Board.

Furthermore, Section 3 of the Act also states that the number of members
nominated to represent the workmen shall not be less than the number of
members nominated to represent the principal employers and the contractors.

State Advisory Board

Section 4 of the Contract Labour (Regulation & Abolition) Act, 1970 states the
composition of the State Advisory Board. It consists of a Chairman appointed by
the state government, the Labour Commissioner of that state and in their
absence, any other officer will be appointed by the state government and the
state government may nominate nine to eleven members to represent that
government, industry, contractors, workmen and members from any other
fields which, in the opinion of the state government, ought to be represented
on the State Advisory Board. However, the number of members nominated to
represent the workmen shall not be less than the number of members
nominated to represent the principal employers and the contractors.

Both Central and State Advisory Boards have the power to form committees
under this Act as they may think fit. The committees will function according to
the provisions of the Act and will carry out all the necessary duties and
responsibilities.

Registration of certain establishments

Section 7 of the Contract Labour (Regulation & Abolition) Act, 1970 states the
registration procedure of the establishments falling under the Act. The principal
employer of such an establishment must make an application to the registering
office in the prescribed manner. By the appropriate government notification in
the Official Gazette must be made within the stipulated period for registration
of the establishment. In cases of expiration of such stipulated period, the
registering office will only accept applications if the registering officer is satisfied
that the applicant was prevented by sufficient cause from making the
application in time.
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After completion of the application of registration, the registering office will
register the establishment and grant the registration certificate to the principal
employer.

Revocation of registration
The registering office has the power to revoke the registration of an
establishment with the approval of the appropriate government if it is satisfied
that the registration of the establishment was received through
misrepresentation, suppression of any material fact, or any other reason which
renders the registration ineffective. However, before revoking the registration
the registering office must give an opportunity to the principal employer of the
establishment to be heard.

Prohibition of employment of contract labour

The Central or state government after consultation with the appropriate
advisory boards may prohibit the employment of contract labour in any process,
operation or other work in any establishment as stated under Section 10 of the
Act.

Licencing of contractors

Chapter 4 of the Contract Labour (Regulation & Abolition) Act, 1970 states the
significant requirements and the procedure of licensing of contracts. This
Chapter lays down the required steps for granting, revoking, suspending and
amending a licence.

Appointment of licensing officers

The appropriate government by an order in the Official Gazette may appoint
Gazetted Officers of the government as licensing officers and state their powers
and functions under Section 11 of the Act.

Grant, revocation, suspension and amendment of licences

Any application for granting a licence under this Act must contain the particulars
regarding the location of the establishment, the nature of the process, operation
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or work for which contract labour is to be employed. The granted licence will be
valid for the specified period and may be renewed from time to time.

However, if it comes to the attention of the licencing officer that a licence has
been obtained through misrepresentation, suppression of any material fact or
the holder of the licence has failed to comply with the conditions subject to
granting of the licence or contravened any provision of the Act then the licensing
officer after giving reasonable opportunity to be heard to the licence holder may
revoke, suspend or amend the licence as the case may be.

Procedure for appeal

Section 15 of the Act states that any person aggrieved under any provision of
the Act may appeal to an appellate officer appointed by the appropriate
government within thirty days from the date on which the order is
communicated to them.

Payment of wages

It is the responsibility of the contractor to pay the required wages to each

worker employed under contract labour before the expiry of the stipulated
period. If the contractor fails to make the payment within the stipulated period
then the principal employer shall be liable to make payment of wages in full or
the unpaid balance due. The wages are to be fixed by the Commissioner of
Labour.

Welfare and health of contract labour

Under Chapter 5 of the Act, it is the duty of the principal employer to ensure
that the contractor provides the following facilities adhering to the rules laid
down by the appropriate government.

• If the contractor is employing more than one hundred workmen by

contract labour then one or more canteens shall be provided and
maintained by the contractor for the use of such contract labour.
• Concerning the work of an establishment where contract labour is
required to halt at night, the contractor must provide and maintain
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restrooms or other suitable facilities which shall be sufficiently lighted,
ventilated, clean and comfortable.
• The contractor is liable to provide other facilities such as drinking
water, latrines and urinals (separate for men and women), washing
facilities, first-aid, etc.

Infringement of provisions concerning employment labour

Section 23 of the Contract Labour (Regulation & Abolition) Act, 1970 regulates
the proper functioning of the provisions of the Act, it states that if anyone
violates any provisions or any rules concerning the employment of contract
labour or contravenes any condition of a licence granted under this Act will be
punished with imprisonment for a term that may extend to three months or with
fine which may extend to one thousand rupees or both.

The Act further states that if any offence is committed by a company infringing
any provisions of the Act then the company, as well as every person responsible
during the time of the commission of the offence, will be held liable.

Cognizance of offences
Under Section 26 a court of law can take cognizance of an offence only when a
complaint is made by an inspector, and no court inferior to a Presidency
Magistrate or a Magistrate of the First Class shall try any offence punishable
under this Act.

Constitutional validity of the Contract Labour (Regulation &

Abolition) Act, 1970
The application of this Act does not violate any Articles of the Indian
Constitution. In the case, Gammon India Ltd. Etc. Etc vs. Union Of India and
others (1974). the constitutional validity of the Act was challenged; it was stated
that Section 28 of the Act conferred arbitrary and unguided power thus
violating Articles 14 and 15 of the Indian Constitution. It was also contended
before the Court that Section 34 of the Act which empowers the Central
Government to make any provision for removal of difficulty is unconstitutional
on the grounds of excessive delegation. The Supreme Court held that Section 34
of the Act is an application for the internal functioning of the administrative
machinery and gives effect to the provisions of the Act, therefore does not
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amount to excessive delegation. The Court dismissed the petitions and held that
the Act does not violate the Constitution and it is constitutionally valid.

Conclusion
The Contract Labour (Regulation & Abolition) Act, 1970 was enacted to prevent
exploitation of contract labourers as there was no existing legislation that dealt
with contract labour. However, certain shortcomings of the Act must be taken
into consideration by the legislature and necessary changes should be made and
implemented. Furthermore, the Act should also be made easier and less
complicated for principal employers and contractors and with better safeguards
and amenities to contract labourers.