Licensing of Contractors
ABSTRACT OF THE CONTRACT LABOUR ACT, 1970 No employer shall undertake any work through Contract Labour except under the
license issued by the Licensing Officer [Sec 11]. Such license will contain conditions as
to hours of work, fixation of wages and other essential amenities for the contract
The Act aims at the abolition of Contract Labour in respect of such categories as may employees. Such license shall be valid for a specific period where after the employer
be notified by the appropriate Government and at regulating the service conditions of may apply for renewal [Sec 12(2)]. Any appeal against an order of the licensing officer
Contract Labour where abolition is not possible. may be made by the employer within 30 days before the Appellate Officer nominated
by the Government [Sec 15].
APPLICABILITY
Welfare, Safety and Health measures
This act applies
Every principal employer governed by this Act is responsible for maintaining such
To every establishment in which 20 or more workmen are employed or were standards of welfare, safety and health of contract labours as prescribed in detail in
employed on any day of the proceeding 12 months as contract labour [Sec 1(4) the Act [Sec 16 to 21]
(a)]
Registers and Records
To every contractor who employs or who employed on any day of the preceding
12 months 20 or more workmen [Sec 1(4) (a)] Registers of contractors: Every principal employer shall maintain in respect of each
registered establishment a register of contractors in Form XII [Rule 74]
To whom does it not apply?
Employment Card:
It shall not apply to establishments in which work only of an intermittent or casual
nature is performed [Sec 1(5) (a). I) Every contractor shall issue an employment card in Form XIV to each worker
within 03 days of employment of the workers,
If question arises whether work performed in an establishment is of an intermittent or
casual nature, the appropriate Government shall decide that question after II) The card shall be maintained up to date and any change in the Particulars shall
consultation with the Central Board or, as the case may be, a state Board, and its be entered therein [Rule 76]
decision shall be final [Sec 1(5) (b) Service Certificate: On termination of employment for any reason whatsoever the
For this purpose of this subsection, work performed in an establishment shall not be contractor shall issue to the workman whose service have been terminated a Service
deemed to be an intermittent nature: Certificate in Form XV [Rule 77]
Muster Roll, Wages Register, Deduction Register and Overtime Register: Every
If it was performed for more than 120 days in the preceding 12 months; or
contractor shall in respect of each work on which he engages contract labour [Rule 78]
If it is of a seasonal character and is performed for more than 60 days in year.
maintain a Muster Roll and Registers of Wages in Forms XVI & XVII respectively
Administration provided that a combined Register of Wage- cum- Muster Roll in Form XVIII
shall be maintained by the contractor where the wage period is a fortnight or
The Act is administered by the Central or State Advisory Boards, as the case may be,
less;
whereon the Labour Commissioner will be a member [Sec 3 & 4]
Who is principal employer? maintain a Register of Deductions for damage or loss, Register of Fines and
Registers of Advances in Form XX, Form XXI and Form XXII respectively.
The head of any office or department of Government or local authority or, in a factory,
the owner or occupier of the factory or a person named as the Manager of the factory Maintain a Register of Overtime in Form XXIII recording therein the numbers of
under the Factories Act 1948, is the principal employer under the Act [Sec 2(g)] hours of, and wages paid for, overtime work if any.
What are Wages? Every contractor shall, where the wage period is one week or more, issue wage
slips in Form XIX, to the workmen at least a day prior to the disbursement of
For the purpose of this Act, the expression ‘wages’ shall have the same meaning wages.
assigned to it under the Payment of Wages Act. Wages will, therefore, comprise Basic
Pay (B. P.), Dearness Allowance (D.A), City Compensatory Allowance (C.C.A), Overtime Every contractor shall obtain the signature or thumb impression of the worker
Wages (O.W) and Production Incentive,. The term also includes encashment amount of concerned against the entries relating to him on the Register of Wages or
leave, terminal dues, such as, notice pay, retrenchment compensation layoff., if the Muster Roll-cum-Wages Register, as the case may be, and the entries shall be
contract between the worker and the immediate employer so provide [Sec 2(h)] authenticated by the initials of the contractor or his authorized representative
and shall also be duly certified by the authorized representative of the principal
Who is a ‘Workman’? employer in the following manner:
Workman means any person employed in or in connection with a work of skilled, semi- The authorized representative of the principal employer shall record under his
skilled or unskilled, manual, supervisory, technical or clerical nature for hire or reward, signature a certificate at the end of the entries in the Register of Wages or the
whether terms of employment are express or implied. The expression ‘workman’ does (Register of Wages-cum-Muster Roll), as the case may be, in the following form:
not includes: “Certified that the amount shown in Column No…..has been paid to the
(a) any person employed mainly in a managerial or administrative capacity; or workman concerned in my presence on………..(date) at…………….(place)
(b) a person being employed in a supervisory capacity but draw wages exceeding Display of the Act
Rs. 500/- per mensem or exercises either by the nature of the duties attached Every contractor shall display an abstract of the Act and rules in English and Hindi and
to his office or by reason of the powers vested in him, functions mainly of a in the language spoken by the majority of workers in such form as may be approved by
managerial nature; or the Chief Labour Commissioner (Central). The contractor shall also display notices
(c) a person who is out-worker, that is to say, a person to whom any articles or showing rates of wages, hours of work, wage period, dates of payment of wages in
materials are given out by on behalf of the principal employer to be made up, conspicuous places at the establishment and the work site [Rule 80-81 (1) & (2)].
cleaned, washed, altered, ornamented, finished, repaired, adapted or Returns
otherwise processed for sale for the purpose of the trade or business of the
principal employer and process is to be carried out either in the home of the Every principal employer shall, within 15 days of the commencement or completion of
out-worker or in some other premises, not being premises under the control each contract work under each contractor, submit a return to the Inspector, intimating
and management of the principal employer [Sec 2(i)] the actual dates of commencement and completion of such contract work in Form VI-B
[Rule 81(3)].
Contractor to make payment of wages
Every contractor shall send half yearly returns in Form XIV (in duplicate) so as to reach
The contractor shall be responsible for payment of wages to each contract worker the Licensing Officer concerned not latter than 30 days from the close of the half year
employed by him, such amounts as wages and at such intervals as are agreed upon in [Rule 82(1)]
the contract. The contractor should ensure that the wages are disbursed in the
presence of authorized representative of the principal employer. Every principal employer of registered establishment shall send annually a return in
Form XXV (in duplicate) so as to reach the Registering Officer concerned not later than
The obligations of the principal employer th
15 February following end of the year to which it relates. [82 (2)]
In the case Contractor fails to make payment of wages within the prescribed period or Penalties
makes short payment, then the principal employer shall be liable to make payment of
wages in full or the unpaid balance due, as the case may be, to the contract labour, Contravention of provisions of the Act will attract punishment by way of imprisonment
employed by the Contractor and recover the amount so paid from the Contractor or fine or both.
either by deduction from any amount payable to the contractor under any contract or
as a debt payable by the Contractor [Sec 21]
Employer’s Obligation
Every principal employer of an establishment shall, under this Act, make an application
to the Registering Officer in Form I for registration of his establishment. If the
establishment fails to so register, it is prohibited to employ contract labour after the
expiry of the period permitted for making the application [Sec 7(1) & (2)]
