Contract Labour

(Regulation and
Abolition) Act,
1970
Unit 4
  The Contract Labour (Regulation and Abolition) Act,
1970 regulates the employment of contract labour in
certain establishments and to provide for its abolition
in certain circumstances and for matters connected
therewith. The Act extends to the whole of India.
SCOPE AND  According to Section 1(4), it applies:
APPLICATIO (a) to every establishment in which twenty or more
workmen are employed or were employed on any
N day of the preceding twelve months as contract
labour;
(b) (b) to every contractor who employs or who
employed on any day of the preceding twelve
months twenty or more workmen.
ACT NOT TO
APPLY TO  According to Section 1(5), the Act shall not apply to
CERTAIN establishments in which work only of an intermittent
or casual nature is performed
ESTABLISHMEN
TS
  If performed for less than 120 days in the preceding
When not 12 months, or
intermittent/cas  If seasonal character and is performed for less than
ual 60 days in a year
  A workmen shall be deemed to be employed as
contract labour in or in connection with the work of an
Contract establishment when he is hired in or in connection
Labour with such work by or through a contractor, with or
without the knowledge of the principal employer.
[Section 2(1)(b)]
  “Contractor” in relation to an establishment, means a
person who undertakes to produce a given result for
the establishment, other than a mere supply of goods
Contractor or articles of manufacture to such establishment,
through contract labour or who supplies contract
labour for any work of the establishment and includes
a sub-contractor. [Section 2(1)(c)]
  “Establishment” means
(i) any office or department of the Government or
Establishme local authority, or
nt (ii) any place where any industry, trade, business,
manufacture or occupation is carried on. [Section
2(1)(e)]
  “Principal Employer” means
(i) In relation to any office or department of the
Government or a local authority, the head of that
office or department or such other officer as the
Government or the local authority, as the case may
be, may specify in this behalf.
(ii) In a factory, the owner or occupier of the factory
Principal and where a person has been named as the
Employer manager of the factory under the Factories Act,
1948, the person so named.
(iii) In a mine, the owner or agent of the mine and
where a person has been named as the manager of
the mine, the person so named.
(iv) in any other establishment, any person responsible
for the supervision and control of the
establishment.
  “Workman” means any person employed in or in connection
with the work of any establishment to do any skilled, semi-
skilled or unskilled, manual, supervisory, technical or clerical
work for hire or reward, whether the terms of employment be
expressed or implied, but does not include any such person-
(a) Who is employed mainly in a managerial or administrative
capacity, or
(b) Who, being employed in a supervisory capacity draws wages
exceeding five hundred rupees, either by the nature of the
Workman duties attached to the office or by reason of the powers
vested in him, functions mainly of a managerial nature; or
(c) who is an out-worker, that is to say, a person to whom any
articles or materials are given out by or on behalf of the
principal employer to be made up, cleaned, washed, altered,
ornamented, finished, repaired, adapted or otherwise
processed for sale for the purposes of the trade or business of
the principal employer and the process is to be carried out
either in the home of the out worker or in some other
premises not being premises under the control and
management of the principal employer. [Section 2(1)(i)]
  Canteen: 100 or more
 Restroom: In every place where contract labor is
required to halt at night in connection with the work
of an establishment. It shall be sufficiently lighted and
ventilated and shall be maintained in a clean and
WELFARE comfortable condition.
AND  Other facilities: It shall be the duty of every
contractor employing contract labour in connection
HEALTH OF with the work of an establishment to which the Act
applies, to provide and maintain:
CONTACT (a) a sufficient supply of wholesome drinking water for
LABOUR the contract labour at convenient places;
(b) a sufficient number of latrines and urinals of the
prescribed types conveniently situated and
accessible to the contract labour; and
(c) washing facilities.
  First Aid facilities: The contractor is required to
provide and maintain a first aid box equipped with the
prescribed contents at every place, where contract
labour is employed by him. The first aid box should be
readily accessible during working hours.
WELFARE  Responsibility for payment of wages: A common
AND complaint against the contractors has been that some
of them do not pay proper wages to the contract
HEALTH OF labourers or that payments are not made in time or
that arbitrary deductions are made from wages. To
CONTACT take care of such malpractices, Section 21 of the
Contract Labour (Regulation and Abolition) Act, 1970,
LABOUR lays down that the Contractor shall pay wages in the
presence of the authorised representative of the
Principal employer. An obligation is also cast on the
principal employer to nominate a representative duly
authorised by him to be present at the time of
disbursement of wages.
  Central Advisory Board
Section 3 requires the Central Government to
constitute a Central Advisory Contract Labour Board to
advise the Central Government on such matters arising
out of the administration of the Act as may be referred
THE to it and to carry out other functions assigned to it
under the Act. (Section 3)
ADVISORY  State Advisory Boards
BOARDS Section 4 similarly requires the State Government to
constitute the State Advisory Contract Labour Board to
advise the State Governments on such matters arising
out of the administration of the Act as may be referred
to it and to carry out other functions assigned to it
under the Act. (Section 4)
  Gazetted officers of appropriate Government
Registering  Principal employer to apply for registration with fees

Officer  Certificate of registration

  Licensing of contractors: Undertake or execute any
work though contract labour except under and in
APPOINTMENT accordance with the license issued in that behalf by
OF LICENSING the licensing officer. The license may contain such
conditions including, in particular, conditions as to
OFFICER AND hours of work, fixation of wages and other essential
amenities in respect of contract labour as the
LICENSING OF appropriate Government may deem fit to impose in
accordance with the rules framed under the Act. The
CONTRACTOR license shall be issued on the payment of prescribed
fee and on the deposit of security, if any, depending
S on the number of workmen employed by the
contractor. The license is not-transferable.
  Grant of license: An application for the grant of
APPOINTMENT license has to be made in the prescribed form. It
should contain particulars regarding the location of
OF LICENSING establishment, nature of process, operation or work
for which contract labour is to be employed and such
OFFICER AND other particulars as may be prescribed. The license is
LICENSING OF issued after necessary investigation by the licensing
officer. It is valid for the period specified therein (12
CONTRACTOR months under the Central Rules) and may be renewed
from time to time for such period and on payment of
S such fees and on such conditions as may be
prescribed. (Section 13)
 Registration of
Difference Establishment
Between: employing Contract
Labour
Licensing of
Contractors
Registration
of  Licensing of Contractors Applicable
to every establishment (Principal
Establishme employer) which employs 20 or more
contract labour
 Applicable to every contractor who
employees 20 or more workmen

nt  The Principal Employer shall apply

 The Contractor shall obtain a license
from the Licensing officer
employing
for registration of an establishment
before the registering officer  This is valid for only one year /
should be renewed before due date.
Contract  This is not renewable on year to year
basis  License shall be displayed

Labour and  Certificate of Registration need not be

displayed at the establishment by
prominently at the premises where the
contract work is being carried on.

Licensing of Principal Employer

Contractors
 Principal Employer: a) Within 15 days of
commencement or completion of each
Compliance contract work under each contractor, submit
s under the a return to the inspector, intimating the
actual dates of commencement and
Act completion of such contract work.
b) Submit annual returns to the registering
officer concerned not later than, 15th
February following end of the year to which it
relates.
Contractor: File half yearly returns with the
concerned Licensing Officer not later than 30
days from the close of the half year.
  Revocation, suspension and amendment of
license
(a)the license has been obtained by misrepresentation
or suppression of any material fact or that
APPOINTMENT (b) the holder of license has, without reasonable cause,
OF LICENSING failed to comply with the conditions subject to which
the license has granted or has contravened of any of
OFFICER AND the provisions of the Act or the rules made thereunder,
LICENSING OF the licensing officer may revoke or suspend the license.

CONTRACTOR However, before revoking or suspending the license or

S ordering forfeiture of the security deposit by the
contractor, the licensing officer has to give the holder
of the license an opportunity of showing cause. The
Licensing Officer may vary or amend a license subject
to the rules that be made in this behalf.
  Obstructing an inspector in the discharge of his
duties: Imprisonment and/or Rs. 500
 Willful refusal to produce on the demand of an
PENALTIES inspector any register: Imprisonment and/or Rs. 500
AND  Contravention of any provision of the Act or any rule:
PROCEDUR Imprisonment and/or Rs. 1000
 Contravention of any provision of the Act or any rule
E WHERE NO PENALTY IS PRESCRIBED: Imprisonment
and/or Rs. 1000