FAQ CONTRACT LABOUR ACT, 1970



1.               What is meant by Contract Labour

A workman shall be deemed to be employed as "contract labour" in
or
in connection with the work of an establishment 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.
         

2.                What is appropriate Government?

'Appropriate Government' means – i) in relation to any Industrial Disputes concerning any industry carried on by or under the authority of the Central Government or by a railway Company [or concerning any such controlled industry as may be specified in this behalf by the central Government or in relation to an Industrial Dispute concerning [a Dock Labour Board established under Section 5-A of the Dock Workers (Regulation of Employment) Act, 1948 or [ the Industrial Finance Corporation of India Limited formed and registered under the Companies Act, 1956], or the Employees' State Insurance Corporation established under Section 3 of the Employees' State Insurance Act, 1948, or the Board of Trustees constituted under Section 3-A of the Coal Mines Provident Fund and Miscellaneous Provisions Act, 1948, or the Central Board of Trustees and the State Board of Trustees constituted under Section 5-A and Section 5-B, respectively, of the Employees' Provident Fund and Miscellaneous provisions Act, 1952, or the Life Insurance Corporation of India established under Section 3 of the Life Insurance Corporation Act, 1956 or [the Oil and Natural Gas Corporation Limited registered under the Companies Act, 1956] or the Deposit Insurance and Credit Guarantee Corporation established under Section 3 of the Deposit Insurance and Credit Guarantee Corporation Act, 1961, or the Central Warehousing Corporation established under Section 3 of the Warehousing Corporations Act, 1962 or the Unit Trust of India established under Section 3 of the Unit Trust of India Act, 1963, or the Food Corporation of India established under Section 3, or a Board of Management established for two or more contiguous states under Section 16 of the Food Corporations Act, 1964, or [the Airports Authority of India constituted under Section 3 of the Airports Authority of India Act, 1994, or a Regional Rural Bank established under Section 3 of the Regional Rural banks Act, 1976, or the Export Credit and Guarantees Corporation Limited or the Industrial Reconstruction Bank of India Limited] ; or [the Banking Service Commission established under Section 3 of the Banking Service Commission Act, 1975, or] [an air transport service, or a banking or an insurance company, a mine, an oil-field], [a Cantonment Board], or a major port, the Central Government, and
ii) in relation to any other Industrial Dispute, the State Government..


3.                What is meant by Contractor

A person who undertakes to produce a given result for the establishment, other than a mere supply of goods 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.


4.                What is meant by Principal employer

In respect of Government or Local Authority - Principal employer means head of the office or department or such other officer notified by the government or local Authority. In case of a factory – the owner or occupier or manager of the factory under the Factories Act.  In case of a mine – the owner or agent named as the manager of the mine.  In any other establishment any person responsible for the supervision and control of the establishment.


5.                In which activities Contract labour  is prohibited ?

Contract Labour is prohibited in core activity.
         

6.                What is core activity ?

"Core Activity of an establishment" means any activity for which the establishment is set up and includes any activity which is essential or necessary to the core activity, but does not include –
a)    Sanitation works, including sweeping, cleaning, dusting, and collection and disposal of all kinds of waste.
b)    Watch and ward services including security service.
c)     Canteen and catering services.
d)    Loading and unloading operations
e)    Running of Hospitals, Educational and Training Institutions, Guest Houses, Clubs and the like where they are in the nature of support services of an Establishment.
f)      Courier Services which are in nature of support services of an Establishment.
g)    Civil and other constructional works, including maintenance.
h)    Gardening and maintenance of Lawns etc.
i)       House keeping and laundry services etc., where they are in nature support services of an Establishment.
j)      Transport services including Ambulance Services;
k)    Any activity of intermittent in nature even if that constitutes a core-activity of an Establishment and
l)       Any other activity which is incidental to the core activity.
Provided that the above activities by themselves are not the "Core Activities" of such establishment.


7.                Is it permissible to deploy Contract labour even in Core activity under certain conditions ?

Yes.  The principal employer may engage contract labour in any core
activity if there is any sudden increase of volume of work in the core activity which needs to the accomplished in a specified time.


8.                Is the Act applicable in Government Departments and Local bodies ?

Yes.  The act applies to every establishment employing 5 or more
contract workers.  Establishment means any office or department of the Government or a local authority or any place where any trade, industry, business, manufacture or occupation is carried out.


9.                Which Organisation comes under the purview of the Act ?

The act applies to every establishment employing 5 or more contract
workers.  Establishment means any office or department of the Government or a local authority or any place where any trade, industry, business, manufacture or occupation is carried out.


10.           How to get registration by the Principal employer ?

Every employer shall submit the application in Form I in triplicate to the registering officer by paying the fees prescribed.


11.           What is the effect of non-registration of Establishment ?

If the principal employer engages the contractors workmen without registration of his establishment he is liable for action under section 23 of the Act.


12.           How to obtain licence ?

Every contractor shall make an application to the licencing officer in From IV along with the Form V given by the principal employer by paying the fees prescribed and also  by paying the security deposit as prescribed by the Government under Rule 24 and 26 of the AP Contract Labour Rules,


13.           When the licence is to be renewed ?

Renewal shall be made not less than 30 days before the date on which the licence expires. 


14.           What are the amenities to be provided to the Contract Labour?

Sufficient supply of wholesome drinking water, sufficient number of latrines and urinals, washing facilities and first aid facilities, rest rooms and canteens.

         
15.           What is the liability of Principal employer, if Contractor fails to provide amenity ?

Principal employer is liable to provide amenities.


16.           What is the responsibility of the Principal employer for less payments to the Contract Labour ?


Principal employer shall ensure payment of wages to the workmen as per the law and if contractor fails the principal employer is liable to pay the wages.


17.           What are the registers and records to be maintained by the Contractor?

i) Maintain a Muster roll and register of wages inform XVI and Form, XVII respectively;

Provided that a combined Register of Wags-cum-Muster Roll in Form XVIII shall be maintained by the Contractor where the wage period is a fortnight or less.

ii) maintain a Register of Deductions for damage or loss, Register of Fine and Register of Advances inform XX, Form XXI and Form XXII, respectively;

iii) maintain Register of overtime in Form XXIII recording therein the number of hours of, and wages paid for overtime work, if any.


18.           What the Registers and records to be maintained by the principal employer ?

Every principal employer shall maintain in respect of each registered establishment a register of contractors in Form XII.


19.           Whether Contract labour is entitled for the wages prescribed under Minimum Wages Act or wages notified by the Commissioner of Labour.?

Contract Labour are entitled to minimum wages if they are employed in a schedule employment.  They are entitled to wages notified by the commissioner of labour under Contract Labour Act if they are employed in non-schedule employments.

20.           Is it necessary that the licence should be displayed, if so, where?

The Contract Labour (Regulation and Abolition) Cent­ral Rules as amended on 11th August, 1987 provide that a copy of the licence shall be displayed prominently at the premises where the contract work is being carried out.

21.             Is a contractor bound to look after the welfare of his workers?

Yes. The Contract Labour (Regulation and Abolition) Act stipulates that a contractor will have to provide canteens, rest rooms, latrines, urinals, washing facilities, water, first aid box for the contract labour. In addition to this, a contractor is required to make prompt payment to his labour.



WORKMAN- UNDER THE ACT

22.        Who is a 'workman' under the Act?

A 'workman' has been defined under Section 2(i) which 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 express 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 more than five hundred rupees per month or exercises, either by the nature of the duties attached to the office or by reason of the powers versed 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 and materials are given but 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 outworker or in some other premises not being premises under the control and management of the Principal Employer.


Obviously, this means that the Contract Labour is en­gaged by a contractor who, controls the work performed by his work­men, directs their work wherever necessary, pay them for the work and has the right to discharge them when no longer required. Evidently this implies that there exists employer-employee relation­ship between the contract labour and the contractor.


23.           How can it be determined whether a particular person is a contractor or not?

A 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 or articles of such establishment, through contract labour or who supplies contract labour for any work of the establishment and includes a such-contractor. In other words, a person undertaking merely to transport manganese for the establishment will not fall within the meaning of 'contractor'

Defined under section 2(1) (e) of the Contract Labour (Regulation and Abolition) Act.


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ACT AT GLANCE

OBJECT OF THE ACT :

 To regulate the employment of contract labor in certain establishments and to provide for its abolition in certain circumstances and for matters connected therewith.

APPLICABILITY :

 Every establishment in which 20 or more workmen are employed or were employed on any day of the preceding 12 months as contract labor.

 Every contractor who employs or who employed on any day of the preceding twelve months 20 or more workmen. Sec. 1

REGISTRATION OF ESTABLISHMENT :

 Principal employer employing 20 or more workers through the contractor or the contractor(s) on deposit of required fee in Form 1 Sec. 7

REVOCATION OF REGISTRATION:

When obtained by misrepresentation or suppression of material facts etc. after opportunity to the principal Employer. Sec. 9

PROHIBITION OF EMPLOYMENT OF CONTRACT LABOUR :

 Only by the appropriate Government through issue of notification after consultation with the Board (and not Courts) can order the prohibition of employment of contract labor. Sec. 10

LICENSING OF CONTRACTOR:

 Engaging 20 or more than 20 workers and on deposit of required fee in Form IV.

 Valid for specified period.Sec.12, Rule 21

REVOCATION OR SUSPENSION & AMENDMENT OF LICENCES:

 When obtained by misrepresentation or suppression of material facts.

 Failure of the contractor to comply with the conditions or contravention of Act or the Rules. Sec. 14

WELFARE MEASURES TO BE TAKEN BY THE CONTRACTOR :

 Contract labor either one hundred or more employed by a contractor for one or more canteens shall be provided and maintained.

 First Aid facilities.

 Number of rest-rooms as required under the Act.

 Drinking water, latrines and washing facilities. Sec. 16 & 17

LAWS, AGREEMENT OR STANDING ORDERS INCONSISTENT WITH THE ACT-NOT PERMISSIBLE:

 Unless the privileges in the contract between the parties or more favorable than the prescribed in the Act, such contract will be invalid and the workers will continue to get more favorable benefits. Sec. 20

LIABILITY OF PRINCIPAL EMPLOYER:

 To ensure provision for canteen, restrooms, sufficient supply of drinking water, latrines and urinals, washing facilities.

 Principal employer entitled to recover from the contractor for providing such amenities or to make deductions from amount payable. Sec. 20

REGISTERS OF CONTRACTORS:

 Principal employer

• To maintain a register of contractor in respect of every establishment in Form XII.

• Contractor Rule 74

• To maintain register of workers for each registered establishment in Form XIII.

• To issue an employment card to each worker in Form XIV.

• To issue service certificate to every workman on his termination in Form XV. Rules 75, 76 and 77

MUSTER ROLL, WAGES REGISTER, DEDUCTION REGISTER AND OVERTIME REGISTER BY CONTRACTOR:

 Every contractor shall

 Maintain Muster Roll and a Register of Wages in Form XVI and Form XVII respectively when combined.

 Register or wage-cum-Muster Roll in Form XVII where the wage period is a fortnight or less.

 Maintain a Register of Deductions for damage or loss, Register or Fines and Register of Avances in Form XX, from XXI and Form XXII respectively.

 Maintain a Register of Overtime in Form XXIII.

 To issue wage slips in Form XIX, to the workmen at least a day prior to the disbursement of wages.

 Obtain the signature or thumb impression of the worker concerned against the entries relating to him on the Register of wages or Muster Roll-Cum-Wages Register.

 When covered by Payment of Wages Act, register and records to be maintained under the rules

 Muster Roll, Register of wages, Register of Deductions, Register of Overtime, Register of Fines, Register of Advances, Wage slip.

 Rule 79

 To display an abstract of the act and Rules in English and Hindi and in the language spoken by the Majority of workers in such forms as may be approved by appropriate authority Rule 80

 To display notices showing rates of wages, hours of work, wage period, dates of payment, names and addresses of the inspector and to send copy to the inspector and any change forwithwith Rule 81

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