Legal Analyst, Hrm
Korgaonkar K A
Payroll, Domestic Inquiry, Administration,
Manager- Hr Compliance
Sr Manager Hr & Administration
Statutory Compliances, Contract Labour, Pay
The applicability depends on the above question. If the labour strength is less than 20, then you need not to worry. In some states the strength must be within 10.
7th April 2012 From India, Kumbakonam
7th April 2012 From India, Kumbakonam
If a person met with an accident while performing the repairing or painting job, will the WC Act excludes the owner of the House from paying the compensation?
There are exemption for BOCW Act but there is no exemption for CLRA. If you engage any contract labour then you must obtain registration under CLAct. If the working strength is more than 20 then the contractors must apply for licence under CL Act.
If the cost is less than Rs.10 Lakhs, then you need not apply for BOCW Act Registration.
7th April 2012 From India, Kumbakonam
According to section 1(4)(a) of the Contract Labour (Regulation and Abolition) Act, this law applies to every "establishment" in which twenty or more workmen are employed or were employed on any day of the preceding twelve months as contract labour. Therefoe, for the CLRA Act to be applicable to the Housing Society, the society should be an "establishment" referred to in section 1(4)(a) and defined in section 2(e) of the CLRA Act. According to section 2(e)(i) any office or department of the Government or a local authority is an establishment under this Act. This clause is not applicable to the Housing Society referred to by you. Further Section 2(e)(ii) states that "establishment" means any place where any industry trade business manufacture or occupation is carried on. Your post does not indicate whether any industry trade business or manufacture or occupation is carried on by the Housing Society referred to by you. If your Housing Society does not carry on any industry, trade, business, or manufacture or occupation then it is not an "establishment" as defined in section 2(e)(ii) of the CLRA Act and therefore need not take out a registration under the CLRA Act if contract labour is employed. You may refer to the judgment in the case Powar vs Labour Enforcement Officer (C) reported in 1993(66)FLR 833(Kerala) = 1993 I LLJ 521 wherein it was held that the residential quarters of a Bank is not an "establishment" as defined under the CLRA Act and therefore the CLRA Act does not apply.
7th April 2012 From India, Madras
As I said it is purely a residential building. The residents has formed the Housing Society.
Over the period of time, the maintenance issue come up and hence housing society has decided for maintenance and painting of the building.
7th April 2012 From India, Mumbai
If as you have said, the building is purely a residential building and the Housing Society is not carrying on any industry etc., then the CLRA Act is not applicable. Therefore, the Society need not get a registration under the CLRA Act as Principal Employer even if more than 20 contract workers are employed. But however, the Housing Society will be liable to pay compensation under the Employees Compensation Act(formerly Workmens Compensation Act) if the workers engaged for the maintenance/repairs are injured or lose their lives as a result of an accident arising out of and in the course of their employment. The applicability of the Employees Compensation Act is subject to the condition that the ESI Act is not applicable. The circumstances /conditions under which the Employees Compensation Act is applicable to a particular employment/employer and worker is different from the circumstances/conditions under which the Contract Labour Act or the BOCW Act is applicable to an employer/worker.
8th April 2012 From India, Madras
Thanks for your clarification. I was able to guess that rightly, but I preferred to get clarification so that I may not misunderstand the term before I reply.
About reply to your query, if a contract labourers have been engaged by the Committee Member in his individual capacity to repair and paint his own residential house, the Society is not at all involved in official capacity for that. So, the Society cannot be treated as the Principal Employer. The Committee Member himself would be responsible for implications of any legal provisions.
However, if the Committee Member has employed contract labourers through a labour contraactor on behalf of the Society, the Society would become the Principal Employer in official capacity. But, if the said Committee Member is responsible for the supervision and control of the contract labour establishment on behalf of the Society, he would be treated as the Principal Employer.
9th April 2012 From India, Delhi
Repairs and painting work to a building by a contractor comes under intermittant work of casual nature. Even the Contractor engaged 20 contract labour for
this purpose. The Contract Labour (R&A) Act will not apply.
LL,HR & IR Consultant
9th April 2012 From India, Hyderabad
also see that the contract agreement is for completion of the work only or as engaged as
one of the ongoing activity under Maintenance department of co-operative housing society?
If contractor for for "few days" then its based on agreement and contractor is responsible for
any compensation in case of accident. Experts, pls guide.
10th April 2012 From India, Ahmadabad
I have been going through various posts on this subject and no body has addressed the basic issue except Mr.V. Harikrishnan. As he has elaborately explained in his post as to why the CLRA is not applicable to a housing soceity, you can go by his views.
HR & Labour Law adsvisor
10th April 2012 From India, Mumbai
With due respect to you Sir, I feel you have made mistake in reading the reply of Shri. Dhindgra ji (Advocate). What he has said is the Society would become the Principal Employer which is very contradictory to the reply of Shri. Harikrishan.
My say on this subject matter is as under:
Co-operative Housing Society is not an establishment under CLA as defined thereunder. Also there is a judgment of Keral HC as stated by Shri. Harikrishan. It was even told to me by some one that Mumbai High Court also has similar Judgment.
Co-operative Housing Society is not an industrial establishment or undertaking or industry under ID Act as defined thereunder.
EPF Act is not applicable to Co-operative Housing Society employing less than 50 employees (Section 16 (a)).
I have not come across any provision or notification covering or not covering Co-operative Housing Society under ESI Act. However, such repairs and painting work can be exempted from ESI.
It is advisable to hire a contractor for this work who is covered under ESI Act. Other wise, the Employee Compensation Act is applicable to this work.
The said repair and painting work may fall under the preview of BOCW Act if cost of work is more than 10 lakhs.
Experts are requested to contribute their views in this matter.
Thanks and regards.
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30th September 2012 From India, Mumbai
Please understand that Contract Labour Act is applicable on the establishments where some commercial activities are going on but in your case it is a housing society which cannot be said to have conducting some commercial activity. that is why CLRA would not be applicable here.
28th December 2012 From India, New Delhi
Thank you very much for your posting. Your posting gave me an opportunity to go thru’ the posting in the thread once again. Due to this I could trace out the judgment in Powar vs Labour Enforcement Officer (C) 1993 (66) FLR 833 ( Kerala) which is requested by one of our colleagues Shri. Anil Sharma.
I clarify my self as under:
I said in my post that Co-operative Housing Society is not an establishment under CLRA Act as defined thereunder.
Shri. Hariharan also said that Housing Society does not carry on any industry, trade, business, or manufacture or occupation then it is not an "establishment" as defined in section 2(e)(ii) of the CLRA Act and therefore need not take out a registration under the CLRA Act if contract labour is employed. But Shri. Dhingra said that the society would become the Principal Employer.
Hence I pointed out to you that Shri. Hariharan and Dhingra are not in the same line of view.
You have rightly said that CLRA Act cannot be applicable on housing society by any stretch of imagination as there is no commercial activity involved in it.
29th December 2012 From India, Mumbai
Please find herewith a copy of judgment in Powar vs Labour Enforcement Officer (C) 1993 (66) FLR 833 ( Kerala) and also in Gowrisankaran K. vs Labour Enforcement Officer.
Answer to your query to Shri. Harikrishnan, in my view even the housing society is not formed the CLRA Act and rules would not be applicable provided the RC obtained by the Developer and Builder while constructing the building is surrendered on completion of the project / obtaining occupation certificate.
29th December 2012 From India, Mumbai
I reside in a housing society is registered under Societies Act. There is a single employee taking care of cleanliness, security, STP morning to evening and also required to sleep (only sleep) in the parking area at night for taking care of security. There are no clear rules for the number of hours of work per day/week and also time for rest. Can he be fired at short notice (he has been working for the Society for 4 years)?
What are the rules governing employment of labour in unorganised sector in India like house holds etc like this employee? Are people in this category he/she too entitled to leave, normal hours of work/week/day etc
Awaiting your response please.
15th May 2013 From India, Bangalore
This old discussion I would like to continue.
I also agree with Saikumar ji. In the entire discussion, only punch by Harikrishan ji is in right direction.
Please do not misunderstand me. I have no intention to hurt any one. I wish to draw your kind attention n only with in intension to exchange / share/ enhance our information and knowledge and correct ourselves.
The question in this discussion is whether the labour laws are applicable to Housing Societies?
Judgments in Powar V. LEO© and Gowrisankaran K Vs. LEO are given by me earlier. In addition to that following points may also be considered.
The society is under a statutory duty to manage, administer and maintain the building of society, pay property tax, water tax and common electrical charges in stipulated time. Apart from this, maintenance of building and other amenities such as sweeper services, security services, lift services, switching on / off common lights, pumping of water etc. are to be looked after. Managing Committee is responsible to do this. The members of society elect the Managing Committee. Each member is required to contribute his share of contribution to meet the expenses of society. The Managing Committee or the society is required to hire the services by various persons.
The services rendered to members are domestic in nature like operating lift, water supply, electricity, cleaning, sweeping and security. Even repairs and maintenance is domestic in nature according to me. These services are essential for the very existence safety and security of the members of society and building of society. These services, therefore are in nature of personal services and can not be said to be economic activity. Such services as contended by itself would not make the society as a “shop”. (Ref. ESIC Vs. Tulsiani Chambers HC Mum 2008 LLR 362.
Society consisting of various premises which are used for business purpose by the members are required to collect maintenance charges and statutory charges from its members under the provisions of Co-operative Societies Act and its Bye Laws. Such activity of the society would not amount to commercial or business activity. The society hence not covered even under section 1(3) of EPF&MP Act 1952. (Ref. Backbay Premises CHS Vs. Union of India 1997 (2) CLR 1075.
Co-operative Society is neither an establishment which carries on any business, trade or profession nor a society registered under Societies Registration Act. It is therefore not a commercial establishment as defined under the Bombay S&E Act and hence it will not come within the purview of the Bombay S&E Act. (Ref: letter of Under Secretary to GOM addressed to Mumbai District Co-op. Housing Federation).
Society can not be held to be industry or shop and at the highest it can be stated that employees of Society are rendering personal services to the members of the society. ID Act 1947 not applicable to Society (Ref: Apex Court in Management of SOM Vihar Apartment Owners Housing Maintenance Society Ltd. Vs. Workmen, Indian Engineering and General Mazdoor 2001 LLR 599: 2001(3) LLN 815 (SC).
Society in which its members carry on commercial and trading activities, can not be treated or said to be engaged in any commercial venture of business, trade or profession and does not even amount to “commercial establishment” much less a “shop”. Such society is amenable to Minimum Wages Act 1948 in so far as employees of Society are concerned. (Ref: Kiran Industrial Premises Co-op Society Ltd. Vs. Janata Kamgar Union 2001 9890 FLR 707 (Bom).
CHS having residential and commercial tenements is not an establishment if it not carrying on business, trade or profession even though some of its members are carrying on business, trade or profession in their premises. Relevant test is whether the society is carrying on business, trade or profession. Mere rendering of service by Society to its members can not be said to be either business or trade or commercial activity to come under the preview of Security Guards Act. (Ref: Maharashtra Rajya Suraksha Rakshak & Gen. Kamgar Union Vs. Security Guard Board for Greater Mumbai and Thane District 2007 (2) AIR Mom. R. 146 (DB).
Hope the above points are sufficient to conclude whether the labour laws are applicable to Societies.
17th July 2013 From India, Mumbai
I appreciate your discussion on the applicability of certain Labor Laws to CHS. Certainly, you have argued quite well. However, I would defer with a viewpoint that such logic cannot be applied as a blanket application to all possible cases of CHS. For example, considering these days that there are several large CHS forming of 1000+ members, or even Federation of CHS happening within the same premises (amalgamations). In such events, it is not so black and white to think that there is no economic interest. Say, if one security guard has to render a personal service to only one member then it would cost such member a lot more, but when a few members come together they share such bill making their outgoings quite low, this certainly can be construed as an economic interest. Thus, it is not entirely true to say that there is no economic interest. Societies do have economic interest as mentioned under Section 4 of the Maharashtra Cooperative Societies Act, and such economic interest has to be looked after by the management committee (this principal is used by several Consumer Court case laws).
The purpose of CLRA is to protect the interests of unorganized workforce who usually bears economic disadvantage. The laws are written to protect the weaker person or weaker section of the society, as for obvious reasons, the stronger one rules the weaker one. This is the essence of common law. The laws are made for the welfare of mankind.
Besides, you may also know the legal maxim, "Those that cannot be done directly cannot be done indirectly." Let's consider this hypothetical situation. Just to bend the rules, 100 small subcontractor are formed and no subcontracting company employs more than 20 persons, and all such subcontracting companies support single Principal Employer. Such arrangement would then defeat the purpose of the CLRA.
Certainly the law is dynamic and its interpretation keeps on changing with changing times. The interpretations of Article 21 of India's Constitution have widened so much since 1950s. Therefore, I feel that each CHS case has to be evaluated based on the facts that are linked with its operation.
6th June 2015 From India, Pune
Welcome you in this knowledge sharing forum.
Thank you so much for your kind words of appreciation for me which were much needed. (My contributions in this discussion was totally neglected).
I do agree with you.
But I do not agree with the example given by you of economic interest of society by hiring the services of guard to be construed that the society is engaged in business or trade or commercial activity.
Consumer Law is different than Labour Laws and therefore Consumer Court Case Laws has no relevance to Labour Laws, to my views.
I look forward your active participation in this forum in years to go. This forum requires Law qualified members so that the object of the forum of sharing the knowledge can meet with.
7th June 2015 From India, Mumbai
Your contribution is well appreciated by me. Only to elaborate what you said, I had given the quote of mine as given in my earlier post in the thread. But the same quote is deleted due to may be some technical reason. The said quote is reproduced hereunder:
"The services rendered to members are domestic in nature like operating lift, water supply, electricity, cleaning, sweeping and security. Even repairs and maintenance is domestic in nature according to me. These services are essential for the very existence safety and security of the members of society and building of society. These services, therefore are in nature of personal services and can not be said to be economic activity. Such services as contended by itself would not make the society as a “shop”. (Ref. ESIC Vs. Tulsiani Chambers HC Mum 2008 LLR 362)"
7th June 2015 From India, Mumbai