Industrial Relations And Labour Laws
Partner - Risk Management
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V. Balaji
Ir & Hr
Labour Law Consultant
+3 Others

Dear Seniors,
I want to know can we engage a contractor (Security less than 20 nos.) without having a principal employer registration from labour department.
If can then under which rule or section.
Thanks & Regards,
Krishan Kant Sharma
27th October 2012 From India, Bharuch
For engaging contract labour of less than 20 numbers, you need not take registration under the Contract Labour (R&A) Act. But the process of taking such registration is not that much complected and since it is a one time registration I would suggest that you should take contract labour registration even if you propose to have only less than 20 contract labour at present. Similarly, it is always advisable to grant contract to engage labour to licensed contractors.
27th October 2012 From India, Kannur
This is OK.
How about a contractor applying to the Labour Department for registering himself with the authority when his strength is 5 or less than 5. Is there anything in the CLRA Act that restricts him to go for registration under the Act (as his sterngth is less than 20) ?
27th October 2012 From India, Madras
The application for registration shall only mention "proposed to engage" and not the actual number of contract labour to be engaged. It is to be interpreted as we propose to engage around 21 contract labour in the coming period and it is not necessary that we should engage this much of labour.
27th October 2012 From India, Kannur
Dear All,
I am having a difference of opinion on this matter.
According to my understanding, the principal employer has register the contractor even if the principal employer is engaging one contract labour.
The contractor need not apply for registration if the contract labours are less than twenty.
Please check and once again.
27th October 2012 From India, Bangalore
Dear Friends,
As i know if an contractor is having above 5 labors he need to apply for registration under Contract Labour Act. As well if an employer wants to engage a Contractor in his estb. / factory employer also has to apply for the registration.
27th October 2012 From India, Hyderabad
Dear All,
The Contract Labour Act, doesn't provide Registration to PE if the contract employees are less than 20. If you mention in your application as CE proposed to be '20' then you'll be granted CLR.
Similarly, Contractor will also not get CLL in case his employees on PE's site is less than '20'. But, when the PE is declaring the proposed CE as '20', then Contractor will have to apply and he'll get the license.
28th October 2012 From India, Mumbai
In case a principal employer is engaging more than nineteen total contract workers at any one site, irrespective to whether from one contractor or many, the principal employer has to get registration under clra act.
and in case if any of the contractor is engaging more than nineteen employees at one site of principal employer, the contractor has to get license for the same and will get license on the registration
number of Principal Employer.
However every state regulate CLRA act in differently like in some states instead of twenty the number is five also. so need to check upon the state rules and notifications also.
Anurag Lakhotia
Industrial and labour law consultant.
28th October 2012 From India, Delhi
Hi All,
Security Services Fall Under the Private Security Agenciest Act 2005.As regards to engaging the manpower under contract,If the contract is for more that 20 Employees Licence needs to obtained by the contratcor provided PE issues the copy of agreement and form V.In Maharashtra Security services are Governed under Maharashtra Private security guards (reg of Emp & Welfare) Act,1981, Where in the license is not applicable but registration under the guard board and exemptions under Sec 23 of MPSG(Reg Of Emp & Welfare) Act 1981,are required.
29th October 2012 From India, Vadodara
Dear Mr KK Sharma,

I think there is some confusion in our minds between the terms ‘Registration’ and License’.

There need not be any doubt that once you engage a contractor to provide contract labour for your establishment you become the Principal Employer (PE) and have to mandatorily register with the labour department. In the application you have to indicate the number of personnel you wish to engage.

The contractor, on the other hand need not register himself. However, if he provides 20 or more personnel at the site, he needs to apply for a ‘License’. It is done by submitting a Form V obtained from the PE. The application for the contractor’s license must be accompanied by a copy of the PE’s registration certificate in which the name of the contractors firm and the number of employees to be engaged are clearly indicated.

Hence a PE’s registration becomes mandatory, if he wishes to employ contractual labour through a contractor. The contractor need not register but he needs to obtain a license if he deploys 20 or more personnel. This is relevant to separate PEs. To clarify, If one contractor is serving more than one PE, he has to follow the procedure for each PE separately i.e. one license will not do for all PEs.

I hope that clears your doubt.

Good luck.

Colonel Gahlot

29th October 2012 From India, Delhi
I think whole thing got confused now. I also know the formalities. Please answer a straight foward answer. This is a typical example (or even the reality) in one of such cases.
1. Contractor Engaged in some spefified job. He has probably 2-3 workmen employed by him (working with him)
2. You (we) are the Principle employer issuing work order to executive a particular job.
I know very well CLRA formality that Principle Employer has to submit Form I to the authority. And the contractor has to submit Form IV (along with Form V, issued by PE).
Now, what would be the view of the Labour Officer receving these two forms. You talk from the angle of the LO. Whether he should accept the application forms for registraion or reject the forms quoting certain rules (if so provided in the Act. If so on what basis), is what I am interested to discuss.
Can anyone throw light on this?
V. Balaji
29th October 2012 From India, Madras
Everyone here has given differing opinions.

The original question was :

Can we engage security guards on contract (less than 20) without having registration under Contract Labour Act

The answer differs from state to state as the states have passed amendment to the central act.

Assuming you are in a state that has no modifications passed the rules are as below :

1. Contract Labour act does applies to any establishment that has 20 or more contract employees (establishment is defined mainly as a single factory or office - check the definition to see where you fit).

2. Contract Labour act applies to all contractors that have 20 or more contract employees (across all establishments that he is working for).

So, if you are not employing more than 20 contract workers through all the contractors working for that establishment, then you do not fall under the act and you do not have to get your self registered under the act. You can voluntarily register, nothing in the act stops that. But why will anyone invite trouble ?

If the contractor you are employing has more than 20 contract workers (not only at your establishment, but in all establishments together), then you need to ensure he gets a license for your establishment also.

In some states (eg Andhra Pradesh), the act applies for any one having 10 or more contract workers. So you need to see any amendments in your state.

You also need to check if your state has passed any notification prohibiting the use of contract labour in your state for security guards. Such notification was passed in Bihar, UP and AP among others, but now reversed and contract labour for security is allowed.
31st October 2012 From India, Mumbai
Dear k4kk
Is the securtiy your only contractor or do you have other contractors as well. If yes and the total number of contractor's workers exceed 19 on any day then you will have to obtain registration certificate from the authorities. If your total of all the contract labour is less than 20 then you need not obtain a registration certificate.
Preetam Deshpande
1st November 2012 From India, Mumbai
As Far As Security Services Is Concerned, In Maharashtra,It is governed under Maharashtra Private Security Gaurds (Regulation of Employment and Welfare) Act 1981.Where in it states that CL license is not applicable if the guards are registered under the guardboard.
1st November 2012 From India, Vadodara
Does that mean security agency is registered ?
Or that the guards are registered ?
Or that they are sourced from the guard board ?
Each of the 3 will have a different implication
No one takes guard board security people, generally get an exemption from the guard board for the agency.
2nd November 2012 From India, Mumbai
First of all exemption is not for agency or principal employer, it is against the guards deployed.Secondly only a n agency which has the PSARA License is valid, and in maharashtra the cases of security are refeerred to Guardboard for verifcation and hence the issue of CL License is becomes void as guard board directs the agency to obtains exemptions and in turn registration of agency and the PE With them after the publication of exemptions notification.
Pls Make a note I am refering to state of maharashtra only and that to in context with Subject of employing private Security Personnel.
Experts pls correct if I am wrong.
3rd November 2012 From India, Vadodara
Dear can any one tell me about that how many Principal Employers required for Contract Labor Supply License. And required minimum Manpower & Documentation.
Sanjay Kumar

29th April 2013 From India, Delhi
Dear Member
As per my knowledge , The Gujarat Rules specify a number of 10 and not 20 for registration of Principal Employer under the provisions of Contract labour Act. The contractor also has to obtain license if the number of employees the contractor is engaging is 10 or more.
As you plan to deploy a contractor having just less than 20 employees you will have to register your self and also ask the contractor to obtain license.
Preetam Deshpande
29th April 2013 From India, Mumbai
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