Query Under The Contract Labour Act - CiteHR
Umakanthan53
Labour Law & Hr Consultant
Saswatabanerjee
Partner - Risk Management
Malay.kumar1
Hr & Administrtion
Korgaonkar K A
Ba,llb,mpm,dir&pm,dll&lw,d.cyber
Lalvallabhm
Proprietor
+4 Others

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Hi,
Nee you help...
  • If supplier of transformer is sending 12 persons of his company at my site to install transformer. Whether this supplier needs to get labour license under the contract labour (R&A) Act?
  • If license is not applicable to the contractor working at site. Whether this contractor needs to submit half yearly return to authority under the contract labour (R&A) act?

Yes ,the contractor need to apply for labor license,subsequently he also has to submit half yearly return.
*Note :Please verify contract labor act of the concerned state for applicability of Labor license.

as far as my experience and knowledge is concerned labour license is applicable to only those where 12 or more workmen has been working on any day of preceding 12 months. As here only 12 persons are supplied hence no applicability of labour license arises.
Seniors please correct me if my statement is wrong.

Dear
There is no requirement to obtain labour licence because as per the rule of Contract Labour Act (Regulation and Abolition ) 1970 It applies--
(a) 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;
(b) to every contractor who employees or who employed on any day of the preceding twelve months twenty or more workmen:
and when you will not obtain Labour Licence there is no need to sent half yearly return to licensing officer.
With Regards

Some of the states have a limit of 10 workers to trigger the applicability of contract labour act.
So without knowing the state, we can't be sure
Again, many state rules have a provision for a temperory license (for 15 days) which automatically lapses after that. Then half yearly returns are not required

Dear Anonymous,
Please check with your contractor who is supplying you the manpower for your workload about the employees having on his board, i am sure he must be having more than 12 employees so in that case he has to hold license to provide such contractual employees in respect of the concerned state Act and will submit Half Yearly and annual return under Contract Labour R&A Act.
Regards,
Pushkar Bisht

The CLRA Act is not applicable to the supplier of transformer if the persons he is sending for istellation is his own workers and not his contract workers. It is also not applicable if is a contract for service included in the purchase order.
Varghese Mathew
9961266966

Varghese
Please check the definition of contractor and contract worker in the act
If you evaluate the wording , you will see that anyone who is working in your premises because you have a contract with his employers to deliver some service to you (not to deliver only a product), it comes under contract labour act,
So it will not matter if they are his own or contracted out. In act covers contract workers from the point of view of the person whose factory the work is being done, not from point of view of the person providing the service.
Unless you can provide that the installation is not a service (the wording of the act is : other than marely providing any goods), it will come under the definition. This perhaps was not the intent of the act but it is what the act says at this time.
Again, whether a PO is issued or a contract is entered into, does not change the nature of the work done.

Dear Anonymous,

I endorse the answer by Varghese ji.

I endorse the said answer after considering the below given points:

"Contractor" as defined in CLRA, 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 of 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.

A workman as defined in CLRA, 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.

On reading both the terms as above, I conclude that the party who supply and install the transformer is not a contractor under the CLRA and the workmen of such party are not contract labour.

Normally such kind of job is done with the help of less than 10 workers and therefore no question of licence arise. PE also avoids enrolling such party as contractor in his RC since such job do not last for long.

Since the queriest raised this point we have to debate on it.

I have another legal view also in this context which is as under:

The term - undertake to produce a given result necessarily involves the contract of service and the CLRA is applicable only in case of contract of service. Whereas, supply and installation of transformer is not a contract of service but it is a contract for service.

A contract for services is a strictly a business contract between two firms on a buyer and supplier basis. There is no question of any employment relationship between the parties.

This is my view. It is not in CLRA. It is only an academic discussion.

I expect comments on this by experts. One can differ with me. I just expressed my point of views.

Thank you Kargoankar for your comments .In the definition of 'contractor' mere supply of goods or articles of manufacture is excluded. Supply,installation/commissioning , trial run etc are nowadays part of business contract for supply of machinery.
Varghese Mathew


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