Dear Sir
Please clarify if contractor engaged by a PSU for performing a job/contract and the contractor is engaging his regular workmen, then:
(a) is contractor supposed to obtain licence under CLRA 1970?
(b) is contractor bind by CLRA 1970?
(c) what will be the liabilities of principal employer in this case?

From India, New Delhi
it does not make any difference whether the workmen is hired for that specific job or contractor execute the job through his own employees after all the work has been done by workmen hired by contractor, and the workmen hired by the contractor always shall be employee of contractors itself whether hired for your establishment or other one.

kindly go through the definition of Contract Labour & Contract provided under CLRA Act.

(b) 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;

(c) “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 manufacture to such establishment, through contract labour or who supplies contract labour for any work of the establishment and includes a sub-contractor;

it is clear from above definition, that the job contract also covered by the Act "undertakes to produced certain/given result for establishmnet".

Contractor shall be covered by the Act, need to obtain license and comply with other provisions of the act.

Principal Employer also need to get registration certificate and other compliance as per act.


thank you sir for the reply..
actually here in a PSU we are facing such ID. Some contract workmen were working at the site for long period and were performing the same nature of job. the contractors would change but the contract workmen would remain same. but recently new contractor was engaged for the said job and he says that he will engage his own employees and he would not be able to engage these contract labours who were working previously at the site. now these contract labours are fighting for the same job at the same site as the matter of their right.
pl guide what can be done in this case as per CLRA

From India, New Delhi
Dear Member,

The issue raised by you is very complex and difficult. As you will see in The Contract Labour (R & A) Act, 1970 there is no provision on the issue as to whom the contractor should engage as his labour/worker. There also appears to be no provision whether the new contractor will engage workers of the previous contractor. In such situation, as narrated by you, the question will arise lateron about the regularisation of the contract employees as direct employees of the principal employer.

On above issue there are some of judgments of hon'ble Supreme Court of India, some of which are mentioned as follows:

Deena Nath-vs- National Fertilizers Ltd,1992 LLR 46 (SC).

Steel Authority of India-vs- Union of India, AIR 2006 SC,3229.

Gujarat Electricity Board -vs- Hind Mazdoor Sabha, 1995, LLR 552, SC.

R.K.Panda -vs- Steel Authrority of India (1994), 69 FLR 256 (SC).

Bhilwara Dugdh Utpadak Sahakaris Ltd. Vs Vinod Kumar Sharma Dead by LRS & ORS (01.09.2011).

If desired, you can study above judgments.

With regards;

Harsh Kumar Mehta

From India, Noida
Dear Clarity Seeker

Your Query: Some contract workmen were working at the site for long period and were performing the same nature of job. The contractors would change but the Contract Labor /Workmen would remain same.Recently a New Contractor was engaged for the said job and he said that he would engage his own C Labors and not those CLs who were working previously at the site on the Muster Roll of the previous Contractor/s. Now those C Ls are fighting for the same job at the same site as the matter of their right. Please guide.

Position: A Contractor is free to employ, on his / her Muster Roll, an Individual Person s/he finds most suitable to work in Designation required for the given Work-on-Contract after obtaining the mandatory License (Labor License) on the basis of Form V issued by the Principal Employer / Establishment.

No C L has any Legally maintainable Claim that the succeeding Contractor must employ him / her in the said Work of the Establishment (now to be carried on by the New Contractor / Contracting Firm) because of the fact that he /she had worked on the said/same Work of the Establishment on the Muster Rolls of another Contractor or Contractors for any stretch of time.

There is often this misunderstanding that C Ls can claim continuity in a Work of the Establishment carried- -on-Contract. It is not so. The Object of the Act was to streamline thru Regulation & Abolition, the Work to be or not to be outsourced.

C Ls have been "Regularized" by Judiciary only when it was found without doubt that the Work-of-the Establishment for which a Contractor was engaged and through him/her the C Ls were employed was a 'Subterfuge" , a "sham".

The moot point is to ascertain whether that-Work-in-Question is of permanent and perennial nature or not as defined in C L ( Regulation & Abolition) Act and the Rules made thereunder. Time for you / your PSU Organization to honestly answer in all earnestness this Question.

Harsh Kumar Sharan

Kritarth Consulting Pvt. Ltd

16.11.13, 9.45 a.m.

From India, Delhi
Dear members,
the question of regualarisation of cl is not new one. Engaging the cl by succeeding contractor is also becoming the right of cl. These situations are raising because of unionism in the organisation. Management is not to think seriously about these matters. Just going on theory should adopt by us.

From India, Visakhapatnam

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