Madhu.T.K
Industrial Relations And Labour Laws
Tushar.swar
Manager - Human Resource
Eswar.potti678@gmail.com
Gujarat Intrux Limited Head Hr & General
Korgaonkar K A
Ba,llb,mpm,dir&pm,dll&lw,d.cyber
9871103011
Private Consultant On Labour Laws
+4 Others

in a manufacturing unit if an organization have 50 employees are on company roles and rest of the 450 employees are contract workers. is there any legal provision against this.
Dear Sowmyarekha,
There is nothing any provision about how many no, should be on contract & how many on roll, only subject to there should not differentiate about the benefits within them.
Regards,
Tushar Swar
Do you mean any remedy for this or something else to safeguard the interest of the employer?

First of all as per the Contract Labour (Regulation and Abolition) Act you can not have contract labour on works of perennial or recurring nature which is incidental to the main activities of the company. In your case, I think you are engaging the contract workers in core areas of operations, that it is understandable that you do not require housekeeping, security or other casual workers ten times more than the employees employed for production. That means there is clear violation of legal provisions in this regard. Therefore, therefore, you will not get the protection of law.

If you need remedy for this, you can have, you just take all those who are engaged in routine, perennial or works which require engagement of permanent workers, in to your rolls and start paying their wages directly. This is the only solution. By doing this you become safe both in terms of law as well as financially because by engaging a contractor you must be paying a good amount to him as his service charges in return for no service. You have to take care of the remittances of PF, ESI, payment of wages, Bonus etc and at the same time you do not have any direct control over the workers also. You can not take any disciplinary action against any of them, you can not make them follow the HR or other policies or just Standing Orders of the company. If you put pressure on them, legally, that will prove against you with issues of sham contract etc. Then why should we go for off roll system? If they organize themselves, we should get involved in their negotiation etc and if we have to do that the picture would become very clear that this arrangement is just a windscreen. That was why while delivering the verdict in Bhilwara Dugdh Utpadak Sahakari S. Ltd. Vs. Vinod Kumar Sharma Dead by LRS & Ors. The Supreme Court has said that “…… this new technique of subterfuge has been adopted by some employers in recent years in order to deny the rights of the workmen under various labour statutes by showing that the concerned workmen are not their employees but are the employees/workmen of a contractor, or that they are merely daily wage or short term or casual employees when in fact they are doing the work of regular employees. This Court cannot countenance such practices any more. Globalization/liberalization in the name of growth cannot be at the human cost of exploitation of workers”.

Madhu.T.K
Dear Madhu sir,
Thank you very much for your quick reply
In this case contractor is sister concern of company in this case to avoid union problems contractor came into existence in that case can u suggest a remedy
Regards
Sowmya
Since the contractor has some kind of influence, the entire system seems to be sham and the only remedy is to take the employees under your rolls. Yes, there are a lot of companies, very big companies including public sector companies who work like that of yours with a major chunk of employees under some other outsourcing agencies rolls. But I cannot suggest a feasible solution for carrying out business like this. As already pointed out, if you want to do this just to avoid union involvements, you are mistaken; the contract labour can raise an industrial dispute and in such a scenario your standing orders will not help you too. Remember what happened in Maruti.
Madhu.T.K
There is one more issue.The contract employees in core functions are more than the regular employees,the contractor/s can stall the functions of the company on a dispute. Varghese Mathew 09961266966
Please find the GO on Contract labour Appointment. Please go as per the Attached GO

Attached Files
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File Type: pdf Go on Core Activity-Contract labor.pdf (13.7 KB, 616 views)

Dear sir, in this case contractor is also running by principal employer
The answer is very simple. First the Principal Employer should obtain Form V under CLRA. Thereafter Contractor will obtain the CL Licence.If in the CL Licence you have the permission to employ 450 then it is legal .If not you need to get the licence to deploy the 450 contract workers.
Extracting Rule 18 of the CLRA Rules

18. Grant of certificate of Registration.—

(1) The certificate of registration granted under sub-section (2) of sec. 7 shall be in Form II.

(2) Every certificate of registration granted under sub-section (2) of Sec.7 shall contain the following particulars, namely:

(a) the name and address of the establishment;

(b) the maximum number of workmen to be employed as contract labour in the establishment;

(c) the type of business, trade, industry, manufacture or occupation which is carried on in the’ establishment; -

(d) such other particulars as may be releyant to the employment of contract labour in the establishment.

(3) The registering officer shall maintain a register in Form lit showing the particulars of -establishments in relation to which certificates of registration have been issued by him.

(4) if, in relation to an establishment, there is any change, ‘in the particulars specified in the certificate of registration, the principal employer of the establishment shall Intimate to -the registering officer, within thirty day from the date written such change takes place, the particulars of, and the reasons for, such change.

Therefore under Rule 18 (2) (b) the maximum No will be specified.If in the Registration Certificate 450 is permitted then its deployment will be legal.
[QUOTE=vsrlaw;2122416]Extracting Rule 18 of the CLRA Rules

18. Grant of certificate of Registration.—

(1) The certificate of registration granted under sub-section (2) of sec. 7 shall be in Form II.

(2) Every certificate of registration granted under sub-section (2) of Sec.7 shall contain the following particulars, namely:

(a) the name and address of the establishment;

(b) the maximum number of workmen to be employed as contract labour in the establishment;

(c) the type of business, trade, industry, manufacture or occupation which is carried on in the’ establishment; -

(d) such other particulars as may be releyant to the employment of contract labour in the establishment.

(3) The registering officer shall maintain a register in Form lit showing the particulars of -establishments in relation to which certificates of registration have been issued by him.

(4) if, in relation to an establishment, there is any change, ‘in the particulars specified in the certificate of registration, the principal employer of the establishment shall Intimate to -the registering officer, within thirty day from the date written such change takes place, the particulars of, and the reasons for, such change.

Therefore under Rule 18 (2) (b) the maximum No will be specified.If in the Registration Certificate 450 is permitted then its deployment will be legal.[/QUOTE

License at present is 350 workers we are amending it for another 100 then its legal rightt .. doing the same thank you
Dear
Our Senior Member / Super Moderator Madhu ji has given answer to your query in very uncertain words, in very simple language. Still you are not clear on subject. You need to enhance your knowledge working under Senior Professionals, reading a lot and interpreting the provisions of law in proper sense.
Sorry. I normally avoid such comments.
Dear Ammisetty.sudhakar,
Thank you very much for sharing this piece of Gazette of Govt. of AP.
In addition to clicking on "Appreciate and Validate" your post, I would like to quote it here so that the members will open the attachment and read it to increase their knowledge hopefully. The core activity defined therein may help us in engaging contract labours.
Good information provided by the contributing member by Sudhakar ji
Dear Sudhakar.
Thank you very much for sharing the Gazette Notification of Govt. of AP. I find the same very informative and useful. The notification has well defined the"Core Activities"leaving hardly any scope for the engagement of Contract labour in the state. It has covered almost all the activities where normally the Contract labour is engaged.I wish the labour deptt. of Andhra Pradesh Govt implement the notification in its true spirit.
Here I would like to give an advice to Delhi's AAP Govt. to follow the steps and amend their Delhi Contract labour Rules. I am sure not some hundreds rather thousands of Contract labour shall get relief.
BS Kalsi
Member since Aug 2011
Dear Madhu Sir,
As you said that we can not engage contract worker in core activities and work which is perennial in Nature. Please explain what is "Perennial in Nature." Are housekeeping and security is of a perennial in nature? Secondly, I want to ask whether we can engage contract worker in HR and Accounts Department in which we have already have some employee on company roll. Please clarify.
Regards
Dinesh Kumar
Dear Dinesh Kumar,

You have asked to explain as to what is "Perennial in Nature." I suggest you to go through the Gazette Notification of Govt. of AP,which has been shared and posted by Sudhakar Sir on the ongoing thread.The notification has well defined the"Core Activities" , where the engagement of Contract labour has been prohibited in the state as the employment in those actitivities are considered the employment of perennial in nature It has covered almost all the activities where normally the Contract labour is engaged. The housekeeping and security is also included and have been treated as employment of perennial in nature.

Section 10(2) of the Act also lays down certain guidelines, which required to be kept in mind while deciding the employment of contract labour in any process, operation or other work in any establishment. The Supreme Court of India in the case of Standard Vacuum Refinery Company Vs. their workmen has observed that contract labour should not be employed where: —

(a) The work is perennial and must go on from day to day;

(b) The work is incidental to and necessary for the work of the factory;

(c) The work is sufficient to employ considerable number of whole time workmen; and

(d) The work is being done in most concerns through regular workmen..

A plain dictionary meaning of perennial employment is "lasting throughout the year or through many years". The seasonal employment or employment to clear the pending work or handle the unforeseen work for short duration etc are allowed. With regards to your second query about the engagement of contract worker in HR and Accounts Department in which you have already have some employee on company roll in cocerned, it is clarified that there is no bar for such employment as long you are fulfilling the conditions of the licence mentioned under Central Rule 25(2)(v)(a),which is as under:-



Rule 25(2)(v)(a)- in cases where the workmen employed by the contractor perform the same or similar kind of work as the workmen directly employed by the principal employer of the establishment, the wage rates, holidays, hours of work and other condition of service of the workmen of the contractor shall be the same as applicable to the workmen directly employed by the principal employer of the establishment on the same or similar kind of work:

BS Kalsi

Member since Aug 2011
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