Your query involved two issues - one is registration under relevant act and two whether any licence to employ labourers. I think whether you employ labour or not you have to register under the Tamil Nadu Shops & Establishments Act, 1947 read with Rules 1948as a "commercial establishment" as you would be conducting some business of extending services or supply of materials using this workshop. I understand your doubt arising why you should have a licence as you don't employ any 'labourer' but you and your brother would not be treated as labourers being partners of this workshop. So you may obtain a registration declaring 'NIL' labourer. However as and when you will employ 'labourer(s) you have to obtain amendment to the registration/certificate quoting the No.of labourers/employees you will engage in due course. On the other hand if you will continue like this there is no need to seek amendment but you should keep renewing this Regn. periodically and maintain records as prescribed in the Act/rules. You can read the copy of TN Act in this link:
The attachment gives you the records to be maintained by you. In your case since there is no employee you have to indicate NIL in most of the records excepting some relating to hours of work, holidays etc.
Contract Labour Act, 1970 is applied to -
i) every establishment in which twenty or more workmen are employed or were employed on any day in preceding twelve months.
ii) every contractor who employs or who employed twenty or more workmen on any day in preceding twelve months.
If it is applied to an establishment, then the establishment needs to obtain Registration Certificate and in case of contractor, he needs to obtain License.
In your case, you need not to apply for Labour License because -
a) You are having a workshop, that means it is an establishment. You are not a contractor.
b) You and your brother are co-owners of the workshop,not workers.
c) You are not employing contract labours 20 or more.
TN Shops & Establishments Act 1947 and the Rules framed thereunder do not have any provision for the registration of any Shop or Commercial Establishment in Tamil Nadu unlike in many States. Pl check with the local Panchayat authorities to find out whether you should get 'Trade licence' to run your business.
N Nataraajhan, Sakthi Management Services (HP:+91 94835 17402 ; e-mail:firstname.lastname@example.org)
Pl.go thru' the provisions of the Act extracted as follows:
THE CONTRACT LABOUR (REGULATION AND ABOLITION) ACT, 1970
ACT NO. 37 OF 19701
[5th September, 1970.]
An Act to regulate the employment of contract labour in certain establishments and to
provide for its abolition in certain circumstances and for matters connected therewith.
Be it enacted by Parliament in the Twenty-first Year of the Republic of India as follows: -
1. Short title, extent, commencement and application. - (1) This Act may be called the
Contract Labour (Regulation and Abolition) Act, 1970.
(2) It extends to the whole of India.
(3) It shall come into force on such date 1* as the Central Government may, by
notification in the Official Gazette, appoint and different dates may be appointed for
different provisions of this Act.
(4) 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:
Provided that the appropriate Government may, after giving not less than two
months' notice of its intention so to do, by notification in the Official
Gazette, apply the provisions of this Act to any establishment or contractor
employing such number of workmen less than twenty as may be specified in the
(5) (a) It shall not apply to establishments in which work only of an intermittent or
casual nature is performed.
(b) If a question arises whether work performed in an establishment is of
an intermittent or casual nature, the appropriate Government shall
1 Received assent of the President on 5.9.1970; Published in Gazette of India on 7.9.1970
decide that question after consultation with the Central Board or, as the case may be, a
State Board, and its decision shall be final.
Explanation.-- For the purpose of this sub-section, work performed in an establishment
shall not be deemed to be of an intermittent nature--
(i) if it was performed for more than one hundred and twenty days in the
preceding twelve months, or
(ii) if it is of a seasonal character and is performed for more than sixty days in a
2. Definitions.- (1) In this Act, unless the context otherwise requires,--
2[(a) "appropriate Government" means,--
(i) in relation to an establishment in respect of which the appropriate
Government under the Industrial Disputes Act, 1947 (14 of 1947), is the
Central Government, the Central Government;
(ii) in relation to any other establishment, the Government of the State in which
that other establishment is situated;]
(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 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;
(d) "controlled industry" means any industry the control of which by the Union
has been declared by any Central Act to be expedient in the public interest;
(e) "establishment" means--
(i) any office or department of the Government or a local authority, or
(ii) any place where any industry, trade, business, manufacture or
occupation is carried on;
2 Subs. by Act 14 of 1986, s. 2 (w.e.f. 28.1.1986).
Going my the Definitions, Applicability of the Act, your Sec.25 company is not an exempted establishment and if you are employing more than 20 persons and your work is not "intermittent or Casual" nature, the fact of which you know better considering the explanations given under Sec.5 (a), (b) shown above, there is no escape.
Section 25 Companies, pl.see the attachment.
From last 6 months, I am working at an NGO. We are registered under Companies Act 25.
We are streamlining the processes now as there wasn't any HR Dept in this organization previously.
We have hired external resource persons for a few classes without any contract letter a year or two ago.
We want to terminate one of the resource person because of misconduct, should we give them a termination letter or communicate termination to them verbally?