Contract Labour Act - Contract Act - CiteHR
Bijay_majumdar
Freelancer In Hr &indirect Taxes For
Rdsyadav
Educator, Management Consultant & Trainer
Rajivk
Hr Skills
Maharakav
Freelancer
+2 Others

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Hi seniors, I have some clarification about contract labour act.
As per act we can not use contract labour for the core activities. my doubt is can we use contract manpower for the production activities on condition that we will pay skilled labour wage as per minimum wage act.
Industry is fabrication and we would like to use welder for the contract role..please advise can we use welder for the contact role..if you have any notification please share
Please help me on this..

No. You cant use CW in production activities also. You may engage contract workers in supportive work like production helpers, assistants, loading and unloading activities. please note that even if you engage contract workers you have to comply minimum wages as per your industry scheduled under MW act.
On other hand, most of the engineering industries using the CWs in production area and registered under CR act may show them as helpers. only thing you need to manage while factory inspector visit if you can.

Dear Ramesh sri,
Thank you so much for your reply.
I agree with your point.
Contract act saying we should not engage contract manpower in core activities. but Minimum wage mention that welder people comes under semiskilled category.
But if we are pay the wage more than that of minimum wage, can we safe.
or which way we can use contract manpower for the welding activities..

Dear Mr. Rajiv,

I would like to add, if you deploy 20 or more contract labour in a single site, than you have to obtain Labour Licence also from DLC office of your area.

As per my opinion deploying Welder should not any issue. As per CLA (R&A) Act 1970, "The contractual workman should not perform the same and similar kind of work as the workmen directly employed by the establishment are performing".

The main point here is that there should not be any "Welder" in your roll who is doing similar kind of work. In your company roll keep Manager Staff only, who will control the contractual staff and they should be involved in Strategic and Supervision area only.

Also note "Paying Minimum Wages" has nothing to do with Contract Labour Act. You are bound to pay Minimum Wages to staff (Either on your scope of contractual scope).

Even if you engaged any contractor, pls track the Payment to labour, it should not be less than the MW. The last liability always lies with the PE.

Hope the points are cleared now. Senior members can correct me.

Dear Rajiv,
Going though your post, it is evident that you want to engage workmen for regular and production activities at lower wages than regular employees. Authorities and courts have been of different view which does not permit this arrangement. This has been termed as camouflage and you have to regularise so called contractor labours' services in case they raise issue. You can reclassify workers category,engage lesser experienced personnel, pay min. wages, PF etc and based on cost benefit and management decisions manage production.
Regds,
RDS Yadav
Labour Law Adviser

Dear RDS Yadav,
Thank you so much for your nice reply.
I understood its high risk that contract do the core activities.
Please guide me that shall we get approve from the Labour commissioner that we need manpower for loading and Unloading and welder also.
Will they approve for welder category or which way we can get approval.
Please guide me as you know better the legal.
Thank you for your support.
Regards
Rajiv

Hi Rajiv,
This refers your post above. Loading and unloading can be outsourced through Contractor. You have to obtain registration under CLRA act to appoint a contractor.I request you to call me at 08439811539 in order to develop clarity to suggest you precautions but before that clarity is must both sides-you and me.
Regds,
RDS Yadav
Labour Law Adviser
Director-Future Instt. of Management and Technology
navtaranghrs@gmail.com

Recently I attended a workshop organized by NIPM Coimbatore Chapter. Mr GERA, DELHI was the faculty. He is an authority in C L (R &A ) Act. We were surprised to know many things. One Important message is that there is no bar to engage Contract Labour in Core activities in a factory . Section 10 is for the Advisory Board and not for factories or establishment. A company can function purely with Contract Labour. Registration Authority can not deny Registration nor the Licensing Authority deny License on this ground. Contract Labour engagement should have been ABOLISHED and that is possible only By Government and until government notifies that engagement of C Labour has been abolished in respect of that company both the above said authorities have no Role to deny. Read 2012 SUPREME COURT JUDGMMENT. It is not wrong. I know at least a couple of factories where License is granted Registration is obtained and Contract Labour is engaged in production.
Dear Rajiv,
Pls note once again, you will liable for RC only if you deploy 20 or more Contract Labour in a single site, the contractor has to obtain Labour Licence. However the documents & process for RC & Licence could vary from state to state.
In Delhi, there is a new rule for creating a website for the particular contract work (either by the PE or by the contractor) in which the detail of Contract Labour should be uploaded on monthly basis.
As a PE you need to take RC and have to submit Annual Return in r/o contract labour.
If u need more clarification, pls feel free to contact. I m handling around 10 Labour Licence for Delhi Units of my company.
PAN SINGH DANGWAL
9560476777

I agree with Mr. Maharakav Ji, Under contract labour Act,it does not have any relevance to type of work or activity which should go on contract and which should not.The Idea is management of the company has to decide what all activities of company to be considered for contracting and outsourcing.However as per the relevant law / act the conditions of the contract needs to be complied within the legal frame.Be it the wages or any other compliance it will be applicable to all who fall under the limits of applicable statute/compliance.It is Principle employer,who will be solely responsible for all such compliance being followed meticulously or not.
One more important fact I would like to share - that Very purpose of contract labour act needs to be understood,it is for the welfare of contract workers and control of contractors engaging these workers.

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