The basic requirement for the application of the CLRA Act,1970 to a Principal Employer and a Contractor is the engagement of a certain no of contract labour in the establishment of the former by the latter in connection with the works of the establishment. Whatever the charges paid to the contractor by the PE for the services rendered as per their agreement includes the wages of the contract labour engaged in that work. Because of the fact that the charges are determined by lumpsum basis or area basis, the contractor has the only advantage of carrying out the work with any no of contract labour as per his discretion. But such discretion can not be arbitrary or impractical for it would certainly have a negative impact on the work's execution and the PE has vicarious liability to ensure payment of wages to the contract labour and the extension of other facilities stipulated under the Act. The registration of the PE and the licensing of the contractor under the Act is determined only by the maximum no of contract labour likely to be engaged in the contract work.Therefore, the absence of the specific no of contract labour to be engaged in the work agreement because of the method of payment to the contractor for his services can not be a valid reason to escape the application of the CLRA Act,1970.
27th December 2016 From India, Salem
Umakanth sir has explained you the legal applicability under the CL (R&A) Act, 1970. The Act is applicable to:-
(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:
The Act has nothing to do whether you have given contract on lumpsum or square basis. If the facility management engaged 20 or more workmen in your premises on any day of the contract period. Then your company and the contractor will be covered under the Act.
It can be avoided only by restricting the no. of contract below 20.
Hope you will find it as per requirement. Expereinced member can put more light.
28th December 2016 From India, Delhi