Many organizations engage private bus operators for the conveyance purpose of their employees, to and fro factory or office. What is the status of Bus transporter. Does CLRA Act comes into operation to have Registration certificate by Principal Employer and license by Transporter. If not under what statute all these activities are covered.
From India, Hyderabad
Labour Law & Hr Consultant
Industrial Relations And Labour Laws
Partner - Risk Management
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Dear Sitaram,

This question stands answered already many times.

I suppose that the buses are rented out to the organization which engages the services of the transporter and the buses are operated by the running crew employed by the transporter. There is no mere supply of indirect labor to the organization which hires the buses owned by the transporter.

In case the buses are owned by the organization and the drivers, conductors are supplied by the transporter, the CLRA Act, 1970 would come into play creating the role of principal employer and contractor respectively.

Therefore, this arrangement falls under the general contract for transportation service under the Indian Contract Act,1872 only.

From India, Salem
The Contract Labour regulations will apply if the contractor's employees are working inside your premises. Otherwise, it is not applicable.

So what exactly are your bus drivers, cleaners and conductors (or whoever else comes with the bus) doing?

If they just get the people and go away, then they are not under CLRA
If the buses come inside your premises but only to drop and pick up and leave immediately, then also CLRA will not apply
If the buses are staying inside your premises, if they driver and other staff stay inside, then CLRA may apply.
So it depends on the circumstances.

However, do check out motor transport workers act and see if it is applicable to you.
Further, it is always a good idea to ensure that the bus contractor pays its driver well, at least above the minimum wages, provided holidays and paid leave, and in general follows the law. Even if CLRA does not apply, impact of non-compliance comes on you and you may be able to fight it in the court, believe me, your lawyers fees will make the entire thing a punishment its self

From India, Mumbai
Thanks a lot sirs. The above clarifications clear my doubts which I have. I too though in the same way but wanted to have clarity from experts like you. Thank you once again.
From India, Hyderabad
I have a different opinion on the point raised by Saswata that, "The Contract Labour regulations will apply if the contractor's employees are working inside your premises. Otherwise, it is not applicable". Is it that CLRA Act applies only to such circumstances where the employees work inside the compound of principal employer?

In this case, the CLRA Act will not apply because the vehicle is not owned and or maintained by the Principal employer. The contractor (transporter) charges per passenger or per kilometer and for that he is raising an invoice and the employer is booking it as a purchase (of service)

On the other hand, if the vehicle is owned or taken on lease by the principal employer. he fills fuel, takes care of its maintenance etc. But he does not have his own drivers but takes the drivers of the transporter to run the vehicle and pays driver's salary through the transporter. In this case, the transporter becomes a contractor for supply of driver (manpower) and the CLRA Act will come in picture. The drivers are contract labours for you even though they do not enter your establishment premises but takes your employees from their residence and drops them at the gate of the establishment and again picks them from the gate point and drops them back home.

In the former case, it is just like hiring a taxi or truck for carrying goods. The amount that you pay is a fees based on running kilometer and you need not worry about the wages paid to driver or others.

From India, Kannur
Hi Madhu

My contention comes from the definition of worker as quoted below :

(i) "workman" means any person employed in or in connection with the work of any establishment to do any skilled, semi-skilled or un-skilled manual, supervisory, technical or clerical work for hire or reward, whether the terms of employment be express or implied, ***but does not include any such person-***
(A) who is employed mainly in a managerial or administrative capacity; or
(B) who, being employed in a supervisory capacity draws wages exceeding five hundred rupees per mensem or exercises, either by the nature of the duties attached to the office or by' reason of the powers vested in him? functions mainly of a managerial nature; or
(C) who is an out worker, that is to say, a person to whom any articles and materials are given out by or on behalf of' the principal employer to be made up, cleaned, washed, altered, ornamented, finished, repaired, adapted or otherwise processed for sale for the purposes of the .trade or business of the principal employer and the process is to be carried out either in the home of the out-worker or in some other premises, not being premises under the control and management of the principal employer.

Item C refers to an outworker, that is a person who does not work within the premised controlled by the Principal Employer. It would be logical to extend the section to services also. So if it is not provided within the premises of the Principal Employer, the person would be excluded from he definition of worker and therefore from the protection of the act.

From India, Mumbai
True but there are other court interpretations regarding outworker. Normally, when a worker is making a product using the materials supplied by the employer and during the course of its production there is some kind of supervision, then the master servant relationship will be established. In such a situation, the product belongs to the employer right from its raw (material) stage and you can not deny that the workers who transform it to finished product is not your servants merely quoting that they are not doing that activity sitting in the factory of the employer but are doing it outside the factory.
From India, Kannur
Thanks a lot sirs for a valuable interaction in different dimensions. I am expecting some more interactions which will provide an in depth knowledge on this topic for our members.
From India, Hyderabad

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