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Can someone throw light on section 10 of CLRA Act 1970 ? When organization can apply for prohibition of employment of contract labour in case of no perennial work is carried on ? If contract labours are working in factory from years and factory is going to be shifted somewhere else, what is the liability of principal employer ? Can CL claim for absorption to the principal employer ?
From India, Mumbai
Labour Law & Hr Consultant


Dear Amit,

I am unable to make it out clear whether you have raised these questions on behalf the Principal Employer or the contract labor.

However, if you go through the entire provisions of Section 10 of the CLRAA,1970 which deals with the prohibition of employment of contract labor in any process, operation or other work in any establishment, you will understand that -
(a) It is an act of the appropriate Government by means of a notification after consultation with the Central or State Advisory Board as the case may be
(b) after considering the conditions of work and benefits provided for the contract labor in the establishment and other relevant factors such as the nature of work whether incidental or necessary in relation to the main activity of the establishment, its perenniality, the possibility of the activity to be carried on by the regular workmen and the sufficiency of employing whole-time workmen in the process.

Therefore, it is not necessary for the organization to invoke the provisions of prohibition u/s 10 when the contract work is not of perennial nature and in this perspective, your question seems to be infructuous. Even the work is of perennial nature, it is just enough that the establishment starts engaging the workmen on whole time basis as regular employees.

In case of shifting of the factory elsewhere on account of genuine reasons, the Principal employer can simply foreclose the contract with the contractor as per the terms of the contract. In such a situation, the PE will have to pay the contractor the amounts of statutory gratuity and other terminal benefits due to eligible contract labor and ensure their actual disbursement.

The question of the successful claim of the CL for absorption depends on their proving the contract a sham one by means of raising an industrial dispute.

From India, Salem
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