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How a Contract Labourer is covered under ID Act? There is no specific provision in the CLRA Act, 1970 on the applicability of ID Act for all purposes or with regard to disputes. There is no express provision that a illegally retrenched contract Labourer can seek a remedy under ID Act. So, it is always a debatable question in the course of any dispute between a contractor and a contract Labourer the enactment that exactly settles the dispute is absent in the applicable Labour enactments. The broad view is that once a reference is made by a Labour departemnt of any state to the Labour court it is considered and several judgments came in favour of the contract Labour on their illegal terminations. But, what provision under which enactment expressly directs the aggrieved contract labourer to raise the dispute under ID Act for a reference later to the Labour Court in case of non-settlement of the issue by the Labour department is not known. Some refers the exclusion categories in the definition of "workman" under Sec. 2(s) of ID Act includes the contract Labourers and some depends on the verdicts of Apex court. My query is as to how an illegally retrenched contract Labourer can blindly approaches the Labour department for redressal and what provisions of any applicable enactments would help him help him to do so?
From India, Chennai
Labour Law & Hr Consultant
Seasoned Ir Professional


A worker who is engaged through a contractor is not a workman of the Principal employer for whom he works but for all remedies, grievances etc he can approach his employer, ie, the contractor. Between them the provisions of Industrial Disputes Act will work. It only when the contractor himself is a dummy or when the contract is sham the question arises, whether the principal employer should interfere in the dispute or not. Certainly, if the contract is sham, the basic contract is void and the workers engaged through the contractor shall get regularisation as employees of the Principal employer.

This issue has been discussed in length by various courts at various instances. Let us reopen with some expert opinion about it.

I hope Umakanthan Sir will comment on it and take the discussion on. Please Sir.

From India, Kannur

Thank you, Madhu, for inviting me to the discussion on the query raised by our friend Kesavapanda and I am really sorry for my belated response due to my preoccupation with some personal works.
Before coming to the ultimate query, I think it is pertinent to look into the scheme of redressal of industrial employment grievances under the existing labor laws in India.
The first and the foremost mechanism of dispute resolution has been provided under the Industrial Disputes Act,1947 in the forms of collective bargaining through direct negotiation and conciliation, arbitration and adjudication. If we analyze this, we will easily understand that the process is generally linear in its operation. The only exception in this regard is the power of the appropriate Government to refer the dispute directly for adjudication u/s 10 of the Act based on the theory of apprehension. Thus, the IDA,1947 is the only comprehensive means of investigation, enquiry and peaceful resolution of employment disputes particularly collective disputes pertaining to the specific class of employees employed in any industry and fall within the ambit of the term 'workman' defined under the Act. This is clearly amplified by the definition of the term 'industrial dispute' u/s 2(k) of the Act. By the Amending Act of 1965, individual disputes of workmen relating to their discharge, dismissal etc., are dealt with u/s 2-A of the Act and further simplified by the later amendment in this regard. Therefore, any contract labor falling within the definition of the term of 'workman' u/s 2(s) of the IDA,1947 can seek remedy against his unlawful discharge, dismissal or retrenchment u/s 2-A. But the respondent should be the immediate employer viz., the contractor unless the cause of action can also be attributed to the Principal Employer for whose benefits the contract labor was engaged as such.
The provision for appeal against dismissal found in the States' Shops and Establishments Acts and other establishment-specific laws could have triggered this question. This was due to the absence of the provision for discharge, dismissal etc of individual employee under the IDA,1947 till1965. Such a provision of appeal is not included in the subsequent Acts like the Model Shops and Establishments Rules,2016 and the Maharashtra Shops and Establishments Act,2017.
The CLRA A,1970 is a comprehensive legislation to regulate as well as to abolish the indirect form of labor through the contractors and as such it does not provide for direct absorption of contract labor even if it is prohibited by section 10 of the Act unless the contract is proved to be sham as observed by Mr.Madhu. Therefore, the contract labor can raise collective disputes as well as individual disputes under the IDA,1947 for their employment grievances against both the contractor and the PE, if the dispute fastens vicarious liability on the PE or only against the respective contractor, if otherwise.

From India, Salem

Thank you very much Madhu ji and Umakanthan ji for participatin and for enlightening me on this issue. It is cleared that the definition of Sec. 2(s) of ID Act, would attract the contract Labourer though it is not expressly included (as in the case of an apprentice) in the definition as contract Labourer or by any other name. Further, since there is separate mechanism existing within the shops and establishments Act for the workers work in shops and establishments and this enactment is not applicable to the contract labourers work in factories, according to the illustration provided by Mr. Umakanthan ji that the ID Act only provides the remedy for them in the case of disputes. Am I right sirs?
From India, Chennai

Dear Mr Kesav Panda,
In the captioned matter already Mr. Umakanthan has put his valued guidance, as well Mr Madhu.
The principal employer would definitely come to picture, if engaged directly or where the contractor did not obtain the CLR&A license. Any retrenchment without adhering to laws pertaining to retrenchment or termination comes under the purview of ID Act.
Further, there are provisions in state CL-R&A rules, where a labour can be terminated directly without referring ID Act, provided the labour termination is fall under such service conditions.
Therefore, every employer should follow the provisions available in state rules of CL(R&A) Act.

From India, Mumbai
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