Contract Labour rules and regulations - SOP of Deployment of Contract Labour

Hi,

Can anyone please tell me the rules and regulations regarding Contract Labour Deployment in any company and what are the minimum wages to be paid to such contract laborers in Maharashtra?

Thanks in advance.
Shiva

There is no separate list of minimum wage for contract labor. The existing legislation Contract Labour Regulation and Abolition Act is silent on the issue. The wage is decided by the Minimum Wage Act only.

H.R. Singh

Minimum wage rates in a manufacturing company are renewed every 6 months. From 01.10.05 to 31.03.06, Hindustan Steel Ltd paid 126.50 per day to unskilled labor, 93.61 to semi-skilled labor, and 98.00 to skilled labor.

The latest minimum wage rates are now fixed as follows:
- HSLT: 130.96 per day
- RPFC:
- Unskilled labor: 93.11 per day
- Semi-skilled labor: 97.26 per day
- Skilled labor: 101.50 per day.

Dear Shiva,

The Minimum Wages Act is a separate piece of legislation that notifies the Minimum Wages payable to a Class of Workers or Industry covered by the Schedule on a bi-yearly basis. This schedule may vary from one state to another.

On the other hand, the Contract Labour Act deals with Contract Labour employment in industries to which the Act applies and Relevant State and Central Rules. So, when deciding on the payment of Minimum Wages, please contact the Circle Labour Inspector for details. For example, the Minimum Wages vary for the same class of worker in different regions of West Bengal.

The main thing to remember is that the status of employment, i.e., contract, casual, or badli, has no effect or link with the Minimum Wages rate of a region.

Kind Regards,
SC

Dear Satish,

You have asked for minimum wages for contract labor as per CLRA. It is clarified that no minimum wages are fixed as per CLRA, i.e., Contract Labor (Regulation and Abolition) Act, 1970. Minimum wages are fixed under The Minimum Wages Act, 1948, and the rates declared for different scheduled employments by the appropriate government are the same for directly and indirectly employed employees. Under CL (R&A) Act and rules, if the work done by the contract workers is the same or similar to that of the employer's workmen, then in that case, wage rates will be the same as that of directly employed workers.

Comments are submitted as per your request.

Regards,
R.N. Khola

Dear all,

First of all, I would like to inform you that there is no separate minimum wage for direct and indirect labor. The appropriate government, under the Minimum Wage Act, publishes a circular every six months regarding this matter. If you are a member of the CII, then CII will also publish the same information with the government labor authority. The rates vary depending on the type of employment.

Regards,
Nayan

Dear Shiva,

The minimum wage rates vary for different zones. For details, please visit the website on minimum wages in Maharashtra. The rates change every six months.

Regards,
Nayan

DEPLOYMENT OF CONTRACT LABOUR

HR MANUAL---SOP

1. MANPOWER PLANNING :

• Each production Unit (PU)/Department will take the monthly manpower planning from ME department every month.

• Manpower planning is necessitated due to following reasons :

i. Enhancement in customer order.

ii. Separation-resignation, completion of break period.

iii. Time bound jobs for temporary nature/leave vacancies.

iv. Heavy maintenance or other emergencies.

 ME Department will review and workout the manpower requirements in view of the company’s business/targets giving proper justification.

ME Department will take the approval of Sr. VP and forward the same to HR department.

HR Department will ensure that the manpower is made available as per the approved/sanctioned manpower

2. RECRUITMENT :-

Recruitment will be done through contractor.

Contractor will give the first preference to old/past employees.

Experience employees of the same trade will be given additional weightage.

3. SELECTION PROCEDURE OF CONTRACT LABOUR

 HR Department will provide the manpower requisition to contract supervisor.

 Contract supervisors will provide the quality of labour according to the skill required by the department.

 To permit the contract labour inside the company, contract supervisor will write the name & address of the contract labour in the slip. The slip will be signed by the HR head and the same to be submitted at the gate before entry.

 Securities personnel will check each and every person identity as mentioned in the slip and make a record of all contract labour.

 Trade test/Practical will be conducted by HR Department and the candidates passing the test with minimum cutoff marks shall be shortlisted for interview and final selection.

 HR department in consultation with concerned Department will setup interview committee consisting of HR personnel/Department Manager.

 The committee shall assess the candidates based on the factors mentioned below in a prescribed format and give its recommendations for approval by HR Head.

 The following weightage will be given in the final evaluation to the different factors:-

FACTORS MARKS (MAXIMUM)

Qualification 10

Experience 10

Tests (Practical/written ) 40

Interview performance

(Personality,clarity of expression,attitude) 40

Total 100

 Selected contract labour will be on trial for three days and

they will mark their attendance at the gate.

 Contract supervisor will collect the performance report of each

contract labour on trial. On the basis of trial report, he will seek

permission for punching the attendance of contract labour.

(Trial Report format enclosed- Annexure –A)

 Contract supervisor will daily check the movement (entry/exit)

of the contract labour and will ensure to maintain the record of

each and every individual contract labour.

 Salary will be prepared on the basis of savior data.

 Entry Level and Wage Fixation will be as per Annexure-2

 Experienced candidates may be placed in higher Basic on the

basis of prior service/ experience and qualification.

 HR Department will maintain a pool of 20-25 contract labour

with them. The labour from the pool will be placed in

respective department to cope up the absenteeism. The

Contract labour will daily report to HR cell and HR cell will

monitor their attendance with the help of contractor.

4. MEDICAL EXAMINATION :

Contract labour selected for employment before joining will be required to undergo a premedical examination by the company’s medical officer. In case the contract labour is declared unfit for employment their selection will stand cancelled.

5. SERVICE DURATION :

 All contract labour will be inducted for a period of seven

month.

 HR Personnel will also maintain a register of contract labour

where in their monthwise days attended will be recorded.

 After successful completion of seventh month in contractor

role , the contract labour will be placed in FTS (Fixed Terms

service) for a period of one year.

 After FTS , no labour will work in the company further.

However they can join a fresh after a period of five months

repeating the same cycle starting with induction of seven

months and ending with FTS. The labour recruited again after a

gap of five months will be given some increment in their wages.

A- Contractor Reward/penalty

1. It is the duty of the contractor to sustain the contract labour working under him. The daily track record will be maintained by the Contractor. There will be a provision of additional Bonus if the worker inducted by him continues his service for a period of six month under him. The contractor will be got the bonus amount as follows:-

2. On completion of six month an amount Rs 100 per worker will be an additional bonus over and above the service charges. The contractors can claim their Bonuses amount after six month. To reimburse the bonus amount he will have to fill up a format describing the date of joining, days worked month wise etc. The records will have to be approved by the shop floor incharge. The HR Department will check the records of the contract labour and process the same for payment by the account department for reimbursement.

If the inducted contract labours left the company before six months, an amount Rs 150 per worker will be fined to the contractor .The same will be deducted from their wage bill.

B- Physical attendance will be taken by the contractor at the shop floor in each shift to be duly certified by the section incharge. An employee of Time office will check the physical attendance of contract supervisor through Saviour.

6. IDENTITY CARD

Contractor will ensure that the contract labour will prominently wear their identity card at all times during working hours including the time of entry and exit from the security gate failing which the contract labour will be denied entry in the plant and will be treated as absent from duties.

Deepak pandey

DGM-HR

I think that the Standard Operating Procedure (SOP) for the deployment of contract labor will help ensure the smooth functioning of work.