Understanding Leave Entitlements for Contract Labor Under the CL Act 1970: Who Qualifies?

Hello,

Does anybody know whether leave is permitted to contract labor under the CL Act-1970? If not, for what category of worker/employee are entitled to?

Tapan

Dear Aashit,

You have to give 1 leave (encash) for every 20 present as per the leave rules of the Factories Act -1948 to contract labor, plus paid holidays as per the norms of the State government.

Thank you.

Yes, if you are engaging contract labor in your factory, there shall be compliance of EL/PL under the Factory Act by the contractor.

Regards, ACCHR

Kindly refer to the Industrial Establishments (National and Festival Holidays and Casual and Sick Leave) Act.

Regards,

Hello all,

Some of you have mentioned leave (encashable) for Contract labor workers. However, I believe that as far as the CL Act is concerned, no such leave is applicable under the act. Here, I would like to specify that mine is a project site where contract labor is working on a contractual basis (obtained a license under the Act). In other words, their employment is fixed as long as the job is there. Once the job is finished, their employment comes to an end. I request detailed specifications.

Tapan

Dear Ravindra,

The act mentioned by you is applicable only to certain states like Punjab and Himachal, etc. The other states are governed by the rules of the Standing Order Act. Am I correct?

Regards,
ACCHR

Dear Swatik 73,

Please clarify whether the Building and other construction workers' (Regulation of Employment and Conditions of Service) Act, 1996, is applicable in Karnataka. If so, has the Labour Department of Karnataka issued any notification regarding this, and from which date is it applicable?

Regards,
M.R. G. Raju

Hello,

While calculating the leave for encashment, should the basic pay be divided by the number of month days (i.e., 30) or working days (i.e., 26)?

Dear Tapan,

All the other Industrial Labour Acts are applicable to the Contract labour, which are applicable to regular workman, except the Bonus Act. The purpose of the Contract Labour Act, 1970 is different, and that is not the correct name of the Act. The correct name of the Act is THE CONTRACT LABOUR (Regulation & Abolition) ACT, 1970. The first paragraph of the Act clears the same which I am producing below:

PREAMBLE
[37 OF 1970]
An Act to regulate the employment of contract labour in certain establishments and to provide for its abolition in certain circumstances and for matters connected therewith.

Hello everybody,

Some of you have mentioned that employees are entitled to 1 day of leave for every 20 days worked. My question is, which act are you referring to - the Factory Act or any specific section mentioned in the CL Act-1970? Please provide a specific legal reference.

Tapan

Dear,

The Contract Labour Act clearly states that the leave benefits shall be as per the Fact Act/National & Festival Holidays Act of the state. However, if the principal employer is providing more benefits to its workmen covered under the above Act, then those rules will be applicable.

Ak Malhotra
Sr. General Manager

Dear,

I fully agree with ACCHR on the issue. When you are engaging contract labor in your factories, they are entitled to PL/EL under the provisions of the Factories Act 1948.

Regards,
Manoranjan

Dear all,

For contract laborers, leave benefits will be applicable as per the Factory Act 1948 (20 days/1 day leave). Additionally, the Bonus and Gratuity Act also applies to contract laborers.

Moreover, the Building and Other Construction Workers (BOCW) Act of 1996 is applicable in Karnataka state where ten or more building workers are engaged in any building or construction work. The licensing authority in Karnataka is the Labor Officer. Cess payment under this act is required, amounting to 1% of the total project cost, to be paid by the principal employer, contractor, or subcontractor.

Santhosh Labour Compliance ABB Ltd

Dear Members,

Though this post is very old, the members are still responding. Therefore, we would also like to share our opinion on this important query. The original subject is whether leave rules are applicable under the Contract Labour Act or whether leave is permitted for contract labour under the CL Act, 1970.

In our opinion, there is no provision in this act that provides leaves to contract workers. However, where this Act is applicable and the work of contract labour and the directly employed workers of Principal Employers is the same or of similar nature, then the conditions of employment such as wages, leaves, etc., will be the same in both cases as per the terms and conditions of the license issued by the Government. After an examination of the Punjab Industrial Establishment (NFH & CS Leave) Act, 1965, this Act does not seem to apply to contractors. If the ESI Act, 1948 is applicable, then in that case, those leave provisions will be applicable to contract workers. Members are advised to review their State/Central Rules, whichever is applicable in their case, before taking any action on the matter as we are sharing our opinion based on Haryana CL Rules.

Regards,

R.N. Khola Sr. Associate

CONTRACT LABOUR ACT

Applicability:
The Act applies to [The Principal Employer of an Establishment] and the contractors employed as more than 20 workmen are/were employed on one day during last year as contract labour.

Registration of Establishment & its fee:
The Principal Employer of an establishment to whom the Act is applicable is required to get himself registered with the Registering Officer of the area i.e. the Assistant Labour Commissioner or the Labour-cum-Conciliation Officer by submitting an application in triplicate in Form-I along with the prescribed fee mentioned herein under.

Grant of certificate of registration:
If the application for registration is complete in all respects, the registering officer shall register the establishment and issue to the principal employer of the establishment a certificate of registration in Form II.

Amendment of certificate of registration:
If in relation to an establishment, there is any change in the particulars specified in the certificate of registration, the principal employer of the establishment shall intimate to the registering officer within thirty days from the date when such change takes place, the particulars of, and the reasons for, such change. On the receipt of the intimation the registering officer is satisfied that there has occurred a change in the particulars of the establishment, as entered in the register in Form III.

Application for a Licence:

• Every application by a contractor for the grant of Licence shall be made in triplicate Form IV, to the licensing officer of the area.
• Every application for the grant of a licence shall be accompanied by a certificate by the Principal employer in Form V.
• Every Licence shall be granted in Form VI.

Filing of Return of commencement and completion of the contract:
The Principal employer shall within 15 days of the commencement or completation of each contract work under each contractor, submit a RETURN to the inspector, appointed ,intimating the actual dates for commencement or completion of such contract work, in FormVI-B.

Maintenance of records and submission of returns by Principal Employer:-
Register of contractors in respect of every establishment in Form XII and annual return in Form XXV in duplicate before 15th February.

Filing of Annual Return:
The principal employer shall send annually return in Form-XXV (in duplicate) so as to reach the Registering officer concerned not later than 15th February following the end of the year to which relates.

Display of Notices& Abstract of Act and Rules:

• The principal employer shall display Notices showing the rates of wages, hours of work, wage period, dates of payment of wages name and addresses of the inspectors having jurisdiction, and date of payment of unpaid wages in English and in Hindi and in the local language understood by the majority of workers.
• Contractor shall display an abstract of the act and rules in English and Hindi or in the local language understood by the majority of workers.

Obligations of the Principal employer:

• The employer has to ensure that the contractor is paying wages to his workmen before expiry of the 7th day of every month if the number of workers employed in the Company does not exceed a thousand, or before the expiry of the 10th day of every month if the number of workers employed in such Company are more than one thousand.
• To ensure that minimum wages are paid to contract labour.
• The Principal Employer shall pay wages in full to the contract workmen in case if the contractor fails to pay the same.
• The principal employer is statutorily responsible for payment of wages to contract labourers including arrears, in case, contractor commits default which he can recover from the contractor by deducting from any amount payable to him or as debt payable to him or as debt payable by him.
• The Act stipulates the obligation of principal employer and contractor employing contract labour to provide canteens facilities. In case of failure on the part of the contractor to provide such facilities, the Principal Employer is made liable to provide the amenities.
• The principal employer shall ensure while making payment to the contractor that the contractor has paid the employees provident fund contributions deductions both of the contractor and employees on time.
• The Act enjoins obligation on every principal employer and every contractor to maintain the registers and records.
• The principal employer shall send the return annually so that it reaches the registering officer not later than 15th February following the end of the year to which it relates.

In respect of establishments which are governed by the Payment of Wages Act, 1936 and the rules made there under, or Minimum Wages Act, 1948 or the rules made there under ,the following registers and records required to be maintained by a contractor as employer under those Acts and the Rules made there under shall be deemed to be register and records to be maintained by the contractor under these Rules , namely-

1. Muster Roll(Form-XVI)
2. Register of Wages(Form-XVII)
3. Register of Deductions for damage or loss (Form-XX)
4. Register of Overtime(Form-XXIII)
5. Register of Fines (Form-XXI)
6. Register of Advances(Form-XXII)
7. Wage slip(Form-XIX)

Every contractor shall-

1. • Maintain register of employed person in Form-XII.
   • Shall issue an employment card in Form –XIV.
   • Shall issue a service certificate in Form-XV

THANKS N RAGARDS

DIPTI SRIVASTAVA
ADVOCATE

Dear all,

Our company is a telecom company. We hire employees on a contract basis for a fixed tenure, i.e., for one year. Does the leave policy apply under the Contract Labour Act as we have obtained a labor license for it? Can anybody specify whether the leave policy is applicable or not?

Regards,
Mohan Chauhan

Dear Mohan Chauhan,

Leave policies are framed by us keeping in view the bare minimum statutory leaves, if any, applicable under any of the laws and not under any Act. If you are working as a contractor in the telecom company which is covered under The Factories Act, 1948, then in that case, you are also to give earned leaves to your workers/employees who may be employed for a fixed term contractual employment under the provisions of this Act. No leave provisions are there in the Contract Labour (R&A) Act, 1970.

Regards,
R.N.Khola

(Labour Law & Legal Consultants)
09810405361

Dear all,

Can anybody help me in getting a clear picture of the leave policy for fixed-term employees? As my company is a telecom company where we hire candidates on a contract basis to sell our products in the market, we have taken a labor license for it.

Kindly suggest. Appreciate your view.

Regards,
Mohan

If any worker does not complete 240 days, how will we calculate the leave as per the Factories Act?

Could anyone please inform me about the rules for contract workers or third-party payroll workers regarding leaving jobs? Can a worker leave a job without giving a notice period if they are working on a contract? Also, if I have been working for more than 3 years and have not been given an appointment letter by the contractor or main employer, do I still have to give a notice period? I am receiving PF, ESIC, and all benefits.

Notice Period for Contract Workers

My company is planning to introduce a signed paper regarding the notice period after 3 years because one worker left without giving notice. Please advise if this is required by law.

Thank you,

Santosh

Could someone provide an abstract of the Contract Labour Act? It's very urgent as an inspection is imminent.

Thank you.

Project Contract System and Leave Entitlement

If a staff member is hired on a project contract system and has 2 years of experience in an NGO, there are two situations to consider:

1. If a new contract is issued to him/her for a new project under the same division rather than as an extension of the contract, can their earned leave (EL) be carried forward?

2. If a new contract is issued to him/her for a new project but in a different division, can their EL be carried forward?

3. If that person is under the same division, should a new contract be issued? If so, why? If not, why?

Please let me know how this contract system works for a research institute aligning with labor law.

Thank you

As per the Act, we are required to provide leaves, and the contract laborers must be eligible to receive them under the Contract Labour (Regulation and Abolition) Act. However, the majority of establishments fail to provide any leaves to contract laborers, which is a violation of Indian laws.

Regards,
RAJESH KANTUBHUKTA