Contract Labor Dilemma: Can Long-term Workers Claim Permanency and What Are the Rules for Production Roles?

1. Contract workers have been working in our company for more than 240 days. They are assigned to housekeeping and canteen duties. Can they claim permanency under the ID Act?

2. Can we employ contract labor for production activities? If so, under what conditions and for how many days?

Dear,

If the contract workman completes 240 days of working, then his services cannot be dispensed with in a simple manner. On termination, he can raise a demand notice before the Conciliation Officer of the area against the contractor if he has served the contractor for 240 days or more under the Industrial Disputes Act, 1947.

In my opinion, if the work on which you want to employ contract labor, then that operation/process should not have been prohibited by the appropriate Government. Therefore, if the principal employer has obtained the Registration Certificate under the Contract Labour (R&A) Act, 1970, then you are allowed to employ contract labor on that work with a valid license.

Opinion/comments submitted as requested.

With Regards,
R.N.Khola

In areas not directly connected to the core activities of business contract labour can be employed. Since housekeeping and work in canteen are not considered as core business activities there in nothing wrong in engaging contract labour for that functions. On the other hand, if you engage contract labour in production areas the concerned authorities can take steps to abolish it by order.
Permanancy of contract labour is not depended on how many days they work but it is mainly depended on whether the contract between the principal employer and the contractor is genuine or sham. If it is genuine and the contractor has obtained licence to engage contract labour then there is no question of contractor's employees working with you claiming permanent employment with you. But on the otherhand, if the principal employer has complete supervision over the contractor's employees in all respect and he has participated in any discussion related them like wage settlement or signed any agreement of settlement as one of the parties to it, the contract will be deemed to be sham and the employees of contractor will be eligible for permanancy.
This has been discussed earlier also. Please follow the link.
https://www.citehr.com/232682-break-...ml#post1042923
Regards,

Madhu.T.K

Dear Sir, Your question does not indicate the state in which your establishment is situated and whether the "appropriate Government" is the Central Government or the State Government. Subject to this observation, my reply is as follows:

1. Contract Labour can be engaged in any process or activity if the engagement of contract labour in such a process is not prohibited under the Contract Labour (Regulation and Abolition) Act.

2. If you engage contract labour after fulfilling the requirements of registration and license as provided for under the Contract Labour (Regulation and Abolition) Act, you are not the employer of the contract labour so engaged. Therefore, even if the contract labour completes 240 days of employment, they would be completing them under the contractor and not under you. Therefore, no liability will be fastened on you with regard to those contract labour.

3. The Industrial Disputes Act 1947 does not talk about the permanency of workmen. Therefore, there can be no claim for permanency under the Industrial Disputes Act. However, if there is any law which confers permanency in your state, then the provisions of those laws will apply. In this case also, the contractor will be liable and not you as the principal employer.

Regards, V. HARIKRISHNAN Joint Commissioner of Labour (Retired) Government of Tamil Nadu Labour Law Consultant Chennai