Understanding CLRA Licensing: What Happens with Fewer Than 20 Contract Laborers or Multiple Employers?

Principal Employer and Contract Labor Queries

As per Form IV, we need to provide the name and address, etc., of the Principal Employer as well. What would happen if:

1) The Principal Employer employs fewer than 20 contract laborers?

2) A contractor provides labor to more than one Principal Employer?

Regards,
Krishan

Pre-requisites of the Principal Employer (PE) under CLRA Act (Haryana)

- When contract labor in excess of 20 or more is engaged, the PE should apply for a Registration Certificate under the Contract Labour (Regulation & Abolition) Act (Central). In the case of fewer than 20 persons, an RC is not required, but if the contractor is covered under the CLRA Act, then an RC should be obtained to facilitate the contractor in obtaining a license to provide your labor.

- The PE should keep a regular check on the number of contract workers engaged so that the same may not cross the permissible limits as per the contract labor RC/license.

- If the premise is a Factory, the number of laborers, including the contract labor, shall not exceed the limit for the maximum number of people that could be engaged within the factory premises as per the Factory license too.

- Penalties: Contravention of sections 7 and 12 are penal (Registration & Licensing).

- Sec 23. Contravention of provisions regarding the employment of contract labor.—Whoever contravenes any provision of this Act or any rules made thereunder prohibiting, restricting, or regulating the employment of contract labor, or contravenes any condition of a license granted under this Act, shall be punishable with imprisonment for a term which may extend to three months, or with a fine that may extend to one thousand rupees, or with both, and in the case of a continuing contravention, with an additional fine that may extend to one hundred rupees for every day during which such contravention continues after conviction for the first such contravention.

I have a doubt: as a contractor, does the Principal Employer have to renew their license every year?

Regards,
Naveen

Dear Naveen, this is to inform you that a contractor is required to get a license, whereas the Principal Employer is to get a registration certificate if they are covered under the Contract Labour (R&A) Act, 1970. Only contractors are to apply for the renewal of the license every year, while the PE is required to apply for an amendment in the RC if there is any change in particulars of the RC.

R.N.KHOLA

Dear All, I am having a doubt regarding whether, like a contractor, shall the Principal Employer have to renew his license every year?

Regards, Naveen

Dear Naveen,

Please note that principal employers are granted registration certificates (RC), and contractors are granted licenses. Principal employers have to amend their RCs whenever there are changes in contractors or other details. Contractors have to renew their licenses when they expire. Hope this clarifies.

Regards,
[Username Removed For Privacy Reasons]

Dear Khola Saheb, I just need clarification on this matter. The principal employer has employed contract labor in more than 20 positions, but all of them are in different branches such as watch and ward. No single location has more than 20 individuals engaged. Does the principal employer need to apply for an R.C.?

Regards, Anirban Biswas

In my opinion, first, we should examine the definition of the establishment, as this Act applies to every establishment in which 20 or more workmen are employed or were employed on any day of the preceding twelve months as contract labor. According to section 2(e)(ii), 'establishment' means any place where any industry, trade, business, manufacturing, or occupation is carried on. Now, as offices/places are different and none of the places is employing 20 or more workmen, in that case, this Act is not applicable.

Comments/opinion submitted as requested.

Regards,
R.N. Khola

Please note that every premises/location is considered a separate establishment. In the case of a different location in the same factory/premises, supervision and control should be separate, like two different companies in the same premises. If branches are located in different places or localities, then consider the branches as separate.

If the same establishment employs more than 20 people as contract labor through more than one contractor employing fewer than 20 from a single contractor, then as per the definition, it is covered under the act. "PE" should register his establishment. However, contractors will not be covered until they employ more than 20 people.

Dear R.N. Khola Sir, please solve my query. We have a manufacturing unit in Haryana and want to engage contractor labor. Specifically, we want to engage contract labor in production as a HELPER, OPERATOR, and ELECTRICIAN. We have already applied for the RC, but we have not yet received it. Is it appropriate to engage contract workers in core activities without having received the RC (as we have only applied for it so far)? Could this be punishable under the Act? We have applied for the RC for more than 200 employees, but the capacity of the factory license is only 300. In this scenario, can we be denied the RC by the Labor Commissioner?