Understanding the Contract Labour Act 1970: How Does It Impact Daily Operations?

Contract Labour Act for Daily Use

Enclosed is the Contract Labour Act for your daily use.

Regards,
S. Bhaskar
[Phone Number Removed For Privacy Reasons]

Yes, UG, I will upload one by one after checking the copy. Today, I have uploaded the Minimum Wages Act. Most probably, tomorrow I will upload The Payment of Wages Act.

In the post-91 era, there is no use for this Act but to abuse it with the help of the political class, government, and bureaucracy. This Act is mainly to abolish contract laborers or, at most, regulate them. What has happened is that these words have been conveniently forgotten. Licenses are procured for 600 workers for loading and unloading when only 15 are required for this job. Then, the rest of the laborers are made to work in routine manufacturing activity, which is prohibited. HR professionals are either conniving with this abuse or keeping their eyes closed. The law is openly flouted. Even government and public sectors are abusing this law openly, so there is no hope from the private sector.

Yesterday, I was visiting the Head of the Radiology Department in the civil hospital here. The doctor told me that the permanent X-ray technician is getting a salary of Rs.30,000 per month after the implementation of the 6th Pay Commission. There is only one permanent technician; the rest are all on contract and are paid Rs.3500 per month. This is not an isolated case. Almost everywhere, you can see this huge gap in compensation paid.

Dear Mr. Bhaskar, I am working for a construction company and had taken a contract labor license under this act. This year, when I applied for the renewal of the license, they asked me to deposit a labor welfare fund at Rs. 15 per worker per month. I believe this fund is not applicable to a construction site. Also, this act under which we get the license says nothing about this contribution. However, the labor commissioner is not convinced and wants this contribution, citing other acts. Can you advise me on this?

Regards,
Jitender

Dear Mr. PTRC, I am not intending to discuss the correctness or any tortious act being done by anyone. In the construction field, almost all the work is carried out with the help of contractors only. The contractors are engaging the workmen who are covered by that license and under this act. Nowadays, placement agencies and outsourcing agencies are also very much available for the supply of manpower.

Whatever it may be, I have only posted the Contract Labour Act and not my views. Thank you for your valuable comments, Sir.

Short Title, Extent, Commencement, and Application

1. This Act may be called the Contract Labour (Regulation and Abolition) Act, 1970.

2. It extends to the whole of India.

3. It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint, and different dates may be appointed for different provisions of this Act.

4. It applies to every establishment in which twenty or more workmen are employed or were employed on any day of the preceding twelve months as contract labour, and to every contractor who employs or who employed on any day of the preceding twelve months twenty or more workmen.

My point is - if in an establishment there are more than one contractor's labours working but they are below twenty on each contractor, then, in that case, will the Act be applicable to the establishment where more than 20 contract workers are working?

And if there are multiple contractors, but the number of workers under each contractor is below twenty, will the Act be applicable to each contractor?

Dear Prashant, First of all, the Principal Employer has to register the establishment before issuing Form 5 to obtain the Contract Labour License. In the Registration of Establishment, the Principal Employer has to provide the names of all the contractors whom the employer intends to engage as contractors. Only then can you obtain the Labor License under the Contract Labour Act.

I do agree with what PRTC had commented because all these legislations are made with the intention of providing safety and welfare to the people employed. However, in the name of business, everything is being hidden under the carpet, which is unethical. The so-called trade unions are also not bothered to attend to this crucial issue, which may in the future erupt like a volcano and may halt the entire industrial progress currently being made by the country.

This issue has to be carefully approached, and an amicable solution agreed upon by all the parties involved to avoid any industrial unrest.

Regards,
Balamurugan Sivaprakasam
Head-HR, ICIL MM Nagar

Thank you, friends, for your valuable comments. If one or two companies are not adopting the said act or rule implemented by the government, it does not mean we should blame the entire country or say that government rules are of no use. You can reconsider your opinion, Mr. PTRC and Siva Balamurugan.

My intention is only to draw the attention of all concerned to the spirit of the law and help implement the law. HR professionals should guide and convince management to respect the law and stand firm in their conviction rather than bowing down. If HR professionals do their job to the best, you do not need any unions. Mr. Balamurugan has rightly predicted what can happen. The late Gujarati poet Umashankar Joshi warned society against this exploitation way back in the 1930s through his famous poem. He said, "If you do not pay attention to the exploitation, one day the volcano will burst, and then you will not be able to find even ashes." Gujarat is celebrating the poet's birth centenary this year. Bhaskarji, you have done a commendable job, and I congratulate you for the post as the first step is to know the law. Many people do not know and do not bother to know.

Please go through the https://www.citehr.com/344521-buildi...lrker-law.html thread, in which you can get the complete details about the Building and Other Construction Workers Act.

All the best.

Dear Deepak Rai, you have not mentioned the name of the CL Rules. Even though, please find attached herewith Form XXIV (format of half-yearly return) as provided by the Contract Labour (R&A) Central Rules, 1971 for your ready reference.

Regards,
R.N. Khola
Skylark Associates | Gurgaon | Haryana
(M) [Phone Number Removed For Privacy Reasons]

Please check the thread available at https://www.citehr.com/316623-cl-act...#axzz1WrjYsvCm, which is already posted in this forum.

Thank you.