Are There Legal Limits on Using Contract Workers in Production and Wage Responsibilities?

Hi there!

One of the good industrial organizations is engaging contract workers in the main production or manufacturing process to support their regular workers. Are there any restrictions under the law regarding engaging such contract labor in the main production activity for any organization?

Additionally, if the contractor is not paying the minimum wages as per the prescribed applicable Minimum Wages Act, is there any obligation for the principal employer to pay the wage according to the law? Or should the principal employer pay the difference between the decided minimum wages and the actual wages paid by the contractor?

Please advise on this matter.

Atul
atulsmalve26@yahoo.com

Let me cite an example to clarify the concept of "core work".

In a garment manufacturing facility, the entire factory can be outsourced. I have noticed the same in one case; the core competency is "designing", i.e., artists/designers, etc., not the fabrication of clothes.

For the wages section, refer to articles on contract labor posted in CiteHR.

Surya

Dear Atul,

As per the law, you cannot engage contract labor directly on the production line. Contract labor can be engaged in jobs connected to production, such as machinery repair, machinery installation, fabrication work, civil work, electrical work, etc. The job can also be of a perennial or casual nature.

If your contractor is not paying minimum wages, make sure he understands the law and exert control over him. Ask him to pay; otherwise, the principal employer is responsible for paying wages to the labor.

Regards,
Bhushan Dahanukar

Bhushan is perfectly right in the interpretation of what constitutes "core job" in the conventional sense.

Depending on a case-by-case basis, let us refer to the previous example of garment manufacturers wherein from a "customs perspective," only stitching (tailors), cutting, and inventory (fabric stores) records are relevant for a product to be considered as "Made in India."

Some other jobs, which are equally important/core and perennial in nature like finishing/washing, etc., fail to make it.

CLRA was formulated with one single idea in mind: regulating the lives of unorganized workers involved in construction. These people were hired for a project, had no social support, and hazardous work conditions.

Over the period of time, the act has come to be applied everywhere.

Core and non-core activities are difficult to define for most companies. However, the example of a garment manufacturing firm which I have given previously is US-owned. The management believes creativity is the core proposition and all other jobs are incidental to the core.

Surya