How Does the Contract Labour Act Apply in Special Economic Zones (SEZ)?

Dear All, please let me know how the provisions of the Contract Labour Act are applicable in SEZ (Special Economic Zone).

Thanks,
Harish Shenoy H

Let us be clear - The Government of India notifies certain areas coming under SEZ and specifies various entities covered under SEZ from time to time in the form of notification(s). Some of the contractors, like canteen, housekeeping, landscaping, material handling/logistics, etc., are not declared entities of SEZ. At best, they are contractors registered under CLRA, and they are service providers to the SEZ companies. Therefore, they will be entitled to certain incentives & exemptions like Service Tax, Local Taxes/CST, etc., as per the SEZ scheme. Their services are never deemed to be exports, nor is any foreign exchange involved. They are neither declared by the Government of India under SEZ nor involved in activities covered under SEZ schemes. Therefore, I believe they have to be covered under CLRA notwithstanding any notifications issued by the respective state governments. It is always better for the companies in SEZ and service providers as well to ensure they are not violating labor-related laws to avoid implications & complications.

Regards,
Kumar S.

Understanding Labor Law in SEZs

The subject is rightly divided into two aspects. One is the company, and the other is the contract under the Contract Labour (Regulation and Abolition) Act (CLRA). Hence, labor law applies to such activities. In the case of the company, there must also be a system to address the problems of SEZ workers. The government should not forget this requirement.

Understanding Labor Law Application in SEZs

It is divided into two categories. One is SEZ activity, and the other is ancillary activity. In any case, both are supposed to follow labor laws. The only difference is that sometimes the Labor Authorities' powers are delegated to the SEZ directorate. However, in the case of non-core activities such as gardening, security, housekeeping, loading and unloading, maintenance, etc., labor rules are fully applicable. The Contract Labour (Regulation and Abolition) Act (CLRA) applies in both cases.

Regards