Contract Labor for Packaging: Is It Considered Prohibited Work? Seeking Guidance

My company is a manpower recruitment agency and has recently signed a contract to provide contract labor for the entire packaging activity of the manufacturing unit. Does this type of work fall under prohibited contract labor? Please guide me.

Dear Vivek ji, our dear friend Govind ji is very correct. You can engage contract laborers for the packing job provided the said job is not carried out by the regular workers of the company.

Prohibition of Contract Labor

Section 10 deals with the prohibition of contract labor. According to this section, the central or state government can prohibit any establishment from engaging contract labor if:

• The conditions of work and benefits to contract labor are not satisfactory.
• The work is not incidental to or necessary for the business.
• The work is not of a perennial nature.
• The work is ordinarily done by regular workers.
• The work is sufficient to engage a number of full-time workers.

Unless there is a conflict of interest, it is advisable to consult a lawyer.

What Mr. Korgaonkar suggested is correct. The type of work is perennial or intermittent in nature and shall not be abolished under the provisions of The CL (R&A) Act-1971.

Thanks & Regards,
P.V. Rama Rao

When you ask for advice from senior members, it is always imperative to provide the full facts of the case; otherwise, the advice rendered will be either partial or incorrect. Please provide information on the following points:

(a) Have you entered into an agreement/contract with the manufacturing unit? If so, the manufacturing unit will be treated as the Principal Employer and required to register with the appropriate Registering Officer in the area under the CL(R&A) Act if they have 20 or more workers as contract labor. If the registration has been completed, they must include you in the list of contractors with intimation to the registering officer.

(b) If you are deploying 20 or more workers as contract labor, you need to obtain a license from the Licensing Officer in the area.

(c) Please ascertain if the packaging is a regular or interim task and if it requires regular completion.

(d) Packaging activities should not be the core activities of the manufacturing unit and should not be performed by regular employees. Otherwise, you will be required to pay them the same wages and perks as their regular counterparts.

(e) The appropriate Government has the authority to prohibit any employment in general or specific employment at any establishment. Please verify if the concerned State Government has issued any notifications prohibiting packing activities.

Regards,
BS Kalsi
Member since Aug 2011

Irrespective of whether it is prohibited or not, you have no additional liability. It is the principal employer who needs to worry about these workers getting deemed status.

Contract Labor in Packaging: Regular Practice or Not?

Packaging is part and parcel of the normal manufacturing process. So, the logic of engaging contract labor is unclear. Is it not a regular practice to pack manufactured goods? If the items to be packed are only for a specific order and not a normal practice, then yes, contractual labor can be employed; otherwise, as per the provisions of rules, no.

Contractual laborers are routinely employed by companies as they are not paid as much as regular employees, helping to cut costs and add to profit. Also, the period of employment is to be kept in mind. A long duration means they have been employed in lieu of regular workers. A few recent unrests have been due to this kind of practice. Members have otherwise spelled out contingencies for contractual employment.

Regards,
Col. Suresh Rathi