Navigating Contract Labor Challenges: Seeking Advice on Compliance and Licensing Issues

Dear All,

I am presently working in a PSU as an HR Officer. While managing the day-to-day activities, I have come across certain issues related to the administration of contract labour. To find a proper solution, I am presenting the following issues one by one:

Applicability of Labour License:
Our organization is registered under the CL (R&A) Act as the principal employer, and the average number of contract workers per day is around 1000. If a specific contractor appointed involves 9 workers for a particular work order, is that contractor liable to obtain a labour license?

Statutory Compliance in Job Contracts:
In case a job contract is issued, a contractor must abide by the statutes such as the CL (R&A) Act, EPF Act, ESI Act as per the law of the land. But if the engaging authority does not include the specific clause on statutory compliance in the work order, can the contractor avoid his responsibility for compliance with statutes because such a clause is not present in the order?

Coverage of Job Contracts under CL (R&A) Act:
In the case of job contracts in areas like Data Entry, Design, Drawing, etc. (where rates are fixed on a per drawing/per page basis), should such job contracts be covered under the CL (R&A) Act, especially when the job is carried out:

• Within the premises
• Outside the premises.

Minimum Wage Compliance for Contractors:
Our organization is a Central PSU. If a job contract is issued and the Contractor is registered under the State Govt., must such a contractor follow the minimum wage rate as per central rules while working with us:

• At our premises
• Outside our premises

Non-payment of Minimum Wages:
If a contractor engages employees as Supervisors or Executives and does not pay minimum wages, please suggest.

Applicability of Labour Laws for CSR Projects:
A civil repairing job of a college undertaken as a CSR project by our company. Accordingly, a work order is issued by our company, and the contractor completes the civil job at the college (i.e., outside our company premises). Please suggest on the applicability of the CL (R&A) act and other labor laws (e.g., EPF Act, ESI Act, etc.).

I understand that the length of the queries is a bit long, but I have faced such issues while dealing with contract labour issues on a day-to-day basis. Your valued guidance will help me to execute my job with command.

Regards,
DG

I have tried to respond to your queries.

Applicability of Labour License

Our organization is registered under the CL (R&A) Act as a principal employer, and the average number of contract workers working per day is around 1000. If a specific contractor appointed involves 9 workers against a particular work order, then is that contractor liable to obtain a labor license?

IF THE STATE RULE APPLICABLE TO YOUR ESTABLISHMENT PRESCRIBES FOR 10 OR MORE, THERE IS NO REQUIREMENT TO OBTAIN A LICENSE AS SUCH, PROVIDED YOU ARE SURE THAT IN NO CASE ON A SINGLE DAY DURING THE JOB THE NUMBER OF LABORERS WILL NOT EXCEED 9.

Statutory Compliance in Job Contracts

In case a job contract is issued, a contractor must abide by the statutes e.g., CL (R&A) Act, EPF Act, ESI Act as per the law of the land. But in case the engaging authority does not put the specific clause on statutory compliance in the work order, then in such a scenario can the contractor avoid his responsibility on compliance with statutes because such a clause is not present in the order?

NO RELEVANCE WHETHER THE CLAUSE HAS BEEN MENTIONED IN WORK ORDER OR NOT, MANDATORY PROVISIONS IMPLY SUBJECT TO THE SCOPE AND ELIGIBILITY PRESCRIBED IN RESPECTIVE ACTS.

Job Contracts in Specific Areas

In the case of job contracts in areas like Data Entry, Design, Drawing, etc. (where the rates are being fixed on a per drawing/per page basis), whether such job contracts should be covered under CL (R&A) Act, especially when the job is carried out:

(a) Within the premises

(b) Outside the premises.

YES, IN BOTH CASES THE CLRA ACT IS APPLICABLE.

Minimum Wage Rate Compliance

Our organization is a Central PSU. In case a job contract is issued and the Contractor is registered under the State Govt., in such a case whether such a contractor must follow the minimum wage rate as per central rules while they work with us:

(a) At our premises

(b) Outside our premises.

IN YOUR CASE, MINIMUM WAGES NOTIFIED BY THE CENTRAL GOVERNMENT WILL BE APPLICABLE (AS PER MINIMUM WAGES ACT- SCHEDULED EMPLOYMENT).

Minimum Wages for Supervisors or Executives

Contractor engages employees as Supervisors or Executives and does not pay minimum wages. Please suggest.

DO THEY PAY LESS THAN MINIMUM WAGES?

CSR Project and Labor Law Applicability

A civil repairing job of a college undertaken as a CSR project by our company. Accordingly, a work order is issued by our company, and the contractor finishes the civil job at the college (i.e., outside our company premises). Please suggest on the applicability of CL (R&A) act and other labor laws (e.g., EPF act, ESI act, etc.).

ALL PROVISIONS OF CLRA AND OTHER APPLICABLE ACTS ARE BINDING BECAUSE LABORERS ARE ENGAGED AS "CL" IN CONNECTION WITH THE WORK OF AN ESTABLISHMENT.

Regards,
Shailesh Parikh
Vadodara, Gujarat
[Phone Number Removed For Privacy Reasons]