Contract labour act - If the supplier of transformer is sending 12 persons of his company at my site

Varghese & Kargaonkar

This is not the view being taken by the labour officers in many states

Most companies are not taking the risk of the courts later declaring that mare supply of goods is only supply of goods and installation and erection does not come under the term mare supply, etc. I do not know of any case decided by the court on this count. If anyone has info on that, please let me know.

That is also the reason that many of the state rules provide for a temporary license : taken for up to 15 days. In most cases, license is not required as they are less than 10 workers. However, the ones i have been seeing in large factories is that teams that come to install transformers, boilers, etc are often as large as 25-30 people. I saw one team consisting of 85. This is more likely in the case of large projects like expansion of plants.

In any case, for mitigation of risk, companies insist on ensuring that PF, ESIC and / or Workman Liability Insurance (or workman compensation insurance) is taken. Also they try to ensure that the concerned workers are paid above minimum wages.

Our topic is Contract Labour Act, whether an agency supplying and installing any plant or machinery comes under the preview of CLRA or not. We are doing academic discussion on the base of interpreting CLRA.
It will be appreciated if senior member like you restrict to the context of discussion to get maximum benefit to enhance our knowledge.

Varghese ji wrote rightly,there is in CL 1970 (RA) only will licence provision to few categories, like housekeeping ,fabrication,loading & unloading ,material shifting ,gardening.
But in above case there is no need to obtained licence from authority because of work is not as per CL1970 nature.
workmen less than 20.
but if organasation is registerd undr P.F.& E.S.I.C.act ,itshould be responsibility of the principal employer.
Regards,
Ashish
Ct.No.09469489001

I hope you guys have seen the latest Court judgement that clearly states that employers liability exists under all laws irrespective of whether it is a service contract or labour supply. It's about compensation to employees who were recruited by an agency to ferry cars of Mahindra and Mahindra from the factory to various other places. The fact that it was a service contract, piece rate, not controlled by the PE and not even in the factory was discarded by the court
So, I think you better take a license if the numbers cross the limit

Can you give the title and citation of the Mahindra;s case please?
Varghese Mathew

Dear members,
I am in total agreement with Mr.Korgaonkar. The Contract Labor Act comes into play only in a situation wherein particularly a contract of service hired by an establishment through contract labor is (1) perennial and on day-to-day basis (2) incidental but necessary to the core activity (3) sufficient enough to permit the employment of considerable no. of regular and whole-time workforce and (4) being carried on mostly in similar establishments through regular workers. In my opinion,when the erection of a particular machinery, because of its enormity or sophistication, is inextricably linked to its sale or supply, it can not be brought within the above parameters.

Hi Varghese
Unfortunately, i do not have the copy of the judgement yet.
This is the article that appeared in TOI about the same.
Liability of employee is on principal employer: HC - The Times of India

Banerjee ,
If you read the article you can understand that the case was not under CLRA Act, But it was on an appeal by the insurance company against the order of EC commissioner awarding compensation to the driver employed by the contractor.The court observed " it was not proved that due to any terms of contract between the parties that the liability is on contractor (MGM Motors)"
Pl read sec 12 of the EC Act.This decision of Bombay HC is of no use for our topic of discussion.
Varghese Mathew

Well, from what I understand and what some PF my lawyer friends explained,
The principals based on which the court decided the case is very much going to be extended to clra also. The insurance company had given a cover for employees under workman compensation act. The court held that these contract workers are entitled to compensation from the insurance company. It is not under motor insurance but under workman compensation act.
I am waiting for someone to get me the full copy if the decision and then I will share it here so we can analyse it together and figure out how it affects CLRA.

Trimurti Group offer Contract Labour Act Compliances Consultancy Services.

We are providing Following Services in Compliances to the Provision of Contract labour (Regulation & Abolition) Act 1970

Contract Labour Compliances for Employer (Company) & Contractor

1. Obtaining Registration of Principal Employer Establishment under Contract Labour Act (Form -1)

2. Obtaining Labour Licence of Contractors from Labour Commissioner (From-6)

3. Amendments in Principal Employer Registration/Labour Licence

4. Obtaining Duplicated Copy of Certificate of registration/Labour Licence

5. Renewal of labour Licence from time to time from Labour Commissioner

6. Preparation & Maintain of Various registers as provided under the Contract Labour act, Register of Contractors, Register of Workmen Employed by Contractors, Register of Wages, Register of Overtime, Register of Fine, Register of Deductions, Register of Advance,

7. To Provide Assistance in Preparation & maintain to various Record Like Wage slip, Muster Roll as per Contract Act

8. Assistance to Ensuring Compliances of the provision of the contract labour act related to Disclosure, Notices, Displays, Deductions etc

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