Who Is To Take Disciplinary Action Against Contract Labour?

1. Who is to take disciplinary action against contract labor, and whether the Standing Orders are applicable to contract labor or not?

2. Can we engage contract labor in security, housekeeping, drivers, canteen, or horticulture, etc.? Please clarify the above for me.

Dear Mr. Pratap,

Contract labour is the employee of the contractor, either supplied as manpower to the contracting firm or deployed for providing some services on contract. Such arrangement is regulated under the Contract Labour (R&A) Act. Disciplinary action is to be initiated by the employer, though misconduct may be reported by the Principal Employer to the contractor. Standing orders of the establishment of the contractor are applicable.

Any such services can be availed on contract unless the appropriate government prohibits the employment of contract labour in the establishment/company for such services. Hope this clarifies.

With best wishes,

If the Standing Order of the establishment is applicable to contract workmen, then it is persistent that the contract laborers are treated as direct employees of the employer. This situation could be considered a sham contract. Am I right or wrong? Please clarify.

Standing Orders, as they are, will not be applicable to contract laborers. However, when engaging workers, there will be a contract with the contractor (who engages labor) outlining specified conditions of service such as safety provisions, shift timings, intervals of rest, confidentiality matters, etc., that the contractor's workers must adhere to. This does not imply that Standing Orders apply to workers engaged through a contractor. Strictly speaking, the standing orders themselves would specify their 'applicability' and to whom the rules are binding. If it is stated that they apply to contract labor, then the provisions of the orders will indeed be applicable to them.

Extending the standing orders to contract labor will not render the contract sham. However, it will become questionable if direct interference occurs with contract labor, such as initiating disciplinary action, imposing fines or penalties for tardiness or other offenses, directly overseeing their work, making direct wage payments, or providing advances under normal circumstances (in cases where the contractor fails to pay wages, the Principal employer can make direct payments to contract workers).

Contract labor should only be engaged in operations not directly linked to the organization's core business. Employing contract labor for tasks of a perennial nature is illegal. Activities like housekeeping and security deployment are considered indirect operations, suitable for contract labor. For instance, in the hospitality industry, housekeeping in guest areas is a core operation, necessitating direct labor. However, for cleaning public areas (e.g., admin office/staff cafeteria), contract labor is permissible. Similarly, direct labor is recommended in kitchens attached to restaurants, while indirect/contract labor can be utilized in staff kitchens.

Madhu.T.K