Building Our Home: Do We Really Need to Follow Labour Laws for Personal Projects?

Dear Seniors, I am reposting this issue as I could not get any reply for my post in another forum of Cite HR. My query is: We are constructing a house in a prime locality, engaging a building contractor. The officials from the Labour Department have visited the site and issued notices for complying with the provisions of the BOCW Act and also the Contract Labour Act. We are constructing the house for domestic purposes and specifically for our own use. Do we need to comply with the said Acts? Once again, I request clarification from all of you.

Regards, Pavithra.R

I don't know exactly what rules apply in your state. If it is a domestic house construction, to my knowledge, CLA is not applicable. Please check the application of the BOCW Act and its scope, application, etc. This will help you come to a conclusion.

As per my knowledge, the BOCW Act of 1996 mandates that even if it is one's own house and the budget is above 10.00 Lakhs, it is necessary to obtain a BOCW Registration Certificate.

Yes, you are correct. You can refer to the BOCW Act of 1996 and the CLA of 1971 for your safety.

As per my knowledge, the CLA doesn't apply to construction; it is applicable only to commercial organizations. In construction, only the BOWC Act of 1970 is applicable. Please clarify this with the labor office issuing the notice.

Regarding the BOWC Act, its applicability depends on the cost of construction of the property. If the construction cost exceeds 10 lakh (certified by the construction company), then it is applicable. The Labour Inspector should have provided you with Form-I along with an Information sheet in the Notice. If not, please request these documents. The Notice should outline points where the Labour Inspector has identified discrepancies. You need to address these points and submit your response accordingly.

I hope this information proves helpful.

Kind regards,
[Your Name]

Thank you for your opinion. Could you please mention the section under which the CLA is not applicable to projects other than commercial construction?

With Regards,
N. Mohan

Repeatedly, we are advising the members to give complete details to get a suitable reply. First of all, please give a reply to the following questions:

1. You have mentioned in your post "WE." How many owners are involved in constructing the residential building in your post?
2. What is the cost of construction?
3. How many contractors/contract workmen got involved?
4. Have you made any agreements with other owners or formed any association for constructing and maintaining the residential building?
5. What is the contention of the Labor Department Official? Because the Labor Department is separate, and BOCW Officials are separate in almost all the sites.

If you give a reply to the above questions, our members will provide you with a suitable reply.

We are two owners (brothers). The cost of construction is more than 10 lakhs. We have engaged one contractor, and he has employed 50 laborers for the construction. Unfortunately, we do not have any written agreement in place. SLI has issued a notice to comply under the BOCW Act. I hope the above information is sufficient to clarify my situation.

Regards,
Pavithra.R

As per The Contract Labour (Regulation & Abolition) Central Rules, 1971:

The Act is applicable to every establishment in which twenty or more workmen are employed or were employed on any day of the preceding twelve months as contract labour.

Definition of Establishment

Section 2(e) of the Act also says that:

“Establishment” means any office or department of the government or a local authority or any place where any industry, trade, business, manufacture, or occupation is carried on.

Supreme Court Judgment on Construction

However, concerning Construction, there is a judgment of the Hon'ble Supreme Court of India in the matter "Gammon India Ltd. v. Union of India, (1974) 1 SCC 596: 1971 SCC (L & S) 252" in which it is clearly mentioned that:

“In connection with the expansion of establishment, buildings are constructed. The site chosen for the building is the work site of the establishment. The work site is the place where on completion of construction, the business of the establishment will be carried on. Therefore, the work at the site as understood in the definition is the work of an establishment. Establishment is understood as including the work site.”

So, in view of the above, if the construction work is not related to any Business Organization for the purpose of Business purpose, it will not fall under the scope of the Act.

I would like to request the learned member to kindly provide your views on this.