Navigating Labor Licenses in Civil Engineering: Do We Need One for Every Short Project?

Dear Seniors, we are involved in civil engineering consultancy and testing work, executing projects across India that vary in scale from small to large. These projects are carried out at different locations and durations, employing our own staff and also contractor labor. However, some of these contractors lack proper registration or licenses.

My Query Pertains to Labor Licenses:

1) Do we need to apply for a labor license for each project, even if the work is for just a single day?

2) For extensive projects, we secure labor licenses; but for smaller projects lasting only a couple of days, often the work concludes by the time the license is obtained. In such cases, what is the recommended course of action?

3) Does the requirement for a labor license vary based on the site, especially when operating in different districts within the same state falling under distinct jurisdiction of the labor department? Can a single labor license be obtained for a specific period to cover work across multiple locations within the same or different districts during that duration?

I kindly request guidance from seniors, especially Mr. Umakanthan, if he comes across this post.

Thanks in advance.

Labor License Consultation

If you need a labor license, the best person to consult is a labor consultant who can help you understand which license you require and when to apply for it. When using outsourced manpower, you have the option to request the license directly or obtain a declaration from the contractor confirming that the license application process is underway or has already been completed.

Thank you for your attention to this matter.

Dear Talentsorcerer,

Thank you for your response, but it appears you may have misunderstood my question. I am not seeking a labor license; rather, I am interested in the details (rules & regulations) involved in obtaining a labor license. I hope other experienced members will be able to provide further insight.

Kind regards,

[User's Name]

Dear Tittli ji,

Your query is on a license under the Contract Labour Act. You are involved in civil engineering consultancy and testing work carried out all across India. Your own employees and contractors' employees are working on your project sites, which vary from 1 day to 2 years.

You are a contractor to the owner of each project site, who is called the Principal Employer (PE).

Applicability of the Contract Labour Act (CLRA)

The CLRA is applicable to the PE if they have 20 or more workmen as contract labour on any day and to you (the Contractor) if you employ 20 or more workmen on any day (directly employed by you or through subcontractors).

Definition of 'Workmen' under CLRA

Section 2(i): 'workman' means any person employed in or in connection with the work of any establishment to do any skilled, semi-skilled, or unskilled manual, supervisory, technical, or clerical work for hire or reward, whether the terms of employment are express or implied, but does not include any such person:

(a) who is employed mainly in a managerial or administrative capacity; or

(b) who, being employed in a supervisory capacity, draws wages exceeding five hundred rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.

Regarding Your Questions

1) Do we need to apply for a Labour license for each project even if the work is for a single day?

You need to apply for a labor license if you have 20 or more workmen, including those through your subcontractors. The law states that if you have 20 or more workmen even for a single day, the Act is applicable to you, and you are liable for a license.

2) For huge projects, we get a Labour license, but for small projects (say for a couple of days), by the time we obtain the license, the work is over. In this case, what are we supposed to do?

You need to find a practical approach and/or write to the Central Government about your practical difficulties and seek exemption from obtaining a labor license due to practical difficulties.

3) Does the labor license vary from site to site if the work is carried out in different districts of the same state but falls under different jurisdictions of the labor department? Can we obtain a single labor license for a particular period and carry out work at different locations in the same district or different districts during this particular period?

The labor license varies from site to site. There is no single license for different locations. The license is different for every establishment/work project of every PE.

I hope I have answered your queries to your satisfaction, and there is no contrary view to it by any member of the forum.

Regards