Can the Labor Department Issue Show Cause Notices to Factory Occupiers Under Contract Labor Act? Seeking Insights

Hi all, Today, our occupier of the factory has received a show cause letter from the Labor Department mentioning that contractors are not replying to some of their queries (which is not true at all, as we have seen the replies being sent by the principal employers). I want to know, can the Labor Department write a show cause letter directly to the occupier in the case of the Contract Labor Act? Are there any rules that can prove that Labor Departments can issue show cause notices to the occupier in cases involving contract labor? Please share your views on this matter.

Regards

Contract Labour (Regulation and Abolition) Act, 1970: Licensing and Show Cause Notices

1. Sir, please refer to Chapter IV of the Contract Labour (Regulation and Abolition) Act, 1970, under which it is stipulated that the contractor is required to obtain "a license" from the Licensing Officer of the area as appointed under the said Act. The term "opportunity of showing cause" is mentioned in section 14 of the Act. However, in this case, as detailed in the thread, the show cause notice has been sent to the principal employer. If the contractor's license is cancelled, then the work of the principal employer is also likely to be affected. The revocation of registration of the principal employer in certain cases is outlined under section 8 of the Act.

2. In the same Act, there seems to be no provision where the department cannot issue any show cause notice to the principal employer. It would be more beneficial if it is clarified under which provisions of the Act the said Show Cause Notice has been issued and which shortcomings or defaults of the contractors have been pointed out by the department to the occupier of the firm. Please refer to section 20 of the Act, which addresses the liability of the principal employer in certain cases where the contractor fails to provide amenities to their workers.

Dear Awdesh,

You have to be more clear about the show cause notice as it is related to which area. In some areas, definitely, the labor department can ask the principal employer. Suppose a contractor has not paid wages to his employees, then the labor department can hold you responsible as the principal employer.

Thank you.

As per the act, the labor department has every right to intervene and safeguard the welfare of the workers. Employers need to justify the answers asked by the department.

Hi,

Yes, the principal employer is responsible for all the activities of contract employees. If the contractor is not responding to the labor department queries, they will send a show cause notice to the principal employer on behalf of the contractor.

Thank you.