Is the Contract Labour Act Relevant for Agricultural Workers in Sugarcane Fields?

Applicability of the Contract Labour (R&A) Act

The Contract Labour (R&A) Act is applicable to places where any industry, trade, business, manufacture, or occupation is carried out. In other words, the Act has been extended to industries covered under the Factories Act, Shops & Establishments Act, Mines Act, and Plantation Act.

Will the Act be applicable where purely agricultural activities are conducted? There are thousands of contract workers working in the sugarcane fields, particularly involved in cutting and transporting the sugarcane to the sugar mills. While minimum wages are notified by some state governments, agricultural activity has not yet been declared as an industry.

What are the labor laws applicable to the lakhs of contract workers mainly engaged in agricultural activities? I request veterans in the labor law profession to clarify the legal position.

Regards,
N. Nataraajhan, Sakthi Management Services

Dear Nataraajhan ji,

You have asked a very big question here. You have rightly said that thousands of contract workers are working in the sugar cane fields, especially cutting and transporting the sugar cane to the sugar mills. The system of contract labor is prevalent in agricultural and allied operations on a very large scale. In Urban India, contract and sub-contract as well as migratory agricultural laborers make up most of the unorganized labor force. Ninety percent of this labor force does not have social security and other benefits of employment as in the organized sector.

To answer your question, I would say only the Minimum Wage Act is applicable to agricultural and allied operations, but I have a doubt about its enforcement.

However, if the agricultural and allied operations are run systematically as an industry, trade, business, or occupation, in such cases, all the labor laws should be made applicable depending upon their applicability.

The conditions of contract labor in India, including in the unorganized sector, have been studied by various Commissions, Committees, the Labour Bureau, and the Ministry of Labour—both before and after independence. All these have found their condition to be appalling and exploitative in nature.

But till date, no special law is enacted to protect the interest of agricultural laborers, unlike the BOCW Act for construction or the Domestic Workers Act, Beedi and Cigar Workers Act.

Supreme Court Observation

The Supreme Court of India, in the case of Standard Vacuum Refinery Company vs. their workmen, observed that contract labor should not be employed where:

- The work is perennial and must go on from day to day;
- The work is incidental to and necessary for the work of the factory;
- The work is sufficient to employ a considerable number of full-time workmen; and
- The work is being done in most concerns through regular workmen.

But this is applicable to the organized sector. Another big question is, is it really happening there in the organized sector?

Regards

Dear Natarajan, While appreciating your specific concern for the plight of agricultural labor engaged through contractors in certain agricultural operations and Korgaonkar's general statement of the Contract Labour (R&A) Act's diluted implementation, I may be permitted to point out in the first place that the sphere of agriculture, per se, is not exempted from the purview of the CLRA Act, 1970. When agriculture is carried out in an integrated manner as normally done in the West, it too automatically becomes an industry. But the Indian scenario is entirely different. Here, we have small and marginal farmers owning the major portion of agricultural holdings. After the advent of far-reaching statutory reforms like the abolition of the Zamindari system, land-ceiling, etc., fragmentation of land holdings has increased. Cooperative forms of agriculture did not get the due thrust for carrying out the cultivation in an integrated manner and on a large scale. Hence, the prevalence of the contract labor system in operations like sugarcane cutting. If you are hailing from the Delta Region of Tamil Nadu, I hope that you will certainly admit the fact that agricultural operations are gradually dwindling because of higher wages and lesser effective working hours among many other reasons. The notified minimum wages are generally less than the prevailing market rates. The dearth of agricultural labor and their effective mobilization coupled with the seasonality of the operations, in my opinion, acts as a positive restraint in exploitative tendencies relating to payment of wages.

Secondly, if a conjunctive reading of Sections 1(5) and 2(e) is made, one will find it very difficult to bring the labor force mentioned in the thread within the fold of the CLRA Act, 1970 unless the operations are carried out by the establishment in an integrated manner or on a large-scale farming.

The Kerala Agricultural Workers Act, 1974

Coming to Mr. Korgaonkar, actually, there is a special piece of labor legislation in the State of Kerala styled as "The Kerala Agricultural Workers Act, 1974" to provide for the welfare of agricultural workers in the State and to regulate the conditions of their work. There are provisions for the settlement of "agricultural disputes" through conciliation officers, Agricultural Tribunals, establishment of Agricultural Workers Welfare Fund administered by the Agricultural Workers Welfare Board through periodic contributions raised from landowners and registered agricultural workers, hours of work, intervals for rest, overtime wages, harvest wages, pension from the fund for workmen after 60 years of age, etc.

Regards,

1. Sir, the applicability of labor laws in the agriculture sector has been well explained by seniors and experts in their earlier posts. I may, however, want to add that some labor laws, such as the Payment of Wages Act, Equal Remuneration Act, Plantation Labor Act, etc., are already applicable in selected parts of agricultural labor, such as plantations, as mentioned in the said Acts. However, in major labor laws such as the ESI Act, 1948, there are enabling provisions through which the appropriate government can extend the provisions to other types of establishments, including agriculture. However, considering the peculiar nature of the unorganized sector, the government has not done much to protect the interests of agricultural/rural labor.

2. As mentioned by one of the experts above, the Kerala State first enacted the Kerala Agricultural Workers Act, 1974. Tripura and Tamil Nadu State Governments have also perhaps enacted such Acts protecting the rights of agricultural workers. None of the other states appears to have any such Act protecting the rights of agricultural labor.

3. The Government of India, in the year 1987, set up the National Commission on Rural Labor. It submitted its report in 1991, but the implementation of its recommendations is still pending with the government. When the question of providing social security to agricultural labor arises, the government always mentions that they provide social security to such agricultural labor through the Unorganized Workers Social Security Act, 2008, and some other schemes like MNREGA, 2005, etc. But this all appears on paper only, and I think there is no effective machinery through which agricultural labor working in sugarcane, etc., can be covered. A few years back, there was a proposal to extend the ESI Act, 1948, to sugar industries, but the said proposal was opposed by such industries on the plea that such industries are seasonal and have very few regular staff/workers.

4. At present, nothing substantial can be expected from the current central government, which is following instructions from the World Bank or from supporters of laissez-faire policy and a free economy at the cost of the welfare of the working population to maintain a high production rate in the industrial sector. The scope of coverage for social security for industrial employees is being narrowed down or curtailed. In the present situation, I think there appears to be no scope for any comprehensive scheme for the welfare of agricultural labor.

Sir, I need help. We have plenty of farm workers in contact, but the problem now is what agreement should be made with landowners. What approval letter should I get from the government? I did a few demo recruiting businesses by fixing a monthly salary for workers, and it's working out for us. Please suggest.

Sir, I need help. We have plenty of farm workers in contact, but the problem now is what agreement should be made with landowners. What approval letter should I get from the government? I did a few demo recruiting businesses by offering a fixed monthly salary for workers, and it's working out for us. Please suggest.