Understanding CLRA: Do Contractors with Small Teams Across India Need a Labor License?

I have some doubts regarding CLRA. What is the applicability of CLRA?

Suppose a contractor has more than 20 employees, but they are working in different locations across pan India. On any location of pan India, there are not more than 5 or 10 employees. Then please tell me if it is mandatory to take a labor license? If yes, then what is the full procedure, and if no, then why?

Dear Mr. Adeshkumar,

Basically, the CLPA Act is applicable only when any employer engages twenty or more contract workmen of various contractors in his establishment. Similarly, the contractor shall take a license only when he engages twenty or more workmen in any particular establishment.

Regards,

N. Nataraajhan
Sakthi Management Services
HP: +91 94835 17402
Email: natraj@sakthimanagement.com

Applicability of CLRA and Licensing Requirements

This is a doubt I have always had. Perhaps the intent and wording of the legislation have a mismatch. The applicability provision says that the act will apply to all contractors who have 20 or more workers and to all enterprises where 20 or more contractors are working. (Of course, in some states, the limit is 10.)

The licensing section also talks of a license required where the contractor has 20 or more workers (in total, not at each location). However, the administrative section of our labor departments is giving a license only when there are 20 or more contract workers of a single contractor at that particular location.

Understanding CLRA Licensing Requirements

As per the provisions of the CLRA Act, registration certificates and licenses are issued separately for each factory, considering the factory license and the contract workers engaged. A company with two or more factories in different locations within the same town or city will have separate licenses and will fall under the jurisdiction of different factory or labor inspectors.

However, if a contractor engages 20 or more workers in different factories within an area under the same inspector, they must obtain a license. This involves enclosing the different registration certificates to show that they engage 20 or more workers within the jurisdiction of the same inspector. We have obtained a contractor's license for a company in Tamil Nadu, which has its headquarters and a petrol bunk in different locations but within the jurisdiction of the same labor inspector.

Regards,
N. Nataraajhan
Sakthi Management Services
HP: [Phone Number Removed For Privacy Reasons]
Email: [Email Removed For Privacy Reasons]

Licensing Authorities and Employee Count

Well, you may have been able to get that done, but in most cases, the licensing authorities send it back, saying it's not necessary because you have fewer than 20 employees here. They don't even bother during inspection to mention those they know have more than 20 in multiple locations (e.g., BIS Security has over 25,000 security guards, but the inspector/GLC will say nothing in places where they have 6-8 guards).

Also, in your case, what if the Head Office (HO) and the pump were at different places under different inspectors? The law would still apply, but would you not get a license?