Navigating Labour Compliance: Do We Need Dual Registrations for the Same Site?

Clarification Needed on Labour Regulation and Compliance

My company has taken a civil contract from X X X X X company for constructing a boundary wall. That X X X X X company has already issued Form V to our company to obtain a license under the Contract Labour (Regulation and Abolition) Act, 1970. Our company applied for the license through Form IV. Additionally, our company is asking me to get the registration of the establishment under the Buildings and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996, through FORM-I (See Rule 23(1)) Application for Registration of Establishments Employing Building Workers for the same workplace/site/location.

Queries Regarding Registration and Compliance

1. If we have obtained a license under the Contract Labour (Regulation and Abolition) Act, 1970, for one workplace/site/location, is registration of the establishment under the Buildings and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996, required for that same workplace/site/location?

2. At that workplace/site/location, the following designated employees are working:
- Deputy Project Manager
- Senior Engineer – Civil
- Junior Engineer – Civil
- Junior Surveyor
- Civil Supervisor
- Machine Operator

These employees are receiving an approximate starting salary ranging from Rs.10,000 to Rs.1,00,000 per month.

Understanding Employee Classification and Compliance

As per the Contract Labour (Regulation and Abolition) Act, 1970 (CLRA), employees who are employed in a supervisory capacity and draw wages exceeding five hundred rupees per month, or who exercise functions mainly of a managerial nature, are not included in the definition of 'workman.'

How can we maintain statutory compliances and records under the CLRA Act for that workplace/site/location?

The total employee strength at that workplace/site/location is approximately above 40 workmen on any day of the preceding twelve months.

Your immediate reply regarding the above will be highly appreciated.

Thanks with Regards,

Thirumurugan

The BOCW Act and the CLRA Act are distinct and different in terms of their objectives and applicability. There is no possibility of their overlapping concerning the same establishment. Let's compare the definitions of the term "establishment" in both enactments. The definition of establishment under section 2(1)(j) of the BOCW Act is broader than that of the definition under section 2(1)(e) of the CLRA Act. While the definition under the latter covers only establishments/places where any industry, trade, business, manufacture, or occupation is carried out, the former includes all establishments, including those of contractors and individuals who employ building workers in any building or other construction work as defined under section 2(1)(d) of the Act. The exclusion of construction work related to Factories and Mines, as provided for in the same definition clause, unequivocally eliminates the possibility of overlapping between the BOCW and CLRA Acts in such establishments.

Since XXXXX Company has already provided you with the necessary form to obtain a contractor's license under the CLRA Act, it must either be a factory or a mine as per the Factories Act, 1948, or the Mines Act, 1952, information that is missing in your post. Therefore, the answer to your first query is no.

Please review the definition of "workman" under section 2(1)(i) of the CLRA Act again. You will be convinced that the JE (CIVIL), Jr Surveyor, and Machine Operator are workmen despite their higher earnings per mensem.

Regards

Dear Mr. Umakanthan M,

Thanks for your valuable reply. We are still confused due to the overlapping of the CLRA Act and the BOCW Act at the same workplace/location/site and the applicability of the term "workman" under the CLRA Act.

Clarification Needed on Overlapping Acts

For my first query, we couldn't find any section to avoid the overlapping of the CLRA and BOCW Acts. We believe both acts should be applicable to our company because we have taken a contract. This is one point. Additionally, we are doing civil work at the same workplace/location/site under the control of one principal employer. If we are wrong, please correct us.

For your quick reference, I have added details of both acts below.

As per the CLRA Act

It applies:
(a) 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;
(b) To every contractor who employs or employed on any day of the preceding twelve months twenty or more workmen:

Provided that the appropriate Government may, after giving not less than two months' notice of its intention to do so, by notification in the Official Gazette, apply the provisions of this Act to any establishment or contractor employing such a number of workmen less than twenty as may be specified in the notification.

"Establishment" means:
(i) Any office or department of the Government or a local authority, or
(ii) Any place where any industry, trade, business, manufacture, or occupation is carried on.

As per the BOCW Act

"Building worker" means a person who is employed to do any skilled, semi-skilled, or unskilled manual, supervisory, technical, or clerical work for hire or reward, whether the terms of employment be expressed or implied, in connection with any building or other construction work but does not include any such person:
(i) Who is employed mainly in a managerial or administrative capacity; or
(ii) Who, being employed in a supervisory capacity, draws wages exceeding one thousand six 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.

"Establishment" means any establishment belonging to, or under the control of, Government, any body corporate or firm, an individual or association or other body of individuals which or who employs building workers in any building or other construction work; and includes an establishment belonging to a contractor, but does not include an individual who employs such workers in any building or construction work in relation to his own residence, the total cost of such construction not being more than rupees ten lakhs.

Clarification on the Definition of "Workman"

For my second query, in our view, those employees in a supervisory capacity who draw wages exceeding five hundred rupees per month are not considered workmen as per the CLRA Act. If we are wrong, please correct us.

For your quick reference, I have added the definition of "workman" under section 2(1)(i) of the CLRA Act below:

"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, or clerical work for hire or reward, whether the terms of employment be 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; or
(C) Who is an out-worker, that is to say, a person to whom any articles or materials are given out by or on behalf of the principal employer to be made up, cleaned, washed, altered, ornamented, finished, repaired, adapted, or otherwise processed for sale for the purposes of the trade or business of the principal employer and the process is to be carried out either in the home of the out-worker or in some other premises, not being premises under the control and management of the principal employer.

Please correct us soon.

Thanks with regards,

Thirumurugan

Clarification on BOCW and CLRA Acts

Umakanthan Sir has clearly defined the scope of the BOCW and CLRA Acts. The BOCW is to ensure service conditions for construction workers, whereas the CLRA addresses all kinds of workers irrespective of their nature of work. The former also aims at the collection of cess for the benefit of construction workers.

The remuneration part to decide whether a person employed is a workman or not has no relevance. What is important are their functional responsibilities and authorities. As such, any person who has the right to approve leave of their subordinates, initiate disciplinary action against their subordinates, or appraise the performance of their subordinates is not considered a workman. Therefore, regardless of the designation you have given or the salary you offer, if your Engineers do not have these rights, they will also come under the definition of a workman.

Regards,
Madhu.T.K

My submission to your entire matter and point-wise query is as follows:

[My company] has taken a civil contract from XXXXX company for constructing a boundary wall. The XXXXX company has already issued Form V to our company to obtain a license under the Contract Labour Regulation and Abolition Act, 1970. Our company applied for a license through Form IV. Additionally, our company is requesting me to obtain registration of the establishment under the Buildings and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 through FORM-I.

Answer/Suggestion:

When the PE (XXXXX) has issued you FORM-V, your company is the contractor, and you only need to register under the provisions of CLRA - 1970. No further registrations are required under the BOCW Act and its provisions, as the PE (XXXXX) is registered under the BOCW Act and obligated to pay cess under BOCW, and undergo inspections and audits.

Question:

Now, how can we maintain Statutory Compliance and records under the CLRA Act for that workplace/site/location? The total employee strength at that workplace/site/location is approximately above 40 workmen on any day of the preceding twelve months.

Answer/Suggestion:

All the forms (registers and half-yearly returns that need to be maintained under CLRA) have no ambiguity or any special provisions that cannot be filled due to pay hikes or managerial positions.

Looking forward to your reply or remarks.

Regards