Understanding the '20 Workers' Rule in the Contract Labour Act: Does Hiring Different Employees Count?

I have a doubt about the meaning of 20 workers in the Contract Labour Act.

Examples:

This month, I have employed 5 employees. Next month, I am going to employ another 5 employees, but they are not the same kind of employees that I employed last month. Does this mean that I am employing 10 contract workers?

I would request the poster to read Section 1(4) of the CLRA Act, 1970. Even if he employs 20 or more workmen on any day of the preceding 12 months as contract labor in his establishment, the Act will apply.

Sir,

My question is, according to my agreement, I want to employ only 10 contract laborers.

In the first month, my contractor sends me 10 employees. However, in the second month, all those ten employees sent by my contractor are replaced, and a new set of people are coming in.

In this scenario, are they considered as 10 workers or 20 workers? As over the course of two months, a total of 20 individuals are coming to work.

Dear Mr. Narayanan, I find myself quite perplexed by my inability to effectively communicate my concerns to you. I believe you would acknowledge that your agreement with the contractor pertains to specific numbers regarding the supply of contract labor. For instance, the agreement specifies 10 contract workmen at a time, rather than specific individuals - is that correct?

Consequently, over any continuous period lasting more than a month, the contractor consistently provides only 10 individuals, albeit not the same ones each time. This results in a scenario where, at any given point during this period, the total number of contract laborers never exceeds 10.

In terms of the relevant legislation, the Act refers to a timeframe of 12 months prior to the calculation date. It emphasizes the absolute number of 20 or more individuals on any single day within this specified period, rather than an average figure.

Thank you for your attention to this matter.

Sincerely, [Your Name]

Thanks, Sir. So, its name specific and not number specific, am I right?

Dear Narayanan,

As a student, before raising questions, please go through the relevant act in detail. Furthermore, mention whether your question is hypothetical or genuine.

Your conclusion is not correct. The total number of contract employees employed should be taken into consideration. Based on your example, it is only 5.

The count is number-specific and not name-specific.

The count of names that appear in the muster roll represents the strength for that month. However, in any month of the calendar year (January to December), if the name count on the muster roll is 20 or more, then the establishment is required to obtain a license under the CL(R&A) Act.

Furthermore, if your contractor sends 10 workers in the 1st month and another 10 in the 2nd month as replacements for the 1st month's workers, the count remains at 10. In another scenario, if the new workers are in addition to the existing strength, then the total count would be 20.

Mr. Narayanan, if you read Sec. 1(4) of the CLRA, the Contract Labour Act is applicable only if the establishment employs 20 or more contract labour on ANY DAY in the preceding 12 months. From your post, what I understand is that the contractor replaces ten employees with another ten employees but the number does not exceed ten on any day in any month. So, the number remains ten only and not twenty or more.

B. Saikumar
HR & Labour Law Adviser
Navi Mumbai

The contractor has understood the wording of the section well and keeps fewer than 20 on any particular day to avoid the provisions of the Act.

Hope the querist has now at least understood.