Navigating Labour License Requirements for Building a College in Maharashtra: What Should Contractors Know?

Dear Sir,

We are a construction contractor and have received an order from an Educational Institute (Trust) in Maharashtra to build a college building.

My queries are:

- Is it required for the principal employee to be registered under CLRA?
- As a contractor, how can we obtain the Labour License as we will be deploying more than 50 employees?
- Are there any exemptions for trusts/educational institutions under CLRA regarding the licensing requirements?

Please advise.

Pradeep

Applicability of Labor Laws to Educational Institutions

Education is an industry. As such, it is not exempt from any labor laws. Therefore, the CLRA Act of 1970 is applicable to educational institutions regardless of whether they are a Trust if any business activity involves the engagement of the minimum number of contract laborers as prescribed under the Act. Consequently, the Trust must register itself as the Principal Employer, and the Contractor must obtain a contractor's license under the Act. Furthermore, the Building and Other Construction Workers' (Regulation of Employment and Conditions of Service) Act of 1996 would also be applicable to construction work.

Thank you, sir,

If the principal employer does not issue Form V, can the contractor apply for a labor license without Form V, considering it is a completely online process in Maharashtra?

Please suggest.

Thanks & Regards,
Pradeep B N

Dear Mr. Pradip,

The Maharashtra Contract Labour Rules are not applicable to Educational Institutes/Trusts. However, they are applicable during the construction of the building. Additionally, the Maharashtra Building & Other Construction Workers Rules are also applicable.

Regards,

Dilip Nandanwar

For Vidarbha Industries Labour Law Consulting, Auditing & Third-Party Payroll Outsourcing Navi Mumbai & Nagpur.

License under the Contract Labour Act is mandatory. For a construction company, it is also mandatory to be registered under BOCW.

Dear Dilip Nandanwar ji,

According to you, Maharashtra Contract Labour Rules are not applicable to Educational Institutes/Trusts. Can you support your statement with the help of a specific rule or notification, etc.? I will be highly obliged.

Though our learned member Shri. Umakanthan gave you the right answer, I would like to provide answers to your questions as follows:

Is it required for the principal employee to have registration under CLRA?

Yes. The Principal Employer (PE) is required to obtain a Registration Certificate (RC) under the Contract Labour (Regulation and Abolition) Act (CLRA) and then issue you Form V. Without Form V, you cannot proceed with your application for a license.

Being a contractor, how will we get the Labor License as we will deploy more than 50 employees?

You have to apply online. For that, you need to register yourself first on Maitree - Mahaonline. The procedure of registering yourself and then applying for a license on the portal - Labour Management System is a time-consuming and tedious job. My office can get this job done for you with appropriate charges. If you are willing to do it, you can contact my office at [Phone Number Removed For Privacy-Reasons].

Is there any exemption for trust/educational institution under CLRA for the licensing part?

I am sure there is no such exemption for trust/educational institutions.

Apart from the license under CLRA, you need to obtain an RC under the Building and Other Construction Workers (BOCW) Act. You need to register your construction workers under BOCW as Beneficiaries, subject to certain conditions. Cess under BOCW is payable at 1% of the construction cost by the PE, but the PE can ultimately recover it from you, irrespective of express terms in the contract or not. Under BOCW, you need to comply with many provisions. You need to comply with many applicable Labor Laws, and therefore, you need a person like me to guide you from time to time.