Can a Contractor Avoid Registration Under the Contract Labour Act by Using Different Agency Names?

Contract Labour Act of 1970: Registration Requirements

Let's suppose a contractor employs 11 employees under one agency name and another 10 employees under a different agency name. Does this contractor need to be registered under the Contract Labour Act? Or does having employees split up between two different agencies mean he can avoid registering? The owner/contractor is the same in both cases but is operating under different brand/agency names.

Obligations of Principal Employers

Principal employers have the obligation to ensure that all regulatory norms related to contractual workers are fulfilled through their contractors.

Contract License Requirements

If you are hiring two different agencies for contracts owned by a single proprietor, and the nature of work is similar, then ensure that the contract license is obtained as required.

Thank you for clarifying. Would you happen to be aware of a judgment or government rule that would affirm that a sole proprietor operating under different contractor names needs to obtain a license?

Dear Amit Rajani, if both the agencies, though ownership is the same, are independent with different brand names, constitutions, nature of work, and no interconnection or interdependency, both agencies will be considered separate from each other if established without the intention to defraud the laws. They are liable individually under the CLRA, as per the prevalent provisions. However, finding such cases is challenging.

I mention prevalent provisions because each state has different criteria for obtaining a license under the CLRA. I recall that the criteria in West Bengal, Gujarat, and Goa were 10 and above a few years ago. I am unsure if it remains the same or has been amended. In Goa, I remember it being amended to 50, but again, I am not certain.

Returning to the topic of obtaining a labor license, no one seems to prioritize compliance with the law. Unfortunately, few are concerned with the law, but more with what is paid under the table. This department is one of the most corrupt across the country, in every state, despite the availability of online procedures. Unless you make under-the-table payments, your online application will likely not be approved. The applicant's identity, the nature of the contract work, or the genuineness of the application are often overlooked.

I have witnessed cases where a contractor had multiple entries for different types of work, exceeding 50 laborers, yet no license was issued. By following the system, anything seems possible. The system revolves around meeting officers periodically and catering to their greed.

You may encounter very few exceptions where officers demonstrate knowledge and honesty.

Thank you.