Multiple Branches and CLRA: Should Each Be Seen as Separate Establishments?

Multiple Branches and CLRA Applicability

If an organization has multiple branches at various centers and has employed a company for housekeeping work at all the branches, each branch has fewer than 5 employees working from the housekeeping company. However, if we add the number of such employees at all the branches, the total is more than 20. The payment to the housekeeping company is made by the individual branches for their housekeeping. In this case, could the different branches be considered as different establishments under CLRA?

Is CLRA Applicable in This Situation?

Is CLRA applicable in such a situation?

I would like to draw your attention to the definition of "establishment" in section 2(e)(ii), where it is mentioned that (ii) any place where any industries, trade, business, manufacture, or occupation is carried on.

Thus, in your case, each branch is a separate establishment, and although the contractor firm is the same, he is a different contractor for each branch. Please remember, CLRA is a PLACE-specific act.

Regards, Shailesh Parikh

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Thank you very much, Shailesh! This means the organization will not be treated as 'Principal Employer'. Is there any court case or verdict available which firmly establishes this view? I am receiving a contrasting view from some interested parties who maintain that CLRA will be applicable.

No, CLRA remains applicable even for a single person hired by a contractor to undertake your job. However, it will not attract the mandatory obtaining of a Labour License if the same contractor has not engaged more than the prescribed number of persons at a single place (branch) of your company.

Regards, Shailesh Parikh
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Vadodara

Thank you, Shailesh! Please pardon my inability to immediately grasp this concept fully. I am not sure about the implications in such a case. Less than the prescribed number of workers means that the organization need not obtain a Labour License. That's okay. But, what if the contractor fails to make payment of minimum wages to workers? Are the provisions of CLRA applicable where the Principal Employer has to make the payment of the difference?

Dear Pradeep, rightly said by Mr. Shailesh. CLRA is more place-specific and has nothing to do with the overall headcount. However, the Code on OSH may lead to one license for all sites too.

If it is a single work order issued centrally for multiple locations, is a license under CLRA required even though the number of workers in each location is less than the specified number?

From the discussions, I assume that a license is not needed under CLRA if the number of workers in each location is below the threshold in such situations. However, it is not yet clear whether the Principal Employer will be responsible under the provisions of the act in case of failure by the contractor, such as minimum wages, etc.

Hope that some expert member will be able to tell us this!