Dear Brother,
Understanding Contract Labour Regulations
Contract labour is a sensitive subject, and there are several judgments and rules pronounced by different courts of the country at different times. It is complex but at the same time simple to follow if we have a good understanding.
1. The engagement of contract labour as of today is governed by the provisions of the Contract Labour Regulation and Abolition Act and Rules (CLRA), combined with different judgments pronounced by courts.
2. The basic requirement is that the work or job in which you engage contract labour should not be of a perennial nature or should not have been abolished by notification by the appropriate government. Please check what jobs are abolished in your respective industry.
3. Get your establishment registered under the CLRA and obtain a registration certificate.
4. Engage contract workers only through licensed contractors who have obtained a specific license for your factory or establishment under CLRA. Moreover, ensure that the contractors cover their workers under their own PF and ESI establishment code number.
5. Fulfill the conditions stipulated under the CLRA license.
6. Comply with the relevant labour laws applicable to contract workers.
7. Have a robust work order or contract established between the principal employer and the contractor.
8. Ensure that the contract is not sham in nature and that there are fair employment terms, wages, and other benefits for the contract workers.
9. If these are followed, it is by and large a safer system.
10. The main purpose why some companies give breaks is to avoid gratuity liability and continuity of service for the said workers. Other than that, no other reason is there. When the same set of workers is engaged for five years or more, they become eligible for gratuity, which please bear in mind.
All the best,
Dr. P. SIVAKUMAR
Dr. SivaglogalHR
Tamil Nadu