Is Hiring Contract Labor for Core Activities in Telangana Allowed? Seeking Clarity and Advice

Dear Seniors,

Greetings for the day! First of all, I would like to thank my seniors for their suggestions for every problem posted on citehr.

Query on Contract Labor in Telangana

In my organization, all the operator positions like 1st class boiler attendant, 2nd class boiler attendant, turbine operators, CHP operators, lab chemist, ETP/WTP operators, fitters, and welders, etc., are under contract rolls. I need your advice in this regard: Is the employment of contract labor in core activities in the State of Telangana prohibited or not? Do the above positions come under "core activities"?

Understanding the Andhra Pradesh Amendment

As per my knowledge and collection from citehr, the below information is collected, but I am still expecting suggestions from seniors:

The State amendment of Andhra Pradesh in 2003 introduced a clause restraining the employment of contract labor in core activities of any establishment if the same was prohibited by notification. However, it introduced the following exemptions:

[a]. The normal functioning of the establishments is such that the activity is ordinarily done through contractors; or

[b]. The activities are such that they do not require full-time workers for the major portion of the working hours in a day or for longer periods, as the case may be;

[c]. Any sudden increase in the volume of work in the core activity that needs to be accomplished in a specified time.

Definition of Core Activities

Also, the Andhra Pradesh Amendment introduced a definition clause for "core activities" of an establishment meaning any activity for which the establishment is set up, which includes any activity that is essential or necessary to the core activity. It again provides certain exceptions as follows:

1. Sanitation works, including sweeping, cleaning, dusting, and collection and disposal of all kinds of waste;
2. Watch and ward services, including security service;
3. Canteen and catering services;
4. Loading and unloading operations;
5. Running of hospitals, educational and training institutions, guesthouses, clubs, and the like where they are in the nature of support services of an establishment;
6. Courier services which are in the nature of support services of an establishment;
7. Civil and other constructional works, including maintenance;
8. Gardening and maintenance of lawns, etc.;
9. Housekeeping and laundry services, etc., where they are in the nature of support services of an establishment;
10. Transport services, including ambulance services;
11. Any activity of intermittent nature, even if that constitutes a core activity of an establishment; and
12. Any other activity that is incidental to the core activity.

A rider was introduced by the Andhra Pradesh Amendment that the above 12 activities by themselves should not be the core activities of such establishment.

It must be noted that the Andhra Pradesh Amendment has force only in Andhra Pradesh State and not in the rest of the country.

Please find the enclosed GO copy .

The Bold Step of AP Govt. in 2003

The bold step of the AP Government in 2003 was a path-breaking moment in the contract labor management of the country. While other states were toying with prohibited trades and activities, Andhra Pradesh was innovative in defining the areas where contract labor could be deployed regularly or otherwise without the legal issues of regularization, etc. My understanding is that the state has only listed out the non-core activities where contract labor could be deployed without any questions, and whether any trade or activity is prohibited is to be verified from records. Obviously, this was a step much welcomed by the industries and helped in creating the image of being an employer-friendly state. As an offspring of Andhra Pradesh, Telangana has inherited the same and it would be applicable there too.

Core Activities and Their Definition

As regards the issue of whether the operations mentioned in the query are core activities or not, it is not mentioned what the nature of the business your establishment is having. Section 2(dd) defining the Core Activity reads as follows: “(dd) Core Activity of an establishment” means any activity for which the establishment is set up and includes any activity which is essential or necessary to the core activity, but does not include...

It appears you are seeking information for a thermal power plant. Obviously, the items mentioned like boiler attendants, turbine operators, CHP operators, lab chemists, ETP/WTP operators, fitters, and welders are essential and necessary for the establishment, so they will be considered core activities.

Dear Colleague,

Very well guided by our colleague in the above reply. Your understanding of the provisions is very accurate, and to add:

What is a core activity?

This depends on many factors that need to be studied further in line with the clauses below. In such cases, the "Designated Authority" is the only competent entity to make a recommendation, which is then submitted to the Government. Only the Government decides what is core and non-core, apart from the exceptions given under the Act.

Hence, it must be studied in synchronization with the nature of your organization and its purpose, and whether it falls within the meaning of the activity for which the establishment is set up and is essential or necessary to the core activity. The final decision rests with the Government. Such situations arise only when there is a representation by any aggrieved party or stakeholder like the Licensing Authority/Inspector under the Act, etc.

Management perspective on core activities

Unless it is questioned, tested, examined, and studied by the "Designated Authority" and his recommendation comes as a Government Order, as well as in the absence of any prohibition notification under section 10, the activities mentioned cannot be concluded as Core or Non-Core.

From a management perspective, unless you provide all statutory benefits, comply with all labor laws, and ensure that the contractors are licensed or have registered the said contractors in your registration certificate, it is in line with the provisions of the CLRA. Extend all benefits to them in line with labor laws, including welfare, PF, ESI, bonus, safety, gratuity, etc., through contractors and make a clear contract agreement. Have only licensed contractors under the CLRA.

Relevant provisions

ANDHRA PRADESH ACT 010 OF 2003: CONTRACT LABOUR (REGULATION AND ABOLITION) (ANDHRA PRADESH AMENDMENT) ACT, 2003

2"(dd) "Core Activity of an establishment" means any activity for which the establishment is set up and includes any activity which is essential or necessary to the core activity.

ANDHRA PRADESH ACT 010 OF 2003: CONTRACT LABOUR (REGULATION AND ABOLITION) (ANDHRA PRADESH AMENDMENT) ACT, 2003

10.(1) Prohibition of employment of Contract Labour.- Notwithstanding anything contained in this Act, the employment of contract labor in core activities of any establishment is prohibited;

Provided that the principal employer may engage contract labor or a contract for any core activity if:

(a) the normal functioning of the establishments is such that the activity is ordinarily done through contractors, or

(b) the activities are such that they do not require full-time workers for the major portion of the working hours in a day or for longer periods as the case may be

(c) any sudden increase in the volume of work in the core activity which needs to be accomplished in a specified time;

ANDHRA PRADESH ACT 010 OF 2003: CONTRACT LABOUR (REGULATION AND ABOLITION) (ANDHRA PRADESH AMENDMENT) ACT, 2003

(2)(a) Designated Authority.- The 'Appropriate Government' may by notification in the official gazette appoint a designated authority to advise them on the question of whether any activity of a given establishment is a core activity or otherwise;

(b) If a question arises as to whether any activity of an establishment is a core activity or otherwise, the aggrieved party may make an application in such a form and manner as may be prescribed, to the appropriate Government for decision;

(c) The appropriate Government may refer any question by itself or such an application made to them by any aggrieved party as prescribed in clause (b), as the case may be, to the designated authority, which on the basis of relevant material in its possession, or after making such an enquiry as deemed fit, shall forward the report to the appropriate Government within a prescribed period, and thereafter the appropriate Government shall decide the question within the prescribed period.