CLRA Act 1970: Does It Apply to a Single Location with Fewer Than 20 Workers?

Please advise me on the topic of the CLR 1970 Act: Suppose labor is supplied by a contractor to a total of 5 locations with the same principal employer. Since the total number of workers across all locations is more than 20, this act will be applicable.

However, my question pertains to location number 3. All locations, except for location 3, have more than 20 workers, but location 3 has fewer than 20. In this scenario, is the act applicable to location 3?

Thank you.

The act applies even in location 3. This is because the applicability clause states that it applies to every establishment in which twenty or more workmen are employed or were employed on any day of the preceding twelve months as contract labor and to every contractor who employs or employed twenty or more workmen on any day of the preceding twelve months.

Establishment can be assumed to be each location separately. But since the contractor has more than 20 employees in total, the act will apply.

The next question (which you are probably asking) is whether he needs a license for each location, including no. 3. That will depend on the state rules that you have to read and check.

Even if the license is not required, the rest of the regulations, including maintaining registers and records, payment of proper wages, etc., will continue to apply and protect the employees.

Application of the CLR 1970 Act to Location 3

Suppose location 3 is situated in a different state than the remaining 4 locations. At this location, only 2 workmen were supplied, which is less than 20. In such a situation, how will this act apply when the supplier, contractor, and principal employer are the same?

If this act applies, it becomes a meaningless and impractical requirement to develop canteen and other facilities solely for the 2 workmen supplied at location 3. It appears to be a vast and impossible task for every principal employer to fulfill.

Please clarify.

No, Mr. Bindra, you have not understood the gist of the matter.

Applicability of the Act

The act applies to all cases where you have 20 or more contract workers (irrespective of whether there is 1 contractor or many). The provisions of the act are far more than just getting a license. So your responsibility to ensure payment of wages, statutory dues, safety, workers' facilities, etc., will apply, whether you have 1 contract worker or 1,000 contract workers at a particular location.

Purpose of the Provisions

The idea of the provisions is to ensure that you do not shirk off your responsibilities and do not turn a blind eye (or actually facilitate) exploitation of workers by pushing them onto various contractors.

Licensing Requirements

What you (or the contractor) will not be liable for is to get a license for the contractor at the location where there are fewer than 20 contract workers. And no, it is not an impossible task. And no, it does not (according to me) make the act meaningless or impractical. Companies all over the country are adhering to it.

Incidentally, licensing is now for 50 workers and more in most of the states. Please check the status in your state when you do your compliances.

Check the Date and Reliability of Information

Always check the date of internet posts and the reliability of the information. You are looking at a post made in 2011, which was more than 10 years ago. The law has been changed many times since then. For example, https://taxguru.in/corporate-law/mah...employees.html

Read Contract Labour (Regulation and Abolition (Maharashtra Amendment) Act, 2016.