Navigating Contract Labour Agreements: CLRA Section 30(2) vs. Industrial Disputes Act – Which Path Offers More Benefits?

Contract Labour Act and Industrial Disputes Act: Choosing the Right Approach

Section 30(2) of the Contract Labour (Regulation and Abolition) Act, 1970, allows an agreement to be made with the Principal Employer or the Contractor. In this case, the contract labor union has submitted a charter of demands to the Principal Employer seeking a wage increase, which has not yet been discussed. To maintain industrial peace, the contractor is prepared to settle with the workers, and the Principal Employer has agreed to revise the work order terms to cover the financial impact of the settlement.

Which Approach is More Beneficial?

My question is: Which approach is more beneficial—to formalize this agreement under Section 30(2) of the CLRA or a settlement under the provisions of the Industrial Disputes Act? What are the key differences between these options?

Regards,

Hi,

If the contract workers are part of any union and the Charter of Demands (COD) was given by the said union on behalf of the contract labor (CL), it is better that an agreement be entered into between the contractor and the said union under Sec. 18(1) of the Industrial Disputes (ID) Act. However, the contractor will privately have a discussion with the management about the percentage of the hike. In the absence of any union, the terms of the Work Order can be revised, and the contractor can inform all the CLs informally that their wages are revised.

Sec. 30(2) of the CLRA Act

Sec. 30(2) of the Contract Labour (Regulation and Abolition) Act (CLRA) says that if there is any agreement with the contractor that provides for better benefits than those given in the Act, the said better benefit shall be given to the workers.

In any way, the Principal Employer need not enter into any agreement with the CLs or with their union, and the agreement should be between the contractor and the CL or their union. If there is no union, there is no need to enter into an agreement; simply revise the Work Order and communicate to all concerned through the contractor.