Navigating Contract Labour Act: Should We Register or Push Contractors for Licenses?

Dear All,

I am working with a manufacturing company. We have engaged 10 contractors, and each contractor has recruited 12 employees. We have a total of 120 contractual employees. I would like to ask the question: should the company apply for registration of a certificate, or should the company force the contractors to apply for labor licenses? I would also like to know if, as per the Contract Labour Act, only when 20 or more workmen are employed during the calendar month, the act applies. In my case, is the act applying or not?

My second question is, what is section 1(4) b under the Contract Labour (Regulation and Abolition) Act 1970?

Kindly guide me.

Thanks & Regards,
Sachin Dethe

Subject: CLRA Registration

Dear All,

Do not be under the impression that avoidance of CLRA registration is beneficial to your organization. In reality, it is quite the opposite; it will backfire on you as the principal employer. Do not simply count the numbers; opt for registration.

Best regards,

V. Sounder Rajan
Email: rajanassociates@eth.net

Dear Sachin,

An employer who engages less than 20 contract employees and a contractor who has fewer than 20 employees do not require registration under the Act. However, if an employer engages more than 20 contract employees, registration is necessary. In this case, the contractor can be unlicensed.

If a contractor has more than 20 employees, they need a license, and the employer also needs to complete the registration process.

Regards,
Srinivas

1. At any given point in time, if the number of employees exceeds more than 20 in a year, whether in direct or indirect employment, the company is required to be registered under CLRA.

2. The contractor needs a license only if the number of his employees exceeds more than 20.

Hope this is clear.

Regards,
Zakir Malik
zakir.malik@suzlon.com

Dear Sachin,

An employer who engages less than 20 contract employees, and a contractor with fewer than 20 employees, do not require registration under the Act. However, if an employer engages more than 20 contract employees, registration is necessary. The contractor can be unlicensed.

Thanks,
Ajay Raj

Dear Sachin,

I think that in a factory where there are 10 or more workmen under contract, the firm should come under the Contract Labour Regulation and Abolition Act (CLRA). Except for manufacturing concerns, the limit has been extended to 20 workmen. I would request other members to correct me if I am wrong, but recently, I had a talk with the Labour Inspector, and he stated this.

Please let me know if you need any further clarification.

Thank you.

CLRA is applicable for 5 employees engaged. Up to four employees, it is not required; it comes under the Shop & Establishment Act.

Regards,
Rajashekar

When we are discussing the CLRA Act, we should not use the word "employee"; we should use the term "workmen," as "workmen" has been defined by the CLRA Act of 1970. Regarding your question, it is mandatory for an establishment employing 20 or more workmen to register if they employ contract labor. It is also mandatory for a contractor to obtain a license if they employ contract labor. For either of these cases, it is not mandatory if there are less than 20 employees. However, if the appropriate government deems it necessary, this act will be applicable even if the number is less than 20.

With regards,
Khusi Sarangi

Dear all, Which type of labor is included in the Contract Labor Act? For example, are factory security employees included or not? Thank you.