DRAFT BILL ON THE CONTRACT LABOUR (REGULATION AND ABOLITION), 2015
An Act to regulate the employment of contract labour in certain establishments and to provide for its abolition in certain circumstances and for matters connected therewith.
CHAPTER I
PRELIMINARY
1. Short title, extent, commencement, and application.
(1) This Act may be called the Contract Labour (Regulation and Abolition) Act, 2015.
(2) It extends to the whole of India.
(3) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.
(4) It applies--
(a) To every establishment in which ten or more contract labour is employed or was employed on any day of the preceding twelve months through a contractor.
(b) To every manpower contractor who supplies/provides contract labour to any establishment.
2. Definitions.
(1) In this Act, unless the context otherwise requires,--
(a) "Appropriate Government" means--
(i) in relation to the manpower supply contractor having functioning in more than one State, the Central Government, and
(ii) in relation to any other manpower supply contractor, the Government of the State.
(b) Blacklisted Contractor - any contractor who has been blacklisted by any Government Department.
(c) A workman shall be deemed to be employed as "contract labour" in or in connection with the work of an establishment when he is hired in or in connection with such work through a manpower supply contractor.
(d) "Manpower Supply Contractor" means a firm that supplies contract labour for any work of the establishment.
(e) "Establishment" means--
a. any office or department of the Government or a local authority, or
ii. any place where any industry, trade, business, manufacture, or occupation is carried on.
(f) "Prescribed" means prescribed by rules made under this Act.
(g) "Wages" means all remuneration (whether by way of salary, allowances, or otherwise) expressed in terms of money or capable of being so expressed which would, if the terms of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment, and includes:
(a) any remuneration payable under any award or settlement between the parties or order of a court;
(b) any remuneration to which the person employed is entitled in respect of overtime work or holidays or any leave period;
(c) any additional remuneration payable under the terms of employment (whether called a bonus or by any other name);
(d) any sum which by reason of the termination of employment of the person employed is payable under any law, contract, or instrument which provides for the payment of such sum, whether with or without deductions, but does not provide for the time within which the payment is to be made;
(e) any sum to which the person employed is entitled under any scheme framed under any law for the time being in force;
(f) house rent allowance;
but does not include--
(1) any bonus payable under this Code, which does not form part of the remuneration payable under the terms of employment or which is not payable under any award or settlement between the parties or order of a Court;
(2) the value of any house-accommodation, or of the supply of light, water, medical attendance, or other amenity or of any service excluded from the computation of wages by a general or special order of the State Government;
(3) any contribution paid by the employer to any pension or provident fund, and the interest which may have accrued thereon;
(4) any travelling allowance or the value of any travelling concession;
(5) any sum paid to the employed person to defray special expenses entailed on the nature of his employment; or
(6) any gratuity payable on the termination of employment in cases other than those specified in sub-clause (d).
(h) "Worker" means any person (except an apprentice) employed to do any manual, unskilled, skilled, technical, operational, clerical work for hire or reward, whether the terms of employment be express or implied, but does not include who is employed mainly in a supervisory or managerial or administrative capacity.
CHAPTER II
THE ADVISORY BOARDS
3. Central Advisory Board.
(1) The Central Government shall, as soon as may be, constitute a board to be called the Central Advisory Contract Labour Board (hereinafter referred to as the Central Board) to advise the Central Government on such matters arising out of the administration of this Act as may be referred to it and to carry out other functions assigned to it under this Act.
(2) The Central Advisory Board shall consist of--
a. Union Labour Minister (in charge), Chairman, ex-officio;
b. Secretary (Labour), Vice-Chairman, ex-officio;
c. Joint Secretary/DGLW, Member Secretary;
d. Chief Labour Commissioner (Central), Member, ex-officio;
e. such number of members, not exceeding eleven but not less than three, as the Central Government may nominate to represent the Government, the contractors, the workers, and any other interests which, in the opinion of the Central Government, ought to be represented on the Central Advisory Board.
(3) The number of persons to be appointed as members from each of the categories specified in sub-section (2), the term of office, and the manner of filling vacancies of the Central Advisory Board shall be such as may be prescribed:
Provided that the number of members nominated to represent the workers shall not be less than the number of members nominated to represent the contracts.
4. State Advisory Board.
(1) The State Government may constitute a board to be called the State Advisory Contract Labour Board (hereinafter referred to as the State Board) to advise the State Government on such matters arising out of the administration of this Act as may be referred to it and to carry out other functions assigned to it under this Act.
(2) The State Advisory Board shall consist of--
a. Labour Minister (in charge), Chairman, ex-officio;
b. Secretary (in charge Labour), Vice-Chairman, ex-officio;
c. Joint Secretary, Department of Labour, Member Secretary, ex-officio;
d. the Labour Commissioner, ex-officio;
e. such number of members, not exceeding eleven but not less than three, as the State Government may nominate to represent the Government, the contractors, the workers, and any other interests which, in the opinion of the State Government, ought to be represented on the State Advisory Board.
(3) The number of persons to be appointed as members from each of the categories specified in sub-section (2), the term of office, and the manner of filling vacancies among the members of the State Advisory Board shall be such as may be prescribed:
Provided that the number of members nominated to represent the workers shall not be less than the number of members nominated to represent the contractors.
5. Power to constitute committees.
(1) The Central Advisory Board or the State Advisory Board, as the case may be, may constitute such committees and for such purpose or purposes as it may think fit.
(2) The committee constituted under sub-section (1) shall meet at such times and places and shall observe such rules of procedure in regard to the transaction of business at its meetings as may be prescribed.
(3) The members of a committee shall be paid such allowances for attending its meetings as may be prescribed:
Provided that no allowance shall be payable to a member who is an officer of Government or of any corporation established by any law for the time being in force.
CHAPTER III
LICENSING OF CONTRACTORS
6. Appointment of Licensing Officers.
The Appropriate Government may, by an order notified in the Official Gazette, appoint such persons, being Gazetted officers of Government, as it thinks fit to be licensing officers for the purposes of this Chapter.
7. Licensing of contractors.
(1) No contractor shall supply or engage contract labour in any establishment except under and in accordance with a licence issued in that behalf.
8. Eligibility for Licence
(1) Applicant must be a (Private Limited Company or Public Limited Company/Limited Liability Partnership) and incorporated or registered in India under the Indian Companies Act 2013.
(2) Applicant must have a minimum of 100 workers on its payroll.
(3) Applicant must not have been blacklisted by the Central, or any State/UT Government under any law.
(4) Applicant must be registered under the Employee's Provident Fund and Miscellaneous Provisions Act 1952 and each of his workers must be a member of the same.
(5) Applicant must be registered with the ESIC Act, 1948, if applicable, and each of his workers is a member of the same.
(6) Applicant must have registration under the Income Tax Act and be an Income Tax Payee.
(7) The applicant must have registration under the Service Tax Act or other similar law.
(8) The net worth of the applicant must not be less than 5 crore.
(9) The applicant must have a Labour Identification Number (LIN).
9. Application for Licence.
(1) Every application for the grant of a licence shall be made in the prescribed form.
(2) The licensing officer may make such investigation in respect of the application received under sub-section (1) and in making any such investigation the licensing officer shall follow such procedure as may be prescribed.
10. Grant of Licence:
If the applicant satisfies the requirement of section 8 and section 9, the licensing officer shall grant the licence within 30 days of receipt of the application.
11. No fees/Commission or any cost to workers:
The contractor shall not charge directly or indirectly, in whole or in part, any fees/commission or costs to the workers.
12. Revocation, suspension, and amendment of Licence.
(1) If the licensing officer is satisfied, either on a reference made to him in this behalf or otherwise, that--
a) a licence issued under section 10 has been obtained by misrepresentation or suppression of any material fact, or
b) That the contractor has violated the provision of this Act or the rules made thereunder or any of the conditions of the licence.
c) the holder of a licence has, without reasonable cause, failed to comply with the conditions subject to which the registration has been granted or has contravened any of the provisions of this Act or the rules made thereunder, or any other applicable labour law(s) then, without prejudice to any other penalty to which the contract may be liable under this Act, the licensing officer may, after giving the contractor an opportunity of showing cause, revoke or suspend the license.
(2) Subject to any rules that may be made in this behalf, the licensing officer may vary or amend a registration granted under section 10.
13. Appeal.
(1) Any person aggrieved by an order made under section 10 or section 12 may, within thirty days from the date on which the order is communicated to him, prefer an appeal to an appellate authority who shall be a person notified in this behalf by the appropriate Government:
Provided that the appellate officer may entertain the appeal after the expiry of the said period of thirty days, if he is satisfied that the appellant was prevented by sufficient cause from filing the appeal in time.
(2) On receipt of an appeal under sub-section (1), the appellate officer shall, after giving the appellant an opportunity of being heard dispose of the appeal within 30 days.
14. If the establishment has not taken contract labour from the licensed contractor, then the contract labour shall be deemed to be directly employed workers of the establishment.
CHAPTER IV
SOCIAL SECURITY OF CONTRACT LABOUR
15. It shall be the duty of the establishment to pay the dues to the contract labour and deposit the dues towards the contract labour to various statutory bodies on behalf of the contractor and to comply with the following legislations wherever applicable:
1. The Employee's Compensation Act, 1923,
2. The Employee's State Insurance Act, 1948,
3. The Employee's Provident Funds and Miscellaneous Provisions Act, 1952,
4. The Maternity Benefit Act, 1961,
5. The Payment of Gratuity Act, 1972,
6. The Payment of Wages Act, 1936,
7. The Equal Remuneration Act, 1976,
8. The Minimum Wages Act, 1948,
9. The Payment of Bonus Act, 1965.
CHAPTER V
OTHER BENEFITS
16. Annual Increment:
Contract Labour shall be entitled to the annual increment which shall not be less than three percent of wages.
17. Priority in Regular Employment:
The contract labour who has worked not less than three years in an establishment shall be given preference by the establishment while recruiting regular workers.
18. Skill Certification:
The establishment shall issue a skill certificate to the contract labour at the time of termination/leaving the employment obtained from the institutions recognised for this purpose.
19. Experience Certificate:
The contractor shall issue experience certification to the contract labour annually giving details of the work performed by the contract labour in the prescribed format.
CHAPTER VI
PROHIBITION
20. Prohibition of employment of contract labour.
(1) Notwithstanding anything contained in this Act, the appropriate Government may, after consultation with the Central Board or, as the case may be, a State Board, prohibit, by notification in the Official Gazette, employment of contract labour in any process, operation, or other work in any establishment.
(2) Before issuing any notification under sub-section (1) in relation to an establishment, the appropriate Government shall have regard to the conditions of work and benefits provided for the contract labour in that establishment and other relevant factors, such as--
(a) whether the process, operation, or other work is incidental to, or necessary for the industry, trade, business, manufacture, or occupation that is carried on in the establishment.
(b) whether it is of perennial nature, that is to say, it is of sufficient duration having regard to the nature of industry, trade, business, manufacture, or occupation carried on in that establishment;
(c) whether it is done ordinarily through regular workmen in that establishment or an establishment similar thereto;
(d) whether it is sufficient to employ a considerable number of whole-time workmen.
Explanation.-- If a question arises whether any process or operation or other work is of perennial nature, the decision of the appropriate Government thereon shall be final.
21. If any establishment has engaged contract labour in violation of section 20 of this Act, such contract labour shall be deemed to be directly employed workers of the establishment.
CHAPTER VII
RECORDS, RETURNS, AND NOTICES
22. Records, Returns, and Notices:
(1) Every employer of an establishment to which this Act applies shall maintain records containing the details with regard to persons employed, muster roll, wages, and other details as prescribed by the appropriate Government on their website and in case the contractor is not having the website then on the website of the establishment in which the contract labour is engaged.
(2) Every employer shall display on the notice board at a prominent place of the establishment containing the abstract of the Act, category-wise wage rates of employees, wage period, day or date and time of payment of wages, and the name and address of the Facilitator having jurisdiction.
(3) Every employer shall issue wage slips to the employees as may be prescribed.
(4) Every employer of an establishment shall send an annual return in the prescribed form and as far as possible electronically to the authority as may be prescribed.
CHAPTER VIII
FACILITATORS
23. Appointment of Facilitators and their powers:
(1) The appropriate Government may, by notification, appoint Facilitators who shall exercise the powers conferred on them under sub-section (4) throughout the State or such geographical limits assigned to them, in relation to establishments situated in such State or geographical limits, as the case may be.
(2) The appropriate Government may, by notification, lay down an inspection scheme which shall provide for the generation of a web-based inspection schedule.
(3) Every Facilitator appointed under sub-section (1) shall be deemed to be a public servant within the meaning of section 21 of the Indian Penal Code 1860 (45 Of 1860).
(4) Subject to any rules made in this behalf by the appropriate Government, a facilitator may, within the local limits for which he is appointed--
(i) (a) supply information and advice to employers and workers concerning the most effective means of complying with the provisions of this Act.
(b) inspect the establishment based on the inspection scheme referred to in sub-section (2);
(ii) Subject to clause (i), the Facilitator may--
(a) examine any person who is found in any premises of the establishment and whom, the Facilitator has reasonable cause to believe, is a worker of the establishment;
(b) require any person to give any information, which is in his power to give with respect to the names and addresses of the persons;
(c) search, seize or take copies of such register, record of wages or notices or portions thereof as the Facilitator may consider relevant in respect of an offence under this Act and which the Facilitator has reason to believe has been committed by the employer;
(d) bring to the notice of the appropriate Government defects or abuses not covered by the law for the time being in force; and
(e) exercise such other powers as may be prescribed.
(5) Any person required to produce any document or to give any information required by a Facilitator under sub-section (4) shall be deemed to be legally bound to do so within the meaning of section 175 and section 176 of the Indian Penal Code (45 of 1860).
CHAPTER IX
PENALTIES AND PROCEDURE
24. Contravention of provisions regarding employment of contract labour.
Whoever contravenes any provision of this Act or of any rules made thereunder prohibiting, restricting, or regulating the employment of contract labour, or contravenes any condition of a license granted under this Act, shall be punishable with imprisonment for a term which may extend to one month, or with a fine which may extend to fifty thousand rupees, or with both, and in the case of a continuing contravention with an additional fine which may extend to one thousand rupees for every day during which such contravention continues after conviction for the first such contravention.
25. Cognizance of offences.
No court shall take cognizance of any offence under this Act except on a complaint made by, or with the previous sanction in writing of, the facilitator and no court inferior to that a judicial magistrate of the first class shall try any offence punishable under this Act.
26. Limitation of prosecutions.
No court shall take cognizance of an offence punishable under this Act unless the complaint thereof is made within one year from the date on which the alleged commission of the offence came to the knowledge of the facilitator.
27. Compounding of offences:
(1) Notwithstanding anything contained in the Act of Criminal Procedure, 1973 (2 of 1974), on the application of the employer concerned, any offence under this Act shall be compounded, by such officer being a gazetted officer of the appropriate Government, in such manner and on payment of such amount to such government as may be prescribed and if the employer does not agree to pay such amount for the composition of the offence, then, the proceedings shall be initiated against such employer in accordance with law.
(2) The offence referred to in sub-section (1) may be compounded before or pending the trial of the offence and when the offence is compounded during the trial of the offence, the officer compounding the offence under sub-section (1) shall file a report in the court in which the trial of the offence is pending and the court shall, on filing of such report, discharge the accused with whom the offence has been compounded and such composition shall have the effect of an acquittal of the accused.
(3) Notwithstanding anything contained in this section, where--
(i) the second or subsequent offence of similar nature is committed within five years from the date of the commission of the first such nature of offence, then, only the first such offence may be compounded and such second or subsequent offence shall not be compounded; and
(ii) the accused has previously been convicted by a Court for committing the offence of similar nature, no further offence of the same nature shall be compounded, under this section.
(4) No offence under this Act shall be compounded, except as provided under this section.
CHAPTER X
MISCELLANEOUS
28. Power to exempt in special cases.
The appropriate Government may, in the case of an emergency, direct, by notification in the Official Gazette, that subject to such conditions and restrictions, if any, and for such period or periods, as may be specified in the notification, all or any of the provisions of this Act or the rules made thereunder shall not apply to any establishment or class of establishments or any class of contractors.
29. Protection of action taken under this Act.
(1) No suit, prosecution, or other legal proceedings shall lie against any registering offices, licensing officer, or any other government servant or against any member of the Central Advisory Board or the State Advisory Board, as the case may be, for anything which is in good faith done or intended to be done in pursuance of this Act or any rule or order made thereunder.
(2) No suit or other legal proceeding shall lie against the Government for any damage caused or likely to be caused by anything which is in good faith done or intended to be done in pursuance of this Act or any rule or order made thereunder.
30. Power to give directions.
The Central Government may give directions to the Government of any State as to the carrying into execution in the State of the provisions contained in this Act.
31. Power to remove difficulties.
If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order published in the Official Gazette, make such provisions not inconsistent with the provisions of this Act, as appears to it to be necessary or expedient for removing the difficulty.
32. Effect of laws and agreements inconsistent with this Act.
(1) The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law or in the terms of any agreement or contract of service, or in any standing orders applicable to the establishment whether made before or after the commencement of this Act:
Provided that where under any such agreement, contract of service or standing orders the contract labour employed in the establishment are entitled to benefits in respect of any matter which are more favourable to them than those to which they would be entitled under this Act, the contract labour shall continue to be entitled to the more favourable benefits in respect of that matter, notwithstanding that they receive benefits in respect of other matters under this Act.
(2) Nothing contained in this Act shall be construed as precluding any such contract labour from entering into an agreement with the establishment or the contractor, as the case may be, for granting them rights or privileges in respect of any matter, which are more favourable to them than those to which they would be entitled under this Act.
33. Power to make rules.
(1) The appropriate Government may, subject to the condition of previous publication, make rules for carrying out the purposes of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:--
(a) the number of persons to be appointed as members representing various interests on the Central Board and the State Board, the term of their office, the procedure to be followed in the discharge of their functions, and the manner of filling vacancies;
(b) the times and places of the meetings of any committee constituted under;
(c) the form of application for the grant of a license and the particulars it may contain;
(d) the manner in which an investigation is to be made in respect of an application for the grant of a license and the matters to be taken into account in granting or refusing a registration;
(e) the form and manner in which appeals may be filed and the procedure to be followed by appellate officers in disposing of the appeals;
(3) Every rule made by the Central Government under this Act shall be laid as soon as may be after it is made, before each House of Parliament while it is in session for a total period of thirty days which may be comprised in one session or in two successive sessions, and if before the expiry of the session in which it is so laid or the session immediately following, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.
34. Repeal and savings
(1) Contract Labour (Regulation & Abolition) Act, 1970 is hereby repealed.
(2) Notwithstanding such repeal, anything done or any action taken under the enactment so repealed (including any notification, nomination, appointment, order, or direction made thereunder) shall be deemed to have been done or taken under the corresponding provisions of this Act and shall be in force to the extent they are not contrary to the provisions of this Act till they are repealed under the corresponding provisions of this Act.
(3) Without prejudice to the provisions of sub-section (2), the provisions of section 6 of the General Clause Act, 1897 (10 of 1897) shall apply to the repeal of such enactments.
From India, Bangalore
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2An Act to regulate the employment of contract labour in certain establishments and to provide for its abolition in certain circumstances and for matters connected therewith.
CHAPTER I
PRELIMINARY
1. Short title, extent, commencement, and application.
(1) This Act may be called the Contract Labour (Regulation and Abolition) Act, 2015.
(2) It extends to the whole of India.
(3) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.
(4) It applies--
(a) To every establishment in which ten or more contract labour is employed or was employed on any day of the preceding twelve months through a contractor.
(b) To every manpower contractor who supplies/provides contract labour to any establishment.
2. Definitions.
(1) In this Act, unless the context otherwise requires,--
(a) "Appropriate Government" means--
(i) in relation to the manpower supply contractor having functioning in more than one State, the Central Government, and
(ii) in relation to any other manpower supply contractor, the Government of the State.
(b) Blacklisted Contractor - any contractor who has been blacklisted by any Government Department.
(c) A workman shall be deemed to be employed as "contract labour" in or in connection with the work of an establishment when he is hired in or in connection with such work through a manpower supply contractor.
(d) "Manpower Supply Contractor" means a firm that supplies contract labour for any work of the establishment.
(e) "Establishment" means--
a. any office or department of the Government or a local authority, or
ii. any place where any industry, trade, business, manufacture, or occupation is carried on.
(f) "Prescribed" means prescribed by rules made under this Act.
(g) "Wages" means all remuneration (whether by way of salary, allowances, or otherwise) expressed in terms of money or capable of being so expressed which would, if the terms of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment, and includes:
(a) any remuneration payable under any award or settlement between the parties or order of a court;
(b) any remuneration to which the person employed is entitled in respect of overtime work or holidays or any leave period;
(c) any additional remuneration payable under the terms of employment (whether called a bonus or by any other name);
(d) any sum which by reason of the termination of employment of the person employed is payable under any law, contract, or instrument which provides for the payment of such sum, whether with or without deductions, but does not provide for the time within which the payment is to be made;
(e) any sum to which the person employed is entitled under any scheme framed under any law for the time being in force;
(f) house rent allowance;
but does not include--
(1) any bonus payable under this Code, which does not form part of the remuneration payable under the terms of employment or which is not payable under any award or settlement between the parties or order of a Court;
(2) the value of any house-accommodation, or of the supply of light, water, medical attendance, or other amenity or of any service excluded from the computation of wages by a general or special order of the State Government;
(3) any contribution paid by the employer to any pension or provident fund, and the interest which may have accrued thereon;
(4) any travelling allowance or the value of any travelling concession;
(5) any sum paid to the employed person to defray special expenses entailed on the nature of his employment; or
(6) any gratuity payable on the termination of employment in cases other than those specified in sub-clause (d).
(h) "Worker" means any person (except an apprentice) employed to do any manual, unskilled, skilled, technical, operational, clerical work for hire or reward, whether the terms of employment be express or implied, but does not include who is employed mainly in a supervisory or managerial or administrative capacity.
CHAPTER II
THE ADVISORY BOARDS
3. Central Advisory Board.
(1) The Central Government shall, as soon as may be, constitute a board to be called the Central Advisory Contract Labour Board (hereinafter referred to as the Central Board) to advise the Central Government on such matters arising out of the administration of this Act as may be referred to it and to carry out other functions assigned to it under this Act.
(2) The Central Advisory Board shall consist of--
a. Union Labour Minister (in charge), Chairman, ex-officio;
b. Secretary (Labour), Vice-Chairman, ex-officio;
c. Joint Secretary/DGLW, Member Secretary;
d. Chief Labour Commissioner (Central), Member, ex-officio;
e. such number of members, not exceeding eleven but not less than three, as the Central Government may nominate to represent the Government, the contractors, the workers, and any other interests which, in the opinion of the Central Government, ought to be represented on the Central Advisory Board.
(3) The number of persons to be appointed as members from each of the categories specified in sub-section (2), the term of office, and the manner of filling vacancies of the Central Advisory Board shall be such as may be prescribed:
Provided that the number of members nominated to represent the workers shall not be less than the number of members nominated to represent the contracts.
4. State Advisory Board.
(1) The State Government may constitute a board to be called the State Advisory Contract Labour Board (hereinafter referred to as the State Board) to advise the State Government on such matters arising out of the administration of this Act as may be referred to it and to carry out other functions assigned to it under this Act.
(2) The State Advisory Board shall consist of--
a. Labour Minister (in charge), Chairman, ex-officio;
b. Secretary (in charge Labour), Vice-Chairman, ex-officio;
c. Joint Secretary, Department of Labour, Member Secretary, ex-officio;
d. the Labour Commissioner, ex-officio;
e. such number of members, not exceeding eleven but not less than three, as the State Government may nominate to represent the Government, the contractors, the workers, and any other interests which, in the opinion of the State Government, ought to be represented on the State Advisory Board.
(3) The number of persons to be appointed as members from each of the categories specified in sub-section (2), the term of office, and the manner of filling vacancies among the members of the State Advisory Board shall be such as may be prescribed:
Provided that the number of members nominated to represent the workers shall not be less than the number of members nominated to represent the contractors.
5. Power to constitute committees.
(1) The Central Advisory Board or the State Advisory Board, as the case may be, may constitute such committees and for such purpose or purposes as it may think fit.
(2) The committee constituted under sub-section (1) shall meet at such times and places and shall observe such rules of procedure in regard to the transaction of business at its meetings as may be prescribed.
(3) The members of a committee shall be paid such allowances for attending its meetings as may be prescribed:
Provided that no allowance shall be payable to a member who is an officer of Government or of any corporation established by any law for the time being in force.
CHAPTER III
LICENSING OF CONTRACTORS
6. Appointment of Licensing Officers.
The Appropriate Government may, by an order notified in the Official Gazette, appoint such persons, being Gazetted officers of Government, as it thinks fit to be licensing officers for the purposes of this Chapter.
7. Licensing of contractors.
(1) No contractor shall supply or engage contract labour in any establishment except under and in accordance with a licence issued in that behalf.
8. Eligibility for Licence
(1) Applicant must be a (Private Limited Company or Public Limited Company/Limited Liability Partnership) and incorporated or registered in India under the Indian Companies Act 2013.
(2) Applicant must have a minimum of 100 workers on its payroll.
(3) Applicant must not have been blacklisted by the Central, or any State/UT Government under any law.
(4) Applicant must be registered under the Employee's Provident Fund and Miscellaneous Provisions Act 1952 and each of his workers must be a member of the same.
(5) Applicant must be registered with the ESIC Act, 1948, if applicable, and each of his workers is a member of the same.
(6) Applicant must have registration under the Income Tax Act and be an Income Tax Payee.
(7) The applicant must have registration under the Service Tax Act or other similar law.
(8) The net worth of the applicant must not be less than 5 crore.
(9) The applicant must have a Labour Identification Number (LIN).
9. Application for Licence.
(1) Every application for the grant of a licence shall be made in the prescribed form.
(2) The licensing officer may make such investigation in respect of the application received under sub-section (1) and in making any such investigation the licensing officer shall follow such procedure as may be prescribed.
10. Grant of Licence:
If the applicant satisfies the requirement of section 8 and section 9, the licensing officer shall grant the licence within 30 days of receipt of the application.
11. No fees/Commission or any cost to workers:
The contractor shall not charge directly or indirectly, in whole or in part, any fees/commission or costs to the workers.
12. Revocation, suspension, and amendment of Licence.
(1) If the licensing officer is satisfied, either on a reference made to him in this behalf or otherwise, that--
a) a licence issued under section 10 has been obtained by misrepresentation or suppression of any material fact, or
b) That the contractor has violated the provision of this Act or the rules made thereunder or any of the conditions of the licence.
c) the holder of a licence has, without reasonable cause, failed to comply with the conditions subject to which the registration has been granted or has contravened any of the provisions of this Act or the rules made thereunder, or any other applicable labour law(s) then, without prejudice to any other penalty to which the contract may be liable under this Act, the licensing officer may, after giving the contractor an opportunity of showing cause, revoke or suspend the license.
(2) Subject to any rules that may be made in this behalf, the licensing officer may vary or amend a registration granted under section 10.
13. Appeal.
(1) Any person aggrieved by an order made under section 10 or section 12 may, within thirty days from the date on which the order is communicated to him, prefer an appeal to an appellate authority who shall be a person notified in this behalf by the appropriate Government:
Provided that the appellate officer may entertain the appeal after the expiry of the said period of thirty days, if he is satisfied that the appellant was prevented by sufficient cause from filing the appeal in time.
(2) On receipt of an appeal under sub-section (1), the appellate officer shall, after giving the appellant an opportunity of being heard dispose of the appeal within 30 days.
14. If the establishment has not taken contract labour from the licensed contractor, then the contract labour shall be deemed to be directly employed workers of the establishment.
CHAPTER IV
SOCIAL SECURITY OF CONTRACT LABOUR
15. It shall be the duty of the establishment to pay the dues to the contract labour and deposit the dues towards the contract labour to various statutory bodies on behalf of the contractor and to comply with the following legislations wherever applicable:
1. The Employee's Compensation Act, 1923,
2. The Employee's State Insurance Act, 1948,
3. The Employee's Provident Funds and Miscellaneous Provisions Act, 1952,
4. The Maternity Benefit Act, 1961,
5. The Payment of Gratuity Act, 1972,
6. The Payment of Wages Act, 1936,
7. The Equal Remuneration Act, 1976,
8. The Minimum Wages Act, 1948,
9. The Payment of Bonus Act, 1965.
CHAPTER V
OTHER BENEFITS
16. Annual Increment:
Contract Labour shall be entitled to the annual increment which shall not be less than three percent of wages.
17. Priority in Regular Employment:
The contract labour who has worked not less than three years in an establishment shall be given preference by the establishment while recruiting regular workers.
18. Skill Certification:
The establishment shall issue a skill certificate to the contract labour at the time of termination/leaving the employment obtained from the institutions recognised for this purpose.
19. Experience Certificate:
The contractor shall issue experience certification to the contract labour annually giving details of the work performed by the contract labour in the prescribed format.
CHAPTER VI
PROHIBITION
20. Prohibition of employment of contract labour.
(1) Notwithstanding anything contained in this Act, the appropriate Government may, after consultation with the Central Board or, as the case may be, a State Board, prohibit, by notification in the Official Gazette, employment of contract labour in any process, operation, or other work in any establishment.
(2) Before issuing any notification under sub-section (1) in relation to an establishment, the appropriate Government shall have regard to the conditions of work and benefits provided for the contract labour in that establishment and other relevant factors, such as--
(a) whether the process, operation, or other work is incidental to, or necessary for the industry, trade, business, manufacture, or occupation that is carried on in the establishment.
(b) whether it is of perennial nature, that is to say, it is of sufficient duration having regard to the nature of industry, trade, business, manufacture, or occupation carried on in that establishment;
(c) whether it is done ordinarily through regular workmen in that establishment or an establishment similar thereto;
(d) whether it is sufficient to employ a considerable number of whole-time workmen.
Explanation.-- If a question arises whether any process or operation or other work is of perennial nature, the decision of the appropriate Government thereon shall be final.
21. If any establishment has engaged contract labour in violation of section 20 of this Act, such contract labour shall be deemed to be directly employed workers of the establishment.
CHAPTER VII
RECORDS, RETURNS, AND NOTICES
22. Records, Returns, and Notices:
(1) Every employer of an establishment to which this Act applies shall maintain records containing the details with regard to persons employed, muster roll, wages, and other details as prescribed by the appropriate Government on their website and in case the contractor is not having the website then on the website of the establishment in which the contract labour is engaged.
(2) Every employer shall display on the notice board at a prominent place of the establishment containing the abstract of the Act, category-wise wage rates of employees, wage period, day or date and time of payment of wages, and the name and address of the Facilitator having jurisdiction.
(3) Every employer shall issue wage slips to the employees as may be prescribed.
(4) Every employer of an establishment shall send an annual return in the prescribed form and as far as possible electronically to the authority as may be prescribed.
CHAPTER VIII
FACILITATORS
23. Appointment of Facilitators and their powers:
(1) The appropriate Government may, by notification, appoint Facilitators who shall exercise the powers conferred on them under sub-section (4) throughout the State or such geographical limits assigned to them, in relation to establishments situated in such State or geographical limits, as the case may be.
(2) The appropriate Government may, by notification, lay down an inspection scheme which shall provide for the generation of a web-based inspection schedule.
(3) Every Facilitator appointed under sub-section (1) shall be deemed to be a public servant within the meaning of section 21 of the Indian Penal Code 1860 (45 Of 1860).
(4) Subject to any rules made in this behalf by the appropriate Government, a facilitator may, within the local limits for which he is appointed--
(i) (a) supply information and advice to employers and workers concerning the most effective means of complying with the provisions of this Act.
(b) inspect the establishment based on the inspection scheme referred to in sub-section (2);
(ii) Subject to clause (i), the Facilitator may--
(a) examine any person who is found in any premises of the establishment and whom, the Facilitator has reasonable cause to believe, is a worker of the establishment;
(b) require any person to give any information, which is in his power to give with respect to the names and addresses of the persons;
(c) search, seize or take copies of such register, record of wages or notices or portions thereof as the Facilitator may consider relevant in respect of an offence under this Act and which the Facilitator has reason to believe has been committed by the employer;
(d) bring to the notice of the appropriate Government defects or abuses not covered by the law for the time being in force; and
(e) exercise such other powers as may be prescribed.
(5) Any person required to produce any document or to give any information required by a Facilitator under sub-section (4) shall be deemed to be legally bound to do so within the meaning of section 175 and section 176 of the Indian Penal Code (45 of 1860).
CHAPTER IX
PENALTIES AND PROCEDURE
24. Contravention of provisions regarding employment of contract labour.
Whoever contravenes any provision of this Act or of any rules made thereunder prohibiting, restricting, or regulating the employment of contract labour, or contravenes any condition of a license granted under this Act, shall be punishable with imprisonment for a term which may extend to one month, or with a fine which may extend to fifty thousand rupees, or with both, and in the case of a continuing contravention with an additional fine which may extend to one thousand rupees for every day during which such contravention continues after conviction for the first such contravention.
25. Cognizance of offences.
No court shall take cognizance of any offence under this Act except on a complaint made by, or with the previous sanction in writing of, the facilitator and no court inferior to that a judicial magistrate of the first class shall try any offence punishable under this Act.
26. Limitation of prosecutions.
No court shall take cognizance of an offence punishable under this Act unless the complaint thereof is made within one year from the date on which the alleged commission of the offence came to the knowledge of the facilitator.
27. Compounding of offences:
(1) Notwithstanding anything contained in the Act of Criminal Procedure, 1973 (2 of 1974), on the application of the employer concerned, any offence under this Act shall be compounded, by such officer being a gazetted officer of the appropriate Government, in such manner and on payment of such amount to such government as may be prescribed and if the employer does not agree to pay such amount for the composition of the offence, then, the proceedings shall be initiated against such employer in accordance with law.
(2) The offence referred to in sub-section (1) may be compounded before or pending the trial of the offence and when the offence is compounded during the trial of the offence, the officer compounding the offence under sub-section (1) shall file a report in the court in which the trial of the offence is pending and the court shall, on filing of such report, discharge the accused with whom the offence has been compounded and such composition shall have the effect of an acquittal of the accused.
(3) Notwithstanding anything contained in this section, where--
(i) the second or subsequent offence of similar nature is committed within five years from the date of the commission of the first such nature of offence, then, only the first such offence may be compounded and such second or subsequent offence shall not be compounded; and
(ii) the accused has previously been convicted by a Court for committing the offence of similar nature, no further offence of the same nature shall be compounded, under this section.
(4) No offence under this Act shall be compounded, except as provided under this section.
CHAPTER X
MISCELLANEOUS
28. Power to exempt in special cases.
The appropriate Government may, in the case of an emergency, direct, by notification in the Official Gazette, that subject to such conditions and restrictions, if any, and for such period or periods, as may be specified in the notification, all or any of the provisions of this Act or the rules made thereunder shall not apply to any establishment or class of establishments or any class of contractors.
29. Protection of action taken under this Act.
(1) No suit, prosecution, or other legal proceedings shall lie against any registering offices, licensing officer, or any other government servant or against any member of the Central Advisory Board or the State Advisory Board, as the case may be, for anything which is in good faith done or intended to be done in pursuance of this Act or any rule or order made thereunder.
(2) No suit or other legal proceeding shall lie against the Government for any damage caused or likely to be caused by anything which is in good faith done or intended to be done in pursuance of this Act or any rule or order made thereunder.
30. Power to give directions.
The Central Government may give directions to the Government of any State as to the carrying into execution in the State of the provisions contained in this Act.
31. Power to remove difficulties.
If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order published in the Official Gazette, make such provisions not inconsistent with the provisions of this Act, as appears to it to be necessary or expedient for removing the difficulty.
32. Effect of laws and agreements inconsistent with this Act.
(1) The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law or in the terms of any agreement or contract of service, or in any standing orders applicable to the establishment whether made before or after the commencement of this Act:
Provided that where under any such agreement, contract of service or standing orders the contract labour employed in the establishment are entitled to benefits in respect of any matter which are more favourable to them than those to which they would be entitled under this Act, the contract labour shall continue to be entitled to the more favourable benefits in respect of that matter, notwithstanding that they receive benefits in respect of other matters under this Act.
(2) Nothing contained in this Act shall be construed as precluding any such contract labour from entering into an agreement with the establishment or the contractor, as the case may be, for granting them rights or privileges in respect of any matter, which are more favourable to them than those to which they would be entitled under this Act.
33. Power to make rules.
(1) The appropriate Government may, subject to the condition of previous publication, make rules for carrying out the purposes of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:--
(a) the number of persons to be appointed as members representing various interests on the Central Board and the State Board, the term of their office, the procedure to be followed in the discharge of their functions, and the manner of filling vacancies;
(b) the times and places of the meetings of any committee constituted under;
(c) the form of application for the grant of a license and the particulars it may contain;
(d) the manner in which an investigation is to be made in respect of an application for the grant of a license and the matters to be taken into account in granting or refusing a registration;
(e) the form and manner in which appeals may be filed and the procedure to be followed by appellate officers in disposing of the appeals;
(3) Every rule made by the Central Government under this Act shall be laid as soon as may be after it is made, before each House of Parliament while it is in session for a total period of thirty days which may be comprised in one session or in two successive sessions, and if before the expiry of the session in which it is so laid or the session immediately following, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.
34. Repeal and savings
(1) Contract Labour (Regulation & Abolition) Act, 1970 is hereby repealed.
(2) Notwithstanding such repeal, anything done or any action taken under the enactment so repealed (including any notification, nomination, appointment, order, or direction made thereunder) shall be deemed to have been done or taken under the corresponding provisions of this Act and shall be in force to the extent they are not contrary to the provisions of this Act till they are repealed under the corresponding provisions of this Act.
(3) Without prejudice to the provisions of sub-section (2), the provisions of section 6 of the General Clause Act, 1897 (10 of 1897) shall apply to the repeal of such enactments.
From India, Bangalore
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Well... it's going to undermine the benefits of the Contract Labor system. Annual increments erode the competitive cost advantage, and increased social security contributions will result in a significant rise in compliance requirements. That's my preliminary analysis.
From India, Jamshedpur
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From India, Jamshedpur
Acknowledge(0)Amend(0)CiteHR is an AI-augmented HR knowledge and collaboration platform, enabling HR professionals to solve real-world challenges, validate decisions, and stay ahead through collective intelligence and machine-enhanced guidance. Join Our Platform.
Contract Labour Act.zip
SELF-CERTIFICAT E PROFORMA UNNDER CONTRACT LABOUR (R&A) ACT, 1970.doc