As we all know, if we employ 20 or more employees on a contract, then we need to obtain the RC and License respectively under the Contract Labour Act.
Question on Contract Labour Act Applicability
So, my question is, if we employ executives or managers on a contract basis, will the Contract Labour Act still be applicable?
From India, Mumbai
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208Question on Contract Labour Act Applicability
So, my question is, if we employ executives or managers on a contract basis, will the Contract Labour Act still be applicable?
From India, Mumbai
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If your contract workforce exceeds 10 individuals, you need to have a Registration Certificate (RC) and a license. When you hire executives and managers on a contract basis, you are not required to include them under contract workmen since their criteria are not covered under contract labor.
From India, Mumbai
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From India, Mumbai
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When discussing contractual employment, there are two types:
Types of Contractual Employment
Firstly, employees directly hired by the company for a fixed-term appointment. In such cases, there is an employer-employee relationship between the hired employee and the company, and the Contract Labour (Regulation and Abolition) Act (CLRA) shall not be applicable to such employees.
Secondly, contractual employees hired through third parties, such as service providers, manpower agencies, or job contracts, regardless of the nomenclature.
Applicability of CLRA Act
The CLRA Act comes into play in the second type of contractual employment, meaning when an employee is hired through a contractor or agency. In such contractual manpower arrangements, all compliance under the CLRA Act and social legislation shall be followed.
Definition of Workmen under CLRA
The definition of "workman" as enumerated under the CLRA is clear. Any person who has been hired in a managerial or administrative capacity shall not be considered a workman, as detailed below:
(i) "Workman" means any person employed in or in connection with the work of any establishment to do any skilled, semi-skilled, or unskilled manual, supervisory, technical, or clerical work for hire or reward, whether the terms of employment are express or implied, but does not include any such person:
(A) who is employed mainly in a managerial or administrative capacity; or
(B) who, being employed in a supervisory capacity, draws wages exceeding five hundred rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature; or
any outworker.
Definition of Contract Labour
Now, coming to the definition of contract labour: "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 by or through a contractor, with or without the knowledge of the principal employer."
If we analyze both definitions, then even a person who has been hired as a Manager, Supervisor, or in an administrative capacity shall not fall under the definition of "Workmen" and "Contract Labour" under the CLRA Act, and such an employee does not need to be named under the CLRA License/registration. However, be clear that it is not the nomenclature that defines whether a person is a workman or not; it is the nature of the duties assigned that shall be the sole criterion for determining whether one is a workman or not.
But there may be technicalities. If you hire someone as a Manager in your establishment through an agency or contractor, and they manage your workforce in your establishment, and you control their working, then supervision and control factors may come into existence and prove adverse in case of any dispute between your establishment.
From India, Delhi
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Types of Contractual Employment
Firstly, employees directly hired by the company for a fixed-term appointment. In such cases, there is an employer-employee relationship between the hired employee and the company, and the Contract Labour (Regulation and Abolition) Act (CLRA) shall not be applicable to such employees.
Secondly, contractual employees hired through third parties, such as service providers, manpower agencies, or job contracts, regardless of the nomenclature.
Applicability of CLRA Act
The CLRA Act comes into play in the second type of contractual employment, meaning when an employee is hired through a contractor or agency. In such contractual manpower arrangements, all compliance under the CLRA Act and social legislation shall be followed.
Definition of Workmen under CLRA
The definition of "workman" as enumerated under the CLRA is clear. Any person who has been hired in a managerial or administrative capacity shall not be considered a workman, as detailed below:
(i) "Workman" means any person employed in or in connection with the work of any establishment to do any skilled, semi-skilled, or unskilled manual, supervisory, technical, or clerical work for hire or reward, whether the terms of employment are express or implied, but does not include any such person:
(A) who is employed mainly in a managerial or administrative capacity; or
(B) who, being employed in a supervisory capacity, draws wages exceeding five hundred rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature; or
any outworker.
Definition of Contract Labour
Now, coming to the definition of contract labour: "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 by or through a contractor, with or without the knowledge of the principal employer."
If we analyze both definitions, then even a person who has been hired as a Manager, Supervisor, or in an administrative capacity shall not fall under the definition of "Workmen" and "Contract Labour" under the CLRA Act, and such an employee does not need to be named under the CLRA License/registration. However, be clear that it is not the nomenclature that defines whether a person is a workman or not; it is the nature of the duties assigned that shall be the sole criterion for determining whether one is a workman or not.
But there may be technicalities. If you hire someone as a Manager in your establishment through an agency or contractor, and they manage your workforce in your establishment, and you control their working, then supervision and control factors may come into existence and prove adverse in case of any dispute between your establishment.
From India, Delhi
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