Contract Labour Law in India

A person is deemed to be employed as a contract Labour, in or in connection with the work of an establishment, when he is hired for such work by or through a contractor, with or without the knowledge of the principal employer. Applicability The Act applies to every establishment and contractor with which 20 or more workmen are employed or were employed on any day of the preceding 12 months as contract Labour. It does not apply to establishments where the work performed is of intermittent or casual nature. The establishments covered under the Act are required to be registered as Principal Employer by making an application in form I to the registering officer in terms of section 7 read with rule 17 of the Contract labour (Regulation & Abolition) Central Rules,1971. The certificate of registration will be granted in form II. The certificate shall, interalia, provide for name and address of the establishment, number of workmen to be employed as contract labour and the type of business, trade, industry, manufacture or occupation which is carried in the establishment. The effect of non-registration of the establishment is that the principal employer cannot employ contract labour in the establishment. Likewise, every contractor to whom the Act applies is required to obtain a licence in terms of section 13 read with rule 21 of the said rules. An application will be made in form IV to the licensing officer of the area where the establishment is located. The application will be accompanied by a certificate by the principal employer in form V to the effect that the applicant has been employed by him as a contractor in relation to the establishment. The license will be granted in form VI and has validity of one year from the date it is granted or renewed. The license so issued is non transferable. Reasons for engaging Contract Labour a. For seasonal / occasional requirement / temporary increase of work. i.e loading and unloading of goods/materials; catering including canteen services; civil/construction works; electrical/ air conditioning /painting/whitewashing; security services; house keeping services; equipment maintenance etc.
b. Need of expertise in particular job.
c. Economic and financial feasibility - the contract Labour are able to do a better job in terms of supervision since they have a fear of loss of job as compared to regular workers PROCEDURE FOR SELECTION OF A CONTRACTOR Ascertain contractor's profile and antecedents. Never engage fly by night operators as a contractor. A limited company registered as a contractor should be preferred. An employee of the company should not be made as a contractor. He should be an independent contractor. Ascertain contractor's profile and antecedents. Never engage fly by night operators as a contractor. A limited company registered as a contractor should be preferred. An employee of the company should not be made as a contractor. He should be an independent contractor.

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