Contract Labour (R&A) Act

Contract Labour (R&A) Act

The objective of the Contract Labour (Regulation and Abolition) Act, 1970 is to prevent exploitation of contract labour and also to introduce better conditions of work. A workman is deemed to be employed as Contract Labour when he is hired in connection with the work of an establishment by or through a Contractor. Contract workmen are indirect employees. Contract Labour differs from direct labour in terms of employment relationship with the establishment and method of wage payment. The Contract Workmen are hired, supervised and remunerated by the contractor, who in turn, is remunerated by the establishment hiring the services of the contractor.

Registration by Principal Employer

  • Principal Employer means the owner or occupier or the person who executes ultimate control and supervision and manages the affairs of the establishment.
  • Every Principal Employer is required to register his establishment under the Act and obtain the Certificate of Registration.
  • For this purpose the Principal Employer shall make an application in Form I in triplicate with other relevant documents as may be prescribed in the Act, to the Registering officer, within the stipulated time (Section 7)

Registration by ContractorContract Labour (R&A) Act

  • Contractor in relation to the establishment means a person who undertakes to produce a given result for the establishment other than a mere supply of goods or articles of manufacture to such establishment, through contract labour or who supplies contract labour for any work of the establishment and includes a sub-contractor.
  • Every Contractor is required to obtain licence before executing any work through contract labour.
  • For this purpose the an application in Form IV is required to be submitted in triplicate, along with other relevant prescribed documents, to the Licensing Officer of the area in which the Principal Employer’s establishment is located (Section 12, Rule 21).

Effect of Non-Registration

If the Principal Employer does not get registration under Section 7 or the contractor does not get the licence under Section 121 of the Contract Labour (R&A) Act, 1970, then the person appointed by the Contractor shall be deemed to be the direct employee of the Principal Employer.

Applicability

The Contract Labour (Regulation and Abolition), Act, 1970 applies to:

  • Establishment in which 20 or more workmen are employed or were employed on any day of the preceding 12 months, as a contractor.
  • Contractor who employs or who employed 20 or more workmen on any day of the preceding 12 months (Section 1).