OVERVIEW OF CONTRACT LABOUR (REGULATION AND ABOLITION) ACT 1970
INTRODUCTION
Contract labour is the system of employing labourers through a contract by a
contractor for a specified period. A workman is known as a contract labourer
when they are assigned to a work of an establishment for a specific period
through a contract by a contractor with or without the knowledge of the principal
employer. Contract workmen are indirect employees; a contract worker is a daily
wager or the daily wages are accumulated and given at the end of the month. It is
the responsibility of the contractor to hire, supervise and remunerate contract
labourers.
In India, contract labourers are used in various industries varying from skilled to
semi-skilled jobs. Therefore the legislature enacted the Contract Labour
(Regulation & Abolition) Act, 1970 (which came into force on 10th February, 1971)
to regulate the adequate functioning of the contract labourers and to prevent the
exploitation of contract labourers by the hands of management.
The objective and scope of the Act are:
· To prevent exploitation of contract labour.
· To provide proper and habitable working conditions.
· To regulate the functioning of the advisory boards.
· To lay down the rules and regulations regarding the registration procedure
of the establishments employing contract labour.
· To state the necessary requirements and the procedure of licensing of
contracts.
· To provide the penal provisions in case of violation of offences under the
Act.
Some Provisions of this Act RELATED TO FORMATION OF ADVISORY BOARDS
Central Advisory Board: Section 3 of this Act deals with the composition of the
Central Advisory Board that consists of a Chairman, the Chief Labour
Commissioner, and eleven to seventeen members who are nominated by the
Central Government. It also states that the number of members who are
nominated for representing the employees must always be more than the number
of members representing the employers.
State Advisory Board: Section 4 of this Act deals with the composition of the
State Advisory Board that consists of a Chairman, the Labour Commissioner of
that state, nine to eleven members who are nominated by the State Government,
and other members who are appointed by the State Government to act in their
absence. It also states that the number of members who are nominated for
representing the employees must always be more than the number of members
representing the employers. It is the duty of the Central and State Advisory Boards
to carry out all the necessary responsibilities.
Registration of certain establishments: Section 7 of the Contract Labour
(Regulation & Abolition) Act, 1970 states the registration procedure of the
establishments falling under the Act. The principal employer of such an
establishment must make an application to the registering office in the prescribed
manner. By the appropriate government notification in the Official Gazette must
be made within the stipulated period for registration of the establishment.
Prohibition of employment of contract labour: section 10 The Central or state
government after consultation with the appropriate advisory boards may prohibit
the employment of contract labour in any process, operation or other work in any
establishment.
Licencing of contractors
Chapter 4 of the Contract Labour (Regulation & Abolition) Act, 1970 states the
significant requirements and the procedure of licensing of contracts. This Chapter
lays down the required steps for granting, revoking, suspending and amending a
licence. Any application for granting a licence under this Act must contain the
particulars regarding the location of the establishment, the nature of the process,
operation or work for which contract labour is to be employed. The granted
licence will be valid for the specified period and may be renewed from time to
time
SALIEN FEATURES OF THE ACT
1. The Act is applicable to every establishment in which twenty or more
workmen are employed or were employed on any day of preceding twelve
months as contract labour. Every contractor who employs or who employed
on any day of the preceding twelve months, twenty or more contract
workers, is subject to the provisions of this Act
2. The Act provides for the setting up of Central Advisory Contract Labour
Board by the Central Government in Central sphere and State Advisory
Contract Labour Board by the State Governments to advice upon the
matters arising out of the administration of the Act.
3. The principal employer is required to be registered and the contractor is
required to have license in order to execute any work through contract
workers, as provided under the Act. The work undertaken to be done must
be under and in accordance with the conditions of license.
4. There are certain welfare provisions in the Act and the Central Rules made
there under regarding the provisions of canteens, restrooms, sufficient
drinking water supply, latrines and urinals, washing facilities and first aid
facilities for the contract workers.
5. Wages are required to be disbursed by the contractor in the presence of the
authorized representative of the principal employer. If the contractor fails to
pay wages either in part or in full, the principal employer is liable to pay the
same.
In the case of Standard Vacuum Refining Company v. Their Workmen AIR 1960,
the guidelines issued by the honorable Supreme Court emphasized on special
attention to the problems of contract labourers. The issue in the case was with
regard to an award of the Industrial Tribunal which was in favour of workmen
considering demand made by the union for abolition of contractual system of
work, cleaning and maintenance of machinery. Employer challenged the award
raising issues whether such dispute constitutes an Industrial Dispute under The
Industrial Disputes Act and justifiability of the tribunal in interfering with the
management's rights. The Supreme Court, nullyfied the arguement of the
employer, observed that contract labour system in the company is primitive and
not correct. The Court directed the company to discontinue the practice of
contract labour.
