THE CONTRACT LABOUR (REGULATION AND ABOLITION) ACT, 1970

COMMENCEMENT- 5TH SEPTEMBER 1970

PREAMBLE- to regulate the employment of contract labour in certain establishments and to provide
for its abolition in certain circumstances

1. Short title, extent, commencement and application:

It applies—

(a) to every establishment in which twenty or more workmen are employed or were employed on
any day of the preceding twelve months as contract labour;

(b) to every contractor who employees or who employed on any day of the preceding twelve months
twenty or more workmen

Work performed in an establishment shall not be deemed to be of an intermittent nature—

(i) if it was performed for more than one hundred and twenty days in the preceding twelve
months, or
(ii) (ii) if it is of a seasonal character and is performed for more than sixty days in a year.

If a question arises whether work performed in an establishment is of an intermittent or casual

nature, the appropriate Government shall decide that question after consultation with Central Board
or, as the case may be, a State Board, and its decision shall be final.

Section 2 – definitions

1. Appropriate Government [Section 2(1)(a)]:

o Central Government: For establishments where the Central Government is the

"appropriate Government" under the Industrial Disputes Act, 1947.

o State Government: For other establishments located within a state.

2. Contract Labour [Section 2(1)(b)]:

o A workman is deemed to be employed as contract labour when hired for work by or

through a contractor, with or without the principal employer’s knowledge.

3. Contractor [Section 2(1)(c)]:

o A person who:

1. Undertakes to produce a result through contract labour for an

establishment.

2. Supplies contract labour for the work of an establishment.

o Includes sub-contractors.
4. Controlled Industry [Section 2(1)(d)]:

o Any industry declared by a Central Act to be under Union control in the public
interest.

5. Establishment [Section 2(1)(e)]:

o Includes:

1. Any office/department of the Government or a local authority.

2. Any place where industry, trade, business, manufacturing, or occupation is

carried on.

6. Prescribed [Section 2(1)(f)]:

o Means prescribed by rules made under this Act.

7. Principal Employer [Section 2(1)(g)]:

o Definitions vary based on the type of establishment:

 Government/local authority: Head of the office/department or officer

specified by the authority.

 Factory: Owner, occupier, or manager named under the Factories Act, 1948.

 Mine: Owner, agent, or manager named under the Mines Act, 1952.

 Other establishments: Person responsible for supervision and control.

8. Explanation for "Mines" Terms [Section 2(1)(g), Explanation]:

o Definitions as per Mines Act, 1952:

 Mine: Clause (j)

 Owner: Clause (l)

 Agent: Clause (c).

9. Wages [Section 2(1)(h)]:

o As defined in Section 2(vi) of the Payment of Wages Act, 1936.

10. Workman [Section 2(1)(i)]:

 Includes: Persons doing skilled, semi-skilled, unskilled, manual, supervisory, technical, or

clerical work for hire or reward.

 Excludes:

o Managerial/administrative employees.

o Supervisory employees earning more than ₹500 per month or performing primarily
managerial functions.

o Out-workers processing materials at their home or premises not controlled by the

principal employer.
Section 3: Central Advisory Board

1. Constitution and Purpose:

o The Central Government shall establish the Central Advisory Contract Labour Board
(Central Board) to:

1. Advise the Central Government on matters related to the administration of

the Act.

2. Perform other functions assigned under this Act.

2. Composition of the Central Board:

o Chairman: Appointed by the Central Government.

o Chief Labour Commissioner (Central): Ex-officio member.

o 11 to 17 members: Nominated by the Central Government to represent:

 Government

 Railways

 Coal industry

 Mining industry

 Contractors

 Workmen

 Other interests as deemed necessary by the Central Government.

3. Conditions for Representation:

o The number of workmen representatives must not be less than the number of
representatives of principal employers and contractors.

o Terms of office, service conditions, procedures, and filling of vacancies are

prescribed by rules.

Section 4: State Advisory Board

1. Constitution and Purpose:

o The State Government may establish the State Advisory Contract Labour Board
(State Board) to:

1. Advise the State Government on matters related to the administration of the

Act.

2. Perform other functions assigned under this Act.

2. Composition of the State Board:

o Chairman: Appointed by the State Government.

 o Labour Commissioner (or nominee): Ex-officio member.

o 9 to 11 members: Nominated by the State Government to represent:

 Government

 Industry

 Contractors

 Workmen

 Other interests as deemed necessary by the State Government.

3. Conditions for Representation:

o The number of workmen representatives must not be less than the number of
representatives of principal employers and contractors.

o Terms of office, service conditions, procedures, and filling of vacancies are

prescribed by rules.

Section 5: Power to Constitute Committees

1. Purpose:

o The Central Board or the State Board can form committees for specific purposes.

2. Meetings and Procedures:

o Committees meet at times and places as prescribed.

o Rules of procedure for meetings are prescribed by rules.

3. Fees and Allowances:

o Members of committees are entitled to fees and allowances for attending meetings.

o Exception: Government officers or officers of corporations established by law are not

eligible for fees.

Section 6: Appointment of Registering Officers

1. Appointment:

o The appropriate Government may appoint Gazetted Officers as registering officers

by a notification in the Official Gazette.

2. Limits:

o The Government defines the jurisdiction of the registering officer for exercising
powers under this Act.

Section 7: Registration of Certain Establishments

1. Application for Registration:

 o Every principal employer of an establishment (to which this Act applies) must apply
for registration within the time specified by the appropriate Government.

o Application must be made in the prescribed manner to the registering officer.

2. Delayed Applications:

o The registering officer may accept applications beyond the fixed period if satisfied
that the delay was due to sufficient cause.

3. Certificate of Registration:

o If the application is complete, the registering officer shall issue a certificate of

registration containing prescribed particulars.

Section 8: Revocation of Registration in Certain Cases

1. Grounds for Revocation:

o Registration may be revoked if obtained through:

 Misrepresentation or suppression of material facts.

 Any other reason rendering the registration useless or ineffective.

2. Procedure for Revocation:

o The principal employer must be given an opportunity to be heard.

o Revocation requires prior approval of the appropriate Government.

Section 9: Effect of Non-Registration

1. Prohibition on Employing Contract Labour:

o No principal employer can employ contract labour if:

 The establishment has not been registered within the specified time under
Section 7.

 Registration has been revoked under Section 8.

Section 10: Prohibition of Employment of Contract Labour

1. Authority to Prohibit:

o The appropriate Government may prohibit the employment of contract labour in

any process, operation, or work in an establishment by notifying in the Official
Gazette.

2. Factors for Consideration:

o Before issuing the notification, the Government considers:

  Relevance to industry: Whether the work is necessary for the industry,
trade, business, or occupation.

 Perennial nature: Whether the work is of long-term duration based on the

industry’s nature.

 Regular workmen: Whether the work is usually done by regular workers in

that or similar establishments.

 Workforce size: Whether a considerable number of full-time workers are

required.

3. Final Decision on Nature of Work:

o The appropriate Government’s decision on whether a process or work is of a

perennial nature is final.

Section 11: Appointment of Licensing Officers

1. Authority to Appoint:

o The appropriate Government may appoint Gazetted Officers as licensing officers

through a notification in the Official Gazette.

2. Jurisdiction:

o The limits within which the licensing officers exercise their powers are defined by the
Government.

Section 12: Licensing of Contractors

1. Requirement for Licence:

o Contractors cannot undertake or execute work through contract labour without

obtaining a licence from the licensing officer.

o This applies from the date specified by the appropriate Government via notification
in the Official Gazette.

2. Licence Conditions:

o Licences may include conditions related to:

 Hours of work.

 Fixation of wages.

 Provision of essential amenities for contract labour.

3. Fees and Security Deposit:

o Licences are issued upon payment of prescribed fees and security deposits for
ensuring compliance.
Section 13: Grant of Licences

1. Application Requirements:

o Applications for licences must be in the prescribed form and contain details such as:

 Location of the establishment.

 Nature of the process or work for which contract labour is to be employed.

 Other prescribed particulars.

2. Investigation of Applications:

o The licensing officer may conduct an investigation as per prescribed procedures

before granting a licence.

3. Validity and Renewal:

o Licences are valid for a specified period and can be renewed upon payment of fees
and fulfillment of prescribed conditions.

Section 14: Revocation, Suspension, and Amendment of Licences

1. Grounds for Revocation or Suspension:

o A licence may be revoked or suspended if:

 It was obtained through misrepresentation or suppression of facts.

 The licence holder failed to comply with the conditions of the licence or
violated provisions of this Act or rules.

2. Procedure:

o The licence holder must be given an opportunity to show cause before revocation or
suspension.

3. Forfeiture of Security Deposit:

o The licensing officer may forfeit the deposited security amount (or part of it) for non-
compliance.

4. Amendment of Licence:

o Licences may be varied or amended as per rules.

Section 15: Appeal

1. Right to Appeal:

o A person aggrieved by an order under Section 7, 8, 12, or 14 can file an appeal

within 30 days of the order's communication.

2. Extension for Filing Appeals:

 o Appeals filed after 30 days may be entertained if the appellate officer is satisfied
with the reason for delay.

3. Appellate Officer:

o The appropriate Government nominates the appellate officer.

4. Hearing and Disposal:

o The appellate officer must provide an opportunity for the appellant to be heard and
dispose of the appeal as quickly as possible.

Additional knowledge in English

Section 11: Licensing Officers

 The Government will appoint officers to issue and manage licences for contractors.

 These officers are Gazetted Officers, and their work area (limits) is defined by the
Government.

Section 12: Licensing of Contractors

1. Who Needs a Licence?

o Every contractor must have a licence to employ contract labour.

o This rule starts from the date announced by the Government.

2. What Does the Licence Cover?

o The licence includes rules about:

 Working hours.

 Wages (payment to workers).

 Facilities for workers (like water, toilets, etc.).

3. Fees and Security:

o To get the licence, contractors must pay fees and deposit money as security (to
ensure they follow the rules).

Section 13: Grant of Licences

1. Application for Licence:

o Contractors must fill an application form with details like:

 Where the work will happen.

 What type of work is being done by contract labour.

2. Investigation Before Granting Licence:

 o The officer checks the application and investigates if necessary before granting the
licence.

3. Validity of Licence:

o The licence is valid for a specific time and can be renewed if needed.

Section 14: Revoking or Suspending a Licence

1. When Can a Licence Be Cancelled?

o If the contractor:

 Lied or hid important details to get the licence.

 Broke the rules or didn’t follow licence conditions.

2. Procedure:

o Before cancelling, the officer must hear the contractor’s side.

3. Penalty:

o The officer can take away the security money deposited by the contractor.

4. Amending Licences:

o Licences can also be changed if needed, following the rules.

Section 15: Appeals

1. Right to Appeal:

o If someone is unhappy with a decision (like licence refusal or cancellation), they can
appeal within 30 days.

2. Late Appeals:

o Appeals can be accepted after 30 days if there’s a valid reason for the delay.

3. Who Handles Appeals?

o An officer appointed by the Government will decide the appeal after listening to
both sides.

Section 16: Canteens

1. When Are Canteens Required?

o If an establishment:

 Falls under this Act.

 Employs 100 or more contract workers.

  The work is expected to continue for a certain period (as decided by the
Government).

o The contractor must provide and maintain canteens for contract workers.

2. Rules for Canteens:

o The Government will decide:

 The deadline to provide canteens.

 The number of canteens needed.

 Standards for construction, furniture, and food.

 The cost of food for workers.

Section 17: Rest-Rooms

1. When Are Rest-Rooms Needed?

o If contract workers stay overnight at or near a workplace.

o The contractor must provide rest-rooms or alternative accommodation.

2. Standards for Rest-Rooms:

o Rooms must be:

 Well-lit and ventilated.

 Clean and comfortable for workers.

Section 18: Other Facilities

The contractor must provide:

1. Drinking Water:

o Clean water at convenient locations.

2. Latrines and Urinals:

o Adequate in number, type, and easy to access.

3. Washing Facilities:

o Proper washing areas for workers.

Section 19: First-Aid Facilities

 The contractor must keep a first-aid box at all work locations.

 It should be:
 o Easily accessible.

o Stocked with items specified by the Government.

Section 20: Principal Employer’s Liability

1. When Contractor Fails to Provide Amenities:

o If the contractor doesn’t provide:

 Canteens, rest-rooms, drinking water, or first-aid.

o The principal employer must arrange these amenities.

2. Recovering Costs from the Contractor:

o The principal employer can:

 Deduct the cost from payments owed to the contractor.

 Or recover it as a debt.

Section 21: Payment of Wages

1. Contractor’s Responsibility:

o The contractor must pay wages to workers on time (as per the rules).

2. Role of the Principal Employer:

o The principal employer must:

 Nominate an authorized representative to oversee wage disbursement.

 The representative certifies the payment.

3. What If the Contractor Fails?

o If the contractor:

 Doesn’t pay wages on time.

 Pays less than the agreed amount.

o The principal employer must pay the workers and recover the amount from the
contractor.

Section 22: Obstructions

1. Who is guilty?

o Anyone who:

 Obstructs an inspector from performing duties.

 Refuses or neglects to provide necessary assistance.

  Refuses to produce registers/documents demanded by an inspector.

 Prevents or attempts to prevent anyone from being examined by an

inspector.

2. Punishment:

o Imprisonment: Up to 3 months.

o Fine: Up to ₹500.

o Or both.

Section 23: Contravention of Rules for Contract Labour

1. What is the offence?

o Violating any provisions of the Act/rules regarding the employment of contract

labour.

o Breaching any conditions of the licence issued under the Act.

2. Punishment:

o Imprisonment: Up to 3 months.

o Fine: Up to ₹1,000.

o Additional fine: ₹100 per day for continued violation after conviction.

Section 24: Other Offences

1. Who is guilty?

o Anyone violating provisions of the Act or rules, where no specific penalty is provided
elsewhere.

2. Punishment:

o Imprisonment: Up to 3 months.

o Fine: Up to ₹1,000.

o Or both.

Section 25: Offences by Companies

1. Who is responsible?

o Company: If it commits an offence under this Act.

o Persons in charge: Anyone responsible for the conduct of the company’s business at
the time of the offence.
 2. Exceptions for individuals:

o If the individual proves:

 The offence occurred without their knowledge.

 They exercised due diligence to prevent it.

3. In case of negligence:

o If a director, manager, or officer consented to, connived in, or neglected duties, they
are also guilty.

4. Definitions:

o Company: Includes firms and associations.

o Director: Refers to a partner in the case of a firm.

Section 26: Cognizance of Offences

1. Who can complain?

o Only the inspector or someone with their written approval can file a complaint.

2. Jurisdiction:

o Cases can only be tried by:

 A Presidency Magistrate.

 Or a Magistrate of the First Class.

Section 27: Limitation of Prosecutions

1. Time Limit for Filing Complaints:

o Complaints must be filed within 3 months from the date the inspector became
aware of the offence.

o If the offence involves disobedience of a written order, the complaint can be filed
within 6 months.

Section 28: Inspecting Staff

1. Appointment of Inspectors

o The government can appoint inspectors and define their work areas through a
notification.

2. Powers of Inspectors
Inspectors can:

o Enter premises to inspect registers, records, or notices.

o Question workers or employers for information.

 o Take copies or seize documents related to offences.

o Exercise other powers as prescribed by rules.

3. Legal Binding

o Any person required to produce documents or provide information must comply, as

per Sections 175 and 176 of the Indian Penal Code.

4. Search and Seizure Procedure

o These will follow the rules of the Code of Criminal Procedure (CrPC), 1898.

Section 29: Registers and Records

1. Registers and Records

o Employers and contractors must maintain records with details of:

 Contract labour employed.

 Nature of work.

 Wages paid.

 Other prescribed details.

2. Notices

o Employers must display notices in prescribed forms at workplaces, covering:

 Working hours.

 Nature of duties.

 Other required information.

Section 30: Effect of Laws and Agreements

1. Supremacy of the Act

o The Act overrides any conflicting law, agreement, or contract of service.

2. More Favourable Benefits

o If an agreement or law provides better benefits to contract labour than the Act, they
will continue to receive those better benefits.

3. Additional Rights

o Workers can make agreements with employers for additional benefits beyond those
provided by the Act.

Section 31: Power to Exempt in Special Cases

  In emergencies, the government can exempt:

o Specific establishments.

o Classes of contractors.

o Or areas, from the provisions of this Act for a specified period, subject to conditions.

Section 32: Protection of Action Taken

1. Protection for Officers

o No legal action (suit, prosecution, etc.) can be taken against officers or board
members for actions done in good faith under this Act.

2. Protection for Government

o The government is not liable for damages caused by actions taken in good faith
under this Act.

Section 33: Power to Give Directions

 The Central Government can direct State Governments on implementing the provisions of
this Act.