Notes Prepared By Ravi Pande

CONTRACT LABOUR (REGULATION & ABOLITION) ACT, 1970

OBJECT OF THE ACT:

To do away wit the abuses of the system of employment of contract labours. An act to
regulate the employment of contract labour in certain establishments and to provide for
its abolition in certain circumstances and for matters connected therewith.
It extends to the whole of India

ACT APPLIES TO:

1. Every establishments in which twenty or more workmen are employed or were
employed on any day of the preceding twelve months as contract labour.
2. To every contractor who employees or who employed on any day of the
preceding twelve months twenty or more workmen.

ACT NOT APPLIES TO:

1. Intermittent/Casual nature of work
2. Work not performed for more than 120 days
3. Seasonal nature
4. Establishments situated in SEZ

CONTRACTOR: Contractor 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.

WORKMAN:
Workmen means any person employed in or in connection with the work of any
establishments to do any skilled semi-skilled or unskilled manual, supervisory, technical
or clerical work for hire or reward, whether the terms of employment be express or
implied but does not include any such person.
1. Who is employed mainly in a managerial or administrative capacity
2. Who is 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
3. Who is an out-worker, that is to say a person to whom any articles or materials are
given out for certain process to return them back.

REGISTRATION OF ESTABLISHMENTS ON WHICH ACT IS APPLICABLE:

• Every principal employer of an establishment to which this Act applies shall,

make an application to the registering officer in the prescribed manner for
registration of the establishment

• If the application for registration is complete in all respects, the registering officer
shall register the establishment and issue to the principal employer of the
establishment a certificate of registration containing such particulars as may be
prescribed.
REVOCATION OF REGISTRATION

• If The Registering Officer Is Satisfied That, The Registration Of Any

Establishment Has Been Obtained By Misrepresentation Or Suppression Of Any
Material Fact, Or That For Any Other Reason The Registration Has Become
Useless Or Ineffective

EFFECT OF NON-REGISTRATION

• If the establishment to which this act applies does not register or registration is
revoked on any grounds mentioned above than that establishment cannot employ
the contract labour.

PROHIBITION OF EMPLOYMENT OF CONTRACT LABOUR

• The appropriate Government may, after consultation with the Central Board or, as
the case may be, a State Board, prohibit, by notification in the Official Gazette,
employment of contract labour in any process, operation or other work in any
establishment.

• The appropriate Government shall have regard to the conditions of work and
benefits provided for the contract labour in that establishment and other relevant
factors, such as –

1. Whether the process, operation or other work is incidental to, or necessary for the
industry, trade, business, manufacture or occupation that is carried on in the
establishment
2. Whether it is of perennial nature, that is to say, it is of sufficient duration having
regard to the nature of industry, trade, business, manufacture or occupation that is
carried on in that establishment
3. Whether it is done ordinarily through regular workmen in that establishment or an
establishment similar there off
4. Whether it is sufficient to employ considerable number of whole-time workmen.

APPOINTMENT OF LICENSING OFFICERS

• Appoint such persons define the limits, within which a licensing officer shall
exercise the powers conferred on licensing officers by or under this Act.

LICENSING OF CONTRACTORS

• With effect from such date as the appropriate government shall undertake or
execute any work through contract labour except under and in accordance with a
licence issued in that behalf by the licensing officer.

• Provisions of this act may contain such conditions including,

1. Hours of work
2. Fixation of wages
3. Other essential amenities
GRANT OF LICENCES

• Every application for the grant of a licence under sub-section(1) of section 12

shall be made in the prescribed form and shall contain the particulars

• The licensing officer may make investigation

• A licence granted shall be valid for the period specified therein and may be
renewed from time to time

REVOCATION, SUSPENSION AND AMENDMENT OF LICENCES

• If the licensing officer is satisfied, either on a reference made to him in this behalf
or otherwise, that-

1. Obtained by misrepresentation or suppression of any material fact

2. Failed to comply with the conditions subject to which the licence has been
granted
3. The licensing officer may vary or amend a licence granted under Section 12.

WELFARE AND HEALTH

Canteen

• Appropriate Government may make rules on such establishments to which this

Act applies, wherein contract labour numbering one hundred or more is ordinarily
employed by a contractor, one or more canteens shall be provided and maintained
by the contractor

• Without prejudice to the generality of the foregoing power, such rules may
provide for:-

1. The date by which the canteens shall be provided;

2. The number of canteens that shall be provided, and the standards in respect of
construction, accommodation, furniture and other equipment of the canteens
3. The foodstuffs which may be served therein and the charges which may be
made thereof.

Rest-rooms

• In every place wherein contract labour is required to halt at night in connection

with the work of an establishment to which this Act applies, and In which work
requiring employment of contract labour is likely to continue for such period as
may be prescribed, The rest rooms or the alternative accommodation to be
provided under subsection shall be sufficiently lighted and ventilated and shall
be maintained in a clean and comfortable condition.
Other facilities

• It shall be the duty of every contractor employing contract labour to provide and
maintain:

1. A sufficient supply of wholesome drinking water

2. A sufficient number of latrines and urinals situated as to be convenient and
accessible to the contract labour and
3. Washing facilities

First-aid facilities

• There shall be provided and maintained by the contractor so as to be readily

accessible during all working hours a first-aid box equipped with the prescribed
contents at every place where contract labour is employed by him.

Liability Of Principal Employer In Certain Cases

• If any amenity required to be provided for the benefit of the contract labour
employed in an establishment is not provided by the contractor within the time
prescribed thereof, such amenity shall be provided by the principal employer
within such time as may be prescribed.

• All expenses incurred by the principal employer in providing the amenity may be
recovered by the principal employer from the contractor either by deduction from
any amount payable to the contractor under any contract or as a debt payable by
the contractor.

Responsibility For Payment Of Wages

1. A contractor shall be responsible for

• Payment of wages to each worker employed by him

• Shall be paid before the expiry of such period as may be prescribed.

2. Duty of principle employer

• Shall nominate a representative to be present at the time of disbursement of wages

• Shall be the duty of such representative to certify the amounts paid as wages in
such manner

3. It shall be the duty of the contractor to ensure the disbursement of wages in the
presence of the authorized representative of the principal employer.

4. In case the contractor fails to make payment of wages within the prescribed period or
makes short payment,

1. Then the principal employer shall be liable to make payment of wages in full or
the unpaid balance due,
 • Recover the amount so paid from the contractor either by deduction from any
amount payable to the contractor under any contract or as a debt payable by the
contractor.

Penalties

Sec. 22 Obstructing the inspector or failing to produce registers etc. - 3

months imprisonment or fine upto Rs.500, or both.

Sec.23 Violation For violation of the provisions of Act or the Rules,

imprisonment of 3 Months or fine upto Rs.1000 and on continuing the offence additional
fine upto Rs.100 per day shall be charged

Rules Framed under the Act by the central government on the question of wages:

(Rule 63 to 73)

63. The contractor shall fix wage periods in respect of which wages shall be payable.

64. No wage period shall exceed one month.

65. The wages of every person employed as contract labour in an establishment or by a

contractor where less than one thousand such persons are employed shall be paid before
the expiry of the seventh day and in other cases before the expiry of tenth day after the
last day of the wage period in respect of which the wages are payable.

66. Where the employment of any worker is terminated by or on behalf of the contractor
the wages earned by him shall be paid before the expiry of the second working day from
the day on which his employment is terminated.

67. All payments of wages shall be made on a working day at the work premises and
during the working time and on a date notified in advance and in case the work is
completed before the expiry of the wage period, final payment shall be made within 48
hours of the last working day.

68. Wages due to every worker shall be paid to him direct or to other person authorized
by him in this behalf.

69. All wages shall be paid in current coin or currency or in both.

70. Wages shall be paid without any deductions of any kind except those specified by the
Central Government by general or special order in this behalf or permissible under the
Payment of Wages Act, 1936 (4 of 1936).

71. A notice showing the wage period and the place and time of disbursement of wages
shall be displayed at the place of work and a copy sent by the contractor to the Principal
Employer under acknowledgement.

72. The principal employer shall ensure the presence of his authorized representative at
the place and time of disbursement of wages by the contractor to workmen and it shall be
the duty of the contractor to ensure the disbursement of wages in the presence of such
authorized representative
73. The authorized representative of the principal employer shall record under his
signature a certificate at the end of the entries in the Register of Wages or the Register of
Wages-cum-Muster Roll, as the case may be, in the prescribed form.

Inspectors

1. The appropriate government may, by notification in the Official Gazette,

appoint such persons as it thinks fit to be inspectors for the purposes of this Act,
and define the local limits within which they shall exercise their powers under this
Act.
2. Subject to any rules made in this behalf, an inspector may, within the local
limits for which he is appointed.
3. He can examine any person, seize and take copies of such register, record of
wages as he thinks relevant for the purpose of inspection.

Maintenance of Registers and Records:

1. Register of Contractors: Every Principal Employer to maintain in respect of each

registered establishment, an up to date and complete register of contractors.
2. All the notices should be displayed
3. Returns must be submitted by the principal employer & contractor to the
registering officer/licensing authority

Compliances under the Act:

1. Whether the establishment has taken registration or not.

2. Whether the contractor has a valid license or not.
3. The establishment has complied with the provisions of the act in respect of
welfare and health of contract labour during the financial year.
4. No contravention of any provision of the act has been made.