This article is written by Abanti Bose, studying at Amity University Kolkata, India. The article gives a detailed overview of the objective, applicability, significant provisions and constitutional validity of the Contract Labour (Regulation & Abolition) Act, 1970.
This article has been published by Sneha Mahawar.
Table of Contents
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. Before and after independence the status and condition of contract labour were analysed by numerous commissions, committees, Labour Bureau Ministry of Labour, etc. and it was found that the major characteristics of contract labour are poor economic conditions of the workers, casual nature of employment, lack of job security, etc. 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.
Objective and scope of the Act
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.
Applicability of the Contract Labour (Regulation & Abolition) Act, 1970
Section 1(4) mentions the establishments where the Act will be applicable:
- Any establishment where twenty or more workmen are employed or were associated as contract labour on any day during the preceding twelve months.
- Any contractor who employs or employed twenty or more workmen as contract labour on any day of the preceding twelve months.
- The Act is also applicable to every establishment if the workmen are employed in the establishment as ‘contract labour’. Section 2(b) of the Act states that a workman is deemed to be employed as contract labour when he is hired in or in connection with such work by or through a contractor with or without the knowledge of the principal employer.
- The Act does not apply to any organisation or establishments where any work of intermittent or casual nature is performed. The Act states that a work is deemed to be of intermittent nature if it is performed for less than 120 days in the preceding twelve months or it is of non-seasonal character and is performed for less than 60 days in a year.
- The Act is not applicable to a person who is appointed in an advisory or managerial capacity.
Essential provisions of the Contract Labour (Regulation & Abolition) Act, 1970
The essential provisions of the Contract Labour (Regulation & Abolition) Act, 1970 are stated below.
Composition of the advisory boards
Chapter 2 of the Contract Labour (Regulation & Abolition) Act, 1970 mentions the establishment and composition of the Central and State Advisory Boards. The functions of these boards are to advise the Central and state governments respectively on the matters concerning the administration of the Act, and also to carry out all the necessary functions assigned under the Act.
Central Advisory Board
The Central Advisory Board consists of a Chairman appointed by the Central government, the Chief Labour Commissioner, and the Central Government may nominate eleven to seventeen members to represent the government, railways, coal industry, mining industry, contractors, workmen and members from any other fields which, in the opinion of the Central Government ought to be represented on the Central Advisory Board.
Furthermore, Section 3 of the Act also states that the number of members nominated to represent the workmen shall not be less than the number of members nominated to represent the principal employers and the contractors.
State Advisory Board
Section 4 of the Contract Labour (Regulation & Abolition) Act, 1970 states the composition of the State Advisory Board. It consists of a Chairman appointed by the state government, the Labour Commissioner of that state and in their absence, any other officer will be appointed by the state government and the state government may nominate nine to eleven members to represent that government, industry, contractors, workmen and members from any other fields which, in the opinion of the state government, ought to be represented on the State Advisory Board. However, the number of members nominated to represent the workmen shall not be less than the number of members nominated to represent the principal employers and the contractors.
Both Central and State Advisory Boards have the power to form committees under this Act as they may think fit. The committees will function according to the provisions of the Act and will carry out all the necessary duties and responsibilities.
Registration procedure of establishments employing contract labour
The Act lays down the appropriate method for registration of the establishments employing contract labour. The appropriate government by an order notified in the Official Gazette will be appointing such persons being Gazetted Officers of the government as it deems fit to be registering offices under Chapter 3 of the Act. It further mentions the limits, within which a registering officer shall exercise the powers and functions as conferred upon them under the Act.
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. In cases of expiration of such stipulated period, the registering office will only accept applications if the registering officer is satisfied that the applicant was prevented by sufficient cause from making the application in time.
After completion of the application of registration, the registering office will register the establishment and grant the registration certificate to the principal employer.
Revocation of registration
The registering office has the power to revoke the registration of an establishment with the approval of the appropriate government if it is satisfied that the registration of the establishment was received through misrepresentation, suppression of any material fact, or any other reason which renders the registration ineffective. However, before revoking the registration the registering office must give an opportunity to the principal employer of the establishment to be heard.
Prohibition of employment of contract labour
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 as stated under Section 10 of the Act.
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.
Appointment of licensing officers
The appropriate government by an order in the Official Gazette may appoint Gazetted Officers of the government as licensing officers and state their powers and functions under Section 11 of the Act.
Grant, revocation, suspension and amendment of licences
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.
However, if it comes to the attention of the licencing officer that a licence has been obtained through misrepresentation, suppression of any material fact or the holder of the licence has failed to comply with the conditions subject to granting of the licence or contravened any provision of the Act then the licensing officer after giving reasonable opportunity to be heard to the licence holder may revoke, suspend or amend the licence as the case may be.
Procedure for appeal
Section 15 of the Act states that any person aggrieved under any provision of the Act may appeal to an appellate officer appointed by the appropriate government within thirty days from the date on which the order is communicated to them.
Payment of wages
It is the responsibility of the contractor to pay the required wages to each worker employed under contract labour before the expiry of the stipulated period. If the contractor fails to make the payment within the stipulated period then the principal employer shall be liable to make payment of wages in full or the unpaid balance due. The wages are to be fixed by the Commissioner of Labour.
Welfare and health of contract labour
Under Chapter 5 of the Act, it is the duty of the principal employer to ensure that the contractor provides the following facilities adhering to the rules laid down by the appropriate government.
- If the contractor is employing more than one hundred workmen by contract labour then one or more canteens shall be provided and maintained by the contractor for the use of such contract labour.
- Concerning the work of an establishment where contract labour is required to halt at night, the contractor must provide and maintain restrooms or other suitable facilities which shall be sufficiently lighted, ventilated, clean and comfortable.
- The contractor is liable to provide other facilities such as drinking water, latrines and urinals (separate for men and women), washing facilities, first-aid, etc.
Infringement of provisions concerning employment labour
Section 23 of the Contract Labour (Regulation & Abolition) Act, 1970 regulates the proper functioning of the provisions of the Act, it states that if anyone violates any provisions or any rules concerning the employment of contract labour or contravenes any condition of a licence granted under this Act will be punished with imprisonment for a term that may extend to three months or with fine which may extend to one thousand rupees or both.
The Act further states that if any offence is committed by a company infringing any provisions of the Act then the company, as well as every person responsible during the time of the commission of the offence, will be held liable.
Cognizance of offences
Under Section 26 a court of law can take cognizance of an offence only when a complaint is made by an inspector, and no court inferior to a Presidency Magistrate or a Magistrate of the First Class shall try any offence punishable under this Act.
Constitutional validity of the Contract Labour (Regulation & Abolition) Act, 1970
The application of this Act does not violate any Articles of the Indian Constitution. In the case, Gammon India Ltd. Etc. Etc vs. Union Of India and others (1974). the constitutional validity of the Act was challenged; it was stated that Section 28 of the Act conferred arbitrary and unguided power thus violating Articles 14 and 15 of the Indian Constitution. It was also contended before the Court that Section 34 of the Act which empowers the Central Government to make any provision for removal of difficulty is unconstitutional on the grounds of excessive delegation. The Supreme Court held that Section 34 of the Act is an application for the internal functioning of the administrative machinery and gives effect to the provisions of the Act, therefore does not amount to excessive delegation. The Court dismissed the petitions and held that the Act does not violate the Constitution and it is constitutionally valid.
The Contract Labour (Regulation & Abolition) Act, 1970 is an essential legislature when it comes to the protection of the rights of workers who are appointed based on a contract by a contractor. However, the Act has several drawbacks which should be taken into account by the legislature and the Act should be amended accordingly.
- The Act fails to state a distinction between core and peripheral activities which have led to non-implementation.
- The Act states that it applies to every organisation employing 20 or more contract labourers, thus it enables the establishment or contractor to avoid their responsibility regarding the welfare of the workers by employing less than 20 workmen.
- Often the establishments take advantage of the provisions by taking licences in different names. Therefore, to curtail this problem there should be a single window for issuing licences and there should be a licensing authority to deal with the situation in every state.
- The penal provisions of the Act are not deterrent enough, so it enables the principal employer to rather face prosecution instead of following the provisions of the Act.
- Under the Act, the education scheme of contract labourers should be extended as most workers are unskilled, illiterate and ignorant of their rights.
- There is no direct or independent provision under the Act for filing claims or short/non-payments; illegal deductions etc. these claims are filed under the Payment of Wages Act, 1936 or the Minimum Wages Act, 1948 that create problems regarding the applicability of these Acts. Hence these provisions should be included for better functioning of the Act.
The Contract Labour (Regulation & Abolition) Act, 1970 was enacted to prevent exploitation of contract labourers as there was no existing legislation that dealt with contract labour. However, certain shortcomings of the Act must be taken into consideration by the legislature and necessary changes should be made and implemented. Furthermore, the Act should also be made easier and less complicated for principal employers and contractors and with better safeguards and amenities to contract labourers.
- https://clc.gov.in/clc/acts-rules/contract-labour-regulation-abolition-act-1970#Short%20title,%20extent,%20 commencement%20and%20application
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