Contract Labour (Regulation and Abolition) Act, 1970
Image source -

This article is penned by Dipsa Prasanth, a second year BA-LLB student of the  Army Institute of Law, Mohali. Through this article the author has critically anatomized the Contract Labour(Regulation and Abolition) Act, 1970.


With the accelerating world taking its momentum, the work and labour culture of the world has also changed its trajectory. The new-fangled era of liberalization and globalization has attracted foreign investments in India thereby making the corporates uncertain about the workforce, due to the global market fluctuations. This phenomenon had led to the hiring and deployment of labour on a contract basis.

On the onset of economic torrents due to the upswing in liberalising policies, the employers are now looking for a more versatile model in their tie-in with the employees. This is done by the appointment of labour on a temporary or contractual basis, thus making them contract labourers.From, the men who serve food to us in canteens to the security services, contractual labour has become a very popular form of dependence.

Contract Labour (Regulation and  Abolition) Act, 1970

The contract labourers are recurrently susceptible to exploitation by the contractors who act as the link between the workers and the real employer. With lesser wages and poor working conditions, the workers are pushed to an over a barrel situation, with nearly no regulations. Though the government had brought out legislation timely, their feeble implementation has made it fall flat time and again. These woeful states of affairs persuaded to the formulation of the contract labour (regulation and abolition) Act, 1970 which was a giant leap by the government in the sphere of contractual labourers.

This Act is aimed at imparting justice to the rights of the contractual labourers and to fortify the welfare of them. It has various guidelines regarding protection, rights and basic amenities prescribed for the welfare of contract labourers.

Objective  and Applicability

This Act mainly deals with resolving the problems woven around contract labourers, protecting them from exploitation and securing their rights. Adding on to this it aims at abolishing contact labourers from perineal works and works where permanent labourers can be deployed.

On the factor of applicability, it applies to any establishment with a strength of twenty workmen or more or had twenty workmen or more on any day in the preceding twelve months. They apply the same on contractors as well.

Advisory Board

To enhance the enactment of the Act and to guide the government on important provisions concerning the same subject matter, an advisory board has been set up. This body acts as a consultative wing to the central and state governments. Further, these advisory boards are of two:

  1. Central advisory board
  2. State advisory board

Central Advisory Board

For the ease of administration and to perform the functions designated through this Act, the government at the center shall constitute a board called the Central advisory contract labour board. This would act as an advisory board to the government of India in matters relating to the above stated Act.

The composition of the Central advisory board includes, a chairman, chief labour commissioner and members from specified areas. There shall be a minimum of eleven and a maximum of seventeen members on the board, they collectively advise the central government on major steps related to the subject matter.

State Advisory Board

Similar to the board which is formed to assist the central government, the state advisory contract labour board is constituted to advise and aid in the administration of the state government.

The state advisory board will consist of a chairman, a chief labour commissioner in his absence any member nominated by the state government and members maximum of eleven and a minimum of nine.

These boards are vested with the power to constitute committees, the central and the state boards are conferred with the rights to shape committees for various matters concerning this Act. The committee constituted should meet at due time and relevant place, and must be paid an amount as the fee for attending these meetings. Government officials are exceptions to this provision of getting fee as cited above as it becomes part of their delegated duty.

Registration Of Establishment Employing Contract Labour

According to the provisions revealed under this Act every establishment employing contract labour shall be duly registered and shall have a registering officer to preside and administrate the whole mechanisms linked to this Act.
             Click Above

Appointment of Registering Officer

To keep a check on the core aspects of this Act the government on a notification in the official gazette can appoint a person to the post of registering officer who will be a gazetted officer of the government of India. Also, the limits and the power of the registering officer are mentioned discreetly.

Registration of Certain Establishments

The main employer of an establishment to which this Act concerns shall within the period mentioned by the government in the official gazette make an application to the registering officer for registration.

The registering officer if found the application to be fulfilling all the requisites, can register the establishment and provide the principal employer with a certificate of registration.

Revocation of Registration

There is a provision of revoking a registration if found malaise. The registering officer if found, through any means that the registration was made with the wrong intention or has done by misrepresentation has the complete right to revoke the registration provided. This can be done after giving the principal employer a fair chance of hearing and with approval from the government at the center.

Effect of Non-registration

The principal employer of an establishment covered under this Act shall register the establishment as per this Act. And in the case of revocation under section 8, the contract labour should be employed back after the commencement of the prescribed date or after the revocation date as the case may be.

Prohibition of Employment Of Contract Labour

The government with the consultation of the concerned board under this Act has the right to prohibit employment of contract labour with a notification through the official gazette.

Before the publication of the notification, the government shall look into the benefit provided and the working conditions of the contract labour. Another relevant factors involved are the nature of work that it is perennial or not, can the work be done by employing considerable no. of the permanent workman, whether the work is done ordinarily and the necessity of that work being done for the establishment.

Licensing Of Contractors

Every contractor who acts as a link between the contract labour and the principal employer shall have a license to continue with the same. These are explained as follows:

Appointment of Licensing Officer

The Appointment of a licensing officer goes in the same format as that of the registering officer. The government on a notification in the official gazette can appoint a person to the post of registering officer who will be a gazetted officer of the government of India. Also, the limits and the power of the registering officer are mentioned discreetly.

Licensing of Contractors

The government through a notification in the official gazette within a prescribed time can give license to a contractor. Further, he/she can only work within the preview of the provisions issued in the license. The provisions can vary from time period to wages given etc.

The license of a contractor will come into force from the date specified by the government in the official gazette and the contractor can perform or carry out contract labour only and strictly in the way prescribed in the license issued. The license constitutes of the working conditions, wages to be paid etc.

Grant of Licenses

The application made for license under Sec. 12 should include all the required information from place of the establishment to the work which has to be done the contract labourers. And if the licensing officer finds all this information to be valid then he can issue the license to the contractor. The license issued will be for a limited period of time on whose expiration an application for renewal has to be filled.

Revocation, Suspension, and Amendment of Licenses

If at a later stage, the licensing officer finds himself or through any other source that the license was obtained through misrepresentation or fraud then he has the right to revoke or suspend the license.

Adding on to this if the contractor deviated from the guidelines or conditions prescribed to be followed mandatory then again, the licensing officer has the right to revoke or suspend the license after giving the contractor a fair hearing to prove his part.


If any person is aggrieved by the decision of the registering or licensing officer then he/she can go forward with the option of appealing with an appellant officer within thirty days of the communication of the previous order. The appellant officer has complete discretion to consider appeals filed after the expiry of the above- prescribed date if he is satisfied with the appeal made.

Welfare and Health Of Contract Labour

Welfare and health are binary vital aspects of one’s life and also for the progress of the human race thus taking at most care in this showground becomes very imperative. This Act has taken this aspect with great gravity and had put forth various provisions in this pitch. These include facilities like;



First aid facilities

Canteens: Every establishment which is covered under this Act should have a canteen. In establishments with a hundred or more contract labours then there must be a provision of one or more canteens. There must be a check without prejudice on the quality of food served, the rate in which it is served, etc.


Other facilities shall have adequate drinking water facilities, washing facilities, a sufficient number of urinals and latrines, etc.

First Aid Facilities:

It is the duty of the contractor to provide at every place where contract labour is deployed with first aid facilities. This should be available and equipped at working hours as well.

Liability Of Principal  Employer

There are certain liabilities which is embedded over the principal employer, failing to which he would be held liable to bear the penalties. 

The contractor is liable to provide the contract employee with the prescribed amenities of canteen, restrooms, and other facilities, etc within the prescribed time. If the contractor fails to provide the above mentioned, then the principal employer would be held liable. And the amount required by the principal employer for performing the above-mentioned amenities can be incurred by him from the contractor.

Responsibility Of Payment Of Wages

It becomes the responsibility of the contractor to provide the contract labourers with their prescribed salary. The principal employer should send one of his trustees to be present at the time when the contractor distributes the salary amongst the contract labourers.

If the contractor fails to pay the prescribed salary to the workers, then the liability of payment would shift to the principal employer to pay the contract labourers their wages. The principal employer can alter incur this from the contractor.

Penalties And Procedures

A person or contractor who violates the provisions given under this Act can be punished with imprisonment for up to three months and a fine of five hundred rupees or both.

Any person who contravenes with the provisions given in this Act shall be punished with imprisonment of three months and a fine of thousand rupees or both.

If the company contravenes or commits any wrongful deeds that goes against the Act, then every person in charge or responsible of the company would be held guilty.

If there is no complaint given in writing or any previous sanction then no court can take cognizance of any offense given under this Act. The presidency magistrate or a magistrate of the first class only has the right to try such cases.

The complaint must be filed within three months of the date of the commission of the offense had come to notice of the inspector, only then can a court try these offenses. This can be extended maximum to a period of six months.


The government has the jurisdiction to appoint an inspector to guard the provisions of the Act and shall define his/her limit to use power.

The contract labour and principle employers are supposed to maintain all the records related to registration and licensing and of the work performed by the contract labours. All the restrictions which are mentioned in this Act can be discharged in special cases. Adding on to this, the government has the right to move difficulties regarding provisions of the Act, make rules about it and give new directions.


On a concluding note, this Act is a giant leap in the pitch of contract labours. Their urge for protection of their rights and welfare measures which was unheard of for ages was met with and satisfied by this Act. There are various provisions in this Act that upholds the status and secures the welfare of the contractual labourers which had to an extent put an end to the exploitation they had to face these years. This Act provided the contractual labourers with a voice that also has a medium to be heard now as an outcome of this Act and put their grievances across. Granting the labourers a right to be human and live like a human i.e. with dignity, this Act has come a long way from the prehistoric age of barbarism and suppression.

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.

LawSikho has created a telegram group for exchanging legal knowledge, referrals and various opportunities. You can click on this link and join:

Follow us on Instagram and subscribe to our YouTube channel for more amazing legal content.


  1. Hiii

    It’s difficult to get this kind of amazing article,
    which is full of information and knowledge.
    keep up this amazing work!!


Please enter your comment!
Please enter your name here