Dear Seniors,
Four questions:
1. What are the jobs that can be entrusted to contract labour in the manufacturing industr?.
2. Is it mandatory for a company to have a 'contract labour agency' to employ such labour?
3. Is there a laid down percentage of contract labour that can be employed in a company?
4.In absence of a contract labour agency, can a company hire contract labour?
Thank you
Atul Joshi
From India, Jammu
8Four questions:
1. What are the jobs that can be entrusted to contract labour in the manufacturing industr?.
2. Is it mandatory for a company to have a 'contract labour agency' to employ such labour?
3. Is there a laid down percentage of contract labour that can be employed in a company?
4.In absence of a contract labour agency, can a company hire contract labour?
Thank you
Atul Joshi
From India, Jammu
Hi Atul -
Have your answers question wise -
1. What are the jobs that can be entrusted to contract labour in the manufacturing industr? - in any industry no "Core production jobs" to be carried out through contractual employees. Although, you should have mentioned the type of the industry what you are referring here.
2. Is it mandatory for a company to have a 'contract labour agency' to employ such labour? - Yes- for sure. Without having any contract labour agency, we can not use such employment.
3. Is there a laid down percentage of contract labour that can be employed in a company? - It is not defined anywhere in the law. So you can go ahead with the employment as many as you wish to employ but make sure that the contractual employment should not be for core production activities as i mentioned in question # 1.
4.In absence of a contract labour agency, can a company hire contract labour - Answer of the second question is answering this quarry .
Hope your quarries are answered now.
From India, Alwar
Have your answers question wise -
1. What are the jobs that can be entrusted to contract labour in the manufacturing industr? - in any industry no "Core production jobs" to be carried out through contractual employees. Although, you should have mentioned the type of the industry what you are referring here.
2. Is it mandatory for a company to have a 'contract labour agency' to employ such labour? - Yes- for sure. Without having any contract labour agency, we can not use such employment.
3. Is there a laid down percentage of contract labour that can be employed in a company? - It is not defined anywhere in the law. So you can go ahead with the employment as many as you wish to employ but make sure that the contractual employment should not be for core production activities as i mentioned in question # 1.
4.In absence of a contract labour agency, can a company hire contract labour - Answer of the second question is answering this quarry .
Hope your quarries are answered now.
From India, Alwar
Dear All / Dear Experts,
While appreciating Ravi ji for his response and agreeing with him, question no. 2 & 4 by queriest (both the questions are indeed same) need to be debated.
Question is: Can we employ contract labour directly, that means without any contractor?
Some time, we need to give certain work on contract. The said work is negligible one and can be completed within a few days. In this case, can we not entrust this work to group of contract labours directly?
I invite discussion on it by the members so that CLRA Act will be more clear to us, specific in regards to perennial nature.
From India, Mumbai
While appreciating Ravi ji for his response and agreeing with him, question no. 2 & 4 by queriest (both the questions are indeed same) need to be debated.
Question is: Can we employ contract labour directly, that means without any contractor?
Some time, we need to give certain work on contract. The said work is negligible one and can be completed within a few days. In this case, can we not entrust this work to group of contract labours directly?
I invite discussion on it by the members so that CLRA Act will be more clear to us, specific in regards to perennial nature.
From India, Mumbai
Dear Team,
The following is my understanding on CL (R&A) Act, 1970.
First of all, we have to go through the definitions and applicability of a particular act before we enter into any kind of discussion. In line with that I would like to highlight the definitions of 'Contract Labour' and 'Contractor' under the CLRA Act, 1970.
Contract Labour: A workman shall be deemed to be employed as "contract labour" in or in connection with the work of an establishment 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.
Contractor: A person who undertakes to produce a given result for the establishment, other than 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.
As for as applicability of the act is concerned, sub-section (5) of section 1 of CLRA Act, 1970 is reproduced below: -
5 (a) It shall not apply to establishments in which work only of an intermittent or casual nature is performed.
(b) 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 the Central Board or, as the case may be, a State Board, and its
decision shall be final.
Explanation: For the purpose of this sub-section, 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) If it is of a seasonal character and is performed for more than sixty days in a year.
Also, the definitions which is given in The Industrial Employment (Standing Orders) Act, 1946 is also appended: -
- A ‘temporary’ workman is a workman who has been engaged for work which is of an essentially temporary nature and likely to be finished within a limited period.
- A ‘casual’ workman is a workman whose employment is of a casual nature.
Clubbing the above two acts, it is evident that any workmen who is employed for a limited period and of a temporary nature by the employer is called Temporary Employee but not a contract labour until he is hired in connection with such works which has been awarded to a contractor.
Hence, my conclusion is that a contract labour has to be employed through a contractor and any other workmen who has been hired by the employer for a job which is of temporary nature and for limited period is called a temporary workmen or casual workmen and not the contract worker.
Submitted for further discussions by other experts.
P. Vathiraj
Dy. Manager (Personnel)
ACSL- Chennai
From India
The following is my understanding on CL (R&A) Act, 1970.
First of all, we have to go through the definitions and applicability of a particular act before we enter into any kind of discussion. In line with that I would like to highlight the definitions of 'Contract Labour' and 'Contractor' under the CLRA Act, 1970.
Contract Labour: A workman shall be deemed to be employed as "contract labour" in or in connection with the work of an establishment 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.
Contractor: A person who undertakes to produce a given result for the establishment, other than 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.
As for as applicability of the act is concerned, sub-section (5) of section 1 of CLRA Act, 1970 is reproduced below: -
5 (a) It shall not apply to establishments in which work only of an intermittent or casual nature is performed.
(b) 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 the Central Board or, as the case may be, a State Board, and its
decision shall be final.
Explanation: For the purpose of this sub-section, 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) If it is of a seasonal character and is performed for more than sixty days in a year.
Also, the definitions which is given in The Industrial Employment (Standing Orders) Act, 1946 is also appended: -
- A ‘temporary’ workman is a workman who has been engaged for work which is of an essentially temporary nature and likely to be finished within a limited period.
- A ‘casual’ workman is a workman whose employment is of a casual nature.
Clubbing the above two acts, it is evident that any workmen who is employed for a limited period and of a temporary nature by the employer is called Temporary Employee but not a contract labour until he is hired in connection with such works which has been awarded to a contractor.
Hence, my conclusion is that a contract labour has to be employed through a contractor and any other workmen who has been hired by the employer for a job which is of temporary nature and for limited period is called a temporary workmen or casual workmen and not the contract worker.
Submitted for further discussions by other experts.
P. Vathiraj
Dy. Manager (Personnel)
ACSL- Chennai
From India
Hi Atulji,
I would also like to contribute towards your queries :
1. The jobs which are of perennial and permanent nature, should not be got done through Contract Labour (prohibited u/s 10(i) of CLRA Act) unless exemption has been obtained for the same as per Law.
2. I differ with the views expressed earlier. In my opinion, it is not at all mandatory to have a Contract Agency for supplying Contract Labour. There are a number of ways, of which one of the most accepted way is to float Short/Global Tender notice, depending upon the nature and value of work to be executed through contract labour. Through scrutiny of bids viz. price, expertize in the job, past record to handle similar jobs in similar industry, etc. etc. the bidder can be finalized and job be entrusted. There may be one or more such contractors having different specialization like in the field of Civil/ Mech/ Electrical Engg., Hotel management (for guest houses etc.) so on and so forth.
3. No there is no such laid down rule for % of labour to be engaged i.e. component of labour cost in total work value. It depends upon the nature of work, whether it is labour intensive or material intensive or otherwise.
4. No, no Company can directly deploy Contract Labour on its own, because then it will attract many provisions under law to make them permanent employees on the roll of the Company. By engagement of contract labour through contract is safe. You / your estb is the Principal Employer in any case.
Best wishes.
Arun Kr. Jain
HR Personnel
NCL, CIL.
From India, Jabalpur
I would also like to contribute towards your queries :
1. The jobs which are of perennial and permanent nature, should not be got done through Contract Labour (prohibited u/s 10(i) of CLRA Act) unless exemption has been obtained for the same as per Law.
2. I differ with the views expressed earlier. In my opinion, it is not at all mandatory to have a Contract Agency for supplying Contract Labour. There are a number of ways, of which one of the most accepted way is to float Short/Global Tender notice, depending upon the nature and value of work to be executed through contract labour. Through scrutiny of bids viz. price, expertize in the job, past record to handle similar jobs in similar industry, etc. etc. the bidder can be finalized and job be entrusted. There may be one or more such contractors having different specialization like in the field of Civil/ Mech/ Electrical Engg., Hotel management (for guest houses etc.) so on and so forth.
3. No there is no such laid down rule for % of labour to be engaged i.e. component of labour cost in total work value. It depends upon the nature of work, whether it is labour intensive or material intensive or otherwise.
4. No, no Company can directly deploy Contract Labour on its own, because then it will attract many provisions under law to make them permanent employees on the roll of the Company. By engagement of contract labour through contract is safe. You / your estb is the Principal Employer in any case.
Best wishes.
Arun Kr. Jain
HR Personnel
NCL, CIL.
From India, Jabalpur
There is a concept also of temp and Badli workers.
We seem to have forgotten about them :)
So, yes, for a short term period, you can use temps and Badli workers directly on your payroll without engaging a contractor. However, to avoid legal complications, companies generally use contractors.
Using temp / Badli, one advantage is that you can employ them directly on production related activities.
From India, Mumbai
We seem to have forgotten about them :)
So, yes, for a short term period, you can use temps and Badli workers directly on your payroll without engaging a contractor. However, to avoid legal complications, companies generally use contractors.
Using temp / Badli, one advantage is that you can employ them directly on production related activities.
From India, Mumbai
Dear Vathiraj ji, Arun ji & Saswata ji,
Thank you for contributing. In fact, I was expecting intellectual discussion like this. I fully respect your views. In fact, I invited this discussion purposely. I will share on it later, certainly.
Dear Vathiraj ji,
You have nicely pointed out the difference between contract labour and temporary labour.
Dear Arun ji,
I am bit confused on following of your statements. both seems to me contradictory.
From India, Mumbai
Thank you for contributing. In fact, I was expecting intellectual discussion like this. I fully respect your views. In fact, I invited this discussion purposely. I will share on it later, certainly.
Dear Vathiraj ji,
You have nicely pointed out the difference between contract labour and temporary labour.
Dear Arun ji,
I am bit confused on following of your statements. both seems to me contradictory.
From India, Mumbai
Good Morning All,
Yesterday, a monthly compliance audit done by principal employer of contract labor. During the audit they noted one non-compliance regarding Equal Remuneration Register. So, please let me know that is Equal Remuneration Register is applicable on contract workers.
Thanks
Aslam
From India, Mumbai
Yesterday, a monthly compliance audit done by principal employer of contract labor. During the audit they noted one non-compliance regarding Equal Remuneration Register. So, please let me know that is Equal Remuneration Register is applicable on contract workers.
Thanks
Aslam
From India, Mumbai
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