Labour Licence

The Contract Labour (Regulation and Abolition) Act

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.

The Contract Labour (Regulation and Abolition) Act has been enacted by the Indian Legislature from the year 1970. The act intends to prohibit the employment of contract labour in certain circumstances and to regulate the working conditions of contract labour during employment. In this article, we look at the Contract Labour Act applicable in India in detail.

Applicability of the Act

The Contract Labour (Regulation and Abolition) Act applies to the following entities:

• It applies to any establishment in which twenty or more workmen are employed on any day of the of the accounting year as contract labour.
• It applies to any contractor who employs or who employed twenty or more workers on any day of the accounting year.
• Also, it does not apply to the establishments if any work performed in the intermittent nature.
• It does not apply to the establishments if any work not performed for more than one-twenty days in a year.
• It does not apply to the establishments situated in the special economic zone (SEZ).
• It does not apply to the establishments if any work performed in the seasonal nature for more than sixty days in a year.

Contractor under section (2) of the act

A contractor is a person who takes over the responsibility to produce a given result for the establishment, other than a supply of goods or services of manufacture to such establishment, through contract labour or the person who provides contract labour for any work of the establishment and includes a sub-contractor.

Advisory Boards

The central Government under section 3 is expected to set up the Central Advisory Contract Labour Board on activities relating to the administration of the act.

The Central Board should consist of the following are;

• The Chairman to be appointed by the Central Government.
• The Chief Labour Commissioner (Central).

1. Central Advisory Board

The number of members, which does not exceed seventeen but should not be less than eleven, as the Central Government may specify to represent the government, the Railways sector, the coal industry, the mining sector, the contractors, the workmen and any other sector with the opinion of the Central Government have to represent on the Central Board.

2. State Advisory Board

The number of members, which does not exceed seventeen but should not be less than eleven, as the Central Government may specify to represent the government, the Railways sector, the coal industry, the mining sector, the contractors, the workmen and any other sector with the opinion of the Central Government have to represent on the Central Board.

Registration of Establishments Employing Contract Labour

Every establishment which proposes to employ contract workers for its work is required to obtain a certificate of registration from the appropriate Government.

The procedure for registering establishment employed with contract labour are explained here.

• The employer should approach the Registering office with Application for registration in Form No I and along with the receipt representing payment of the prescribed fee.
• If the application for registration is fulfilled in all aspects, the registering officer can register the establishment and grant the copy of the registered certificate in Form-II.

Every certificate of registration will contain the following;

• The name and address of the establishment.
• The maximum number of workers to be contracted as contract labour in the establishment.
• The type of business.
• Other important particulars, if any.

Documents Required for Registration

The required documents are to be produced by the contractor to the employer for approval. They are

• Copy of the report showing the legal status of the firm.
• Photograph of the document showing allotment of PF Code No.
• Copy of receipt/cover note/insurance policy received.
• Copy of challans showing remittance of security deposit.
• The license fee to receive the labour license.

Note: Contractors should in an application Form for engaging contract labour every month or a new entry.

Effect of Non-Registration

In case an establishment required to be enrolled under Section 7 has not been recorded within the time specified for the purpose under that section, then the punishment will be given as per section 36.

Licensing of Contractor

Every contractor who has employed twenty or more workers on any day of the month has to obtain a license for engaging contract labour working for any establishment.The authorized licensing officer will issue the license as per the provisions under section12.

Grant of License under section 13G

The Procedure for granting the license is as follows:

• The Contractor has to request the Licensing Authority along with the application for the grant of a license in Form No-IV.
• Security amount of Rs.20 that has to be deposited at the time of applying for the license.
• Receipt about the fee paid to the licensing officer.
• Certificate by the principal employer in Form-V stating that he employs the applicant as the contractor concerning its establishment.
• The licensing officer, after making necessary investigations will grant a license in Form VI which can be renewed from time to time.