Law of Welfare & Working Condition

The Contract Labour (Regulation and Abolition) Act, 1970

Object and Scope of the Act

The preamble of the Act states that it is 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.

In Gammon India Ltd. vs. Union of India, (1974-I-LU-489) the Supreme Court while
dealing with the object for which the Contract Labour (Regulation and Abolition) Act,
1970 was enacted observed that the Act was passed to prevent the exploitation of
contract labour and also to introduce better conditions of work. The Act provides for
regulation and abolition of contract labour. The underlying policy of the Act is to
abolish contract labour, whenever possible and practicable, and where it cannot be
abolished, the policy of the Act is that the working conditions of the contract labour
should be so regulated as to ensure payment of wages and provisions of essential
amenities

In exercise of the powers conferred by section 35 of the Contract Labour (Regulation

and Abolition) Act, 1970 the Central Government made the rules, “The Contract
Labour (Regulation and Abolition) Central Rules, 1971.

According to section 1, the Act extends to the whole of India. It applies —

1(a) to every establishment in which twenty or more workmen, are employed or were
employed on any day of the preceding twelve months as contract labour ;
(b) to every contractor who employs or who employed on any day of the preceding
twelve months twenty or more workmen

‘Appropriate government’ means, (i) in relation to an establishment in respect of

which the appropriate Government under the Industrial Disputes Act, 1947, is the
Central Government;
(ii) in relation to any other establishment, the Government of the State in which that
other establishment is situated. [Section 2(1)(a)]

“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.
[Section 2(1)(b)]

“Contractor”
Contractor in relation to an establishment, means- a person
l 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
l who supplies contract labour for any work of the establishment and includes a sub-
contractor.[Section 2(1) (c)
– Contractor engaged for Section 2 (1)(c) covers construction of building. Gammon
India Ltd. v. Union of India, (1974)
– Section 2 (1)(c)-’Contractor’ is one who supplies contract labour to an establishment
undertaking to produce a given result for it. He hires labour in connection with the
work of an establishment. State of Gujarat v. Vogue Garments,
– Section 2 (1) (c)-Sub-contractors or ‘piece wagers’, are contractors

“Controlled Industry”
Controlled industry means any industry the control of which by the Union has been
declared by any CentralAct to be expedient in the public interest. [Section 2(1)(d)]

“Principal Employer”
Principal employer means (i) in relation to any office or department of the Government
or a local authority, the head of that office or department or such other officer as “’the
Government or the local authority, as the case may be, may specify in this behalf,
(ii) in a factory, the owner or occupier of the factory and where a person has been
named as the manager of the factory under the Factories Act, 1948 ,the person so
named.
(iii)in a mine, the owner or agent of the mine and where a person has been named as
the manager of the mine, the person so named,
(iv)in any other establishment, any person responsible for the supervision and control
of the establishment. [Section 2(1)(g)]

“Occupier”
Occupier of a factory under section 2(n) of the Factories Act; 1948 means the person
who has ultimate control over the affairs of the factory, and where the said affairs are
entrusted to a managing agent, such agent shall be deemed to be the occupier of the
factory.

The Advisory Boards

(1) Central Advisory Board. Constitution of Central Board: In pursuance to the
provisions of section 3, the Central Government shall, constitute a board to be called
the Central Advisory Contract Labour Board (hereinafter referred to as the Central
Board).
Function of the Central Board: The Central Board shall perform function of advising
the Central Government on such matters arising out of the administration of this Act
as may be referred to it and to carry out other functions assigned to it under this Act.

Composition of the Central Board: The Central Board shall consist of

(a) a Chairman to be appointed by the Central Government;
(b) the Chief Labour Commissioner (Central), ex officio;
(c) such number of members, not exceeding seventeen but not less than eleven, as
the Central Government may nominate to represent that Government, the Railways,
the coal industry, the mining industry, the contractors, the workmen an any other
interests which, in the opinion of the Central Government ought to be represented on
the Central Board.

(2) State Advisory Board

Law of Welfare & Working Condition Constitution of the State Board: Section 4
empowers the State Government to constitute a board to be called the State Advisory
Contract-Labour Board (hereinafter referred to as the State Board).
Note: It is mandatory for the Central Government to constitute the Central Board u/s
3 of the Act while it is discretionary for the State Government to constitute the State
Board u/s 4 of the Act.
Function of State Board: The State Board is constituted to advise the State Government
on such matters arising out of the administration of this Act as may be referred to it
and to carry out other functions assigned to it under this Act

Composition of the State Board:

The State Board shall consist of —
(a) a Chairman to be appointed by the State Government ;
(b) the Labour Commissioner, ex officio, or in his absence any other officer nominated
by the State. Government in that behalf ;
(c) such numbers, not exceeding eleven but not less than nine, as the State
Government may nominate to represent that Government, the industry, the
contractors, the workmen and any other interests which, in the opinion of the State
Government, ought to be represented on the State Board.

(3) Power to constitute committees

According to section 5, the Central Board or the State Board, as the case may be, may
constitute such committees and for such purpose or purposes as it may think fit. The
committee shall meet at such time and places and shall observe such rules of
procedure in regard to the transaction of business at its meetings as may be
prescribed. The members of a committee shall be paid such fees and allowances for
attending its meetings as may be prescribed:
Provided that no fees shall be payable to a member who is an officer of Government
or of any corporation established by any law for the time being in force.

Registration of Establishments Employing Contract Labour

(1) Appointment of Registering Officers: According to section 6, the Appropriate

Government may, by an order notified in the Official Gazette (a) appoint such persons,
being Gazetted Officers of Government, as it thinks fit to be registering officers for the
purposes of this Chapter; and (b) define the limits, within which a registering officer
shall exercise the powers conferred on him by or under this Act.
(2) Registration of certain establishment: Section 7 makes it mandatory for every
principal employer of an establishment to which this Act applies to make an
application to the registering office in the prescribed manner for registration of the
establishment.
(3) Revocation of registration in certain cases: Section 8 provides that if the registering
officer is satisfied, either on a reference made to him in this behalf or otherwise, that
the registration of any establishment has been obtained by mis-representation or
suppression of any material fact, or- that for any other reason the registration has
become useless or ineffective and, therefore requires to be revoked, the registering
officer may revoke the registration.

Rule 19 prescribes the circumstances in which application for registration may be

rejected. — (1) If any application for registration is not complete in all respects, the
registering officer shall require the principal employer to amend the application so as
to make it complete in all respects. (2) If the principal employer, on being required by
the registering officer to amend his application for registration, omits or fails to do so,
the registering officer shall reject the application for registration

(4)Effect of non-registration: According to section 9, no principal employer of an

establishment, to which this Act applies, shall employ contract labour in the
establishment after the expiry of the period under section 7 in the case of the
establishment which is required to be registered under Section 7, but which has not
been registered within the time fixed for the purpose under that section.

(5) Prohibition of employment of contract labour: According to section 10,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. Section
10 vests overriding power in Appropriate Government irrespective of anything
contained in the Act.
But before issuing any such notification in relation to an establishment, the
appropriate Government shall have regard to the conditions of work and benefits
provided for the contract labour that establishment and other relevant factors, such
as
(a) 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 ;
(b) whether it is of perennial nature, that is to say, it is so of sufficient duration having
regard to the nature of industry, trade, business, manufacture or occupation carried
on in that establishment ;
(c) whether it is done ordinarily through regular workmen in that establishment or an
establishment similar thereto;
(d) whether it is sufficient to employ considerable number of whole-time workmen.

(I) Appointment of licensing officers: According to section 11,the appropriate

Government may, by an order notified in the Official Gazette,-(a) appoint such persons,
being Gazetted Officers of Government, as it thinks fit to be licensing officers for the
purposes of this Chapter ; and (b) define the limits, within which a licensing officer
shall exercise the powers conferred on licensing officers by or under this Act.
(II) Licensing of contractors: According to section 12, with effect from such date as the
appropriate Government may, by notification in the Official Gazette, appoint, no
contractor to whom this Act applies, shall undertake or execute any work through
contract labour except under and accordance with a licence issued in that behalf by
the licensing officer. Subject to the provisions of this Act, such a licence may contain
such conditions including, in particular, conditions as to hours or work, fixation of
wages and other essential amenities in respect of contract labour as the appropriate
Government may deem fit to impose in accordance with the rules, if any, made under
Section 35 and shall be issued on payment of such fees and on the deposit of such
sum, If any, as security for the due performance of the conditions as may be
prescribed.

Welfare and Health of Contract Labour

(i) Canteens.- According to section 16, the appropriate Government may make rules
requiring that one or more canteens shall be provided and maintained by the
contractor for the use of such contract labour in every establishment- (a) to which this
Act applies, (b) wherein work requiring employment of contract labour is likely to
continue for such period as may be prescribed, and (c) wherein contract labour
numbering one hundred or more is ordinarily employed by a contract, one or more
canteens shall be provided and maintained by the contractor for the use of such
contract labour.

(ii)Rest-rooms. According to section 17,it is mandatory for the contractor to provide

and maintain for the use of the contract labour such number of rest-rooms or such
other suitable alternative accommodation within such time as may be prescribed in
every place wherein contract labour is required to halt at night in connection with the
work of an establishment (a) to which this Act applies, and (b) in which work requiring
employment of contract labour is likely to continue for such period as may be
prescribed, there shall be provided and maintained by the contractor.

The rest-rooms or the alternative accommodation to be provided shall be sufficiently

lighted and ventilated and shall be maintained in a clean and comfortable condition.

(iii)Other facilities.- According to section 18, It shall be the duty of every contractor
employing contract labour in connection with the work of an establishment to which
this Act applies, to provide and maintain (a) a sufficient supply of wholesome drinking
water for the contract labour at convenient places; (b) a sufficient number of latrines
and urinals of the prescribed types so situated as to be convenient and accessible to
the contract labour in the establishment; and (c) washing facilities.
(iv)First-aid facilities.-According to section 19, 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.
(v) Liability of principal employer in certain cases.- According to section 20, If any
amenity required to be provided under Section 16, Section 17, Section 18 or Section
19 for the benefit of the contract labour employed in an establishment is not provided
by the contractor within the time prescribed therefor, such amenity shall be provided
by the principal employer within such time as may be prescribed.
(vi) Responsibility for payment of wages.- Section 21 makes a contractor statutorily
responsible for payment of wages to each worker employed by him as contract labour
and such wages shall be paid before the expiry of such period as may be prescribed.

Inspecting Staff According to section 28, 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.

Registers and Other Records to be Maintained

According to section 29,every principal employer and every contractor shall maintain
such registers and records giving such particulars of contract labour employed, the
nature of work performed by the contract labour, the rates of wages paid to the
contract labour and such other particulars in such form as may be prescribed. Every
principal employer and every contractor shall keep exhibited in such manner as may
be prescribed within the premises of the establishment where the contract labour is
employed, notices in the prescribed form containing particulars about the hours of
work, nature of duty and such other information as may be prescribed.