Chapter: Business Science : Industrial Relations and Labour Welfare : Welfare of Special Categories of Labour

Contract Labour

The contract labour is labour which is not carried on the payroll and is not directly paid. It is usually divided into two categories.

Contract Labour


Ø  The contract labour is labour which is not carried on the payroll and is not directly paid. It is usually divided into two categories.


Ø  Those employed on job contracts; and Those employed on labour contracts


Ø  The large establishments offer job contracts for such operations as the loading and unloading of the metals by the mining industry or the construction of roads or buildings by Public Works Department.




The Contract Labour Act, 1970.


Scope and Coverage


The Act came into force from 10th February 1971. It extends to the whole of India and applies to every establishment in which twenty or more workmen are or were, employed on any day during the preceding twelve months as contract labour, and to every contractor




The Act does not apply to establishments where work is of a casual (irregular or occasional or intermittent (interrupted or non-continues) nature. The work performed in an establishment is not considered to be of an intermittent nature:


(i)    If it is performed for more than one hundred and twenty days in the preceding twelve months;


(ii) It is not of seasonal character if it is performed for more than sixty days in a year.




(1) Setting Up of Advisory Boards


The Act requires that the Central and State Advisory Boards are to be set up by the Central and State Governments, respectively to advise them on such matters arising out of the administration of the Act as may be refereed to them, and carry out any other functions assigned to them under the Act. Besides, the government nominees, the Boards havemembers representing industry, contractors, workers, and any other interesgovernment may consider should be represented on the Boards. The number of nominees of the workers is to be equal to that of industry and contractors, both on the State and the Central Boards (section 3,4)


(2) Registration of Establishment

Every principal employer who wishes to employ contract labour has to get the establishment is accepted for registration. the registration officer issues a registration certificate if the establishment is accepted for registration. This certificate can be cancelled if it has been obtained by misrepresentation or suppression of any material fact, or if the registration has become useless or ineffective or requires to be revoked.


The contract labour cannot be employed so long as the registration certificate has not been issued or after it is revoked. The employer has to play a registration fee of twenty rupees to five hundred rupees depending on the number of workers to be employed (Section 6, 7, 8, 9)


(3) Prohibition of employment of Contract Labour


Both the Central and State Governments can prohibit the employment of contract labour in any process, operation or other work in any establishment after consulting their Advisory Boards, and consider the conditions of work and benefits provided for contract labour in the establishment. The employment of contract labour may not be permitted for any process, operation and other work if it is:


(a)  incidental to or necessary for the industry, trade, business, manufacture or occupation that is carried on in the establishment;


(b) of perennial or perpetual nature or of a sufficient duration


(c)  done ordinarily through regular workmen in that establishment or an similar thereto:


(d) capable of employing considerable number of wholetime workmen.


(4)  Licensing of Contractors


Every contractor has to obtain a licensing for employing contract labour from the licensing officer appointed by the government for this purpose. In this application for a licensing he has to mention the location of his establishment, the nature of the operation or the work for which contract labour is to be employed, and such other particulars as may be required by the licensing officer. He is charged a licence fee, which may vary from fivec rupees to one hundred and twenty five rupees, depending on the number of workers to be employed


(5)   Welfare and Health of Contract Labour


Ø   A contractors are required to provide and maintain:


Ø   A Sufficient supply of wholesome drinking water at convenient places;



Ø   A sufficient number of latrines and urinals of the prescribed type conveniently situated and accessible.


Washing facilities;


A first –aid box equipped with prescribed contents at every place where contract labour is employed; One or more canteens if the work is to continue for more than 6 months and 100 or more workers are employed. The number of canteens, the standard of their construction, furniture and equipment, and the type of food to be supplied will be as prescribed under the rules framed by the government


(6) Responsibility for payment of Wages


Ø  The contractor is also to be responsible for making regular and timely payment of wages to his workers. The payment is to be made in the presence of the authorized representative of the principal employer. If the contractor does not make payment, the principal employer will do the same and recover the amount so paid from the contractor (Section 16 to 21)


Ø  Get his establishment registered with the registering officer appointed by the government (Section 7);


Ø  Obtain a license from the licensing officer for employing contract labour and comply with the terms and conditions of the grant of the license (Section 12);


Ø  Not to employ contract labour without obtaining a registration certificate and license, or after the registration certificate and license are revoked or suspended (Section 9, 12, 1);


Ø  Provide welfare and health facilities as required under the Act and its rules (Section 16, 19);


Ø  Pay wages to workers before the expiry of the wages period (Section 21);


Ø  Co-operate with the inspectors in the inspection of premises, documents and records and examining any person to determine if the provisions of the Act and the rules framed there under are being complied with (Section 28);


Ø  Maintain the registers and records with such particulars of contract labour, as nature of work performed, rates of wages and other information specified in Rules 74 and 78 of the Act (Section 29);


Ø  Exhibit in the premises of the establishment where contract labour is employed a notice showing hours of work, rates of wages, wage periods, dates of payment of wages, nature of duties and other particulars as mentioned in Rule 81 of the Act (Section 29 (2)); and


Ø Send a half-yearly return to the licensing officer and yearly return to the registration officer, and to supply such information and statistics as may be required by the government from time to time.


(9)Rights of Contract Labour


Ø    Claim such working conditions, facilities and other benefits as are provided for under the Act and the rules framed there under (Section 16 to 22); and


Ø    They can be represented by their representatives on the Central and State Advisory Boards (Section 4)




Organized Labour and Unorganized Labour


Construction Labour


Construction industry employs around three million workers and the nature of work is considered hazardous. Large number of unskilled and semiskilled labour both male and female is employed on various form of building operation and road constructions.


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