Contract Labour Act, 1970

Contract Labour Act, 1970

SHORT TITLE, EXTENT, COMMENCEMENT AND APPLICATION.-

(1) This Act may be called the Contract Labour (Regulation and Abolition) Act, 1970.

(2) It extends to the whole of India.

(3) It shall come into force on such date¹ as the Central Government may, by notification in the Official Gazette, appoint and different dates may be appointed for different provisions of this Act.

(4) It applies – (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 : Provided that the appropriate Government may, after giving not less than two months’ notice of its intention so to do, by notification in the Official Gazette, apply the provisions of this Act to any establishment or contractor employing such number of workmen less than twenty as may be specified in the notification.

(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 the 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.

STATE AMENDMENT

Maharashtra. —In section 1, in sub-section (5), after clause (b), add the following clause, namely:—

“(c) Notwithstanding anything contained in clause (b) or any other provisions of this Act, the work performed or carried out in the area of Special Economic Zone (declared as such by the Government of India), which is of ancillary nature such as canteen, gardening, cleaning, security, courier services, transport of raw material and finished products, or loading and unloading of goods within the premises of a factory or establishments which are declared 100 per cent. export units by Government, required to achieve the objective of a principal establishment in the said area, shall be deemed to be of temporary and intermittent nature irrespective of the period of performance of the work by the workers in such ancillary establishments.”

[Vide The Contract Labour (Regulation and Abolition) (Maharashtra Amendment) Act, 2005 (Maharashtra Act 13 of 2006), sec. 2 (w.e.f. 2-5-2006).]

COMMENTS

The Act is a piece of social legislation for the welfare of labourers whose conditions of service are not at all satisfactory and it should, therefore, be literally construed; Lionel Edward Ltd. v. Labour Enforcement Officer, 1977 Lab IC 1037 (Cal).

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1. Came into force on 10-2-1971, vide G.S.R. 190, dated 1st February, 1971, published in the Gazette of India, Extra., Pt. II, Sec. 3(i), dated 10th February, 1971.

2. DEFINITIONS. –

(1) In this Act, unless the context otherwise requires, –

¹(a) “appropriate Government” means, – (i) in relation to an establishment in respect of which the appropriate Government under the Industrial Disputes Act, 1947 (14 of 1947), is the Central Government, the Central Government; (ii) in relation to any other establishment, the Government of the State in which that other establishment is situated;

(b) 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;

(c) “contractor”, in relation to an establishment, means a person 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 who supplies contract labour for any work of the establishment and includes a sub-contractor;

(d) “controlled industry” means any industry the control of which by the Union has been declared by any Central Act to be expedient in the public interest;

(e) “establishment” means – (i) any office or department of the Government or a local authority, or

(ii) any place where any industry, trade, business, manufacture or occupation is carried on;

(f) “prescribed” means prescribed by rules made under this Act;

(g) “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 (63 of 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.

Explanation : For the purpose of sub-clause (iii) of this clause, the expressions “mine”, “owner” and “agent” shall have the meanings respectively assigned to them in clause (j), clause (l) and clause (c) of sub-section (1) of section 2 of the Mines Act, 1952 (35 of 1952);

(h) “wages” shall have the meaning assigned to it in clause (vi) of section 2 of the Payment of Wages Act, 1936 (4 of 1936);

(i) “workman” means, any person employed, in or in connection with the work of any establishment to do any skilled, semi-skilled or un-skilled manual, supervisory, technical or clerical work for hire or reward, whether the terms of employment be express or implied but does not include any such person – (A) who is employed mainly in a managerial or administrative capacity; or

(B) who, being employed in a supervisory capacity draws wages exceeding five hundred rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature; or

(C) who is an out-worker, that is to say, a person to whom any articles and materials are given out by or on behalf of the principal employer to be made up, cleaned, washed, altered, ornamented, finished, repaired, adapted or otherwise processed for sale for the purposes of the trade or business of the principal employer and the process is to be carried out either in the home of the out-worker or in some other premises, not being premises under the control and management of the principal employer.

(2) Any reference in this Act to a law which is not in force in the State of Jammu and Kashmir shall, in relation to that State, be construed as a reference to the corresponding law, if any, in force in that State.

STATE AMENDMENT

Andhra Pradesh. —In section 2, in sub-section (1), after clause (d), insert the following clause, namely:—

‘(dd) “core activity of an establishment” means any activity for which the establishment is set up and includes any activity which is essential or necessary to the core activity, but does not include,—

(1) sanitation works, including sweeping, cleaning, dusting and collection and disposal of all kinds of waste;

(2) watch and ward services including security service;

(3) canteen and catering services;

(4) loading and unloading operations;

(5) running of hospitals, educational and training institutions, guest houses, clubs and the like where they are in the nature of support services of an establishment;

(6) courier services which are in nature of support services of an establishment;

(7) civil and other constructional works, including maintenance;

(8) gardening and maintenance of lawns, etc.;

(9) house keeping and laundry services, etc., where they are in nature support services of an establishment;

(10) transport services including ambulance services;

(11) any activity of intermittent in nature even if that constitutes a core activity of an establishment; and

(12) any other activity which is incidental to the core activity:

Provided that the above activities by themselves are not the “core activities” of such establishment.’

[ Vide Contract Labour (Regulation and Abolition) (Andhra Pradesh) (Amendment) Act, 2003 (Andhra Pradesh Act 10 of 2003), sec. 2.]

COMMENTS

If the workman is not hired through a contractor holding a valid licence under the Act, he would be a workman employed by the management itself; Workmen of Best & Crompton Industries Ltd. v. Best and Crompton Engineering Ltd., (1985) II LLN 169 (Mad).

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1. Subs. by Act 14 of 1986, sec. 2, for clause (a) (w.r.e.f. 28-1-1986).

3. CENTRAL ADVISORY BOARD. –

(1) The Central Government shall as soon as may be, constitute a board to be called the Central Advisory Contract Labour Board (hereinafter referred to as the Central Board) to advise 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.

(2) 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 and, any other interests which, in the opinion of the Central Government, ought to be represented on the Central Board.

(3) The number of persons to be appointed as members from each of the categories specified in sub-section (2), the term of office and other conditions of service of, the procedure to be followed in the discharge of their functions by, and the manner of filling vacancies among, the members of the Central Board shall be such as may be prescribed :

Provided that the number of members nominated to represent the workmen shall not be less than the number of members nominated to represent the principal employers and the contractors.

state amendment