Salient Features of Contract Labour Act

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The Contract Labour (Regulation and Abolition) Act, 1970 was enacted to regulate the employment of contract Labour in certain establishments and to provide for its abolition in certain circumstances. The Contract Labour (Regulation and Abolition) Act got the assent of the President of India on 05.09.1970. The ideology behind the enactment of the Act was to ban the employment of contract Labour in particular work conditions and to control the working conditions of contract Labour during employment. The Contract Labour (Regulation and Abolition) Act is applicable on an establishment, in which twenty or more contract Labours are employed in an accounting year as contract Labour, however, the Act does not apply to establishments in which work to be performed is only of an intermittent or casual nature. The work will not be considered as intermittent if it is performed for more than a hundred and twenty days in a year, or if work is seasonal and is performed more than sixty days in a year. The Act applies to all establishments in which twenty or more workmen are employed or were employed on any day of the preceding twelve months as contract Labour and every contractor who employs or who employed on any day of the preceding twelve months twenty or more workmen. However, it does not apply to establishments that perform an intermittent or casual nature of work. The appropriate Government shall decide upon the intermittent or casual nature of work after consultation with the Central Board or State Board. 

According to the Act, contract labour is a workman who is hired in or in connection with work by or through a contractor, with or without the knowledge of the principal employer. A contractor is a person who undertakes the completion of a particular task for which he is engaged by the principal employer. The scope of the contractor is not only restricted to the supply of goods or articles for the production of goods or completion of a task by contract Labour.

Central Advisory Board is established under Section 3 of the Act by the Central Government and is known as Central Advisory Contract Labour Board. The Central Board consists of a chairman who shall be appointed by the Central Government, The Chief Labour Commissioner, and 11 to 17 nominated members 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.

Under Section 4 of the Act, if the state government requires the establishment of a state advisory board, the state government may constitute a board which is known as the State Advisory Contract Labour Board to advise the state government on a matter arising out of the administration of the act. The State Board consists of a chairman who is to be nominated by the State Government, the Labour Commissioner or in his absence any other officer represented by the State Government and 9 to 11 members to be appointed by the state government to represent the government, industry, contractors, workers, and any other sectors have to represent on the State Board.

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The Act also states that the Principal Employer shall provide the essential amenities like Canteen (above 100 contract Labours), restrooms, drinking water facilities, and first aid facilities if the same is not provided by the Contractor (Sec 16 to 19). The expenses incurred on amenities by the principal employer may be recovered from the contractor either by deduction of any amount payable to the contractor under any contract or as a debt payable by the contractor (Section 20). The principal employer must ensure the disbursement of wages through the Contractor should be done within the expiry of the prescribed period by nominating a representative. If the Contractor fails to make a payment or makes a short payment then, the principal employer shall be made liable to make the payment of wages in full or the unpaid balance and recover the amount so paid from the Contractor (Section 21).


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