Contract Labour Act

“Contractor”, in relation to an establishment, means the one who supplies contract labour to an establishment undertaking to produce a given result for it other than a mere supply of goods or articles of manufacture to such establishment. He hires labour in connection with the work of an establishment and includes a sub-contractor.

“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.

The act applies to every contractor who employs or who employed twenty or more workmen on any day of the preceding twelve months as per Section. 1(4)(b) of the act

The applicability of the act to Principal Employer can be seen only in reference to an establishment in place under Sec. 1(4)(a). The act applies 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.

The Principal Employer will be liable under the act if the number of contract labours employed with respect to each of the establishments is equal to or more than 20 irrespective of the number of contractors. The establishment in whole will be considered even if the number deployed by each contractor is less than 20.

The applicability of the act to Principal Employer and the Contractor are given separately under Sec. 1(4)(a) and Section. 1(4)(b) separately. Principal Employer will be liable if he employs or had employed 20 or more contract workers in each of the establishments irrespective of the number of Contractors associated whereas the Contractor on the other hand may or may not be liable based on the number of contractors deployed by him.

Principal Employer as per Section. 7 of the Act is liable to apply for registration of the establishment in case if he intends to employ 20 or more Contract Workers in each of the establishments and the application for registration shall be made not less than 30 days from the date on which the principal employer is desirous to employ contract labours.

Contractor as per Section. 21 of the Act is liable to apply for the License of the Contractor if the number of Contract Workers employed by him in each of the establishments is more than or equal to 20. All applications for license by the Contractor should be accompanied with Certificate by the principal employer declaring that he has engaged the specific Contractor.