The Contract Labour (Regulation & Abolition) Act, 1970
(CLRA
Act) regulates employment of contract labour and provides for abolition of contract labour in certain
cases. The
question of applicability of the CLRA Act to an establishment frequently becomes a matter of concern for
employers.
Following points may serve as a guidance note for employers in such cases:
- CLRA Act is applicable to every establishment in which 20 or more workmen are employed as contract
labour or
were so employed anytime during last 12 months. Hence, the Act would be become applicable once
20 or
more workmen are employed as contract labour on any day in an establishment during the preceding 12
months.
- The Act is applicable to every establishment if the workmen are employed in the establishment
as ‘contract labour’. Section 2(b) of the CLRA Act provides that a workman shall
be deemed
to be employed as ‘contract labour’ when he is hired in or in connection with the work of an
establishment, by or through a contractor. Such engagement of contract labour may be with or
without
the knowledge of the Principal Employer. Whether the workman is employed to do any skilled,
semi-skilled,
un-skilled manual, supervisory, technical or clerical work for hire or reward is immaterial for deciding
upon
the applicability of the CLRA Act.
- The Act does not apply to establishments in which work only of an intermittent or casual
nature is
performed. Explanation to Section 1(5) of the CLRA Act further provides that work
performed would be deemed to be of an intermittent nature if it was performed for less than 120 days in
the
preceding twelve months or it is of a non-seasonal character and is performed for less than 60 days in a
year.
- Where question arises as to the applicability of the CLRA Act to a contractor, the same would depend on
the
following aspects:
- Whether there exists a genuine contract between the Principal Employer and such contractor.
- Whether the periodicity and nature of services provided by such contractor to the establishment
of the
Principal Employer are intermittent.
- At the workman level, the Act does not apply to a person who is mainly engaged in
a managerial or
advisory capacity. In an important case decided by the High Court of
Calcutta[1], while interpreting the expression ‘managerial’, ‘administrative’ and
‘supervisory,’ the
Hon’ble Court noted that primary work of a person who is mainly engaged in a managerial or advisory
capacity
would include supervision, but it would not mean that supervision would be the only function of a
manager or an
administrator. Therefore, another test that could be considered to determine whether any supervisory
work was
performed while discharging managerial or administrative work, is to ascertain if the person was
entrusted with
the duty or responsibility of distribution of work and power to sanction or refer leave, increment,
shift
schedule, power to permit late comer, power to allow a person to leave early, etc.
Exclusion from the applicability of the CLRA Act is contingent upon the nature of work in the establishment and
capacity
in which person is employed in or in connection with the work of any establishment. The same needs to be
examined by the
employer on a case by case basis.
