"Navigating the Workforce Web: Decoding the Contract Labour Act 1970 and its Applicability to Schools in India"

 

By Sandigdha Mishra, Adv.

Legal Consultant, School Compliance, Child Protectionist, Life Coach

advocate.sandigdhamishra@gmail.com

https://www.linkedin.com/in/sandigdhamishra/

Introduction:

The Contract Labour (Regulation and Abolition) Act, 1970 is a significant legislation in India that governs the employment of contract labourers across various industries, including educational institutions such as schools. This act aims to regulate and improve the working conditions of contract labourers while ensuring compliance with labor laws. In this article, we will delve into the key provisions of the Contract Labour Act 1970 and discuss its implications specifically on schools in India.

In India Contract labourers suffers from inferior labour status, casual nature of employment, lack of job security and poor economic conditions. It was also observed that in some cases the contract labourers did the same work as the workers directly employed by the industrialist but were no paid the same wages and the same working conditions. This practice of contract labour has also lead to the exploitation of these labourers as they are not employed directly under the employer. This practice of exploitation was and still is very much prevalent in India, therefore to encounter such problem and also to regulate the conditions of these labourers the Govt. passed an Act called the Contract Labour (Regulation and Abolition) Act, 1970. The Act was also passed to provide legislative protection to these workers who had no rights to claim what they deserved like basic amenities, urinals, drinking water facility etc. Furthermore these contract labourers before the enactment could not avail the rights and benefits which were availed by the permanent workers under different labour and industrial provisions.

Definition and Applicability:

The Contract Labour Act defines a contract labourer as an individual employed by a contractor to carry out work for an establishment. 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 employees 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. 

(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 that question after consultation with 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. 

Accordingly, Schools that engage contract labourers, such as security personnel, janitors, transport staff, or other support staff, fall within the purview of this act.

Objectives of the Act:

The main objective of the Act was to stop the exploitation of these labourers and to abolish the practice of contract labour where:

(a) The work is of perennial nature.

(b) The work is incidental to and necessary for the work of the factory i.e. the principal activity of the industry e.g. work related to production.

(c) The work is of the nature that it can employ considerable number of whole time workmen; and

(d) The work can be done by ordinary or regular workmen.

Interpretation of Judicial Body:

Before the enactment of this Act there was no specific legislation which dealt in detail with the problem of the contract labour. Although there were legislations like Industrial Disputes Act, 1947 , Payment of Wages Act, 1936 etc. but none of them was specifically designed to regulate contract labour. This restricted the Courts from forming the basic guidelines as to abolish or restrict the contract labour. Therefore they required an Act which completely dealt with the regulations of the contract labour.

After the enactment of the Act, which took place on the 5th September, 1970 but came in force on the 10th February, 1971, the courts did not have to face much difficulties as regarding the facilities which should be provided to these contract labour (S. 16,17,18 and 19). The definition of employer, contractor (S.2(c)) and workmen (S.2(b)) were also provided by this Act which helped the court to interpret the meaning of these words. The courts also construe as to when the labourers would be considered as contract labourers or not.

In the case of R.K. Panda v. Steel Authority of India where the same issue was in question the Supreme Court held that the Act regulates contract labour but has never proposed to abolish it entirely. The primary object of the Act can be taken as to save the contract labourers from exploitation. But the right to be absorbed by the employer directly is neither proposed nor mentioned in the Act. The Supreme Court also said that insertion of certain clauses in the contract with the contract labourers by the industry does not give them a right to escape from the duty of providing the contract labourers rights.

On these basis the Supreme Court gave the following decision –

# The labourers who were continuing in the employment for the last 10 years, in spite of change of contractors and have not crossed the age of superannuation and were medically fit, should be absorbed as regular employees in the order of seniority.

# Regular wages will be payable only for the period subsequent to absorption and not prior to that.

The Court interpreted the Act in a correct way i.e. the Act strives for regulation of Contract Labour and not for its abolishment in entirety and accepted that the Act does not expressly provides the right to get absorbed to the labourers. But it did not end the case right there. Here the Supreme Court rightly performed the function of judiciary to impart justice. It realised that courts should achieve that which the legislations are not able to achieve and which keeps up the faith of people in judiciary. The judges here used the freedom which the common law system confers upon them that is to look into the objective of a matter and device new principles which could suit justice. They devised the principle that a contract labourer who is working for a company in a work of perennial nature has to be absorbed by the industry. This principle was clearly in the interests of those who worked same as the regular employees but were exploited by the unfair practices of the industrialists.

Registration and Licensing:

Under the Act, schools are required to obtain a license to engage contract labourers as Principal Employer under The Contract Labour Act 1970 . 

Section 2(g) of the Contract Labour Act, 1970 states that 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); 

The licensing process involves submitting an application to the appropriate government authority along with necessary documents. 

The Principal Employer (owner, occupier, ultimate controller or Manager) shall submit an application in FORM-I(CL) in triplicate for Registration of Establishment to the Registering Officer, (Contract Labour) IR-II Branch, Labour Department, 30 bays Building, Sector-17, Chandigarh within 15 days after coming into existence of establishment.(Section-6)

An application shall be accompanied by treasury receipt in token of the payment of prescribed fee for registration of the establishment.(Section-7)

The fee structure for the number of workmen proposed to be employed on any one day on contract by the Principal Employer is as under:-

Fee for Registration of Establishment for the number of workmen

 is 20 or less                                  Rs.20

Exceeds 20 but less than 50          Rs.50

Exceeds 50 but less than 100          Rs.100

Exceeds 100 but less than 200  Rs.200

Exceeds 200 but less than 400  Rs.400

Exceeds 400 but less than 500  Rs.500

The fee shall be deposited in Treasury Head No-0230- Labour & Employment-106- Registration and Renewal fee under contract Labour (Regulations and Abolition) Act, 1970.

The Registering officer, if satisfied, shall register the establishment and issue a certificate of Registration in Form-2 (CL) containing name & address of the establishment the maximum number of workmen employed as contract labour, type of business or trade etc.(Section-8).

In case of Haryana for details, please refer to https://hrylabour.gov.in/content/contract_labour

The registration ensures that schools comply with various statutory obligations and take appropriate measures to ensure the welfare provisions, payment of wages, and working conditions of Contract Labours.

Contractor's Responsibility:

Section 2(c) of the Contract labour act, 1970 states that “contractor” refers 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 of 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; 

The Act places the primary responsibility for the welfare and rights of contract labourers on the contractor. The contractor is responsible for providing amenities such as drinking water, canteen facilities, restrooms, and medical facilities. They must also ensure compliance with minimum wage requirements, timely payment of wages, and adherence to working hours. Contractor should produce the following documents to the principal employers on monthly basis to declare that it is paying all the dues as per the applicable provisions:

1. Workmen Attendance Register

2. Wages Sheet 

3. Bank Statement

4. EPF ECR

5. EPF challan

6. EPF TRRN

7. EPF Form No 11

8. ESIC Monthly Contribution

9. ESI Challan/Payment Slip

10. Welfare Fund CHALLANS. 

11.Welfare Fund  RETURN. 

12. Police verification Certificate (New Joinee).

13. Details of New Joinees

14. Details of Left employees

Equal Treatment and Prohibition of Abolition:

The Act mandates that contract labourers should receive the same wages, allowances, and benefits as regular employees performing similar work in the establishment. Discrimination against contract workers based on their employment status is prohibited. Furthermore, the Act prohibits the abolition of permanent or regular posts for the purpose of engaging contract labour, safeguarding the interests of permanent employees.

Health, Safety, and Welfare Measures:

Schools (Principal Employer) are responsible for providing a safe and healthy working environment for contract labourers. They must comply with safety standards, provide necessary protective equipment, and implement measures for accident prevention. Welfare facilities such as first aid, sanitation, and suitable accommodation (if applicable) must be provided to contract labourers.

Penalties for Non-Compliance:

Non-compliance with the provisions of the Contract Labour Act can result in penalties, fines, and legal consequences. Schools found in violation of the act may face closure or cancellation of their registration or license. It is crucial for schools to maintain proper records, adhere to statutory obligations, and implement necessary measures to ensure compliance.

Conclusion:

The Contract Labour Act 1970 serves as a protective measure for contract labourers engaged by schools in India. It emphasises the need to provide fair treatment, welfare facilities, and a safe working environment. Schools must understand the provisions of the Act, obtain the necessary licenses, and diligently adhere to the obligations to ensure the well-being and rights of contract labourers. By upholding the principles of this act, schools can contribute to a fair and just employment ecosystem within the education sector.

Thank you!

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