In 1970, the Contract Labour (Regulation and Abolition) Act emerged in India. Its purpose is simple – to oversee employment, prevent mistreatment, and enhance working conditions for contract labourers.
When individuals are hired through a mediator to work for a business, they become contract labour. The Act defines a workman as a ‘contract labour’ if they are engaged in work through a contractor, with or without the knowledge of the principal employer.
The relationship between contract labour and direct labour differs. The principal employer pays the contractor, who, in turn, distributes wages among the labourers.
The Building and other Construction Workers Act of 1996 highlights that a ‘building worker’ can be hired through a contractor for various tasks. These workers possess diverse skills and engage in activities
requiring manual labour in real estate and infrastructure.
The Contract Labour Act is relevant to:
Both the principal employer and contractor must register the establishment and apply for a license. Any changes must be reported to officials within 30 days.
The Contract Labour Act doesn’t apply when:
The Act outlines joint and individual responsibilities for both parties:
Section-9 of the Contract Labour Act imposes penalties for non-compliance:
Understanding and adhering to the Contract Labour Act is essential for both employers and contractors to ensure fair and lawful employment practices.