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Contract Labour (Regulation & Abolition) Act 1970

(Querist) 12 February 2009 This query is : Resolved 
Under Section 1 the establishment will have to have registration if the employer engages 20 or more contract labour in last 12 preceeding months. Similarly if contractor engages 20 or more contract labour in last 12 preceeding months tnen he has to have licence. However, it is not mandatory that all the 20 contract labour are engaged in one single establishment. i.e. He can have 10 labour in "A" establishment, 5 labour in "B" establishment and another 5 labour in "C" establishment. Even in the above sinario he will have to go for licence. Kindly confirm.

Ramesh Mande
ARVIND JAIN (Expert) 12 February 2009
yes pl.
Ramesh (Querist) 13 February 2009
Dear Mr. Arvind Jain,

Thanks for your reply. One of the advocates opined that, only when the contractor engages 20 or more contract labour in an establishment then only licence will have to be obtained.

I would like to have your opinion on this.

Ramesh Mande
Murali Krishna (Expert) 13 February 2009

I am sorry to differ with Arvind Jain. Under the Act,

“establishment” means—
(i) any office or department of the Government or a local authority, or
(ii) any place where any industry, trade, business, manufacture or occupation is carried on;

“contractor”, 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 or 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;

Hence, licence can be obtained only if the contractor engages more than 20 labourers in any establishment. A cumulative figure is not the intention as per the definitions.
Guest (Expert) 14 February 2009
The principal employer, i.e., the establishment is reaquired to take licence if it engages 20 or more contract labour from one individual contractor or from several contractors.

The contractor, if provides 20 or more labour to that particular establishment, then has to take licence. If he is providing only the contract labour less than 20, he does not require licence. If he has more than 20 contract labour but his labour are divided amongst various establishments, in every one of which, he does not deploy 20 or more workers, he does not require it.

The Act is qua establishment not qua contractor.

But if contract labour system is abolished as per Section 10 of the Act, providing even less than 20 contract labourf is illegal.
H. S. Thukral (Expert) 14 February 2009
I agree with Mr. Jain and totally disagree with Mr. Krishna and Mr. Prabhakar. A contractor shall require licensing if he employs more than 20 workers. There is no specific requirement that such workers should be employed in one establishment. I suggest further reading in the case of :-

Contract Laghu Udhog Kamgar Union, Thane
V. G. Mohite and Others

2001 (2) LLJ 1398,

Murali Krishna (Expert) 16 February 2009
Thanks to Harbhajan Singh Thukral for the judgement. I am corrected.
A. A. JOSE (Expert) 20 February 2009
I endorse the above view of Mr.Harbhajan Singh.
Hiralal Das (Expert) 08 April 2009
Thanks all of you the ld. members and the author.
I think your valuable opinions will assist everybody to solve their problem/matter in question properly.

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