If the principal employer has hired (all from third-party contractors) the following strength:
1. No. of manpower (office boys) from third-party contractor = 6
2. No. of Housekeeping staff from third-party contractor = 5
3. Security personnel from DGR empanelled contractor = 4 (including 1 supervisor and 3 security guards without arms)
4. Under Canteen "rate contract," the contractor provided canteen workers (cook, waiter, cleaner) = 5
5. A software company (third party) has provided a computer technician to the principal employer under AMC/FMS services = 2
The total count of the above goes to 22 during the previous year. So, will the principal employer be required to take registration under THE CONTRACT LABOUR (REGULATION AND ABOLITION) ACT, 1970?
Further, in the case as mentioned above, as per the exception to the definition of "workmen" defined in clause (i) which says
-who, being employed in a "SUPERVISORY CAPACITY," draws wages exceeding five hundred rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.
Thus, since we are employing one supervisor in our security personnel, then the number of workmen will be 19 (excluding the supervisor and 2 computer technicians).
Can you please advise whether such an interpretation is correct on my end and thereby making the entity exempt from taking labor license registration?
In relation to the above question,
I would like to get clarification as to whether the staff provided by the contractor under "Rate contract" will be counted while checking the applicability of the Act. Since, the organization has entered into a contract with the third party to provide the canteen services and accordingly, the contractor has provided 5 workers who can manage the canteen services of the organization.
Suppose, in the future, the contractor increases the strength of the staff provided to say 6 or 7, to provide a good level of service to the organization (though the rate will still be fixed as per the rate contract which is generally as per the number of plates consumed), then do such workers provided under the rate contract be counted while checking the limit of 20 workmen employed during the year?
Thanks
From India, New Delhi
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11. No. of manpower (office boys) from third-party contractor = 6
2. No. of Housekeeping staff from third-party contractor = 5
3. Security personnel from DGR empanelled contractor = 4 (including 1 supervisor and 3 security guards without arms)
4. Under Canteen "rate contract," the contractor provided canteen workers (cook, waiter, cleaner) = 5
5. A software company (third party) has provided a computer technician to the principal employer under AMC/FMS services = 2
The total count of the above goes to 22 during the previous year. So, will the principal employer be required to take registration under THE CONTRACT LABOUR (REGULATION AND ABOLITION) ACT, 1970?
Further, in the case as mentioned above, as per the exception to the definition of "workmen" defined in clause (i) which says
-who, being employed in a "SUPERVISORY CAPACITY," draws wages exceeding five hundred rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.
Thus, since we are employing one supervisor in our security personnel, then the number of workmen will be 19 (excluding the supervisor and 2 computer technicians).
Can you please advise whether such an interpretation is correct on my end and thereby making the entity exempt from taking labor license registration?
In relation to the above question,
I would like to get clarification as to whether the staff provided by the contractor under "Rate contract" will be counted while checking the applicability of the Act. Since, the organization has entered into a contract with the third party to provide the canteen services and accordingly, the contractor has provided 5 workers who can manage the canteen services of the organization.
Suppose, in the future, the contractor increases the strength of the staff provided to say 6 or 7, to provide a good level of service to the organization (though the rate will still be fixed as per the rate contract which is generally as per the number of plates consumed), then do such workers provided under the rate contract be counted while checking the limit of 20 workmen employed during the year?
Thanks
From India, New Delhi
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Dear Tushar,
When the total number of workmen employed through different contractors or a single contractor is 20 and above, the principal employer has to register under section 7 of the CLRA Act, 1970. Only those contractors employing 20 or more workmen will have to obtain a license under section 12 of the Act.
Irrespective of the nature of the contract, every contract for service executed through contract labor within the premises of the principal employer would come under the purview of the CLRA Act, 1970. Please carefully read section 1(4) of the Act, which explicitly mentions the threshold of 20 workmen employed as contract labor with reference to any day of the preceding 12 months for the application of the Act. Therefore, the number of plates consumed has no relevance.
From India, Salem
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When the total number of workmen employed through different contractors or a single contractor is 20 and above, the principal employer has to register under section 7 of the CLRA Act, 1970. Only those contractors employing 20 or more workmen will have to obtain a license under section 12 of the Act.
Irrespective of the nature of the contract, every contract for service executed through contract labor within the premises of the principal employer would come under the purview of the CLRA Act, 1970. Please carefully read section 1(4) of the Act, which explicitly mentions the threshold of 20 workmen employed as contract labor with reference to any day of the preceding 12 months for the application of the Act. Therefore, the number of plates consumed has no relevance.
From India, Salem
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Dear Umakanthan Sir,
Season's greetings!
With due respect, I would like to draw your kind attention to the differing threshold limits in some states. In Maharashtra, A.P., Karnataka, Punjab, Gujarat, and Goa, it is 50. However, in Telangana, it is 5.
In Goa, the threshold was 10 some years ago, then increased to 20, and now stands at 50 effective from June 20.
This is the information I am aware of.
Thank you.
From India, Mumbai
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Season's greetings!
With due respect, I would like to draw your kind attention to the differing threshold limits in some states. In Maharashtra, A.P., Karnataka, Punjab, Gujarat, and Goa, it is 50. However, in Telangana, it is 5.
In Goa, the threshold was 10 some years ago, then increased to 20, and now stands at 50 effective from June 20.
This is the information I am aware of.
Thank you.
From India, Mumbai
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It is mandatory for the contractor and principal employer to get registered under the Contract Labour Act when the threshold limit is crossed according to the specified limit of the state.
Akhil sir and Umakantan sir have rightly mentioned.
From India, Vadodara
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Akhil sir and Umakantan sir have rightly mentioned.
From India, Vadodara
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Without going into the merits, I would suggest that the employer must get the registration under the Act 1970. In the future, if any employee of the contractors raises an industrial dispute seeking reinstatement in the establishment of the principal employer, the registration comes to the rescue of the principal employer.
- S. K. Mittal
9319956443
From India, Faridabad
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- S. K. Mittal
9319956443
From India, Faridabad
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I appreciate the detailed clarification provided above.
Further, canteen services are a prohibited activity in some states to my knowledge. Please check.
Further, to avoid future litigation related to employment, it is better to get registered as the Principal Employer.
From India, Hyderabad
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Further, canteen services are a prohibited activity in some states to my knowledge. Please check.
Further, to avoid future litigation related to employment, it is better to get registered as the Principal Employer.
From India, Hyderabad
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Respected All,
I would like to share my inputs:
1. The Contract Labour Act is now merged under the code "Occupational Safety, Health, and Working Conditions Code, 2020."
2. Any contractor in any state employing more than 50 workers should hold a license.
3. Contractors holding various licenses can apply for a common PAN India license.
4. Housekeeping, security, and canteen contractors are not required to take a license as they are not considered core activities.
Thanks
From India
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I would like to share my inputs:
1. The Contract Labour Act is now merged under the code "Occupational Safety, Health, and Working Conditions Code, 2020."
2. Any contractor in any state employing more than 50 workers should hold a license.
3. Contractors holding various licenses can apply for a common PAN India license.
4. Housekeeping, security, and canteen contractors are not required to take a license as they are not considered core activities.
Thanks
From India
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Dear Himanshu Saraiya ji,
It would not be proper to tell a person like you, who is a Head of HR, that the new labor codes will come into force from the date of notification after the rules under it are released. Until that time, the provisions of the existing CLRA would apply.
I would like to ask you from which section of the code you inferred that housekeeping, security, and canteen contractors are not required to obtain a license?
Thank you.
From India, Mumbai
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It would not be proper to tell a person like you, who is a Head of HR, that the new labor codes will come into force from the date of notification after the rules under it are released. Until that time, the provisions of the existing CLRA would apply.
I would like to ask you from which section of the code you inferred that housekeeping, security, and canteen contractors are not required to obtain a license?
Thank you.
From India, Mumbai
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Dear Akhil,
1. I am well aware that I am the HR head, and I always ensure that the information I post is in reference to the law.
2. Secondly, this is an open forum where HR problems are shared and discussed. If you have any doubts about my post, you can guide me with reference to the law.
3. You asked me about the section - Please refer to the "Occupational Safety, Health, and Working Conditions Code, 2020" section 2 (p). If I am wrong, let's discuss it in a gentle manner.
Thanks
From India
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1. I am well aware that I am the HR head, and I always ensure that the information I post is in reference to the law.
2. Secondly, this is an open forum where HR problems are shared and discussed. If you have any doubts about my post, you can guide me with reference to the law.
3. You asked me about the section - Please refer to the "Occupational Safety, Health, and Working Conditions Code, 2020" section 2 (p). If I am wrong, let's discuss it in a gentle manner.
Thanks
From India
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Applicability of Labour laws-Various issues Statement.docx