CHECK LIST UNDER CONTRACT LABOUR (REGULATION & ABOLITION) ACT, 1970
In view of the judgment of Hon’ble Supreme Court in a case of Haryana State Electric Board, while engaging contract labour through contractor following suggestions are given:
· The establishment in the first instance, must ensure that they have got a registration certificate from the competent authority as provided under Section 7 of the Contract Labour (Regulation & Abolition) Act, 1970 before proceedings to engage the contract labour;
· The establishment must ensure that they issue certificate in Form-V to the contractor for obtaining license as provided must Section 12 of the Act ibid:
· It must be ensured that the contractor who is employing more than 20 persons has a valid license issued in his name by the competent authority as provided under the Act;
· The payment of wages to the employees employed by the contractor is disbursed to his employees by the contractor himself or his nominee and principal employer has to depute his representative to be resent and sign the payment register in token of having disbursed the salary in his presence by the contractor;
· There should not be any supervision and control by the principal employer in respect of employees employed by the contractor to fulfill the obligation of the contract;
· The work for which contract labour is engaged is not of perennial nature;
· Discipline of the employees of the contractor in the discharge of duties must be regulated by the contractor and not by the principal employer;
· Contract should not specify the number of persons required but must quantify the work itself;
· Leave to the employees of contractor must be sanctioned by the contractor and not by the principal employer;
· No advance should be paid by the principal employer to the contractor’s employees directly. Only contractor must regulate the same;
· Maintenance of all type of record in respect of the employees employed by the contractor should be his own responsibility and principal employer should not intervene in such matter;
· Dictum of Supreme Court judgment in Hussainbhai’s case (supra) must be adhered to in drafting the agreement for the contract.
· If the establishment is covered by the employees’ Provident Funds & Miscellaneous Provisions Act and the Employees’ State Insurance Act, 1948 then the reference should be given to those contractors who have their own code numbers under these Acts.
· To ensure compliance of the obligation pertaining to the various provisions regarding, amenities and benefits as prescribed under the Act.
· To ensure to submit annual return to the prescribed authority the prescribed from under the Act.
AN AGREEMENT BETWEEN THE CONTRACTOR AND THE PRINCIPAL EMPLOYER IS SAID TO BE A SHAM CONTRACT UNDER THE FOLLOWING CIRCUMSTANCES.
· When the agreement does not disclosed the name and address of the contractor.
· When the agreement does not disclosed the exact nature of job to be assigned.
· When the agreement narrates the nature of job other than actually to be performed.
· When the agreement is against he norms of judicial pronouncement/ statutory provisions.
· When the agreement is a tool or device to deprive the right of livelihood or as a tool for victimization or unfair labour practice.
· When the agreement does not ensure and disclose the obligations to pay the minimum wages or agreed wages.
THE PRINCIPAL EMPLOYER SHOULD ENSURE:-
· That the contractor should submit the printed bills and sign under the Rubber Stamp.
· That the contractor should maintain records through his staff and not by the staff of principal employer.
· That the contractor’s labour should do only the specific work agreed by the contractor.
· That the contractor should issue the photo identity card to his workers under his name, trading style and signature.
· That the contract should not be a cloak for suppressing the facts and contractor should not be treated as commission agent.
ESSENTIAL INGREDIENTS OF AN AGREEMENT BETWEEN PRINCIPAL EMPLOYER AND THE CONTRACTOR.
· That the agreement should be drafted and executed on non-judicial stamp paper.
· That the agreement must disclose the names, addresses of the contractor and the principal employer.
· That the agreement should contain the rights and obligations of both the parties.
· That the agreement must disclose the place of work, time of working, rate of compensation (towards consideration) and consequences arising out of breach contract and procedure of termination by either of the parties to the agreement.
· That the agreement carry out the objectives of statutory provisions and judicial pronouncements.
· That the agreement must disclose the scope of work, deployment of manpower in number, period of validity, compensation, security deposit and terms of payment of bills.
· That the agreement should be between the contractor and the principal employer and should be witnesses by two witnesses.
From India, New Delhi
22In view of the judgment of Hon’ble Supreme Court in a case of Haryana State Electric Board, while engaging contract labour through contractor following suggestions are given:
· The establishment in the first instance, must ensure that they have got a registration certificate from the competent authority as provided under Section 7 of the Contract Labour (Regulation & Abolition) Act, 1970 before proceedings to engage the contract labour;
· The establishment must ensure that they issue certificate in Form-V to the contractor for obtaining license as provided must Section 12 of the Act ibid:
· It must be ensured that the contractor who is employing more than 20 persons has a valid license issued in his name by the competent authority as provided under the Act;
· The payment of wages to the employees employed by the contractor is disbursed to his employees by the contractor himself or his nominee and principal employer has to depute his representative to be resent and sign the payment register in token of having disbursed the salary in his presence by the contractor;
· There should not be any supervision and control by the principal employer in respect of employees employed by the contractor to fulfill the obligation of the contract;
· The work for which contract labour is engaged is not of perennial nature;
· Discipline of the employees of the contractor in the discharge of duties must be regulated by the contractor and not by the principal employer;
· Contract should not specify the number of persons required but must quantify the work itself;
· Leave to the employees of contractor must be sanctioned by the contractor and not by the principal employer;
· No advance should be paid by the principal employer to the contractor’s employees directly. Only contractor must regulate the same;
· Maintenance of all type of record in respect of the employees employed by the contractor should be his own responsibility and principal employer should not intervene in such matter;
· Dictum of Supreme Court judgment in Hussainbhai’s case (supra) must be adhered to in drafting the agreement for the contract.
· If the establishment is covered by the employees’ Provident Funds & Miscellaneous Provisions Act and the Employees’ State Insurance Act, 1948 then the reference should be given to those contractors who have their own code numbers under these Acts.
· To ensure compliance of the obligation pertaining to the various provisions regarding, amenities and benefits as prescribed under the Act.
· To ensure to submit annual return to the prescribed authority the prescribed from under the Act.
AN AGREEMENT BETWEEN THE CONTRACTOR AND THE PRINCIPAL EMPLOYER IS SAID TO BE A SHAM CONTRACT UNDER THE FOLLOWING CIRCUMSTANCES.
· When the agreement does not disclosed the name and address of the contractor.
· When the agreement does not disclosed the exact nature of job to be assigned.
· When the agreement narrates the nature of job other than actually to be performed.
· When the agreement is against he norms of judicial pronouncement/ statutory provisions.
· When the agreement is a tool or device to deprive the right of livelihood or as a tool for victimization or unfair labour practice.
· When the agreement does not ensure and disclose the obligations to pay the minimum wages or agreed wages.
THE PRINCIPAL EMPLOYER SHOULD ENSURE:-
· That the contractor should submit the printed bills and sign under the Rubber Stamp.
· That the contractor should maintain records through his staff and not by the staff of principal employer.
· That the contractor’s labour should do only the specific work agreed by the contractor.
· That the contractor should issue the photo identity card to his workers under his name, trading style and signature.
· That the contract should not be a cloak for suppressing the facts and contractor should not be treated as commission agent.
ESSENTIAL INGREDIENTS OF AN AGREEMENT BETWEEN PRINCIPAL EMPLOYER AND THE CONTRACTOR.
· That the agreement should be drafted and executed on non-judicial stamp paper.
· That the agreement must disclose the names, addresses of the contractor and the principal employer.
· That the agreement should contain the rights and obligations of both the parties.
· That the agreement must disclose the place of work, time of working, rate of compensation (towards consideration) and consequences arising out of breach contract and procedure of termination by either of the parties to the agreement.
· That the agreement carry out the objectives of statutory provisions and judicial pronouncements.
· That the agreement must disclose the scope of work, deployment of manpower in number, period of validity, compensation, security deposit and terms of payment of bills.
· That the agreement should be between the contractor and the principal employer and should be witnesses by two witnesses.
From India, New Delhi
Dear Sir
Very nice infm, I have a doubt, kindly clarify
What should be the value of stamp paper , it should be Rs 20 or 50 or 100
if we make any agreement or contract with any landlord or agency, what is the basis of selection of this stamp paper, is there any difference in use of this denominations as per the contract or
this denominations to be used as per the value of the contract we are making with the third party
kindly guide
Regards
R Sudhakar
From India, Madras
Very nice infm, I have a doubt, kindly clarify
What should be the value of stamp paper , it should be Rs 20 or 50 or 100
if we make any agreement or contract with any landlord or agency, what is the basis of selection of this stamp paper, is there any difference in use of this denominations as per the contract or
this denominations to be used as per the value of the contract we are making with the third party
kindly guide
Regards
R Sudhakar
From India, Madras
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
Check-List for Principal employers engagind CONTRACT LABOUR.pdf
HR Check List.doc