Dear All
The question raised is whether contract labour can be employed in direct production processes. I request you to read section 10 of the CLRA Act. This section gives power to the appropriate Government to prohibit the employment of contract labour in any processes or operation or other work in an establishment. Before exercising this power to prohibit contract labour, section 10 of the CLRA Act prescribes the procedure to be followed by the appropriate Government. In other words, through the CLRA Act, Parliament has not abolished contract labour but has given power to the Central and State Governments to abolish contract labour. This implies that unless and until either the Central Government or the State Government abolish the employment of contract labour in any processes or operations, contract labour could be employed in those processes or operations. The Government of Andhra Pradesh through Andhra Pradesh Act 2003 had amended section 10 of the CLRA Act. This amendment prohibits the employment of contract labour in the core activities of any establishment. However this Amendment has force only within the State of Andhra Pradesh and is not applicable in other States. If any member is aware of any such amendments in any other States, they may inform this forum with specific details.
With regards
From India, Madras
169The question raised is whether contract labour can be employed in direct production processes. I request you to read section 10 of the CLRA Act. This section gives power to the appropriate Government to prohibit the employment of contract labour in any processes or operation or other work in an establishment. Before exercising this power to prohibit contract labour, section 10 of the CLRA Act prescribes the procedure to be followed by the appropriate Government. In other words, through the CLRA Act, Parliament has not abolished contract labour but has given power to the Central and State Governments to abolish contract labour. This implies that unless and until either the Central Government or the State Government abolish the employment of contract labour in any processes or operations, contract labour could be employed in those processes or operations. The Government of Andhra Pradesh through Andhra Pradesh Act 2003 had amended section 10 of the CLRA Act. This amendment prohibits the employment of contract labour in the core activities of any establishment. However this Amendment has force only within the State of Andhra Pradesh and is not applicable in other States. If any member is aware of any such amendments in any other States, they may inform this forum with specific details.
With regards
From India, Madras
hi madhu,
the act specifically prohibits contract labour in prodution as it says it can only be used for non-core and non-perinial work. it is not left to the states. we agree there.
however, if u do take up contract labour for core activities, the penalty is not just an order to stop using cotract labour. instead they will be deemed to be permanent labour of the fatory, with all consequences that it entails.
the possibility of such an order depends on local conditions, so its a risk that the unit needs to take a call on
From India, Mumbai
the act specifically prohibits contract labour in prodution as it says it can only be used for non-core and non-perinial work. it is not left to the states. we agree there.
however, if u do take up contract labour for core activities, the penalty is not just an order to stop using cotract labour. instead they will be deemed to be permanent labour of the fatory, with all consequences that it entails.
the possibility of such an order depends on local conditions, so its a risk that the unit needs to take a call on
From India, Mumbai
The question of whether the contract workers engaged in an operation which is later on declared as prohibited should be absorbed as regular workmen by the Principal Employer has been discussed in various cases. In Steel Authority of India Ltd Vs. National Union Waterfront Workers’ (2001 (II) LLJ 1087) it was held that mere abolition of contract labour following section 10(1) of the CLRA Act would not entitle the workmen for automatic absorption.
If any job is found to be perennial in nature and following the finding the Appropriate Authority has prohibited engagement of contract labour in that job or operation, the principal employer can employ regular workmen. In the process he shall give preference to the former contract workmen, if otherwise found suitable. A direction of this kind has been given by the Jharkhand High Court in a recent judgment in Bharat Coking Coal Ltd Vs. Workmen, Bharat Coking Coal Ltd(2010-II-LLJ 131). Therefore, there is no compulsion on the part of Principal employer to employ the erstwhile contract labour. In Gujarat State Electricity Board Vs Hind Mazdoor Sabha (1995 SC –II-LLJ 790) it was held that claim for regularization is maintainable if raised on the ground that the contract was sham and camouflage. The same view was expressed in Municipal Corp. of Greater Mumbai Vs K V Shramik Sangh (2002-II-LLJ 544)
If the contract is sham, the principal employer will be bound to absorb the employees. In the following instances a contract shall become sham contract.
1. When Principal employer signs as party to a wage settlement between the Contractor and his workmen
2. When the Principal Employer has absolute control and supervision over of the work of contract workers
3. When the Principal Employer fixes the service conditions of contract workers and initiates disciplinary action against them as and when required.
4. When the Principal Employer ordinarily pays of salaries and allowances to contract workers otherwise than when the contractor fails to pay it time.
5. When the Principal Employer himself becomes the authority for granting leave to contract workers
Regards,
Madhu.T.K
From India, Kannur
If any job is found to be perennial in nature and following the finding the Appropriate Authority has prohibited engagement of contract labour in that job or operation, the principal employer can employ regular workmen. In the process he shall give preference to the former contract workmen, if otherwise found suitable. A direction of this kind has been given by the Jharkhand High Court in a recent judgment in Bharat Coking Coal Ltd Vs. Workmen, Bharat Coking Coal Ltd(2010-II-LLJ 131). Therefore, there is no compulsion on the part of Principal employer to employ the erstwhile contract labour. In Gujarat State Electricity Board Vs Hind Mazdoor Sabha (1995 SC –II-LLJ 790) it was held that claim for regularization is maintainable if raised on the ground that the contract was sham and camouflage. The same view was expressed in Municipal Corp. of Greater Mumbai Vs K V Shramik Sangh (2002-II-LLJ 544)
If the contract is sham, the principal employer will be bound to absorb the employees. In the following instances a contract shall become sham contract.
1. When Principal employer signs as party to a wage settlement between the Contractor and his workmen
2. When the Principal Employer has absolute control and supervision over of the work of contract workers
3. When the Principal Employer fixes the service conditions of contract workers and initiates disciplinary action against them as and when required.
4. When the Principal Employer ordinarily pays of salaries and allowances to contract workers otherwise than when the contractor fails to pay it time.
5. When the Principal Employer himself becomes the authority for granting leave to contract workers
Regards,
Madhu.T.K
From India, Kannur
Dear All
I fully agree with Mr. Madhu's opinion; and few others who have correctly observed that contract workers can't be engaged in "regular" jobs which are perennial in nature such as production or other such routine/regular/core activity or process.
In fact, the ignorance of such basic and important provision of a very prominent Labour Act is appalling.
The unsavoury fact that many private/small organizations are flouting these rules and provisions with IMPUNITY, does not make a wrong act, right.
As HR professionals we should at least be aware of what is ethical and rightful (if its not possible to get it implemented). Such pathetic issues arise from the lack of proper HR education and a business environment which encourages and thrives on wrongful and illegal acts.
Regards.
From India, Delhi
I fully agree with Mr. Madhu's opinion; and few others who have correctly observed that contract workers can't be engaged in "regular" jobs which are perennial in nature such as production or other such routine/regular/core activity or process.
In fact, the ignorance of such basic and important provision of a very prominent Labour Act is appalling.
The unsavoury fact that many private/small organizations are flouting these rules and provisions with IMPUNITY, does not make a wrong act, right.
As HR professionals we should at least be aware of what is ethical and rightful (if its not possible to get it implemented). Such pathetic issues arise from the lack of proper HR education and a business environment which encourages and thrives on wrongful and illegal acts.
Regards.
From India, Delhi
- I feel some of the members are getting it wrong. Correct me if I am wrong.
- CLRA Act has a provision of prohibiting use of contract labor and this specific prohibition can be used by state or central govt., by following procedure to prohibit use of contract labor.
- As stated by Mr. Harikrishna, unless specifically prohibited by concerned govt. use of contract labor is legal. As he has given specific example of Andhra Pradesh, where govt. has specifically prohibited use of contract labor in core process.
- As per my knowledge, Maharashtra State Govt. has not prohibited use of contract labor in core manufacturing.
- Citehr Members may please share their knowledge with respect to other states.
From India, Pune
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