Can someone shed light on Section 10 of the CLRA Act 1970? When can an organization apply for the prohibition of the employment of contract labor in cases where there is no perennial work being carried out? If contract laborers have been working in a factory for years and the factory is going to be relocated, what is the liability of the principal employer? Can contract laborers claim absorption by the principal employer?
From India, Mumbai
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From India, Mumbai
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Dear Amit,
I am unable to ascertain whether you have raised these questions on behalf of the Principal Employer or the contract labor.
However, if you go through the entire provisions of Section 10 of the CLRAA, 1970, which deals with the prohibition of the employment of contract labor in any process, operation, or other work in any establishment, you will understand that:
(a) It is an act of the appropriate Government by means of notification after consultation with the Central or State Advisory Board as the case may be, and
(b) after considering the conditions of work and benefits provided for the contract labor in the establishment and other relevant factors such as the nature of work, whether incidental or necessary in relation to the main activity of the establishment, its perenniality, the possibility of the activity to be carried out by the regular workmen, and the sufficiency of employing whole-time workmen in the process.
Therefore, it is not necessary for the organization to invoke the provisions of prohibition under Section 10 when the contract work is not of a perennial nature. In this perspective, your question seems to be fruitless. Even if the work is of a perennial nature, it is sufficient for the establishment to start engaging the workmen on a whole-time basis as regular employees.
In the case of the factory being shifted elsewhere due to genuine reasons, the Principal employer can simply terminate the contract with the contractor as per the terms of the contract. In such a situation, the Principal Employer will have to pay the contractor the amounts of statutory gratuity and other terminal benefits due to eligible contract labor and ensure their actual disbursement.
The successful claim of the Contract Labor for absorption depends on their ability to prove the contract as a sham by means of raising an industrial dispute.
From India, Salem
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6185I am unable to ascertain whether you have raised these questions on behalf of the Principal Employer or the contract labor.
However, if you go through the entire provisions of Section 10 of the CLRAA, 1970, which deals with the prohibition of the employment of contract labor in any process, operation, or other work in any establishment, you will understand that:
(a) It is an act of the appropriate Government by means of notification after consultation with the Central or State Advisory Board as the case may be, and
(b) after considering the conditions of work and benefits provided for the contract labor in the establishment and other relevant factors such as the nature of work, whether incidental or necessary in relation to the main activity of the establishment, its perenniality, the possibility of the activity to be carried out by the regular workmen, and the sufficiency of employing whole-time workmen in the process.
Therefore, it is not necessary for the organization to invoke the provisions of prohibition under Section 10 when the contract work is not of a perennial nature. In this perspective, your question seems to be fruitless. Even if the work is of a perennial nature, it is sufficient for the establishment to start engaging the workmen on a whole-time basis as regular employees.
In the case of the factory being shifted elsewhere due to genuine reasons, the Principal employer can simply terminate the contract with the contractor as per the terms of the contract. In such a situation, the Principal Employer will have to pay the contractor the amounts of statutory gratuity and other terminal benefits due to eligible contract labor and ensure their actual disbursement.
The successful claim of the Contract Labor for absorption depends on their ability to prove the contract as a sham by means of raising an industrial dispute.
From India, Salem
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Enforcement of negative covenants in employment terms.pdf