Legal opinion is required-Contract Labour (R&A) Act, 1970

Hi Friends,

SOME ONE CAN PLEASE HELP

We are having four different units in SEEPZ –SEZ, Andheri, Mumbai in different buildings and are registered every establishment under DISH having four different Factory licenses.

Presently all four units, numbers of employee on contract are below 20 hence we are not inform the authorities Contract Labour (R&A) Act, 1970 neither applied.

Now we want to go increase the limit of employee from 20 to 50.

Legal opinion on following is required.

If my company want to employs contract labours through three contractors, suppose each contractor employ 19 labours,
1) As a principle employer should we register under Contract Labour ( Regulation and Abolition) act ?
2) Do the contractors need to get licence ?

Siddesh,

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Dear Friend

Some one can please help…on Industrial Disputes Act of 1947

On completion of 240 Days of continuous employment under temporary employment, a person can claim for permanent employment.

In the case of any contract can a person claim any right of permanent employment

1. If the contractual period is 240 days or more?

2. If yes, what is alternative?

3. If no, what should the clause of the contract refraining the claim as said above?

Is it safe to have a 11 months contract with employees ? Or suggestion is required for alternative procedure. (Contract between employer and employee)

If no, what days of work (tenure) should be maintained?

Is there any compulsion to have percentage/no of employees on regular employment in an org.? Or all can be on contract ?

Waiting Of Your Fruitful Reply.

Siddhesh

Hi,

You need to obtain CLRA Registration bcoz your total strength of CL are more than 20.

B/Regards
Sandip

Dear Sandipl,

Thank you very much for the valuable judgment

Regards

Siddhesh

Dear

Pls see the defenition of retrenchment in the ID Act which is like this :

oo) "retrenchment" means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include - (a) voluntary retirement of the workman; or
(b) retirement of the workman on reaching the age of superannuating if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or
(bb) termination of the service of the workman as a result of the non-removal of the contract of employment between the employer and the workman concerned on its expiry or of such contract being terminated under a stipulation in that behalf contained therein; or
(c) termination of the service of a workman on the ground of continued ill-health;

On reading this carefully your question will be answered.

With Regards
VS Rajan Associates,
Advocates & Notaries,
No.27, Ist Floor, Singapore Plaza,
No.164, Linghi Chetty Street,
Chennai - 600 001.
E-mail :
Off : 044-42620864, 044-65874684,
Mobile : 98401 42164.

Dear Sidhesh,
Since your contract employees exceed 20 you have to obtain registration under the Contract Labour (Regulation & Abolition) Act. For your (principal employer) coverage only the number of contract employees is looked in to and it is immaterial whether they are from one agency or different agencies. As such even if you employ 20 contract employees through 20 agencies, you have to comply with the provisions of the Act. But if any agency has engaged less than 20 employees, then that agency will be exempted from the operation of the Act.

The second part of your question pertains to ID Act. First of all let me clarify that there is no temporary employee for a permanent job. If your job is perennial in nature any employee engaged thereon is also a permanent employee. In a factory or establishment if an electrician is called for repairing some fans or luminaries or a plumber is called to change a water tap or a worker is called for white washing or painting that is a temporary work. The word temporary should not be used to deny the workers any statutory protection offered by Labour enactments.

An employee who has worked for 240 days in the preceding year shall be entitled for all benefits such as leave with pay (@ 1 day for every 20 days worked), lay off compensation, notice for retrenchment etc at par with any other employee who has been regularised in service by order of the management in writing. Therefore, even without any letter or order confirming service, an employee becomes eligible for benefits of continuous service with a work of 240 days.

For a employee who has been engaged through a contractor, the above is not applicable. Such an employee has an employee employer relationship between him and his contractor and no such relationship will exist between him and the principal employer for whom he works. Therefore, he cannot claim employment with the principal employer for reason that he has been working with the principal employer for the last 240 days. The employment will be terminated when the contract with the contractor is terminated. Therefore, no special mention about days of work is required in this case. However, to be of safer side you can include the following in your contract with the contractor (The contract is with the contractor and there is no contract with the concerned employee)
" The contract will cease to exist on (date) or (completion of work) and thereafter the employees engaged by the second party (contractor) will not have any lien or right of employment in the company of (principal employer) "

Regards,

Madhu.T.K

Mr. Madhu.T.K and VS Rajan Associates,


Thank you very much for the valuable judgment


Regards

Siddhesh

Friends!!

"Retrenchment" does not specifically use for "Termination of Employment" in fact, its means to curtail/reduce the expenses. If an organization does not curtail its expenses (e.g. electricity, purchases, entertainment, public relations etc) but simply terminates its employees, thus, this act of the organization leads to violation of natural justice and one can (an employee) reserves right to knock at the door of law to challenge his unjustified termination.

So, it simply mean to clear the definition of "Retrenchment" so that people could learn that it does not even limited to "termination of employment" but "curtailing expenses in each & every heads of account including retrenchment of employees".

People have disagreement with my clarification may contact me at or


Regards,

Abdul Rauf
Cell: +92 323 6309863

Dear Siddesh,

Even if you are employing contract workers below 20, you need to apply for the registration certificate from the Factory Inspectorate. If your contractor has employed more than 20 employees in your premises, he has to get a contract labour licence from the inspectorate with respect to your premises and this has to be renewed every year.

Hope the above clears your doubt on registration and licence as per the Act.

Regards,