The Government of India has been deeply concerned about the exploitation of workers under the contract labour system. With a view to removing the difficulties of contract labour and bearing in mind the recommendations of various commissions and committees and the decisions of the Supreme Court, particularly in the case of Standard Vacuum Refining Company in 1960, the Contract Labour (Regulation and Abolition) Act was enacted in 1970. This Act seeks to regulate the employment of contract labour in certain establishments and to provide for its abolition under certain circumstances.
Contract Labour, by and large, is neither borne on pay roll or muster roll nor is paid wages directly. The establishments, which farm out work to contractors, do not own any direct responsibility in regard to their labourers. Generally, the wage rates to be paid and observance of working conditions are stipulated in agreements but in practice they are not strictly adhered to.
The main features of the Act can be summarized thus:-
- The Act applies to every establishment in which 20 or more workmen are employed or were employed on any day on the preceding 12 months as contract labour and to every contractor who employs or who employed on any day of the preceding 12 months 20 or more workmen. It does not apply to establishments where the work performed is of intermittent or casual nature. The Act also applies to establishments of the Government and local authorities as well.
- The Central Government and the State Governments are required to set up Central Advisory Board and State Advisory Boards, which are authorized to constitute Committees as deemed proper. The functions of the Boards are advisory, on matters arising out of the administration of the Act as are referred to them. The Boards carry out the functions assigned to them under the Act.
- The establishments covered under the Act are required to be registered as the Principal Employer. Likewise, every contractor to whom the Act applies is required to obtain a licence and not to undertake or execute any work through contract labour except under and in accordance with the licence issued.
- The Act has provided for establishment of canteens. For the welfare and health of contract labour, provision is made for restrooms, first aid, wholesome drinking water, latrines and urinals. In case of failure on the part of the contractor to provide such facilities, the Principal Employer is made liable to provide the amenities.
- The contractor is required to pay wages and a duty is cast on him to ensure disbursement of wages in the presence of the authorized representative of the Principal Employer. In case of failure on the part of the contractor to pay wages either in part or in full, the Principal Employer is liable to pay the same. In case the contract labour perform same or similar kind of work as regular workmen, they will be entitled to the same wages and service conditions as regular workmen as per the Contract Labour (Regulation and Abolition) Central Rules, 1971.
- The Act makes provision for the appointment of Inspecting staff, for maintenance of registers and records, for penalties for the contravention of the provisions of the Act and Rules made there under and for making Rules for carrying out the purpose of the Act. In the central sphere, officers of the CIRM have been appointed as Inspectors.
- Apart from the regulatory measures provided under the Act for the benefit of the contract labour, the “appropriate government” under section 10(1) of the Act is authorized, after consultation with the Central Board or State Board, as the case may be, to prohibit, by notification in the official gazette, employment of contract labour in any establishment in any process, operation or other work.
- Sub-section (2) of Section 10 lays down sufficient guidelines for deciding upon the abolition of contract labour in any process, operation or other work in any establishment and the “appropriate government” while taking action under this Section will have to take an overall picture of the industry carrying on similar activities. The guidelines furnished under sub-section (2) oblige the “appropriate government” to consider, as relevant data, the material to which it must have regard. The Central Government on the recommendations of the Board has abolished contract labour system in a number of jobs in different industries.