Applicability of the Contract Labour Act

The Contract Labour Act applies to the following entities:

 

Establishments : It applies to any establishment employing twenty or more contract labourers on any day of the accounting year.

 

Contractors : It pertains to any contractor who employs or has employed twenty or more workers on any day of the accounting year.

 

Exemptions : The Contract Labour Act does not apply to establishments with intermittent work, those where work is not performed for more than 120 days in a year, those located in Special Economic Zones (SEZ), and establishments with seasonal work lasting over sixty days a year.

Definition of Contractor under the Contract Labour Act

Under Section 2 of the Contract Labour Act, a contractor is defined as a person who undertakes to produce a given result for an establishment through contract labour, excluding the supply of goods or services. This definition also includes subcontractors.

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Advisory Boards for the Contract Labour Act
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The central government is required to set up the Central Advisory Contract Labour Board to oversee the administration of the Contract Labour Act. This board will include:

 

A Chairman appointed by the Central Government.

 

The Chief Labour Commissioner (Central).

 

Members representing various sectors, including government, railways, coal, mining, contractors, and workers.

Registration of Establishments Employing Contract Labour

Every establishment intending to employ contract workers must obtain a certificate of registration from the appropriate government authority. The registration process under the Contract Labour Actincludes:

 

Submitting an application in Form No I along with the prescribed fee receipt.

 

Upon approval, the registering officer issues a registered certificate in Form-II, containing essential details such as the establishment’s name, address, maximum number of contract workers, and business type.

Required Documents for Registration under the Contract Labour Act

To register, contractors must provide the following documents to the employer:

 

Legal status report of the firm.

 

PF Code Number allotment document.

 

Receipt or insurance policy.

 

Security deposit remittance challans.

 

Labour license fee receipt.

Note : Contractors must submit a monthly application for engaging contract labour.

Licensing of Contractors under the Contract Labour Act

Contractors employing twenty or more workers must obtain a license from the licensing authority, which includes:

 

Requesting the license in Form No-IV.

 

Depositing a security amount of ₹20 at the time of application.

 

Providing a certificate from the principal employer confirming their engagement.

Renewal of License under the Contract Labour Act

To renew the license, contractors should approach the licensing authority at least 30 days before the expiry date, submitting an application in Form VII along with the required fee. Failure to submit on time results in a 25% penalty on the standard fee.