The Contract Labour (Regulation and Abolition) Act, 1970
The Contract Labour (Regulation and Abolition) Act, 1970
This Act was enacted to regulate the employment of contract labor in certain establishments and to abolish contract labor in specific circumstances to protect the rights of workers.
Why was the Act needed?
Contract labour became widely used, often leading to exploitation, poor working conditions, and lack of job security.
Many contract workers lacked basic benefits, fair wages, and legal protections.
The Act aims to balance the interests of employers and workers by regulating the system and abolishing contract labour where possible.
Key Definitions
Contract Labour: Work performed by a worker supplied by a contractor to an establishment.
Principal Employer: The person who owns or controls the establishment where contract labour is employed.
Contractor: The person or firm supplying contract labour.
Key Provisions of the Act
1. Applicability (Section 1)
Applies to establishments where 20 or more contract workers are employed.
2. Registration and Licensing (Sections 7-11)
Contractors must obtain a license to supply contract labour.
Principal employers must register their establishments where contract labour is used.
3. Welfare and Working Conditions (Sections 16-26)
The Act mandates provision of basic amenities to contract workers: drinking water, restrooms, canteens, first aid, etc.
Contractors must ensure fair wages and proper working hours.
4. Abolition of Contract Labour (Section 10)
The government can issue notifications to abolish contract labour in certain processes if deemed necessary to protect workers.
After abolition, principal employers must directly employ workers.
5. Penalties (Section 20)
Violations, such as employing contract labour without license or poor conditions, are punishable by fines and imprisonment.
Important Case Law
1. Bharat Earth Movers Ltd. v. Their Workmen (1964)
Even though before the Act, this case set a precedent about when contract labour can be abolished — especially if it causes exploitation.
Held that the government can intervene and abolish contract labour to protect workers’ interests.
2. Workmen of Associated Cement Companies Ltd. v. Their Workmen (1961)
Discussed the principle employer’s liability regarding contract workers.
Held that principal employers can be held responsible for the welfare of contract labour.
3. Maharashtra State Road Transport Corporation v. Its Workmen (1973)
The Supreme Court clarified the scope of abolition of contract labour and said abolition must be in accordance with the Act’s provisions.
The government’s notification abolishing contract labour in certain cases must be “just and reasonable.”
Summary Table
| Feature | Details |
|---|---|
| Purpose | Regulate and abolish contract labour to protect workers |
| Applicability | Establishments with 20+ contract workers |
| Licensing | Contractor license and employer registration required |
| Worker Welfare | Basic amenities, fair wages, working conditions |
| Abolition Power | Govt. can abolish contract labour in certain processes |
| Penalties | Fines and imprisonment for violations |
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