A BRIEF NOTES ON CONTRACT LABOUR

(R&A) ACT, 1970 & RULES

COMPOSED by
P.B.S. KUMAR

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CONTRACT LABOUR (REGULARATION & ABOLITION) ACT, 1970
CHECKLIST & THE RULES
Applicability Registration of
• Every establishment in which 20 or more Establishment
Object of the Act
workmen are employed or were Principal employer employing
To regulate the
employed on any day of the preceding 20 or more workers through
employment of contract
12 months as contract labour. the contractor or the
labour in certain
• Every contractor who employs or who contractor(s) on deposit of
establishments and to
employed on any day of the preceding required fee in Form 1
provide for its abolition in
twelve months 20 or more workmen. Sec. 7
certain circumstances and
Sec. 1
for matters connected
therewith.

Revocation of Registration Licensing of Contractor

Prohibition of Employment of Contract When obtained by • Engaging 20 or more than
Labour Misrepresentation or 20 workers and on deposit
Only by the appropriate Government suppression of required fee in Form IV.
through issue of notification after Of material facts etc. after • Valid for specified
consultation with the Board (and not Courts) opportunity to the principal period.Sec.12, Rule 21
can order the prohibition of employment of employer
contract labour. Sec. 10 Sec. 9

Revocation or Suspension & Welfare measures to be taken by the Contractor

Amendment of Licences • Contract labour either one hundred or more employed by a contractor
• When obtained by misrepresentation or for one or more canteens shall be provided and maintained.
suppression of material facts. • First Aid facilities.
• Failure of the contractor to comply with • Number of rest-rooms as required under the Act.
the conditions or contravention of Act or • Drinking water, latrines and washing facilities. Sec. 16 & 17
the Rules. Sec. 14

Liability of Principal Employer

Laws, Agreement or standing
• To ensure provision for canteen, restrooms, sufficient supply of drinking
orders inconsistent with the Act-
water, latrines and urinals, washing facilities.
Not Permissible
• Principal employer entitled to recover from the contractor for providing such
Unless the privileges in the contract
amenities or to make deductions from amount payable. Sec. 20
between the parties or more favourable
than the prescribed in the Act, such
contract will be invalid and the workers will Muster Roll, Wages Register, Deduction Register and Overtime Register by
continue to get more favourable benefits. Contractor
Sec. 20 • Every contractor shall
• Maintain Muster Roll and a Register of Wages in Form XVI and Form XVII respectively
when combined.
Registers of Contractors • Register or wage-cum-Muster Roll in Form XVII where the wage period is a fortnight or
• Principal employer less.
• To maintain a register of contractor in • Maintain a Register of Deductions for damage or loss, Register or Fines and Register of
respect of every establishment in Form Avances in Form XX, from XXI and Form XXII respectively.
XII. • Maintain a Register of Overtime in Form XXIII.
• Contractor Rule 74 • To issue wage slips in Form XIX, to the workmen at least a day prior to the disbursement
of wages.
• To maintain register of workers for
• Obtain the signature or thumb impression of the worker concerned against the entries
each registered establishment in Form relating to him on the Register of wages or Muster Roll-Cum-Wages Register.
XIII. • When covered by Payment of Wages Act, register and records to be maintained under
• To issue an employment card to each the rules
worker in Form XIV. • Muster Roll, Register of wages, Register of Deductions, Register of Overtime, Register of
• To issue service certificate to every Fines, Register of Advances, Wage slip. Rule 79
workman on his termination in Form • To display an abstract of the act and Rules in English and Hindi and in the language
XV. Rules 75, 76 and 77 spoken by the Majority of workers in such forms as may be approved by appropriate
authority Rule 80
• To display notices showing rates of wages, hours of work, wage period, dates of
payment, names and addresses of the inspector and to send copy to the inspector and
PENALTIES any change forwithwith Rule 81

Sec. Offence Punishment

Sec. 22 Obstructions For obstructing the inspector or failing to produce registers etc.
- 3 months’ imprisonment or fine upto Rs.500, or both.
Sec.23 Violation For violation of the provisions of Act or the Rules, imprisonment of 3
[email protected] Months or fine upto Rs.1000. On continuing Pagecontravention,
2 of 12 additional fine
upto Rs.100 per day
THE CONTRACT LABOUR (R&A) ACT, 1970

CHECKLIST FOR PRINCIPAL EMPLOYER

1. Registration of the Establishment :

The Principal Employer to apply in Triplicate to the Registering Officer of the area
(Asst. Commissioner of Labour or Labour Officer) by furnishing all the relevant
particulars in the prescribed application FORM – I. The Principal Employer is
required to deposit the prescribed rates of fees for registration as per rules of the
(Central or State Rules ) Contract Labour Act. The Principal Employer to take one
certificate of registration in respect of each establishment and it may not be linked
with to the number of contracts or contractors in an establishment.

2. Regarding rejection of application for registration :

The Principal Employer should submit the application complete in all respects along
with fees for registration. However, in case the Registering Officer requires the
Principal Employer to amend or rectify the defects as pointed out the application the
Principal Employer should do so within the specified date otherwise the application
for registration may be rejected as per rules of the Contract Labour Act (Central or
State rules).

3. Temporary Certificate of registration :

In case of urgency and where the Contract Labour for not more than 15 days is
required to be employed in the establishment the Principal Employer should apply in
triplicate for a certificate of registration in FORM – (PRESCRIBED IN THE ACT.)
to the Registering Officer of local Labour Dept. who will grant a temporary
registration certificate for a period not exceeding 15 days with certain fees.

4. Amendment of Certificate of Registration :

Whenever there is any change in the particulars specified in the certificate of

registration of the establishment the Principal Employer shall apply to the Registering
Officer within 30 days from the date when such change takes place, with the reasons
for such changes along with the appropriate fees as per the Rules if necessary.

5. Effect of non-registration :

The effect of non-registration of the establishment or revocation of the registration

certificate is that the Principal Employer cannot employ contract labour in the
establishment otherwise he is liable for penal action.

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6. Certain circumstances under which the registration of an establishment can be
revoked. :

The Registering Officer, after affording reasonable opportunity to the Principal

Employer, the holder of the Certificate of Registration can revoke the registration of
an establishment with the previous approval of the appropriate State of Central Govt.
in case he is satisfied that :-

The registration has been obtained by mis-representation or suppression of

any material facts or.

The registration has become useless or ineffective for any other reason as
specified in the schedules will be advised by the local labour department.

7. Issue of duplicate copy of registration certificate :

In case a registration certificate is defaced or accidentally destroyed or lost as per

Rules (Central or State) the Principal Employer can obtain a duplicate copy of the
Certificate or Registration on payment of normal fee.

8. Appeals :

The Appeals may be considered by any person aggrieved by an order made under
Section __ (Central / State) (or Registration of certain establishments & Section
__(Central / State) (Regarding revocation of registration in certain cases) – could go
in appeal against the order of the Registering Officer within 30 days of the receipt of
such order as per rules ___ (Central / State). In case there is delay in filing the appeal
within the time limit the Appellate Officer on being satisfied about the sufficient
reasons for the delay could entertain the appeal by condoning delay. The expression
“sufficient cause” & “condonation of delay”.

9. Prohibition of Employment of Contract Labour :

The Principal Employer should not permit a Contractor to employ contract labour in
any prohibited process, operation or other work in the establishment as notified as per
Section ___ (Central / State) by the appropriate Govt. otherwise he is also liable for
penal action.

10. Display of Notices :

The Principal Employer shall display following notices at a conspicuous place which
shall be maintained in a clean an legible condition in English / and local language
understood by the majority of contract labour.
Rate of Wages.
Hours of work.
Wage periods.
Dates of payment of wages.
Names of the Officer and address of the local Govt.of Labour Dept.
Date of payment of unpaid wages.

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11. Maintenance of Registers :

(a) 1. Register of Contractors :

Every Principal Employer to maintain in respect of each registered

establishment, an up to date and complete register of contractors
in the prescribed FORM as per the rules of Central / State of the Act.

(b) Preservation of Register :

The above register maintainable under the Rules shall be preserved

in original for a period of three calendar years from the date of last
entry therein and shall be produced on demand before the local
Govt.of Labour Dept. officials.

12. Submission of Copies of Notices :

Principal Employer to submit copies of notices to the Local Labour Department under
acknowledgment as required to be displayed under Rule ___ (Central / State),
whenever, any change occur, the same should be communicated to the local Labour
Department immediately.

13. Submission of Return of Commencement or Completion of Contract Work. :

(a) Every Principal Employer shall within 15 days of commencement of each

contract work submit a return to the local Labour Department of the area
intimating the actual date of the commencement of such contract work, in the
prescribed FORM (Central/State) under acknowledgement.

(b) Every Principal Employer shall within 15 days of completion of each contract
Work submit a return to the local Labour Dept. of the area intimating the actual
date of the completion of such contract work in the prescribed FORM
(Central/State) under acknowledgement.

14. Annual Returns :

Every Principal Employer shall send Annual Return with correct, complete and upto
date information in the prescribed FORM (Central/State) so as to teach the
Registering Officer concerned by 15th February, following the end of the year to
which it relates, under acknowledgement.

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15. Liability of the Principal Employer for provision of Welfare amenities to the
Contract Labour :

In case the contractor fails to provide the following amenities for the welfare and
health of contract labour employed in an establishment within the stipulated time
limit then the principal employer is under a legal obligation under Section ___
(Central/State) of the Act, to provide such amenity for the benefit of the Contract
Labour. Under Section ____(Central/State) also empowers the Principal Employer to
recover all expenses incurred by him from the contractor for providing welfare
amenities of the prescribed standards from the amount payable to the contractor or as
a debt payable by the contractor.

16. Responsibility of the Principal Employer regarding payment of Wages to the

Contract Labour :

Principal Employer shall nominate his authorized representative to ensure his

presence at the time and place of disbursement of wages directly in full, without any
un authorized deductions (a part from PF & ESI as applicable), such as messing
charges, advances given to the contract workers at their native place by the Thekedar
/ Sub-Contractor, or by the Contractor to his workmen etc.,

The authorized representative of the Principal Employer re required to record the

following prescribed certificate at the end of the entries of each relevant wage period
in the Register of Wages or Register of Wages-cum-Muster Roll as the case may be
certifying that the wage amounts have been paid directly and in full without any un-
authorised deductions to the contract labour “Certified that the amount shown in
column No------- has been paid to the workmen concerned in my presence on------“.

There is a joint inter-linked responsibility and liability on the contractor as well as on

the principal employer for payment of wages to the Contract Labour. Therefore, in
case the contractor fails to make payment of wages within the due date the Principal
Employer is legally liable to make payment of wages in full. Thereafter, the Principal
Employer is entitled to recover the amount from the contracts bills.

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CHECKLIST FOR CONTRACTORS

1. Licence :

The contractor to obtain licence for the contract work from the Licensing Officer of
the local Govt.of Labour Department by applying in triplicate in the prescribed
FORM __ (Central/State) enclosing there with FORM – V of the Principal Employer
by depositing prescribed rate of refundable security amount and licence fee etc.

A license issued for one contractor work cannot be used for another work with
entirely different nature of contract work, even though there is no change in the
establishment.

2. Temporary Licence :

In case of urgency of commencement of contract work and where the employment of

contract labour is not likely to last for more than 15 days, a contractor may apply to
the Licencing Officer, in triplicate in FORM___(Central/State) along with the
Licence fee and the Security amount.

3. Effect of not taking a Licence :

A Contractor not to undertake or execute any work through contract labour without
obtaining a valid licence otherwise he is liable for penal action. Moreover, such
breach is a continuous offence punishable until he obtains a Licence.

As per the definition of a Contractor under the Act it includes a Sub-Contractor.

Therefore, the Contractor will be liable for breaches of the provisions of the Act and
Rules, if any committed by a Sub-Contractor. However, a Sub-Contractor, subject to
fulfillment of certain conditions, could apply for a licence which has already been
prescribed in the Act.

4. Amendment to Licence :

Contractor to get his Licence amendment in respect of changes (such as increase in

number of contract labour) as occurring subsequent to obtaining of Licence from the
Licensing Officer by submitting an application stating therein the nature of the
amendment and the reasons thereof, and if necessary, along with the prescribed
licence fee, and on refusal, Licensing Officer to pass an order.

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5. Renewal of Licence :

After expiry of the validity of _____ months period of a licence (from the date the
licence is granted or renewed as the case may be); in case the Contractor desires to
renew the licence he should apply, in triplicate, in the prescribed
FORM___(Central/State), not less than 30 days before the expiry of the licence to
local Labour Department.

6. Revocation / Suspension or amendment or amendment of the Licence :

The Licensing Officer after giving reasonable opportunity to the Licencee can revoke
or suspend licence or amend the Licence or forfeit the security deposit as the case
may be in case he is satisfied that:

(a) The licence has been obtained by misrepresentation or suppression of any

material fact or,
(b) That the holder of the licence has failed to comply with the terms and conditions
of licence.
(c) Or that the holder of the licence has contravened any of the provisions of the Act
or Rules made there under.

7. Terms & Conditions of a Licence :

The Contractor should observe the terms and conditions specified in the Licence
otherwise as per Section 14 (1) (b) the licence is liable to be
revoked/suspended/amended as the case may be.

8. Issue of Duplicate Licence :

In case a licence is defaced or accidentally destroyed or lost, a duplicate copy of the

licence can be obtained by the Contractor on payment of fee from the local Labour
Office.

9. Appeals :

Any person aggrieved by an order made under Section____(Central/State) could go in

appeal against the order of the Licensing Officer within 30 days of the date of the
communication of the order to him as per rules of the Act. In case the Appellate
Officer, is satisfied about the delay in filing the appeal within the time limit he could
entertain the appeal by condoning delay. The appeal will lie to the person as
nominated in this behalf by the appropriate Govt. The Appellate Officer should give
reasonable opportunity of personal hearing to the Contractor/Principal Employer
while disposing of the appeal after following the principles of natural justice.

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10. Security Deposit :

The Contractor is required to deposit a refundable amount of security deposit with the
local Labour Department while obtaining the licence.

11. Adjustment of Security Deposit :

On expiry of licence in respect of an old contract work, the contractor is eligible for
the refund of the Security amount paid in respect of licence of old contract work. The
contractor can request the licensing officer by submitting an application in the
prescribed FORM ___(Central/State) for adjustment of the Security amount to be
refunded towards the security required to be deposited in respect of the new licence
and in such case, the contractor could deposit only the balance amount of security, if
any, after making adjustment.

12. Refund of Security Deposit :

On expiry of the period of Licence, the Contractor could apply to the local Labour
Department for the refund of the Security amount. The Licensing Officer on being
satisfied that there is not breach of terms and conditions of licence and that the
Contractor has fully complied with provisions of the Act & Rules.

13. Prohibition of Employment of Contract Labour :

As per notifications issued from time to time unser Section. 10(1) by the Central /
Sate Governments as the case may be, a Contractor not to employ contract labour in
the prohibited process.

14. Maintenance of Registers & Records (as per Central/State rules):

Register of persons employed

Muster Roll
Register of Wages
Register of Wages-cum-Muster Roll
Wage Slips
Register of Deductions for damage or loss
Overtime Register
Register of Advances

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15. Display of Notices :

The Contractor to display conspicuously at the worksite the following notices in

English/Locanl language spoken in by the contract labour.

Rate of Wages
Hours of Work
Wage period
Dates of payment wages
Name of the Officer and address of the local Govt.of Labour Dept
Date of payment of unpaid wages.

16. Other Liked Acts:

A part from the Contract Labour Act, the contractor has to observe the Provident
Fund Act, Employees State Insurance Corporation Act. Migrant workmen Act., etc

17. Submission of Returns :

Half-Yearly Return ; The Contractor to send a Half-yearly Return in the prescribed

FORM___(Central/State) in duplicate to the Local Labour Department within 30 days
of close of Half-Year ending 31st December and 30th June of each year.

18. Employment Card:

The Contractor to issue Employment Card in the prescribed FORM

___(Central/State) to each worker within 3 days of his employment. The card shall be
maintained upto date and any change in the particulars shall be entered therein.

19. Service Certificate :

On termination of Service of a Contract Labour the Contractor to issue a Service

Certificate in the prescribed FORM____(Central/State) to the Contract Labour.

20. Payment of Wages to Contract Labour :

The Contractor to ensure disbursement of wages to contract labour in the presence of

the authorized representative of the Principal Employer.

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21. Rates of Wages :

The Contractor to pay the rates of wages to contract labour at the rates prescribed
under the Minimum Wages Act, 1948 for such employment where applicable and
where rates have been fixed by agreement, settlement or award to pay not less than
the rates so fixed by agreement, settlement or award to pay not less than the rates so
fixed whichever is higher. Any agreement made with concerned employees reducing
their minimum rate of wages will be null & void. The rates of Minimum Wages are
fixed by the concern Sates Authorities as per their Rules and Central Rules will be
fixed by the Authorities from time to time which will be published in the official
gazette notification.

22. Welfare amenities for Contract Labour :

i) Supply of Drinking Water, ii) Washing facilities, iii) Canteen, iv) Rest Rooms,
v) Latrines and Urinals, vi) First Aid Facilities, vii) Creche etc.

STATUTORY RECORDS AND FORMS AS PER CENTRAL RULES:

SL.NO. REGISTER / FORM NO. DESCRIPTION

01 Form – I (See Rule 17 (1) Registration form
02 From – II (See Rule 18(1) Certificate of Registration
03 Form – III (See Rule 18 (3) Register of Establishment
04 Form – IV (See Rule 21 (1) Application for licnece
05 Form – V (See Rule 21 (2) Form of Certificate by Principal Employer
06 Form – VA (See Rule 24(1-A) Adjustment of Security Deposit
07 Form – VI (See Rule 25 (1) Licence
08 Form – VIA (See Rule 25 (2) Notice of Commencement/Completion of work
09 Form – VIB (See Rule 81 (3) Notice of Commencement/Completion of work
10 Form – VII (See Rule 29 (2) Application for Renewal of Licence
11 Form – VIII (See Rule 32(2) Application for Temporary Registration
12 Form- IX (See Rule 32(3) Temporary Certificate of Registration
13 Form – X (See Rule 32 (2) Application for Temporary Licence
14 Form – XI (See Rule 74) Register of Contractors
15 Form- XIII (See Rule 75) Register of workmen employed by contractor
16 Form – XIV (See Rule 76) Employment Card
17 Form – XV (See Rule 77) Service Certificate
18 Form – XVI (See Rule 78(1) Muster Roll
19 Form – XVII (See Rule 78 (1) Register of Wages

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SL.NO. REGISTER / FORM NO. DESCRIPTION
20 Form – XVIII (See Rule 78 (1) Register of Wages cum Muster Roll
21 Form – XIX (See Rule 78 (1.b) Wage slip
22 Form- XX (See Rule 78 1a ii ) Register of deductions for damages or loss
23 Form – XXI (See Rule781 a ii) Register of Fines
24 Form – XXII (See Rule 78 aii) Register of Advances
25 Form – XXIII (See Rule 78 a iii) Register of Over Time
26 Form – XXIV (See Rule 82 (1) Half – Yearly Return by contractor
27 Form – XXV (See Rule 82 (2) Annual Return by Principal Employer

STATUTORY RECORDS AND FORMS AS PER STATE RULES:

“As prescribe by the respective State Governments Rules”

NOTE: The Central / State Governments may issue notifications / amendments etc from
time to time on the Contract Labour Act, accordingly in the official Gazettes.

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