Contract Labour Act(2)

By: Minakshi 6396

We have with us complete knowledge and understanding in offering labor law services under The Contract Labor (Regulation & Abolition) Act, 1970. The Parliament, therefore, passed Contract Labor (Regulation and Abolition) Act in 1970 to prevent exploitation of contract labor. The policy of Act is to prohibit employment of contract labor & wherever this is not possible so as to improve conditions of work of contract labor. Apart from providing for prohibition of employment of contract labor, the Act provides for health and welfare of the contract labor.

To regulate employment of contract labor in certain establishments and provide for its abolition in certain circumstances as well as for matters connected therewith.

 To do away with the abuses of the system of employment of Contract Labor.

It applies:-

(a) To every establishment in which twenty or more workmen are employed or were employed on any day of the preceding twelve months as contract labour

(b)To every contractor who employees or who employed on any day of the preceding twelve months twenty or more workmen

Act does not apply to:-

a) Intermittent nature

b) Work not perform for more than 120 days

c) Seasonal nature

Definition

“Contractor", in relation to an establishment, means a person who undertakes to produce a given result for the establishment, other than a mere supply of goods or articles of manufacture to such establishment, through contract labour or who supplies contract labour for any work of the establishment and includes a sub-contractor.

“Workman" means any person employed in or in connection with the work of any establishment to do any skilled, semi-skilled or un-skilled manual, supervisory, technical or clerical work for hire or

reward, whether the terms of employment be express or implied, but does not include any such

person.

(A) Who is employed mainly in a managerial or administrative capacity; or

(B) Who, being employed in a supervisory capacity draws wages exceeding five hundred rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature; or

(C) Who is an out-worker, that is to say, a person to whom any articles or materials are given out for certain process to return them back.

1. A contractor shall be responsible for

Payment of wages to each worker employed by him

Shall be paid before the expiry of such period as may be prescribed.

2. Duty of principle employer

Shall nominate a representative to be present at the time of disbursement of wages

Shall be the duty of such representative to certify the amounts paid as wages in such manner

3. It shall be the duty of the contractor to ensure the disbursement of wages in the presence of the authorized representative of the principal employer.

In case the contractor fails to make payment of wages within the prescribed period or makes short payment,

Then the principal employer shall be liable to make payment of wages in full or the unpaid balance due,

Recover the amount so paid from the contractor either by deduction from any amount payable to the contractor under any contract or as a debt payable by the contractor.

1. Appropriate Government may make rules.

(a) to which this Act applies,

(b) wherein contract labor numbering one hundred or more is ordinarily employed by a contractor, one or more canteens shall be provided and maintained by the contractor.

2. Without prejudice to the generality of the foregoing power, such rules may provide for:-

(a) The date by which the canteens shall be provided.

(b) The number of canteens that shall be provided, and the standards in respect of construction, accommodation, furniture and other equipment of the canteens.

1. In every place wherein contract labor is required to halt at night in connection with the work of an establishment.

(a) To which this Act applies, and

(b) In which work requiring employment of contract labor is likely to continue for such period as may be prescribed,

2. The rest rooms or the alternative accommodation to be provided under subsection

(1) shall be sufficiently lighted and ventilated and shall be maintained in a clean and comfortable condition.

It shall be the duty of every contractor employing contract labor to provide and maintain:

A sufficient supply of wholesome drinking water A sufficient number of latrines and urinals.

situated as to be convenient and accessible to the contract labor

There shall be provided and maintained by the contractor so as to be readily accessible during all working hours a first-aid box equipped with the prescribed contents at every place where contract labor is employed by him.

Only by appropriate Government through issue of notification after consultation with Board (and not Courts) can order prohibition of employment of contract labor.

Contract labor either one hundred or more employed by contractor for one or more canteens shall be provided & maintained

First Aid facilities Number of rest-rooms as required under the

Act Drinking water, and washing facilities

{Section 16 & Section 17}

1) Where does the Contract Labor Act does not apply?

2) What are the responsibilities for payment of wages?

3) What measures are to be taken in case the Contractor fails to make payment of wages within the prescribed period or makes short payment?

Earlier, on June 4, workers at the plant had gone on a 13-day-long strike demanding the recognition of a new union, the Maruti Suzuki Employees Union (MSEU).  

In the Gurgaon plant the salary of skilled workers adds to 30,000 – 40,000 Rs including the overtime and incentives, whereas the skilled labourers at Manesar get only around 13,000 to 17,000 Rs.

It was a hard strike. The workers gave no notice to management, they stopped production completely and around 2,000 workers stayed inside the factory for nearly two weeks.The strike ‘postponed’ the production of 13,200 cars and caused a loss of about 6 billion Rs. (133 million USD / 100 million Euro). Maruti Suzuki’s June sales figures dropped by 23 per cent, the sharpest fall in two and a half years. Workers continued the strike despite the police stationed within the factory premises and despite strike having been officially declared illegal by Haryana government on 10th of June.

There are around 3,500 to 4,000 workers employed in the factory, but their status differs significantly. Around 900 to 1,300 workers are permanent workers, around 800 to 1,000 trainees, around 400 apprentices and around 1,000 to 1,200 ‘temporary’ workers hired through contractors.

Permanent workers at Manesar compared their wages to the wages of permanent workers at nearby Honda, Hero Honda or Maruti Gurgaon plant and voiced anger about the fact that they earn only half as much.

The production capacity of Maruti has gone up from 10 lakh units in 2009-10 to 12.7 lakh units in 2010-11, but our salary has not gone up at all. Where is the incentive for hard work?”

If a worker is few minutes late, then his half day salary is cut. If a worker takes one day leave, he looses about 1,500 Rs to 2,000 Rs as salary cut in various forms of incentives and allowances. If a worker takes two day leave, he almost looses all the incentives.

These conditions form the background of the strike, they form the background of the general situation of workers in Gurgaon and beyond.

• Maruti Suzuki management tried to back a single union, the Maruti Suzuki Kamgar Union, for both Gurgaon and Manesar plant.

• This union had been set-up by forces close to management after the lock-out at Gurgaon plant in 2000/2001.

• During this initial stage, workers raised various issues and demands: low wages, incentive cuts, few breaks. The workers have demanded that the temporary workers should be given preference for permanent posts in new departments, which the company is currently building on the premises.

• On 5th and 6th of June management sealed the gates and placed a row of security guards in front of them in order to prevent exchange between workers inside and outside, between workers and supporters and media.

• Management also restricted water, food, electricity and toilet access. Only after a demonstration outside the gate on 6th of June, the food supply through family and friends was permitted again.

• Eleven workers were officially dismissed on the 6th of June. Police was deployed both inside and outside the premises.

• On the 8th of June the main unions AITUC, CITU, HMS, INTUC, UTUC formed a ‘joint action committee’ to ‘support’ the strike.

• .

• On the 16th of June Maruti management told the media that it would try to ‘revive’ production lines in the Gurgaon plant in case the strike dragged on for longer – unnecessarily so, because a day later, on 17th of June, the dispute was settled.

• The workers were represented by leader of the proposed new union Maruti Suzuki Employees Union Shiv Kumar and national secretary of AITUC Sachdev. “The company has now agreed that we would not be asked to sign the paper.

• Also, the fact that Maruti took back the 11 workers shows that our demands were met,” said Shiv Kumar.

• The Haryana government signed separate pacts with MSI and its arms — Suzuki Power train India Ltd (SPIL) and Suzuki Motorcycle India Pvt Ltd (SMIPL) and their respective workers' bodies to end the stir.

• Haryana government-brokered negotiations between Maruti Suzuki India management and its workers to end the standoff at MSI’s Manesar plant failed today.

• Haryana Minister for Labour and Employment Shiv Charan Lal Sharma held talks with the company’s management and workers of the Manesar plant — along with representatives of MSI’s recognised union Maruti Udyog Kamgar Union (MUKU) — through the day but an agreement proved elusive.

• “The workers were apologetic about the production loss that MSI has suffered and also about yesterday’s violent incident, but they are insisting that the dismissed and suspended colleagues must be taken back,” Sharma said.

• In response to the workers request for transport, the company agreed to provide bus services in line with shift timings.

• To address the concerns of the Manesar workers, the company has agreed to set up a ‘grievance redressed committee’. The committee will have representatives from the management and the workers.

• A labor officer from the state government will be a permanent invitee to it and review its proceedings.

• Maruti Suzuki has also agreed to the formation of a ‘labor welfare committee’ to promote good relations between the management and the workers. The committee will comprise members of the management and the workers.