Regulation of Contract Labour


Author: Shreya Wadhwa

Law Graduate (Amity Law School, Noida)


In present situation globalisation and liberalisation is making rapid strides at a very rapid rate and has led to changes in business environment, growth & profit oriented economics &this has led to a fierce competition among various industries grappling to survive. Top MNC’S all around the world have started investing in India because the market capability has improved and the workforce available. Labour relations deal with the relationship that exists between the employees of an organization and the management. It is generally about the shop floor and a typical factory environment. Business environment has changed due to Economic, technological, political and social aspects of the environment putting increased pressure on the environment and demands on the enterprise and its workforce also must respond to the rapid changes which are happening. And response to changing business environment causes stress and tensions at times among the parties to the Industrial relations. The workers, the trade union and the management are the basic constituents of it. Business Environment keeps on changing and throws newer challenges. The market keeps on changing rapidly. What is relevant today becomes obsolete tomorrow.

Business change environment is caused due to many factors. These are

1. Political,

2. Economic

3. Social

4. Technological

5. Environmental

6. Legal.

All these aspects have put greater pressure on the enterprise and the workforce which is employed in the company. And this change in social environment in industries becomes a big contributor to industrial relations which plays a vital role in achieving the key objective of the enterprise.

These companies have started setting up increasing their presence in India by opening offices in India, in turn proving to be a tough competition to their Indian counterparts. To be able to compete in this fast-moving world and market that is increasingly becoming customer oriented, the companies and industries require a lot of flexibility in managing their manpower to address the occasional rise and fall in demand. But the old rigid Indian Labour Laws which came into existence decades back are creating problems for the proper functioning of these companies.

Due to this factor many companies are employing more and larger number of contract labourers to adjust the workforce and to have flexibility to achieve economic efficiency, better optimum utilisation of the resources, optimum profit, greater output and to have cost efficiency despite prevailing risk of lesser worker loyalties.

Hiring or employing contract labour in India has become a very crucial form of employment, engaged in different occupations across the skilled, semi-skilled and unskilled jobs across all the sectors. While hiring contract labourers the companies should exercise caution and should understand the laws that govern their relationship with them (the company). me to submit an article

The government plays a very role in industrial relations, be it through its policies or its representatives like the labour commissioner etc. In the present-day scenario, IR is losing its relevance because of the advent of information technology and the service sector becoming dominant. Its dispensability still can’t be questioned as it clearly showcases the success of HR policies at the grass root level.


Contract labour has been in existence since time immemorial. During the early phase of industrialisation, the industrial establishments were always faced with the difficulties of having to recruit labour. The British employers or be it their representatives were not familiar with some basic problems of the employees like the low status of workers, lack of mobility of labour, caste and religion taboo prevalent, etc. They were not able to get rid of these problems. Therefore, they depended on the middlemen who helped them to hire and control workers. These middlemen and contractors were known by different names in different parts of the country.

Contract labourers have been exploited section of working class mainly due to lack of organisation. Due to this, the Whitely Commission (1860) also recommended the abolition of contract labour by implication. Much before 1860, in addition to the various disadvantages the contract labour had to undergo, the Workmen’s Breach of Contract Act 1959 was operating in holding them criminally responsible in the form of vent of a breach of a contract service. Subsequently, Many Committees came into existence to study the socioeconomic conditions of contract labour likewise the Bombay Textile Labour Enquiry Committee. Because of these findings, the scope of the definition of “Workers” in the Factories Act, 1948, The Mines Act, 1952 and The Plantations Labour Act, 1951 was subsequently enlarged to able to include contract labour. Also in the case of Standard Vacuum Refinery Company Vs. Their Workmen, the Supreme Court observed that the contract Labour should not be employed where

a) The work is perennial and must go on from day to day

b) The work is incidental to and necessary for the work of the Factory

c) The work is sufficient to employ considerable number of whole time workman

d) The work is being done in most concerns through regular workmen

Subsequently, in the 2nd Five-year plan, the planning commission also stressed upon the need for improvement in the working conditions of contract labour and thus, recommended for a special treatment to the contract labour to ensure that their continuous employment was there wherein it was not possible to abolish such type of labour.

Overview of Contract Labour Regulation & Abolition Act:

Before this act came into existence there was no specific legislation which dealt with the issue of contract labour but there was legislation like Industrial Disputes Act, 1947, Payment of Wages Act, 1936 etc which also dealt with problems of the workers but these enactments were not specifically designed to solve the problem of contract labour. Therefore, it was felt to have a specific legislation to stop the exploitation of contract laborers by Contractors and Establishments.

Contract labour is a very popular and a form of employment which has grown. Prevalent in almost every sector of the employment, industries, allied operations and the service sector. Generally, refers to the workers engaged by a contractor for employment in other organisation. Exploitation of contract labour in employment has been the biggest concern of the government as contract labour have little bargaining power, less social security and are often engaged in hazardous industries with no to less facilities and security. To regulate this system the government enacted the Contract Labour (Regulation & Prohibition) Act, 1970 to secure the status of the contract labourers and to abolish them from establishment and it came into existence on 10.2.1971.

The main objective of the Act is to provide for regulation of the employment of contract labour and its abolition under various circumstances. The Object of the Contract Labour Regulation and Abolition) Act, 1970 is to prevent exploitation of contract labour and bring about better conditions at work.

The Contract Labour (Regulation & Prohibition) Act, 1970 extends to the whole of India.

It applies—

(a) To every establishment wherein20 or more workmen are in employment or were in employment on any day of the preceding 12 months as contract labour.

(b) To every contractor who employees or who have been employed on any day of the preceding 12 months 20 or more workmen:

(c) Not applicable to establishments in which work only of an intermittent or casual nature is carried out.

Explanation. — For this sub-section, the quantum of work performed in an establishment shall not be deemed to be of an irregular nature– (I) if it was performed for a period of more than 120 days in the preceding 12 months, or (ii) if it is of a periodic character and is due to be performed for more than 60 days in a year.


A workman is deemed a contract labour when he/she is hired about work or “contract for service” of an establishment by or through the services of a contractor. They are indeed indirect employees; persons who have been hired, supervised and remunerated by a contractor who, in turn gets compensated by the establishment. In either form, contract labour is neither borne on pay roll or wages paid directly to the labour.

Contract workmen are not the employees of the companies. They are generally indirect workers or they are not directly related to the companies

Contract Labour is different from Direct Labour in terms of the relationship of employment with the establishment and method of wage payment that has been adopted. Contract Labour, are not borne on pay roll nor is paid directly. They are usually hired for limited amount of time. The Contract Workmen are hired, supervised and remunerated by the main contractor, who in turn, is paid by the company hiring the services of the Contractor. Companies engage contract labour to keep an eye on the no of the workforce and flexibility it provides in management of workforce to achieve the work efficiency

“Contractor”, in relation to an establishment, means a person who undertakes work to achieve a given target or goals for the establishment, other than a mere supply of goods of articles of manufacture to such an establishment, through the contract labour or who supplies contract labour for any work of the establishment and it also includes a sub-contractor;

Labour regulation is one of the most important tasks of an enterprise. To face the problems various companies and organisations are now hiring or employing contract labourers which are governed by the contract labour (regulation and abolition) act 1970.It has been seen that the contact between the entrepreneur and the inspector has aide din violation of the laws. This legislation was enacted to provide better working conditions for the labourers and to reduce their sufferings and the problems. Due to the lack of awareness the labour workers are not able to avail their benefits available to them and receive their wages. They must work according to the will or according to the instructions of the principal employer otherwise they are unable to continue with thief jobs or work which in turn makes it difficult for them to find a new job in the market. Hence the problems of the contract labourers should be heard by the company engaging contract labourers, their demands should be heard of and they should be given the same allowances, perks and other benefits which a regular employee of a company receives. Recently all the sectors like education, hospitals, hotels, transport, construction, railways etc all employ contract labourers.

They should be regulated at the levels and should receive all the benefits and perks which a regular employee of an organisation receives.

The Contract Labour (Regulation & Abolition) Act, 1970 (Act) allows companies and establishments prevalent in the manufacturing and services sectors to engage contract labour with the help of contractors. Such a company can be only for work that do not form part of the core operations, which has been guided by the memorandum of association of the company. Prior to the Act, in the case of Standard Vacuum Refinery Company vs Their Workmen (1960) the Supreme Court of India had indeed observed that contract labour shouldn’t employed where:

(I) The work is everlasting and must go on from day to day;

(ii) The work is incidental to and is necessary for the work of the factory;

(iii) The work is sufficient to employ considerable number of whole time workmen;

(iv)The work is being done in most concerns through regular workmen.

Therefore, contract labours are generally engaged for support services like gardening, housekeeping, maintenance, catering, transport, security etc.



In the above kind of workers, the intermediary supplies labour to the principal employer. These kinds of workers work at the site and are under the control of the entrepreneur or the main employer. Such kind of labour workers are paid by the third person i.e. the intermediary and they have no direct kink with the principal employer.


When the third person undertakes to complete a task in form of a service rather than labour then it is known as service contracts or job contracting, they are of two types one which is purely commercial contracts where two companies come together and one party promises to supply other with the goods etc. The second type of service contracts is the one which is included under the aspect of contract labour and need legislation this kind of contracts the work is done by the individual contractors or by sub-contractors. Such kind of workers have a position like that of a regular employer.


Some of the reasons for hiring or employing contract labourers are-

  • It helps in the problem of the ever-growing population on the market by creation of the employment opportunities.
  • Makes the availability of labour easily
  • Helps in the minimisation of the overall costs of the company
  • The unwillingness to perform less skilled jobs on the part of educated youth is also said to be a reason for the increase in contract labour system.
  • Migration of people from one place to another is also one of the main reasons as they put extra pressure on the workers.

Advisory Boards:

The Contract Labour Act provides for setting up of Central and State Advisory Contract Labour Boards by the central and state governments to advise the respective governments on matters arising out of Act administration.

Registration & licenses:

The establishment covered under this Act are required to be registered as principal employers with the appropriate authorities. Every contractor needs to obtain a licence and not undertake or execute any work through contract labour, except under and in accordance with the licence that has been issued in that behalf by the licensing officer. The licence granted is also subject to conditions relating to hours of work, wages fixation and other essential amenities as prescribed in the rules. in respect of contract.

Prohibition of employment of contract labour.

Notwithstanding anything which is contained in this Act, the appropriate Government may, after engagement with the Central Board or a State Board, prohibit, by notification in the Official Gazette, contract labour employment in any process, operation or other work in any establishment in any process, operation or other work. The guidelines for deciding upon the abolition of contract labour in any process, operation or other work in any establishment are –

Conditions of work and benefits provided to the contract labour

(I) Whether the work is of a perennial nature;

ii) Whether the work is incidental or necessary for the work of an establishment

iii) Whether the work is sufficient to employ a considerable number of wholetime workmen; (iv) Whether the work is being done ordinarily through regular workman in that establishment or a similar establishment.

Compliances under the Act

The Act mandates that the principal employer should be registered and the contractor have a valid license prior to engaging contract labours. In Workmen of Best & Crompton Industries Ltd. vs. Best & Crompton Industries Ltd., the Madras High Court has held that the principal employer must engage contract labour through a contractor who has a legally valid license, because an illegal license of a contractor would imply direct employment of contract labour by the principal employer. Further, such a license of the contractor is also job specific, non-transferable for any other kind of job and indicative of the most number of contract labours that can be engaged.

The Act also puts onus on the contractor for providing all the statutory benefits to contract labour with the rider in place that in case the contractor fails to do so, the obligation would directly fall on the principal employer. This position has been clarified by the Supreme Court in People’s Union for Democratic Rights v. Union of India, wherein it was held that in case the contractor fails to fulfil its duties under the Act then the principal employer shall be under an obligation to provide all the amenities and benefits that are prescribed under the law to contract labour that has been deployed at its establishment. Therefore, it also becomes necessary for the principal employer to also witness disbursement of wages to the contract labour by the legal contractor, collect all the necessary documents that establishes that the statutory benefits are also being made available to the contract labours by the contractor. me to submit an article

Precautions while engaging contract labour

Before hiring contract labourers it is imperative for the company to register with the authority and it also verifies the licences of the contractor. After that the principal employer should execute a contract with the contractors with the terms of engagement specified. The contract labour should not be allowed to work on the major aspects and the main areas of the establishment. The contractor should not be an employee of the principal employer. Principal employer should not exercise direct control (including matters of payments, discipline and removal/termination) and supervision. The chief employer has the right to check the skills and the capabilities of the labourers which have been hired by the contractor to ensure if the work is being carried out correctly or not. This is done to maintain the quality of the work and to see if they aren’t any problems in the company. The establishment generally is not directly linked to the contracted labourers. The labourers are usually controlled and overlooked upon by the contractors.

In Haldia Refinery Canteen Employees Union & Others v. Indian Oil Corporation Limited, the apex Court laid down certain guidelines for engaging contract labour:

  1. Principal employer must not interfere with the contractor for engaging contract labour and contractor must have free hand;
  2. Wages should be paid out by the contractor; principal employer must only be a witness;
  3. Contractor is liable to pay all statutory benefits such as leave salary, provident fund contribution, medical benefits, and observe statutory working hours for its employees and maintain records thereof;
  4. Contractor is also responsible for proper maintenance of registers, records and accounts for compliance with statutory provisions/obligations;
  5. Principal employer should avoid managing the contract labour;
  6. Contractor is liable to compensate the principal employer from any liability or penalty which may be imposed by authorities for any violation by the contractor of such laws, regulations and against all claims, suits or proceedings.

Rights of Contract labour

The act also enlightens the rights of the contract labour to make them safe from any potential problems which might occur. These rights ensure the equality of status for the workmen and the violation of which is enforceable in court of law. In terms of the wages, hours of work, welfare, health and social security contract labourers interests are protected. Any Agreement that has been entered between the Parties and if there are any clauses there in the agreement which are not in conformity with the benefits and other allowances under the Act and which are not favourable for the labourers will be treated as invalid.

  • The contract labours are entitled to their wages which are inclusive of overtime wages and allowances as is stipulated for their work at the establishment. It should be paid without delay whenever the wage period is over. It also should be in accordance with the Minimum Wages Act.
  • The contract labours also have the right to be provided the safety measures at the establishment and immediate health service in case of any injury to the labour.
  • They are entitled for facilities like rest rooms, canteens, washing facility, first aid facilities and many more. The women labours are entitled for the separate washrooms, restrooms. They are entitled not to be employed in any work which is prohibited under any law.

Facilities to contract labours:


  1. Every establishment is also required to provide restrooms or other suitable accommodation for the workmen to which the act would directly be applicable in which hiring of contract labour will continue for a period of 3 months or more within 15 days of the coming of force of the rules in case of existing companies and 15 days of the commencement of contact labour in new companies.
  1. If the amenity referred to in sub-rule (1) has not been provided by the contractor within the period prescribed, the principal employer shall be providing the same within a period of fifteen days of the expiry of the period laid down in the said sub-rule.
  1. Separate rooms shall be also provided for women employees on contract.
  1. Effective and suitable provisions shall also be made in every room for securing and maintaining adequate ventilation by the circulation of fresh air and there shall also be provided and maintained sufficient and suitable natural or artificial lighting.
  1. The rest-room or rooms or other suitable alternative accommodation shall be of such dimensions to provide at least a floor area of 1.1 sq. meter for each person making use of the rest-room. 


(1) In every establishment to which the Act applies and wherein work regarding the employment of contract labour is likely to be in existence for six months and more wherein contract labour in number of  100 or more are ordinarily employed in the due course, an adequate canteen shall also be provided by the contractor for the use of such contract labour within 60 days of the date of coming into force of the rules in the case of the existing establishments and within 60 days of the commencement of the employment of contract labour in the case of new establishments.

(2) If the contractor also fails to provide canteen within the time that has been laid down the same shall also be provided by the principal employer within sixty days of the expiry of the time allowed to the contractor.

(3) The canteen shall be maintained by the contractor or principal employer, in an efficient manner.


(1) The dining-hall shall at a time accommodate at least 30 percent of the contract labour working at a time.

(2) The floor area of the dining-hall, excludes the area occupied by the service counter and any furniture except for tables and chairs shall be not less than one square meter per diner to be accommodated as has been prescribed in sub-rule (1).


(I) A portion of the dining-hall and service counter shall be partitioned off and reserved for women workers, in proportion to their number.

(ii) Washing places for women shall be separate and screened to secure privacy.

(4) Sufficient tables, stools, chairs or benches shall be available for the number of diners to be accommodated as prescribed in sub-rule (1).

Furniture and utensils

(I) There shall be provided and maintained sufficient utensils, crockery, cutlery, furniture and any other equipment necessary for the efficient running of the canteen.

(ii) The furniture, utensils and other equipment shall be maintained in a clean and hygienic condition.

(iii) Suitable clean clothes for the employees serving in the canteen shall also be provided and maintained.

(iv) A service counter, if provided, shall have top of smooth and impervious material.

(vi) Suitable facilities, including an adequate supply of hot water shall be provided for the cleaning of utensils and equipment.

 Books of Accounts

The books of accounts and registers and other documents used in reference with the running of the canteen shall be produced on demand to an Inspector.


The accounts pertaining to the canteen shall be audited once every 12 months by registered accountant and auditors:

PROVIDED that the Chief Labour Commissioner (Central) may approve of any other person to audit the accounts, if he is satisfied that it is not feasible to appoint a registered accountant and auditor in view of the site or the location of the canteen.

Latrines and urinals

Latrines shall be provided in every establishment coming within the scope of the Act on the following scale, namely:

(a) where females are employed, there shall be at least one latrine for every 25 females;

(b) where males are employed, there shall be at least one latrine for every 25 males;

Washing facilities

(1) In every establishment coming within the scope of the Act adequate and suitable facilities for washing shall be provided and maintained for the use of contract labour employed therein.

(2) Separate and adequate screening facilities shall be provided for the use of male and female workers.

(3) Such facilities shall be conveniently accessible and shall be kept in clean and hygienic condition.

First-aid facilities

In every establishment coming within the scope of the Act there shall be provided and maintained to be readily accessible during all working hours first-aid boxes at the rate of not less than one box for 150 contract labour or part thereof ordinarily employed

Regulation of Contract Labour: –

For regulation of contract labour an appropriate government by an order notified in the Official Gazette may appoint persons being Gazetted officers of Government, as it thinks fit to be licensing officers for the purposes of this Act that is for the regulation of contract labour. The appropriate government also defines limit, within which a licensing officer shall exercise the powers conferred on licensing officers by or under the Act. Further with effect from such date as the appropriate Government may, by notification in the Official Gazette, appoint, no contractor to whom this Act applies, shall undertake or execute any work though contract labour except under and in accordance with a license issued in that behalf by the licensing officer. The license given to the contractors includes, conditions as to hours of work, fixation of wages and other essential amenities in respect of contract labour as the appropriate Government may deem fit to impose in accordance with the rules, if any, made under Section 35 and shall be issued on payment of such fees and on deposit of such sum, if any, as security for the due performance of the conditions as may be prescribed.

Judicial interpretation on abolition and absorption

There are number of judgments in which the court delivered its opinion in relation to the status of contract labour being abolished under the notification as it is one of the disputed social issues in relation to government reforms. Therefore, every time the judiciary is more conscious to determine the status and security to be provided for such type of labour and to ensure that they won’t be exploited by the industrial class of the society.

  • In Gammon India Ltd. vs. Union of Indianumerous provisions and rules under the contract labour act, 1970 were interpreted by the judiciary broadly. Various facilities, wage payment manner, duty of contractor and principal employer were broadly interpreted. Also, this case defined the constitutional validity of the contract labour statute as constitutionally valid.
  • In Deena Nath caseSupreme Court held that the principal employer cannot be required to absorb the contract labour which is abolished.
  • But after that there were constant complaints that the contract labours are being thrown out from the employment. So, the questions arose as to the status of abolished labour under the act. On this crucial question of the after effect of the abolition of contract labour, the Supreme Court in Air India Statutory Corporation vs. United Labour union, overruled the two-member bench decision in Deena Nath Case holding that the high court may direct the principal employer to absorb the contract labour who have been abolished under the government notification. The court also ruled that the linkage between the contractor and the labour stood snapped and the direct relationship stood restored between the principal employer and contract labour as its employees.
  • Later in the landmark case namely Steel Authority of India vs. National union of Water Front workers and others, the Supreme Court overruled the decision delivered in the Air India Statutory Corporation Case holding hat neither section 10 of the act nor any other provision of the act whether expressly or by necessary implications provides for the automatic absorption of the contract labour. Consequently, the principal employer cannot be required to absorb the contract labour working in the establishment.


Inspire of the numerous enactments enforceability has always been a hurdle in India, thus preventing the main aim or the objective. Labour flexibility is a very important tool for the inflow of FDI in India. Hence a need was there for having laws for having better output, improved performance and greater efficiency. All this has helped India to become one of the easiest nations of doing business which in turn has also helped in the “Make in India” campaign of the prime minister Mr Narendra Modi. Since 2014 many initiatives have been undertaken by the government in relation to the various labour laws in the country that deal with the safety of the workers, their wages, benefits, working hours, there relations with the companies etc. All this is done to make India an easy and business friendly nation which would also lead to an increase in employment of the people including the youth of the country.

 The Maternity Benefit (Amendment) Act, 2017-

Many reforms have brought about in the maternity benefit bill that came into force on 28 March 2017 which received assent from the president on 27 March 201.Some of the changes brought about under this act are as follows

  • Establishments with 50 or more workers have now provided with creche facilities in which 4 visits in a day are allowed.
  • The act has now allowed the woman to work from home after the maternal leave for time which is mutually decided.
  • The established should from now onwards should inform the woman of the maternity benefits that will be available at the time of the appointment itself.
  • The establishment would from now on would also provide maternity leave for the adoptive mothers and Commissioning mother as well.
  • Establishment would now have to pay full wages for 26 weeks

The Child Labour (Prohibition and Regulation) Amendment Act, 2016-

The changes brought about are as follows

  • A person between 14 to 18 years called as adolescent would not be allowed to work in any hazardous area.
  • A child means a person who is below 14 years of age or of age given under the Right of Children to Free and Compulsory Education Act, 2009, whichever is more.
  • Employment of a child is not allowed except in cases where the child helps his or her family after school.
  • Prohibition is only on occupations related to mining and explosives/inflammable substances

The Payment of Wages (Amendment) Act, 2017

This act has now changed the mode of payment of wages to the employees of the company. Now the company can pay to the employees without obtaining authorisation by the following methods

By cheque

  • By currency notes or coin
  • By transferring to their bank account

Compilation rules-

Earlier separate registers had to be maintained but after the amendment of 2017 maintained of combined registers was introduced to save time and effort and to avoid overlapping. This resulted in better efficiency and this done to make India one of the friendly nations of doing businesses of the acts to which it applies are as follows

  • Payment of wages act ,1936
  • Equal remuneration act 1946
  • Contract labour (regulation and abolition)1970

It was recommended by the second national commission that the contract labour should not be hired for core production/services activities. However, they should be paid as much a regular employee of the entity who’s doing a work of a similar nature. It would be the duty of the employer to ensure that there is not any shortcomings and no misuse of any of the suggestions and to ensure that the work is being done effectively and the contract labourers are paid accordingly or not. It was also suggested that a worker should not be hired as a temporary worker or a casual worker in a company.

The commission also recommended for the creation of centre and state labour boards to control and manage the contract labourers and to supervise them and for their registration and supervision.

Biometric smart card have also been provided to the contract labourers which indicate their name, address, skills, nature of work, photograph etc. This smart card helps the contract labourers to avail the various perks and benefits like cash allowances, pay benefits and other social security benefits.

It is expected that the central government will continue to bring about changes or reforms in labour laws in 2018 and in the run up to the 2019 elections as well.

Also, it is the organisations duty to inform the worker or the labourer about the right of compensation available to him/her under the act. Which should be informed at the time of the employment. The information provided should be in an electronic form and in writing in any language which could be English, Hindi or in any other language which the workers understand.


Essentially, the company hiring the labourers needs to be smart and exercise precautions while it planning to hire contract labours. In case the compliances specifically in relation to the mandatorily perks and payments haven’t been done by the contractors, the onus of making payments falls on principal employer. Contract labours are also employed to make the process easier with the intention of managing the workforce in an easier way. However, lack of due diligence creates a lot of problems for the companies. Though engaging contract labours should always be done by way of executing a contract with the contractor, exercising due diligence is of great importance as contractual safeguards may not offer sufficient protection to principal employers. Although employment of contract labour in India has led to many wide-ranging discussions and raised conflict of interest among the social partners, it has become as one of the most popular and growing form of employment wherein engaged in different occupations including skilled, semiskilled and unskilled jobs. The system of employing contract labour is prevalent almost in all sectors, in agriculture, manufacturing, and high GDP yielding service sector.

The contract labour (regulation and abolition) act 1970 provides protection and security to the workers employed on contract. On the one hand, it seeks to provide contract workers minimum wages through licensing of contractors and by holding principal employers answerable for enforcement of the law. On the other hand, it empowers state and central governments to prohibit the conduct of certain kinds of work through contract labour. The appropriate government can issue a notification in the official gazette to prohibit employment of contract labour in any process, operation or other work. The central government has taken various steps and abolished contract labour practices in a number of jobs in different industries and has issued notifications for this. But in the absence of any labour law reforms over the past so many years, even the courts have taken contradictory positions in the recent past. Many changes have been bought up in the labour laws like maternal leave till 26 weeks, full payment of wages till the completion of the maternity leave, prohibition of the children in hazardous occupation and areas except in cases where the child helps his or her family after school. The mode of payment has also been changed. Now the workers can be paid either by currency, coins, by cheque or by crediting or transferring the amount in the workers bank account. It is expected that the central government will continue to bring about changes or reforms in labour laws in 2018 and in the run up to the 2019 elections as well.

1Received assent of the President on 5.9.1970; Published in Gazette of India on 7.9.1970

2. (Report of the National Commission on Labour, 1969)

3Section 3 and section 4

4Section 7 and section 12

5Section 10

6Regulatory Overview of Contract Labour In India

71974 SCC (L&S) 252 

8AIR 1991 SC 3026, 

9AIR 1997 SC 645

10AIR 1991 SC 3026

11AIR 2001 SC 3527

12 Section 11A

13 Biological mother who uses her egg to have a surrogate child

14 Section 2 (IA)

15Section 3

16 Section 6

17Industrial Relations and Contract Labour in India, All India Organisation of Employees)


Author: Shreya Wadhwa

Law Graduate (Amity Law School, Noida)


Disclaimer: These guides/articles are not legal advice, nor a substitute for a lawyer. These articles are provided freely as general guides. While we do our best to make sure these guides are helpful, we do not give any guarantee that they are accurate or appropriate to your situation, or take any responsibility for any loss their use might cause you. Do not rely on information provided here without seeking experienced legal advice first. If in doubt, please always consult a lawyer.

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