Contract Labour Act, 1970 and Rules

The Object of the Contract Labour Regulation and Abolition) Act, 1970 is to prevent exploitation of contract labour and also to introduce better conditions of work. A workman is deemed to be employed as Contract Labour when he is hired in connection with the work of an establishment by or through a Contractor. Contract workmen are indirect employees. Contract Labour differs from Direct Labour in terms of employment relationship with the establishment and method of wage payment. Contract Labour, by and large is not borne on pay roll nor is paid directly. The Contract Workmen are hired, supervised and remunerated by the Contractor, who in turn, is remunerated by the Establishment hiring the services of the Contractor.

It is also to regulate the employment of Contract Labour in certain establishments and to provide for its abolition in certain circumstances and for matters connected therewith. In the State Government Maharashtra, It applies to any contractor who employs or who employed fifty or more workers on any day of the accounting year. For Central Government, It applies to any establishment in which twenty or more workmen are employed on any day of the accounting year as Contract Labour.

The Act enjoins Joint and Several responsibility on the Principal Employer and the Contractor. The Principal Employer should ensure that the Contractor does the following: