top of page

Contract Labour:- An Analysis


Every industry and organization rely on contract labourers, who also help the industrial economy, grow. However, contract labourers often face issues with their working conditions, the nature of their jobs, minimum pay rates or salary deference, welfare programmes, welfare programmes, and social security plans.

At this point in the era of globalisation and liberalisation, the use of contract labour is the biggest problem.

INTRODUCTION:- According to the Contract Work [Regulated and Abolition] Act of 1970, a contract job performed by persons who fit into these categories requires a range of skills. Unskilled, skilled, qualified, and high categories make up the levels of qualification. A considerable formalised of the organised workforce is indicated by an increase in the usage of temporary agency workers, who are not directly employed by an employer but rather serve as intermediaries or contractors on short-term


Related Case Laws:-

In Olga Tellis v/s. Bombay Municipal Corporation, which dealt with slum and pavement residents in Bombay city, a five-judge Supreme Court bench once more defended the idea that the right to life also encompasses the right to subsistence.

Chief Justice Beg of the Supreme Court felt compelled to 'turn to the preamble to find the object to the Act itself, to the legislative history of the Act, and to the socio-economic ethos aspirations and needs of the times in which the Act was passed' in Bangalore Water Supply; Sewerage Board v/s A. Rajappa.

In Francis Coralie Mullin v/s Administrator, Union Territory Of Delhi, where it has been held by this court that the right of life guaranteed under this article is not confined merely to physical the existence or to the use of any faculty or limb through which life is enjoyed or the soul communicates with the outside world but is also included within its scope and ambit the right to live with basic human dignity and the State cannot deprive anyone of this precious and invaluable right because no procedure by which such deprivation may be effected can ever be regarded as

reasonable, fair and just.

Issues faced by Contract Labours:-

1. Exploitation and Abuse:- Contract workers may be vulnerable to exploitation and abuse, particularly in cases where the third-party contractor does not comply with legal requirements or the contract worker is not aware of their rights. This may include underpayment, non-payment of wages, and denial of basic working conditions and safety standards.

2. Job Insecurity:- Contract workers often face job insecurity, as their employment is not guaranteed beyond the duration of their contract. They may not have access to social security benefits or health and safety protections, making their working conditions precarious.

3. Lack of Benefits and Protections:- Contract workers may not receive the same benefits and protections as regular employees, such as access to social security benefits, health insurance, or retirement benefits. This can lead to a situation where contract workers are underpaid and not provided with basic benefits, which can impact their quality of life.

4. Difficulty in Unionizing:- Contract workers often face difficulties in unionizing and bargaining collectively for their rights. Due to their temporary employment status, they may not have the same level of job security as regular employees and may be hesitant to take part in collective bargaining for fear of losing their jobs.

5. Implementation of Laws:- Despite the legal framework governing contract labour in India, the implementation of the Act has been inadequate, leading to widespread violations. There is a lack of effective monitoring and enforcement mechanisms, and employers may take advantage of loopholes in the law to avoid compliance.

Suggestive measure:-

1. Strengthening the Legal Framework: The government needs to strengthen the legal framework governing contract labour in India, including effective monitoring and enforcement mechanisms to ensure compliance with the law. The government should also consider introducing penalties for non-compliance with the Act, including fines and imprisonment.

2. Encouraging Ethical Practices: Employers should adopt ethical practices and provide fair treatment to contract workers, including providing them with access to benefits such as health insurance and retirement benefits. Employers should also ensure that contract workers are provided with basic working conditions and safety standards.

3. Raising Awareness: Contract workers need to be aware of their rights and be able to assert them. There should be awareness campaigns and educational programs that inform contract workers of their legal rights and the protections available to them.

4. Promoting Unionization: Contract workers should be encouraged to unionize and bargain collectively for their rights. This will provide them with a stronger voice and bargaining power, leading to improved working conditions and job security.

Current labour laws in India:-

1. Contract Labour (Regulation & Abolition) Act, 1970

2. The relevance of the dignity of human labour and the need for protecting and safeguarding the interest of labour as human beings has been enshrined in Chapter-III (Articles 16, 19, 23 & 24) and Chapter IV (Articles 39, 41, 42, 43, 43A & 54) of the Constitution of India keeping in line with Fundamental Rights and Directive Principles of State Policy.

3. National Commission on Labour:- Labour laws enacted by the Central Government, where the Central Government has the sole responsibility for enforcement.

  • The Employees’ State Insurance Act, 1948

  • The Employees’ Provident Fund and Miscellaneous Provisions Act,1952

  • The Dock Workers (Safety, Health and Welfare) Act, 1986

  • The Mines Act, 1952

  • The Iron Ore Mines, Manganese Ore Mines and Chrome Ore Mines Labour Welfare (Cess) Act, 1976

  • The Iron Ore Mines, Manganese Ore Mines and Chrome Ore Mines Labor Welfare Fund Act, 1976

  • The Mica Mines Labour Welfare Fund Act, 1946

  • The Beedi Workers Welfare Cess Act, 1976

  • The Limestone and Dolomite Mines Labour Welfare Fund Act, 1972

  • The Cine Workers Welfare (Cess) Act, 1981

  • The Beedi Workers Welfare Fund Act, 1976

  • The Cine Workers Welfare Fund Act, 1981

Conclusion:- Since there was no legislation, that addressed contract labour, the Contract Labour (Regulation and Abolition) Act, of 1970 was passed to stop the exploitation of contract labourers. Nonetheless, the legislature needs to take into account some of the Act's inadequacies and make the required adjustments. The Act should also be simplified simply for significant employers and contractors, as

well as providing improved protections and facilities for contract labourers.

The Contract Labour (Regulation and Abolition) Act of 1970 failed to recognise the issues faced by contract workers. The social and economic status of the contract workers should require a complete change. It is important to give contract workers the attention they deserve by including them in social security and welfare programmes.

Frequently Asked Questions (FAQ):-

Q1. Who is contract labour?

Ans. Contract labor refers to a type of employment relationship in which an individual is hired to perform a specific task or project for a specific period of time. The individual is usually considered to be an independent contractor, rather than an employee, and is responsible for paying their own taxes and benefits, as well as providing their own tools or equipment. This type of employment

arrangement is often used in industries such as construction or information technology, where the work being done is project-based and requires specialized skills.

Q2. What are laws related to contract labours in India?

Ans . Contract Labour (Regulation & Abolition) Act, 1970. It majorly deals with regulations of working related conditions of the workers and other facets as well.

Q3. What is the responsibility of the Principal employer for less payments to the Contract Labour ?

Ans. Principal employer shall ensure payment of wages to the workmen as per the law and if contractor fails the principal employer is liable to pay the wages.

Q4. Whether Contract labour is entitled for the wages prescribed under Minimum Wages Act or wages notified by the Commissioner of Labour?

Ans. Contract Labour are entitled to minimum wages if they are employed in a schedule employment. They are entitled to wages notified by the commissioner of labour under Contract Labour Act if they are employed in non-schedule employments.

Q5. How can it be determined whether a particular person is a contractor or not?

Ans. A 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 such establishment, through contract labour or who supplies contract labour for any work of the establishment and includes a such-contractor. In other words, a person undertaking merely to transport manganese for the establishment will not fall within the meaning of 'contractor'.

Defined under section 2(1) (e) of the Contract Labour (Regulation and Abolition) Act.

9 views0 comments
bottom of page