What is contract labour?

What is contract labour?
Highlights

“Contract labour” is a term which is applied to man power engaged by somebody else to produce a given result to principal employer where this man power has no direct relationship of employer-employee with the principal employer.

“Contract labour” is a term which is applied to man power engaged by somebody else to produce a given result to principal employer where this man power has no direct relationship of employer-employee with the principal employer. This includes the simple supply of manpower to principal employer by contractor where contractor is not involved in specified activity. The ruling Bharatiya Janata Party (BJP) has an expansive reform agenda; it is unlikely to expend any more political capital on contentious labor reforms. Instead, businesses should expect labor reforms at the state level, says india-briefing.com.

“The Contract Labour (Regulation and Abolition) Act, 1970” was passed by both the Houses of Parliament and received the assent of the President on 5th September, 1970 and it came into force from 10th February, 1971. It seeks to protect the interest of 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 accountable for enforcement of the law. It applies to: (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; and (b) to every contractor who employees or who employed on any day of the preceding twelve months twenty or more workmen:

A total of 384 million persons are employed at various levels and out of the total employed 51% are self-employed, while 33.5% are engaged as casual labour and 15.6% are employed as regular wage or salaried employees, according to Ficci. Labour is in the Constitution’s concurrent list, allowing the Centre and state governments to legislate on it. India has about 144 labour laws and laws differed in 29 states and seven union territories. There is no benchmark for minimum wages in India. In a big automobile company a casual worker could be paid Rs 7,000-8,000 a month, whereas the same person could earn Rs 4,000 in a smaller company. Rules also vary across states.

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