Contract Labour Licence in India

Licensing of Contractors

Contractor to whom the Contract Labour (regulation And Abolition) Act, 1970 applies, shall undertake or execute any work through contract by labour by making application in Form IV, to the licencing officer of the area in which the establishment, in relation to which he is the contractor, is located for his contract labour licence.

Every application for the grant of a contract labour licence shall be accompanied by a certificate by the principal employer in Form V to the effect that the applicant has been employed by him as a contractor in relation to his establishment and that he undertakes to be bound by all the provisions of the Act and the rules made thereunder in so far as the provisions are applicable to him as principal employer in respect of the employment of contract labour by the applicant.

Security for Contract Labour License

Before a contract labour license is issued, an amount calculated at the specified rate for each of the workmen to be employed as contract labour, in respect of which the application for licence has been made, shall be deposited by the contractor for due performance of the conditions of the licence and compliance with the provisions of the Act or the rules made thereunder.

Where the applicant for the licence was holding a licence in regard to another work and that licence had expired, the licensing officer, if he is of the view that any amount out of the security deposited in respect of that licence is to be directed to be refunded to the applicant, may, on an application made for that purpose in Form VA by the applicant adjust the amount so to be refunded towards the security required to be deposited in respect of the application for the new licence and the applicant need deposit, in such a case, only the balance amount, if any, after making such adjustment.

Grant of Contract Labour License

Every licence granted or renewed under shall be subject to the following conditions, namely:-

  • The licence shall be non-transferable;
  • The number of workmen employed as contract labour in the establishment shall not, on any day, exceed the maximum number specified in the licence;
  • The rates of wages payable to the workmen by the contractor shall not be less than the rates prescribed under the Minimum Wages Act, 1948 for such employment where applicable and where the rates have been fixed by agreement, settlement or award and less than the rates so fixed;
  • In cases where the workmen employed by the contractor perform the same or similar kind of work as the workmen directly employed by the principal employer of the establishments, the wage rates, holidays, hours of work and other conditions of service of the workmen of the contractor shall be the same as applicable to the workmen directly employed by the principal employer of the establishment on the same or similar kind of work. In the case of any disagreement with regard to the type of work the same shall be decided by the Chief Labour Commissioner (Central). In other cases the wage rates, holidays, hours of work and conditions of service of the workmen of the contractor shall be such as may be specified in this behalf by the Chief Labour Commissioner (Central);
  • In every establishment where 20 or more women are ordinarily employed as contract labour, there shall be provided two rooms of reasonable dimensions for the use of their children under the age of six years. One of such rooms shall be used as a play room for the children and the other as bed room for the children. The contractor shall supply adequate number of toys’ and games in the playroom and sufficient number of cots and beddings in the sleeping room. The standard of construction and maintenance of the crèches shall be such as may be specified in this behalf by the Chief Labour Commissioner(C);
  • The licencee shall notify any change in the number of workmen or the conditions of work to the licensing officer;
  • The licencee shall, within 15 days of the commencement and completion of each contract work submit a return to the Inspector, intimating the actual date of the commencement, or, as the case may be, completion of such contract work in Form VIA;
  • A copy of the licence shall be displayed prominently at the premises where the contract work is being carried on;
  • No female contract labour shall be employed by any contractor before 6.00 a.m. or after 7.00 p.m. This shall not apply to the employment of women in pithead baths, crèches and canteens and so to mid-wives and nurses in hospitals and dispensaries.

Validity of the Contract Labour Licence

Every licence granted or renewed shall remain in force for 12 months from the date it is granted or renewed.

Amendment of the Licence

The Contractor who desires to have the licence amended shall submit to the licensing officer an application stating the nature of the amendment and reasons therefore.

Renewal of Licence

Every contractor shall apply to the licensing officer for renewal of the licence in Form VII and shall be made not less then 30 days before the date on which the licence expires, and if the application is so made, the licence shall be deemed to have been renewed until such date when the renewed licence is issued. If the application for renewal is not received within the time specified a fee at specified rate in excess of the fee ordinarily payable for the licence shall be payable for such renewal.

Refund of Security

On expiry of the period of licence the contractor may, if she does not intend to have his licence renewed, make an application to the Licensing Officer for the refund of the security deposited by him.

If the Licensing Officer is satisfied that there is no breach of the conditions of licence or there is no order for the forfeiture of security or any portion thereof, he shall direct the refund of the security to the applicant.

If there is any order directing the forfeiture of any portion of the security, the amount to be forfeited shall be deducted from the security deposit, and balance, if any, refunded to the applicant.

Any application for refund shall, as far as possible be disposed of within 60 days of the receipt of the application.

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