Contract Labour Act – Whether Sub Contractor also needs to take CLRA License;

The definition of Contractor as given under Sec. 2(c ) of the Contract Labour (R&A) Act, 1970 provides that a Contactor also includes a Sub-Contractor.

However, answer to the question raised in the title of this article is not categorically provided either in the Act nor in the Rules but at the same time it is to be taken from various provisions including Sec. 2(c ) of the CRLA Act and Rule 21 of CLRA (Central) Rules inter alia providing that for obtaining License, which is to be by the Contractor will be accompanied by a Certificate from the Principal Employer in Form V and as such the Sub-Contractor while obtaining License would be required to have a signature of his employer (contractor as well as the principal employer). Both the Principal Employer and the Contractor will issue the Certificate as given in Form V under Rule 21(2) of the CRLA Rule.

It is also imminent to note that for allowing Sub-Contractor to obtain License, the consent of the Principal employer either in writing via Work Order or the Agreement is mandatory, to enable Sub-Contractor to make an application for CLRA License subject to required headcounts. If such consent or clause in the Agreement is not provided, then it is advisable to ask Principal Contractor only to include head counts of Sub-Contractor in his application when Principal Contractor makes an application for License.

The Authorities normally insists to consolidate head counts of all Sub-Contractors in the application of Principal Contractor when each Sub-Contractor has got less than 50 employees and when such Sub-Contractor has got 50 or more than 50 employees, then Authorities insist for Sub-Contractor’s separatr License. The reason is well known to all. However, Law is silent on this issue

From the desk of Dayanand Mangaonkar