CLRA Labour Licences
According to the CLRA Act in India, all contract workers are indirect employees of the establishment or organisation where a contractor has hired them. Any establishment or organisation that employs contract workers must be registered under this Act and require a CLRA License to continue its hiring procedure.
CLRA stands for the Contract Labour Regulation and Abolition act. This act was passed in the year 1970 to raise the standard of working conditions and prevent the exploitation of employees.
Employers may use the following information as a guide in these situations:
1- The CLRA Act applies to all establishments where 20 or more 20 workers are employed as contract workers or were employed anytime during the last 12 months. Hence, the CLRA Act would become applicable once 20 or more workers are employed as contract workers on any day in an establishment during the preceding 12 months.
2- The CLRA Act applies to every establishment and labourer if the workers are contracted. Section 2(b) of this Act provides that workers shall be deemed to be employed as contract workers when they are hired in or in connection with the work of an establishment by the contractor. Such engagement of contract workers may be with/without the knowledge of the Principal Employer. Whether the worker is employed to do any skilled, unskilled manual, supervisory, technical or clerical work for hire and reward is immaterial for deciding upon the CLRA License Applicability.
3- This Act does not cover establishments where work is only of a sporadic or casual character. Section 1(5) of this Act further provides that work performance would be deemed irregular in case it was performed for less than 120 days in the preceding 12 months or is non-seasonal and performed for less than 60 days in a year.
4- Where the issues arise as to the CLRA License Applicability to the contractor, the same would depend on the following aspects:
5- Whether there exists an open contract between the Principal Employer and contractor.
6- Whether the periodicity & nature of services given by such contractor to the principal employer’s establishment are intermittent.
7- At the worker level, the CLRA Act does not apply to people primarily engaged in an advisory or managerial capacity. In the case decided by the Calcutta High Court