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Introduction to CLRA

In India, the Ministry of Labour and Employment is the governing body for making and implementing laws with regards to the same. The prime responsibility of the Ministry is to protect the interest of the workforce, implement employee-friendly laws and ensure compliance by the industry in the country.

These laws provide a regulative environment for issues like minimum wage, occupational safety, accidental and benefits for social security, health, conditions of employment, etc.

CLRA or Contract Labour Regulation Act 1970 is a specific law and act that regulates the outsourced employees of your workforce. It provides the guideline based on which the industry regulates the terms and conditions for the labour which are used from an outsourced contractor in any specific Industry.

What is CLRA, and is it applicable to your organisation?

The CLRA is legislation driven towards the welfare of the contract labourers or employees. So that they are not exploited and also to introduce better and comfortable work conditions. As per the guarantee under the CLRA, none of the parties can be absolved from any liabilities towards the contract employees by any act of non-adherence of law.

In any outsourcing, there are four stakeholders as per the CLRA. These include the Government, the primary or principal employer, the contractor, and the contract labours. As per the CLRA Act section 7, the primary employer needs to have a registration certificate.

The contractor who is supplying the contract employees to the principal employer needs to obtain a CLRA License as per Section 12 of the CLRA. In effect, the primary employer cannot engage contract employees in case they don’t have a registration certificate.

They can also not engage in contract labour in case the contractor does not have a CLRA License. The Contract Labour Act or CLRA applies to you in case your organisation has ever employed 20 or more contract employees in the preceding year.

How vital is CLRA for the Principal employer?

The CLRA license applicability is to the contractor, and the CLRA registration applicability is for the principal employer. The CLRA act implies that it is unlawful to employ any contract labour in your organisation in the absence of the above two mandatory requirements. Hence it is essential for the principal employer to ensure that the contractor that they employ has fulfilled all the obligations under the CLRA license.

Violations of CLRA and penalties

Under the CLRA laws in India, a principal employer cannot legally employ a contract employee unless they have obtained a CLRA registration from the competent authority, i.e., the Government. The primary employer can be punished with imprisonment of up to 3 months. He can also be charged with a fine of Rs.1000/- or be punished with both, in case of a violation, under Section 23 of the Act.

What you must know as a Principal Employer

Irrespective of whether you have obtained registration under the CLRA or not, you must be fully aware of the liabilities that you carry as part of the CLRA act. The principal employer has to ensure that provision for employee’s welfare is fully taken care of, including the availability of restrooms, canteens, physical safety, drinking water, first aid, etc. by the contractor.

In case the contractor does not, then it falls on the principal employer to make these available to the contract employees.

The Ministry is responsible for promoting the welfare, and social security of the labour force in organised and unorganised employment sectors and each organisation employing contract labours need to be careful and conscious of this law and ensure compliance.

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