Page 96 - DMGT516_LABOUR_LEGISLATIONS

Unit 4: Contract Labour (Regulation and Abolition) Act, 1986

vs. Saraspur Mills, 1998 LLR 686 (Fuj HC). The employees working in a canteen run in a Notes
factory under statutory requirements will be deemed to be the employees of the principal
employer – A.P. Dairy Development Co-operative Federation Ltd. vs. Shivadas Pillay, 1990 LLR
578 (AP HC).

The Factories Act, 1948

Section 2(1) of the Act as amended w.e.f. 20.10.1976, defined ‘a worker’ as under:
“Worker” means a person employed, directly or by or through any agency (including a
contractor), with or without the knowledge of the principal employer, whether for remuneration
in any manufacturing process, or in cleaning any part of the machinery or premises used for
a manufacturing process, or in any other kind of work incidental to, or connected with, the
manufacturing process, or the subject of the manufacturing process but does not include any
member of the armed forces of the Union.”
A perusal of the definition indicates that the Factories Act does not make any discrimination

between person employed directly by the principal employer and a person who is employed
by or through a contractor, in case all other conditions as given in the definition are fulfi lled.

Therefore, such contract labour will be entitled to all the privileges and benefits available to
workers under the Factories Act, including those relating to weekly holidays, compensatory
holidays, overtime wages, leave with wages, etc.
The Industrial Disputes Act, 1947

A workman under the Contract Labour (Regulation and Abolition) Act is also a ‘workman’
under the Industrial Disputes Act. The contractor would be the employer of such person. The
principal employer under the Act would be employer under the Industrial Disputes Act in
certain circumstances, against whom an “industrial dispute” could be raised – Hassain Bhai vs.
Alath Factory Thezbiulati Union, 1978 Lab IC 1264: 1978 II LLJ 397;
The Mines Act, 1952

As per section 2 (1) of the Act, any contractor working in a mine or part thereof, shall also be
liable for compliance of various provisions of the Act and Rules.

The Minimum Wages Act, 1948

Sub-rule IV of Rule 25 of the Contract Labour (Regulation and Abolition) Act provides that the
principal employer will ensure that the workers as engaged through the contactor will not be
paid wages less than the minimum rate of wages as fixed under the Minimum Wages Act.

Payment of Bonus Act, 1965

Neither the Contract Labour (Regulation and Abolition) Act nor the Payment of Bonus Act
provides that the said Act will be applicable. It has been held by the Kerala High Court that the
principal employer will be liable to pay wages to the employees of the contractor, if the latter fails
to make the payment of wages to his employees. It has further been held that the bonus will not
be payable by the principal employer to the workers engaged by two contractors, since the bonus
does not come within the purview of wages.

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