A workman is said to be a Contract Labour when he is hired, supervised and remunerated in connection with the work of an industrial concern by or through a contractor who in turn is compensated by the same industrial concern. Thus contract labours are indirect employees who are employed for a specific and definite duration. The major problems faced by the contract labours are inferior labour status, casual nature of employment,lack of job security and poor economic conditions. The economic factors like cost effectiveness have encouraged the practice of contract labour.
The conditions of contract labour have been studied by various commissions and committees in India. Also, there are significant judgements and legislations against the contract labour system. Regarding contract labour there is an important observation by the Supreme Court of India which states that contract labour should not be employed where:-
The work is perennial and must go on from day to day;
The work is incidental to and necessary for the work of the factory;
The work is sufficient to employ considerable number of whole time workmen; and
The work is being done in most concerns through regular workmen.
The Contract Labour (Regulation and Abolition) Act, 1970 have been the significant legislation which was enacted to get rid of the miserable condition of the contract labour and to regulate the employment of Contract Labour. The Act applies to every establishment in which 20 or more workmen are employed or were employed on any day on the preceding 12 months as contract labour and to every contractor who employs or who employed on any day of the preceding 12 months 20 or more workmen. It does not apply to establishments where the work performed is of intermittent or casual nature. The Act also applies to establishments of the Government and local authorities as well.
