Labour License Registration- Overview

It is an Act to regulate the employment of contract labour in certain establishments and to provide for its abolition in certain circumstances. The Contract Labour (Regulation and Abolition) Act has been introduced and enacted by the Indian Legislature since the year 1970. The act intends to forbid the employment of contract labour in certain circumstances and to regulate the working atmosphere of contract labour during employment. There are several provisions laid down in this act concerning the employment of contract labour.

The Contract Labour (Regulation and Abolition) Act applies to the following establishments:

• It applies to any entity in which twenty or more workmen are employed on any day of the accounting year as contract labour.
• It applies to any contractor who employs or who employed twenty or more workers on any day of the accounting year.
• Also, it does not apply to the companies where any work performed is of the intermittent nature.
• It does not apply to the companies if any work is not performed for more than one-twenty days in a year.
• It does not apply to the companies located in the special economic zone (SEZ).
• It does not apply to the companies if any work performed is of seasonal nature for more than sixty days in a year.

As per Section 2 (1) (c) of the Act, a contractor refers to any person who supplies contract labour for any work of an establishment and includes a sub-contractor. A contractor undertakes the responsibility to produce a given outcome for the establishment, other than the supply of goods or services to such establishment.

There are two advisory boards regulating various aspects of contract labour employment.

• 1. Central Advisory Board
• 2. State Advisory Board

Every establishment which proposes to employ contract labours for its work is required to obtain a certificate of registration from the respective Government.

The labour license registration process is explained as follows:

• The employer should go to the Registrar Office and fill up the application in Form No I and along with the receipt representing payment of the prescribed fee.
• If the application for registration is fulfilled in all aspects, the authorized personnel shall register the establishment and grant the copy of the registration certificate in Form-II.

Every certificate of registration will display the following;

• The name and address of the company
• The maximum number of workers to be contracted as contract labour in the establishment.
• The type and nature of business.
• Other important information, if any.

The following documents are to be produced by the contractor for registration:

• Copy of the report stating the legal status of the firm
• Photograph of the document showing allotment of PF Code Number
• Copy of receipt or cover note or insurance policy received
• Copy of challan showing remittance of security deposit
• Labour license fees

In case an establishment or a company required to be registered under Section 7, has not been recorded within the time specified for the purpose under that section, then the penalty will be given as per section 36.

Every contractor who has employed twenty or more workers on any day of the month has to obtain a license for engaging contract labour working for any establishment.

The authorized licensing officer will issue the license as per the provisions under section12.

License is granted following the under mentioned process:

• The contractor has to apply to the Licensing Authority along with the application for the grant of a license in Form no. IV
• A security fee of Rs. 20 has to be deposited at the time of application.
• The receipt of the fee paid to the licensing officer has to be kept.
• A certificate by the employer in Form V stating that he has employed the respective contractor for his company.
• The licensing officer may make further necessary verifications and grant the license in Form VI, which has to be renewed before 30 days of the expiry date along with the prescribed fee, failing which the contractor will have to pay 25% more fee than the original amount.

Procedure for renewal of the license is mentioned below:

• The contractor is required to approach the Licensing authority before 30 days of the expiry date of the license along with the application for the renewal of license in Form VII with multiple copies.
• The required fee has to be remitted by the applicant. If the applicant fails to renew the license within the specified date then the contractor will have to pay a fee of 25% more than the original fee payable.