Contract Labour

As per the definition adopted by Contract Labour(Regulation and Abolition) Act 1970, workers who are employed through a contractor with or without the knowledge of the final employer to work. These labours may or may not have any direct relationship with the final employer. Those working as a contract labour are usually recruited by a third-party agency and are then supplied to the principal employer to work for him. The mode of payment of such labours is through the same agency or person through which they were recruited.

Characteristics of Contract Labour

Contract labours origins can be plotted back to the small scale industries for which it was difficult to do the entire work by themselves and therefore hired labour on contracts.

The people working as contract labours generally belong to the unorganised sector. The ground reality is that they have very low social security and have to go to great extents to make the ends meet as they have less leverage. They are expected to work for the employer until their contract gets over.

The benefits of contract labour are also there, advantages like cost effectiveness, higher productivity of this labour etc are the factors which have kept the practice of contract labour alive.

Committee for the Rights Of Contract labour

Under the Contract, Labour (Regulation and Abolition) Act, 1970 some categories of work have been abolished to use contract labours. There are several provisions to protect the rights of the Contract Labour. Even though several committees and commissions recommended to ban contract labour in the country, it was found that it is virtually impossible to do away with this practice as many people and industries depended on them. Therefore, it was decided to regulate it and protect the rights of people working as Contract Labour.

Every company or organisation in which there were twenty or more employees working as contract labours in the previous 12 months is covered under this act.


The main aim of this act is to have enough provisions to ensure that people working as contract labours get:

  • Safe working Environment
  • Complete payment of Wages as decided
  • Timely payment of the wages
  • Ensuring equal treatment to all the labour of any kind.
  • Prevent the exploitation of contract labour from the acts of the employer

Other acts and schemes on Contract labour include Unorganised Workers Social Security Act, 2008; Employees’ Provident Funds and Miscellaneous Provisions (EPF&MP) Act, 1952; Minimum Wages Act, 1948; and Employees Compensation Act, 1923.

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