CLRA Compliance- Its Role in Fair Business

August 5, 2019

CLRA Compliance:

CLRA compliance stands for the Contract Labour Regulation and Abolition act. It was passed in 1970 to raise the standard of working conditions and prevent exploitation of employees.

The CLRA Act applies to establishments or organizations that employ twenty or more people. These people must be employed on any day of the last twelve months as paid workers or employees. The act concerns the principal employer of the organization and to the employer who employs or employs 20 or more people, including for one day in the last 12 months, as hired labour.

The act ensures that all contract workers, while they may not receive all benefits that full-time hires have, are entitled to basic amenities such as access to a canteen, drinking water, restrooms and so on.

CLRA Checklist:

When organizations are looking to get started, they must keep a CLRA checklist ready not to violate compliance. These include documents necessary for the formation of an organization, such as:

  • Form I: This is theapplication for registration of establishments employing contract labour.
  • A trade license: It is a certification issued by the licensing department of a municipal corporation. This license permits the organization to conduct its business in a given area or locality
  • Partnership deed: This is a document that prevents any dispute or misunderstanding between partners of a company. This deed is signed on stamp paper. An application form along with fees is then submitted to the Registrar of Firms of the State where the firm is situated. All partners or their agents must sign the application.
  • A Factory license: A certification by the Chief Inspector of factories that allows the organization to carry out manufacturing activities in the state.
  • A previous registration certificate (if applicable).
  • Documents that validate the details in the application(s).
  • Other registration certificates: This is in the cases of co-operative firms to denote trustees and other such instances.

History of the CLRA in India

A landmark case in 1960 that of the Standard Vacuum Refining Company versus their workmen laid the foundation of the CLRA act in India. The Supreme Court gave a monumental judgment concerning the protection of interests of contract workers. The Court issued strict guidelines and laid down specific regulations concerning contract labour. It clarified which work and assignments were to be abolished.

This factor led to the enactment of the Contract Labour (Regulation & Abolition) Act, 1970.

The Ministry of Labour and Employment drafted the Contract Labour Bill after recommendations from a tripartite committee. This was examined and discussed at the 23rd session of the Indian Labour Conference in 1965.

The bill was introduced in the Parliament on 31st July 1967 and referred to a joint committee of the Parliament in 1968. Both the houses of Parliament passed the bill after receiving the assent of the President on 5th September 1970.

It came into effect on 10th February 1971. Provisions for central and state-level rules have been made for the advancement of the act.

The CLRA act prevents contract workers from being exploited. This act enables contract employees to work freely and provides a legal cushion if the employers or organization violate policies. This act benefits employees and is one of the most important acts when it comes to Labour compliance in India.

Labour law compliance for contract employees is now a critical aspect of today’s dynamic market. It caters directly to a lean workforce that handles vital elements of a competitive business.

Labour law compliance also involves the participation employees as well. Knowledge about crucial acts engaged in marketing and trade can ensure that fair activities, effectively contribute to the national economy.

Let TalentPro handle your statutory compliance needs. Contact us today.

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