The Contract Labour (Regulation and Abolition) Act, 1970


This Act aims to regulate the employment of contract labourers in certain establishments, and to abolish such employment in certain circumstances. It extends to the whole of India.

The Act applies to all establishments in which 20 or more ‘workmen’ are employed, or were employed, on any day of the preceding 12 months as contract labourers, and every contractor who is employing or has employed 20 or more ‘workmen’ on any day of the preceding 12 months. It does not apply to establishments where work is intermittent, or of a ‘casual nature’.

A ‘workman’ – states the Act – shall be deemed to be employed as ‘contract labour’ when hired at an establishment through a contractor, with or without the knowledge of the 'principal employer’. A ‘contractor’ is defined as a person who undertakes to produce a certain result for an establishment through contract labour, and who supplies contract labourers for any work at the establishment.


  1. What does the Act say about the prohibition of contract labour?

    The ‘appropriate Government’ (central or state) may prohibit the employment of contract labour in any process, operation or other work in any establishment by notification in the Gazette of India. Before doing so, the government shall ascertain whether the process, operation or other work is necessary for the industry, trade, business, or manufacture that is carried on in the establishment; whether such work is of perennial nature; and whether it is sufficient to employ ‘wholetime workmen’ instead of contract labour.

  2. What does the Act say about the welfare and health of contract labour?

    The Act states that in every establishment where 100 or more contract labourers are employed, contractors shall provide and maintain one or more canteens for the workers. The ‘appropriate Government’ may make rules for the number of canteens; the date by which the canteens shall be provided; the standards of construction, accommodation, furniture and other equipment in the canteen; and the quality of the food served there.

    Where workers are required to spend the night at an establishment for work, contractors shall provide and maintain rest-rooms or other suitable accommodation; such accommodation shall be lit, ventilated and maintained in a clean and comfortable condition.

    The contractor must provide and maintain a sufficient supply of ‘wholesome’ drinking water for the contract labour at convenient places, a sufficient number of latrines and urinals situated such that they are convenient for workers to access, ‘washing facilities’ and readily accessible first-aid boxes.

  3. What does the Act stipulate about the payment of wages?

    The contractor is responsible for the payment of wages to each worker employed as a contract labourer. Every principal employer shall authorise a representative to be present at the time of disbursement of wages by the contractor. If the contractor fails to pay wages within the prescribed period, or shortchanges (‘makes short payment’), the principal employer shall be liable to pay wages to the workers in full, or the unpaid balance, as the case may be. The principal employer may recover the amount paid as wages by either deducting it from any fee payable to the contractor, or as debt payable by the contractor.

  4. What are the penalties for contravening provisions of the Act?

    Whoever obstructs an inspector discharging their duties under this Act shall be punishable with imprisonment for up to three months, or with a fine of up to Rs. 500, or both. Whoever contravenes the Act’s provisions on prohibiting, restricting or regulating the employment of contract labour, shall be punishable with imprisonment for up to three months, or with a fine of up to Rs. 1,000, or both. If anyone contravenes provisions of this Act, and if no penalty is mandated for such a contravention, they shall be punishable with imprisonment for up to three months, or with a fine of up to Rs. 1,000, or both.

    If any of the offences mentioned under the Act is committed by a company, then the company and all persons in charge of, or responsible to, the company at the time of the offence shall be deemed as guilty and liable to be prosecuted and punished accordingly.

  5. Under what circumstances can establishments and contractors be exempt of the provisions of this Act?

    In case of an emergency, the ‘appropriate Government’ may exempt any class of establishments or contractors from all or any of the provisions of this Act or rules made under it. The government shall issue a notification in the Gazette of India, which specifies the conditions and time period for such exemption.

    Focus and Factoids by Gokul K. P.


Ministry of Law and Justice


Government of India, New Delhi


05 Sep, 1970