Contract Labour Act now applicable to 50+ workmen establishments

Amendment
The Government of Maharashtra has on 5 January 2017 notified the Contract Labour (Regulation and Abolition) (Maharashtra Amendment) Act, 2016 (“Amendment Notification”) pursuant to which the Contract Labour (Regulation and Abolition) Act, 1970 (“the Contract Labour Act”) is now applicable to establishments having 50 or more workmen as against 20 or more workmen in the State of Maharashtra.
Date of notification
The Amendment Notification was published in the Maharashtra Government Gazette on 5 January 2017 after having received the Presidential assent.

Prior to the amendment:
Section 1(4) of the Contract Labour Act read as under:
It applies-
a) to every establishment in which twenty or more workmen are employed or were employed on any day of the preceding twelve months as contract labour;
b) to every contractor who employs or who employed on any day of the preceding twelve months twenty or more workmen:
Provide that the appropriate government may, after giving not less than two months’ notice of its intention so to do, by notification in the Official Gazette, apply the provisions of this Act to any establishment or contractor employing such number of workmen less than twenty as may be specified in the notification.
January 2017

The Amendment Notification:
Section 1(4) of the Contract Labour Act has been amended as follows:
a) in clause (a), for the words “twenty or more workmen” the words “fifty or more
workmen” shall be substituted ;
b) in clause (b), for the words “twenty or more workmen” the words “fifty or more
workmen” shall be substituted ;
c) in the proviso, for the words “less than twenty” the words “less than fifty” shall be
substituted.
Pursuant to the Amendment Notification the applicability of the Contract Labour Act has
now been narrowed to establishments having 50 or more workmen (as opposed to 20 or more
workmen). The Amendment Notification is more beneficial to the employer since the
Contract Labour Act will not be applicable to an establishment employing less than 50
workmen. However it shall be noted that this Amendment Notification is only in force in
State of Maharashtra.

Disclaimer
This news flash has been written for the general interest of our clients and professional
colleagues and is subject to change. It is not intended to be exhaustive or a substitute for
legal advice. We cannot assume legal liability for any errors or omissions. Specific advice
must be sought before taking any action pursuant to this news flash.
For further clarification and details on the above, you may write to the Labour &
Employment team comprising of Kruti Desai (Partner) at [email protected], and Shruti
Tandon (Associate) at [email protected].