Govt to propose annual licence for hiring contract workers across projects

Companies will soon not be required to obtain separate licences for hiring workers for executing different sets of projects across the country.

Labour and Employment Minister Santosh Kumar Gangwar is likely to introduce the Code on Occupational Safety Health and Working Conditions, 2019, in the Lok Sabha on Tuesday. It will propose an annual licence for companies, instead of acquiring separate licences for new work orders and hiring contract workers.

“A company will get an annual licence to operate all work orders related to a certain occupation across the country, instead of obtaining say 10 licences to hire workers for 10 different projects,” said a senior government official, requesting anonymity.

According to the provision, no company will “undertake or execute the work through contract labour” without a licence issued to it “after satisfying” various conditions, such as the minimum level of turnover, among other things. “The move will help big firms like Tata Consultancy Services, which executes several projects across the country and has to obtain several licences for hiring contract workers under the present law,” the official added.

If the company wants to work in a single state for different projects, the permit needs to be obtained from the state government.

As per the Contract Labour (Regulation and Abolition) Act 1970, every contractor who wants to employ at least 20 workers has to obtain a licence for engaging contract labour working for any establishment. Every time a company seeks to acquire a licence, it has to send a formal request to the licensing authority, along with an application, security fee and other documents. The licence is granted after “necessary investigations” which is renewed from time-to-time.

The Code will subsume 13 central labour laws, including the Factories Act 1948, the Mines Act 1952, the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996, and the Contract Labour (Regulation and Abolition) Act, 1970, among others. It will be applicable to establishments with at least 10 workers.

According to another proposal, employers will have to give appointment letters to workers at the time of joining. There is no legislation at present that mandates appointment letters. Workers often find it difficult to establish proof of employment, giving companies some room to violate labour laws and not extend any social security benefits to them.