Dear All

In fact many of the Clients of the Staffing Industry insist Compliance of Contract Labour (Abolition & Regulation ) Act 1970 [CLRA] . The Clients without understanding the implications of CLRA and the Industry reciprocating it just for the sake of getting the Business undertake its compliance without understanding that Compliance of CLRA is not a one way route.It involves mutual duties and responsibilities.

It is the basic rule of CLRA compliance that the Contractor cannot get a licence without registration by the Principal Employer. Therefore one needs two hands to clap.

The relevant provisions for beginning the Compliance under CLRA are:

The Principal Employer needs to do the following :

7. Registration of certain establishments.-
(1) Every principal employer of an establishment to which this Act applies shall, within such period as the appropriate Government may, by notification in the Official Gazette, fix in this behalf with respect to establishments generally or with respect to any class of them, make an application to the registering officer in the prescribed manner for registration of the establishment: Provided that the registering officer may entertain any such application for registration after expiry of the period fixed in this behalf, if the registering officer is satified that the applicant was prevented by sufficient cause from making the application in time.
(2) If the application for registration is complete in all respects, the registering officer shall register the establishment and issue to the principal employer of the establishment a certificate of registration containing such particulars as may be prescribed.
8. Revocation of registration in certain cases.- If the registering officer is satisfied, either on a reference made to him in this behalf or otherwise, that the registration of any establishment has been obtained by misrepresentation or suppression of any material fact, or that for any other reason the registration has become useless or ineffective and, therefore, requires to be revoked, the registering officer may, after giving an opportunity to the principal employer of the establishment to be heard and with the previous approval of the appropriate Government, revoke the registration.
9. Effect of non- registration.- No principal employer of an establishment, to which this Act applies, shall--
(a) in the case of an establishment required to be registered under section 7, but which has not been registered within the time fixed for the purpose under that section,
(b) in the case of an establishment the registration in respect of which has been revoked under section 8, employ contract labour in the establishment after the expiry of the period referred to in clause (a) or after the revocation of registration referred to in clause (b), as the case may be.

Application has to be made in Form I and Certificate will be issued in Form II

The Contractor is required to do the following :


12. Licensing of contractors.-
(1) With effect from such date as the appropriate Government may, by notification in the Official Gazette, appoint, no contractor to whom this Act applies, shall undertake or execute any work through contract labour except under and in accordance with a licence issued in that behalf by the licensing officer.
(2) Subject to the provisions of this Act, a licence under sub- section (1) may contain such conditions including, in particular, conditions as to hours of work, fixation of wages and other essential amenities in respect of contract labour as the appropriate Government may deem fit to impose in accordance with the rules, if any, made under section 35 and shall be issued on payment of such fees and on the deposit of such sum, if any, as security for the due performance of the conditions as may be prescribed.
13. Grant of licences.-
(1) Every application for the grant of a licence under sub- section (1) of section 12 shall be made in the prescribed form and shall contain the particulars regarding the location of the establishment, the nature of process, operation or work for which contract labour is to be employed and such other particulars as may be prescribed.
(2) The licensing officer may make such investigation in respect of the application received under sub- section (1) and in making any such investigation the licensing officer shall follow such procedure as may be prescribed.
(3) A licence granted under this Chapter shall be valid for the period specified therein and may be renewed from time to time for such period and on payment of such fees and on such conditions as may be prescribed.
14. Revocation, suspension and amendment of licences.-
(1) If the licensing officer is satisfied, either on a reference made to him in this behalf or otherwise, that--
(a) a licence granted under section 12 has been obtained by misrepresentation or suppression of any material fact, or
(b) the holder of a licence has, without reasonable cause, failed to comply with the conditions subject to which the licence has been granted or has contravened any of the provisions of this Act or the rules made thereunder, then, without prejudice to any other penalty to which the holder of the licence may be liable under this Act, the licensing officer may, after giving
the holder of the licence an opportunity of showing cause, revoke or suspend the licence or forfeit the sum, if any, or any portion thereof deposited as security for the due performance of the conditions subject to which the licence has been granted.
(2) Subject to any rules that may be made in this behalf, the licensing officer may vary or amend a licence granted under section 12.


Application is to be made under Form IV and the Licence will be issued under Form VI .


Next time when you undertake Compliance of CLRA the Industry needs to tell the Client of mutual duties and responsibilities.


With Regards


VS Rajan Associates,
Advocates & Notaries -Legal Consultants-HR
No.27, Ist Floor, Singapore Plaza,
No.164, Linghi Chetty Street,
Chennai - 600 001.
E-mail : rajanassociates@eth,net,
Off : 044-42620864, 044-65874684,
Mobile :9840142164- 9025792684.