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Contract Labour Clarifications

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Submitted By koripallisrihari
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Pages 12
Important Clarifications On Contract Labour
• Anil Kaushik
Chief Editor, Business Manager - HR Magazine

Q. What is the difference between contract labour and outsourcing? Which is better option and why? Ans. Neither the term “Contract Labour” nor the term “outsourcing” has been defined under Contract Labour Act.The intention of ultimate net result of both the terms appears to be same. Term “outsourcing” has been coined very intelligently to create confusion between the two. “Contract Labour” is a term which is applied to man power engaged by somebody else to produce a given result to principal employer where this man power has no direct relationship of employer-employee with the principal employer. This includes the simple supply of manpower to principal employer by contractor where contractor is not involved in specified activity. “Outsourcing” conveys more or less same meaning. When an employer engages somebody else to deliver a specified result where employer is not involved with the man power engagement or supervision or control activity over such man power. If any activity which is outsourced to someone and carried outside the premises of the principal employer, such manpower engaged will not be termed as “workman” under Contractor Labour Act. It is not the nomenclature of the term but the real intent to decide when it is a Contract Labour or outsourcing. It can also be said like contract labour reflect manpower where as outsourcing reflects the job or the activity. Bombay High Court in the case of Sudhir Kondiram Jadhav (2002 I CLR 97) has held that workers employed by agencies will be the Contract Labour under the Act. Q. Is Contract Labour Act applicable when jobs and services are outsourced? Ans. When the jobs and services are outsourced and are carried out in some other premises not being premises under controlled and management of the principal

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