Engaging contract labour: learnings from landmark judgements

Abstract

Despite debates on its hiring, contract labour is a growing form of employment in India. Establishments usually maintain a workforce composition of both regular workers and contract labour for optimizing their available resources and ensuring financial prudence. However, in the process, they often get embroiled in compliance issues related to regularization and ‘equal pay for equal work’ in the context of contract labour. In this article, we have explored the different judicial interpretations of the Contract Labour (Regulation and Abolition) Act, 1970, on contract labour. For this, we have referred to the landmark judgements passed by the Supreme Court of India on the deployment and regularization of contract labour, and also their entitlement to equal pay for equal work. A scrutiny of these judgements directs us to advise establishments to avoid engaging contract labour in their core and perennial activities. Considering the statutory provisions and the possible legal complications, we have recommended some measures to establishments to mitigate the underlying risks in deploying contract labour alongside regular workforce in similar kinds of jobs or activities. We propose that the legislative framework grants flexibility to industries to generate employment to contract labour, without compromising on the rights of these workers.