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.
(i) Both conditions of obtaining a certificate of registration and employing labour through a licensed contractor by the principal employer must be satisfied; Food Corporation of India Workers’ Union v. Food Corporation of India, 1990 LLR 589 (Guj).
(ii) The employees engaged by a contractor to run a canteen for a company do not become employees of the company if the contractor fails to register the contract with the appropriate authorities; General Labour Union (Red Flag) v. K.M. Desai, 1990 LLR 208 (Bom).
(iii) Licensing is only a regulatory measure and it does not create any privilege; Steel Authority of India v. Steel Authority of India Contract Workmen’s Union, (1990) 64 FLR 573 (Karn).
(iv) No special qualification is required for a person who seeks a licence; Steel Authority of India v. Steel Authority of India Contract Workmen’s Union, (1990) 64 FLR 573 (Karn).