The Object of the Contract Labour Regulation and Abolition Act, 1970 is to prevent exploitation of contract labour and also to introduce better conditions of work.

Contract labour generally refers to “Workers employed by or through an intermediary on work of any establishment”. Such labour can be distinguished from the direct workers in terms of employee-employer relationship and the method of wage payment. The contract labour does not have any direct relationship with the principal employer. It has a distinct way of working unlike in any other classes of labour like permanent, temporary, casual etc. The contract labour system is based on triangular relationship between the user enterprises, the contractors including the sub-contractors as middle man, and the worker. The workers are recruited by an outside agency or person and are supplied to an establishment or engaged on its work. Unlike direct labour, they neither feature on the muster roll of principal employer/ establishment nor are paid directly.