CLC circular · 20 Jan 2026
Official title
Instruction/Clarification issued regarding Minimum Wages Act, 1948, Payment of Gratuity Act, 1972 and Contract Labour(RA) Act, 1970
Summary
Check the official recordThis document consolidates instructions from the Office of the Chief Labour Commissioner (Central) regarding the Minimum Wages Act, 1948, the Payment of Gratuity Act, 1972, and the Contract Labour (Regulation and Abolition) Act, 1970. It clarifies that the Central Government is the 'appropriate government' for nationalized banks, the State Bank of India, and BHEL. It confirms the applicability of the Payment of Gratuity Act to NBRC employees. Furthermore, it provides procedural guidelines for Deputy Chief Labour Commissioners to handle wage disputes under the Contract Labour Act and mandates that Registering Officers must strictly adhere to statutory definitions when processing Principal Employer registrations for entities like the Food Corporation of India and the Rural Health Training Centre.
What you must do
Who is affected
If you do not comply
OFFICE OF THE CHIEF LABOUR COMMISSIONER(CENTRAL), NEW DELHI
SECTION-LS SECTION
INSTRUCTIONS ISSUED BY THE OFFICE OF THE CLC(C)
| Sl.No. | Act | F.No. | Subject |
|---|---|---|---|
| 01. | Minimum Wages Act, 1948 | CLC Instruction No. 2/77 dated 12.1.77 (LS.II) | MW Act, 1948- Appropriate Government with respect to the Nationalized Banks and State Bank of India. |
| 02. | Minimum Wages Act, 1948 | 26(31)2022-LS.III | Clarification issued regarding BHEL under Minimum Wages Act, 1948 |
| 03. | Payment of Gratuity Act, 1972 | 20(48)2025-LS.I | Provision for retirement/Death Gratuity for NBRC employees. |
| 04. | Contract Labour (Regulation and Abolition) Act, 1970 | 25/1/97-LS.III | Clarification issued regarding Handling of cases by Dy.CLCs(C) under Rule 25(2)(v)(a) and (b) of the Contract Labour (Regulation and Abolition) Central Rules. |
| 05. | Contract Labour (Regulation and Abolition) Act, 1970 | 20(23)2023-LS.III | Circular issued regarding FCI |
| 06. | Contract Labour (Regulation and Abolition) Act, 1970 | 20(25)2025-LS.III | Clarification sought by MoHFW in respect of Compliance with Contract labour Act and Registration with Regional Labour Commissioner. |
Government of India Ministry of Labour OFFICE OF THE CHIEF LABOUR COMMISSIONER(C) ... CLC INSTRUCTION NO. 2/77 dated 12.1.77
Subject:- MW Act, 1948-appropriate Government with respect to the nationalised banks and State Bank of India.
Under Section 2(b) of the MW Act, 1948, the Central Government is the "appropriate government" for any scheduled employment in relation to any corporation established by Central Act.
Before the nationalisation of certain banking companies, the State Government was the appropriate Government under the MW Act for the scheduled employments in relation to those banks. The position has changed subsequent to the nationalisation of these banking companies.
Certain banking companies were taken over by the Government by a Central Act, known as the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1969. Section 3(1) of this Act provides that on the commencement of the Act, the existing banks specified in the schedule shall be constituted into new banks as shown therein. Sub-section (4) provides that every new bank shall be a body corporate with perpetual succession and a common seal. Under Sub-section (5) the new banks are empowered to carry on the business of banking as defined in Section 5(b) and 6(1) of the Banking Regulation Act, 1949.
From the above provisions it would be clear that the new banks, set up under the Banking Companies (Acquisition and Transfer of undertakings) Act, 1969, in place of the old banking companies are corporations established by a Central Act. Therefore the "appropriate Government" for any scheduled employments in relation to such banks would be the Central Government for the purpose of MW Act.
The position regarding the State Bank of India is also the same. The State Bank of India was constituted by a Central Act namely the State Bank of India Act to carry on the business of banking and other business in accordance with the provisions of the Act. Under Sub-section (2) of Section 3 of the State Bank of India, it is a body corporate with perpetual succession and a common seal under the name of State Bank of India. Therefore, it is a corporation established by a Central Act and for the purpose of MW Act the Central Government would be the "appropriate government."
This office memorandum No. 1(8)/70-LS.II dated 7-6-1972 issued to ALC(C), Ahmadabad with copy to RLCs Ajmer and Hyderabad, may be treated as cancelled.
(S.M. DIKHALE) Jt. Chief Labour Commissioner(C) F.No. 1(4)/76-LS.II
To (1) All RLCs, ALCs and LEOs. (2) All Sections in CLC's office (3) Dy. Director IIIS. (4) Guard file
File No. 26(31)/2022-LS-III Government of India Ministry of Labour & Employment O/o CLC(C), New Delhi Dated 09.11.2023
To, Shri Ajay Kumar Singh, Under Secretary, Wage Cell, MOLE
Subject:- Representation received from Shri V. Elanthamilan, General Secretary, BHEL Society Thozhilalar Vuduthalai Munnani, Trichy.
Sir,
Please refer to your note No. Z-16016/24/2023-WC dated 05.09.2023 addressed to this office on the subject mentioned above.
After detailed examination of the matter, the clarifications sought have been answered accordingly. The factual note prepared is enclosed as Annexure.
This issues with the approval of competent authority.
Encl: As above.
Yours faithfully, (Pankaj Dahiya) Regional Labour Commissioner(C)Hq
Copy to: Shri Jai Bhagwan, Under Secretary, O/o DG(LW), MOLE in reference to your letter No. II-11013/01/2023-LW(A) dated 03.08.2023 for kind information. 2. Parliament Unit, MOLE in reference to your e-mail dated 19.09.2023 for kind information please.
Annexure
The factual note prepared by CLC(C) Organisation is as follows:-
i. As to whether the Central Government is the appropriate Government relating to BHEL under the provisions of the Minimum Wages Act, 1948.
Ans.(i) As per the section 2(b) of Minimum wages Act 1948
"appropriate Government" means,- (i) in relation to any scheduled employment carried on by or under the authority of the Central Government, or a railway administration, or in relation to a mine, oilfield or major port, or any corporation established by a Central Act, the Central Government, and (ii) in relation to any other scheduled employment, the State Government.
Hon'ble Supreme Court of India in Air India Statutory Corporation vs United Labour Union & Ors after detailed deliberations propounded certain principles for the word "control" and "by or under the authority". The word 'control', therefore requires to be interpreted in the changing commercial scenario broadly in keeping with the constitutional goals and perspectives.
Hon'ble Supreme Court in another judgment in Steel Authority of India Ltd. & Ors. Vs National Union Water Front Workers & Ors. also held that
"in the case of a Central Government company/undertaking, an instrumentality of the Government, carrying on an industry, the criteria to determine whether the Central Government is the Appropriate Government, is that the industry must be carried on by or under the authority of the Central Government. Such an authority may be conferred, either by a Statute or by virtue of relationship of principal and agent or delegation of power and this fact has to be ascertained on the facts and in the circumstances of each case."
Therefore, after application of the above said principles as propounded by the Hon'ble Apex Court, it can be inferred that establishment of BHEL, in relation to any scheduled employment is carrying on by or under the authority of the Central Government. Hence, Central Government is the appropriate government in respect of establishment of BHEL.
