Labour License To Sub Contractor Of A Contractor Engaged By An Establishment - CiteHR
Psdhingra
Legal Analyst, Hrm
R.N.Khola
Labour Laws & Ir
Kuljit Pal Singh
Legal Professional
J.Gopi Krishna
Agm Hr & Ir
+4 Others

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Hi all!
Greetings for the upcoming Diwali!
Need some inputs on labour licence issue...
Actually our organization has engaged a contractor (A) for a big technical job. This contractor A has further engaged a sub-contractor (B) for supply of manpower for the said job.
Now, in such a case to whom we should issue form V to our contractor-A or to his sub-contractor-B or to both. As as per CLRA act even a sub-contractor engaged in the establishment is a contractor .
There is a view that the Contractor should get a Registeration Certificate for proposed engagement of contract worker directly of indirectly and then he should issue form V to his contractor (i.e. sub-contractor-B).
Please help as it is urgent!
Regards,
Arvind Tiwari
IFFCO, Paradeep
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Dear Arvind,

According to the CL(R&A) Act, the principal employer is required to issue certificate in Form V to the contractor & you your self have also stated that according to the definition of the contractor under this Act we are also to consider sub contractor as contractor & therefore you are also to issue this form V to the sub contractor. Thus if you allow your contractor to engaged sub contractor then you will be required to issue this certificate to the sub contractor also.

It is further clarified that contractor is not required to have R C. Contractor is required to obtain licence from the Licensing Officer while the P E is to apply for registration Certificate.

Regards,
R.N.Khola


Dear Friend,
Normally who has taken the contract from Principal Employer(PE) should be given Form V, but there is no restriction by law to issue form V in the name of Sub-Contractor.
From the PE point of view it is more convenient to issue Form V in the name of Contractor rather the sub-contractors...
As per the CLRA act, within the same premises, two individual parties cannot register them as PE. Hence, with advise & requisition from the contrator to issue form v to sub contractor, the form V Can be issue to sub contractor also. This is the regular process in most of the industries as of now.
Thank you for your prompt response.
Further to your suggestion if we give form V to both the contractor and the sub-contractor, then we will be issuing 2 form V for the same work. And 2 parties will be obtaining labour license for one job and for same set of workers. Is this OK?
Thanks you for ur prompt response!
Further to your suggestion if we give form V to both the contractor and the sub-contractor, then we will be issuing 2 form V for the same work. And 2 parties will be
obtaining labour license for one job and for same set of workers. Is this OK?
Arvind Tiwari
Dear Arvind,
Both the contractors will apply for their own set of workers. The Act itself include the sub contractor in the definition of the contractor,therefore. it means that if there is any sub contractor & is employing the requisite no. of workers for obtaining the licence then he will apply for licence. Any of the sub contractor will definitely take the work from any of the main contractor & this means that nature of work may be the same for two or more than two number of contractors.
Regards,
R.N.Khola


Dear friends, The form V could be issued to two or more contractors for the same work, as basically the labour license is checked for the contract labourers engaged in an establishment. Whether they are of sub-contractor or sub-sub contractor does not matter. In mega projects the chain of contractors could be pretty long. In such cases the principal employer would be required to issue multiple form V for same or similar type of work. It is stated that the Form Vs are to be issued for the same set of workmen. When thecontractors are different it cannot be the same set of workmen as both will be having seperate set of workmen. Issuance of second Form V is preferable to facing prosection for engaging non-licensed contractors.
Regards
KK
Dear Arvind,



Just consider, if the contractor or sub-contractor sub-contracts the work to several other sub-contractors, would not the issue of multiple Forms V tend to back door entry of several others as contractors to get a lable of contractors without any effort? Further, would you as a Principal Employer like to take responsibility and obligations on behalf of all the contractor and his sub-contractors, as specified under the provisions of CL(R&A) Act and the Rules thereunder? So, you need not be so liberal to make yourself liable on behalf of one and all contractor/sub-contractors.



Although in the definition of "contractor," a sub-contractor is also included there, but, before issue of Form V to the contractor and/or sub-contractor, the question arises whether you, as a Principal Employer, have actually accepted or not the sub-contractor to supply labour? Further, if the contractor is not supplying any labour and only the sub-contractor is destined to supply the labour, Form V can be issued only to the Sub-contractor and not the Contractor.



You may like to read the provisions of Rule 21(2) of the THE CONTRACT LABOUR (REGULATION AND ABOLITION) CENTRAL RULES, 1971, which prescribes as follows, which binds the Principal Employer for all the acts of his contractor:



EXTRACT OF RULE 21

21. Application for a licence.-(1) Every application by a contractor for the grant of a licence shall be made in triplicate, in Form IV, to the licensing officer of the area in which the establishment, in relation to which he is the contractor, is located.



(2) Every application for the grant of a licence shall be accompanied by a certificate by the principal employer in Form V to the effect that the applicant has been employed by him as a contractor in relation to. His establishment and that he undertakes to be bound by all the provisions of the Act and the rules made thereunder insofar as the provisions are applicable to him as principal employer in respect of the employment of contract labour by the applicant.



Further, Form V also reads as under and makes the Principal Employer responsible for the acts of his contractor.



FORM V

Certified that I have engaged the applicant (name of the contractor) as a contractor in my establishment. I undertake to be bound by all the provisions of the Contract Labour (Regulation & Abolition) Act, 1970 and the Contract Labour (Regulation & Abolition) Central Rules, 1971, in so far as the provisions are applicable to me in respect of the employment of contract labour by the applicant in my establishment.



As such you may first need to be sure, whether you have accepted the sub-contract under the agreement with your contractor. Further, if you have actually accepted the sub-contractor, you need to ascertain who (the contractor or the sub-contractor) actually supplies the labour. So, you have to issue the Form V only to that person, who is actually responsible for supply of the labour and NOT TO ALL.



P S Dhingra

Vigilance & Change Management Consultant

New Delhi
Thank you for the inforamtive write up. i appreciate your help. could you please confirm.
are the floriculture produciton units with pack house facility come under factories act 1948?????? PLEASE ADVISE or write to .

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