In Hr Job
Kuljit Pal Singh
Legal Professional
Labour Law/ir
+7 Others

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Dear Seniors,
I have recently joined manufacturing company and observed that the contractors here are localites and not professional. I have also noticed that the labours which they supply are not paid as per minimum wages act & also pf challans are not attached as per number of workers.
I would like to know how I can take actions against them as when I informed problems with the bills of contractors the higher authorities have to say that if we take any action against them there will be loss in production as we have all labours of contractors.

Dear Prachi,
I would like to ask some question if you don't mind....
1) When did you join this oraganization ?
2) Why at the outset company had not engaged professional contractors??
3) Do you pay minimum wages to contractors as per MW acr??
4) Do you think before taking any action against the contractor negotiation may help to improve the situation???

Dear Prashant,
1. I joined just 1 & half month back.
2. To avoid union management had taken decission not to have workers on roll hence contract labours. The company could not engage professional contractors as the contractors here are the previous union leaders & pressurised the mgt to take them as contractors & they will supply skilled unskilled labuors to us.
3. We pay to contractors as per minimum wages act but further they are not paying to their workers.
4. The contractors are not decent & have roudy behaviour. Though all in company know about their background no body is ready to utter a word against them & also advise me not to take panga against them.

the first things your should be review of the payment pay for contractor labour as per as wages act. & 2nd if you pay mw act to the contractor your responsiblities verify wages registor or contribution paid challan 3rd if contractor is not able to pay contribution you should be termination to the contractor...
Dear Friend,
This is common problem companies face, and hats off to u to locate such problem, but the thing is to convince your organisation about the seriousness of such non-compliance. As ultimately its Principle employer who will be held resposible in future for such non compliance with interest and damages and may become huge finacial liabilities on company

Dear Friend
As i agree with Mr Kuljit, i suggest you to pls calculate their non-compliance libility and hold their payments through finance dept, other wise finally the principal employer as liable to pay with all interest and damages, and mean while avoid such type of contrcators in the plant,
Santhosh NK

Dear Prachi,
Greetings for the day,
Go through the advice of kujeet and santosh and ask your accounts dept. to stop the payment of bills raised by your contractors and also take your employers in confidence and ask them that they are liable to pay all penalties & damages if any disputes arises.
thanks & regards,
sumit kumar saxena,
9899669071, 0120-4131277

Hi Prechi

As mentioned above you have taken over the new assignment just 2 months back.

1.Have you checked up whether your establishment has taken registration of employing contract labour from the registring officer.

2.Whether the existing contractors are having labour licence

by engaging 5 or more labour in a day.

3. Whether the contractors are having ESI & PF own code numbers or you are covering them in your company code numbers.

If so you are awarding jobs to various contractors for executing the jobs as per your requirement (Mechanical, Civil, Electrical etc.,)

Before awarding contract you have to give a Purchase Order by putting all the terms and conditions including statutory coverages and damage clauses etc and take their consent.

Also you have to mention whether the job involves skilled, semiskilled or unskilled labour or lumpsum payment.

After completion of job the user department has to certify the job undertaken by the contractor whether the job or as per Purchase Order specifications or not.

Once the bill approved by the user department for payment the bill has routed through ESI/PF certification department for necessary deductions.

Once the bill received by the certification department (contract labour incharge) should verify the mandays worked by their labour (skilled,semiskilled & unskilled) , attendance sheet & paysheet and the ESI & PF employee & employer (contractor part) contributions shall be recovered from out of their bills and forwarded to Accounts department for payment to contractor.

Also it is the responsibility of the Principal Employer to see that the wages to be paid to contract labour within the stipulated time (before 10th of every month) to avoid non-compliance.

As a Principal Employer it is our responsibility whether the contractors are paying minimum wages under Contract Labour (R&A) Act-1971.

Please check with your local labour department for contract labour minimum wages details and follow accordingly.

If u follow the above procedure you will not have any problems with contract labour or the question of payment of ESI/PF contributions. If you fail to recover the PF/ESI contributions and non-remittance to concerned authorities within stipulated time the Occuper/Factory Manager shall be responsible.

Hope the above is clear

Tks & Regards

Hi Prechi,
The best thing to implement is to pay the ESI & PF from your side, the wage disbursement to be done in the
presence of the management representative hence clear the payment and only pay the commission amount to the contractor, if this implemented then you are complying every thing and not giving any scope to the contractor. For some time the issue will be there from the contractor but the workers over a period of time will appreciate you because they are getting higher amounts and even may be ready to depart from the contractor and support you and your organiztion hence try to win the people.
Regards - kameswarao

Dear Prachi, Ultimately the principal employer only resposible for ESI & PF, and MW, if you are paying them as per the act, then call and tll them and make insure the follow the act.

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