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Dear All
Im vignesh working for a construction company as HR executive
i want to know the concept scope of the contract of service and contract for service.
Pls awaiting for your reply.
thanks & regards,
Vignesh hegde

From India
bhushan dahanukar

Dear Vignesh,
Since you are in Construction industry, there is major role for HR in Contract Labour activities.
Normally, all civil activities done through Contractors only and HR role to monitor all statutory compliance in time and handle IR issues. The activites mention below.
1. Obtain Certificate from labour office to engage contractor & its labour
2. Ask Contractor to obtain labour license, PF establishment code, ESI code or W.C. policy which is applicable.
3. Comply Min. Wages to ensure all labour should get min. wages in time. Direct contractors to do all these.
4. Handle any IR situation arises or accident happens. Control the mob.
5. Tie up with nearest hospitals for immediate medical treatment if any accident happens with contract labour.

From India, Mumbai

Dear Vignesh

A contract of servcie and a contract for servcie are both contracts with reference to employment between the parties but with different characteristics. A contarct of servcie is one which creates rights and duties of the nature of master and servant relationship.Explaining the nature of contact of service and master and servant relationship , the Supreme Court in Dharangdhara Chemical Works ltd V.State of Saurashtra & Ors 1957 I LLJ page 477,observed that a contarct of servcie is characterised by the following features ;

1) one person hires the other person to do his work. The former is called the master and the latter is called the servant.

2) the servant agrees that in consideration of a wage or other remuneration , he will use his work and skill in the performance of some servcie to the master.

3) the servant in such performance of servcie to the master, agrrees to be subject to the control of the master.

Thus in a contract of servcie,the contract is a direct bipartite contract between the master and servant for performing certain work and the master exercises direct supervision and control over the servant and directs him as to not only what is to be done but how it is to be done and when it is to be done. Thus any contract that has employer-employee relationship is contarct of servcie.Therefore all permanent employees on the rolls of a company are in contarct of servcie.

A contract for servcie on the other hand does not envisage a direct contract with the servant by the master(employer) but with a third party (middleman) called contractor.Thus the employer enters into a contract with a contarctor to get his work executed. The contractor in turn hires workmen/ employees to execute the work assigned to him. Thus in a contarct for servcie the employer does not have direct control and supervision over the contarctor's workers.They are under the direct control and supervision of the contractor.Therefore there will be no diect master and servant relationship between the employer(who may also be called principal employer) and the contract workers . for example, the house keeping job can be assigned to a contractor.

Another form of contract for servcie will be enagaging an independent professional/consultant for utilising his exepert servcies for a fee or sum to perform comapny' work. For example, a contrsuction company utilising an engineeering consultant in designing a structure or engaging an electrical consultant to do maintenance work of it's electric equipment like air conditioners etc. This is also called contarct for servcie because rthe professional so hired is indpendent of control and supervision of the employer in doing his work . thus in contarct for servcie teh re will be absence of control and supervison by the employer and the other party, be it a contarctor or an independnet consultant, will be free to do his work.


HR & Labour law advisor


From India, Mumbai
Good Morning.
My name is Ku, as a HR Officer working in apparel industry. I have some queries to clarify, please assist.
1)Can the company issue a contract for service to foreign contract workers? Provided they are working in garment factory as sewing operator, will have 3 years contract with Company. Under such situation, if we issue them a contract for service with 3 year contract, is it unlawful or are we against the law?
2) If we can issue the contract for service, can we say that company are not compulsory to provide them benefits stated in the Employment Act exactly. Example, AL accordance to Years of Service, Sick Leave & etc. because "employee" definition in EA 1955 is those under CONTRACT OF SERVICE. Or those who under contract for service are still cover under EA1955. Please advise.
Thanks & Regards,

From Malaysia, Kuala Lumpur
korgaonkar k a

Dear Saikumar ji,
Thank you very much for your elaboration on "Contract of Service" and "Contract for Service". I always enjoy with your postings which are really knowledge base.
This year old posting by you came to my reference once again while responding one of the queries couple of days back. Link is as under:
May I request for your contribution in the above link / thread?

From India, Mumbai

Dear Shri keshav ji

I am sorry for responding late as I was tied up with some domestic commitments and thus could not visit the site for some days.I have gone through the content in the link cited in your post. My view on the first query is that the engagement of an outside agency for inspection and certification of materials no doubt falls under Contract for service and such agency has all the features of an independent contractor and thus does not fall under the purview of the CLRA as you rightly observed.

My view on the second query is that the security guards enraged through a Security agency may not fall within the definition of worker under factories Act, though they are present on the premises of the factory since they are performing watch and ward duties which are not either incidental to or connected with manufacturing process in the factory. Their leave entitlement may have to be therefore decided as per the concerned State's Shops and Establishments Act or as per the provisions of the State Security Guards Act, if any existing in Delhi,


In-House HR & IR Advisor

From India, Mumbai

@ B Saikumar...Thank you for your elaborate explanation about contract of service and contract for service. as per that I understand all job contracts like you mentioned Housekeeping whereby a third party (a contractors) is placed with an order for certain job which he executes by hiring some workmen (contract labours) is a contract for service. whether contract for service attracts compliance under provisions of CL (R&A) Act.

From India, Delhi

Hello Saptarshi
Where a third party agency hires persons for doing house keeping job of a company, it is nevertheless a contarct for service but comes within the purview of CLRA Act.
HR & Labour Law consultant

From India, Mumbai
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