In our organisation which is a manufacturing industry employing more than 2000 employees on roll and almost 1500 worker as contract labour. We are covered under PF and ESI.
In case we engage any firm for certain finance and taxation job then aren't they liable to comply with pf and esi clauses. The firm argues that they will not come under pf and esi as their manpower is less than 10.
My argument on the above is that as a responsible principal employer we must ensure vendors with pf and esi code because any person will enter in our factory premises should be covered under pf and esi to safeguard his interest.
Need your advice.

From India, Delhi

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Dear DG
If they have been engaged in your premises on contract as manpower contract you are liable to check whether they are complying with labour provisions like PF & ESI.
If you have engaged them for auditing purposes you are not responsible for their compliances
but even if the number is less then 10 also they have to compulsoryly comply to the provisions of PF & ESI because as said PRINCIPAL EMPLOYER is always responsible for labour compliances.
P.Venugopal Reddy

From India, Hyderabad
Yes sir, being a responsible principal employer we are asking vendor to abide by cl,pf & esi act. As this is a contract of service and will engage 2-3 employees on regular basis so we are insisting them to follow strictly the prov of CL,PF,ESI acts. However vendors point of argument is they are not covered under the above acts because their manpower strength is below 10.

From India, Delhi
Vendors normally use this tactic saying that they are having less than 20 employees and hence not covered under PF. Therefore, it will be wise for you to employ only those contractors/vendors who are having their own code and complying all their employees or else to give coverage to his employees under your code number.

From India, Mumbai
Hi sir, i feel you agree with me that these issues more than a statutory obligations are related to personnel directly, hence it is very much suggested to identify a service provider who have the requisite registrations, Pl do not deprive the employees with their eligible benefits.

From India, Hyderabad
If they are on contract for service their employees are to be covered under your ESI/EPF code.It is better to give this kind of work to a consultant on contract for service.

From India, Thiruvananthapuram
Sorry Iam correcting my first sentence as "if they are on contract of service their employees are to be covered under your ESI/EPF code." Varghese Mathew
From India, Thiruvananthapuram
For PF the minimum number of employees is 20 while for ESI , it is now 10 .
Hence if the vendor says he not liable to be covered under PF & ESI because his manpower is less than 10, he is right .

From India, Hyderabad
What if the vendor have five clients and he is providing nine employees to each client and say that ESI/EPF is not applicable to him? Varghese Mathew
From India, Thiruvananthapuram
Dear DG,
The argument by your auditing firm on the basis of employee strength is below 10 /20 is not valid.
But the contact you had with this firm is a contract for services, according to me. And under this pretext I will say, you are not liable to it for non complaince of labour laws.

From India, Mumbai

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