Harsh Kumar Mehta
Consultant In Labour Laws/hr
Srinath Sai Ram
Hr Manager

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“We are a non-profit organization registered under the ESIC & PF act. We have a contractual relationship with a contractor/builder/developer to work on our site premises. The contractor has to perform civil, structural, firefighting, electrical, plumbing, finishing and related jobs per the designs provided by us and finally deliver a fully furnished building on the site premises within a given framework of time. In this case we expect the contractor to deliver on a timely basis as agreed upon. We are not concerned whether the contractor employs ‘x’ number of people and whether the same ‘x’ number is always available on the site.

In light of this are we responsible to check on the ESIC, PF and related labor compliances that the contractor undertakes? Would we be responsible for defaults on their part towards ESIC, PF and related labor compliances? If yes, how do we ensure that the details they share for our audit are true and correct as we have no control on which employee of the contractor is available on site? Any other matter that we should be vary about such that we are not caught unaware of our responsibility and liability and what additional measures should we take to be law compliant?”

From India, Mumbai
1. Sir, under both ESI Act & EPF&MPs Act, 1952, it has been laid down and presumed that the principal employer will be responsible and liable for compliance in respect of his contractor employees also. Therefore, it will not be proper and fair for a principal employer to say like "we are not concerned whether the contractor employs ‘x’ number of people and whether the same ‘x’ number is always available on the site."

2. The principal employer or his staff can verify and confirm the compliance in respect of contractor employees on the same pattern as compliance is being made in respect of regular or direct employees except that the contribution in respect of above Acts in respect of contractor employees can be recovered from contractor. You being principal employer can ask your officers or concerned officials to obtain and keep copies of challans, copies of returns, attendance and wages records etc. in respect of contractor employees also so that at the time of verification of records by above department officials, the same be produced for such inspection. There are no separate rules or law in respect of an organisation being non-profit making or otherwise.

From India, Noida
Please verify the Attendance Statement & Salary Abstract attached along with the bill by the contractor with ESI & EPF Remittance.you can link the contractor in ESI Portal to know compliance. similarly under EPF also you can ask for soft copy of ECR. you have to strengthen your Audit system
From India, New Delhi
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