Hello all,
I am currently working with an organisation with branches in various states across the country, with overall more than 200 contract workers. The appropriate government for us is the State government. My query was that since the act applies to establishments with more than 20 workers, will the act apply to us? what, if any compliances will be required if the act is not applicable, both to us and the contractor?
Also, if we have a single contractor who is working for us across all locations, will anything be required for him then?
looking forward to your suggestions.
Anand K

From India, Hyderabad
we do not have more than 20/50 contract workers in any state (as limit is applicable).
From India, Hyderabad
Under state jurisdiction CL act applies to a unit. If your manpower is lesser than the threshold manpower of that state, then the act will be applicable to the contractor.
It is a dicey act. Does the contractor have supervisor at each location in each shift? If the answer is no then it can be case of abolition of the contractor manpower & their transfer to employer role.

From India, Mumbai
Thanks for your reply Shrikant
the contractor does not have a direct supervisor at each site, but limited supervision is allowed under the act, as supervision in itself does not mean sham contract. The attendance is marked by the contractor and wages are processed by them as well, and the contract is also framed for the work to be done, contractor is free to take as many employees as he want provided its For the contractor, if the act is applicable to him, he needs to get form V from us. Do we also need to be registered for issuing the same?

From India, Hyderabad
Dear Anand,

I also have same type of job. We also have many branches all over India where we have given some contracts to deploy menpower as per requirement. The difference is we work as prime contractor and sub-let different contracts.

Now before commenting on your points, I clear the applicability of the Act:_

Principally, the Act is applicable:-

“Every establishment in which 20 or more workmen are employed or were employed on any day of the preceding 12 months as contract labour. Every contractor who employs or who employed on any day of the preceding twelve months 20 or more workmen”.

However, in case of Maharashtra wef 05th Jan 17, the word “20 or more workmen” has been substituted by “50 or more workmen” (notification dtd. 05th Jan 2017).

So, in my view the Act is not applicable to you (as your have less than 20/50). But you have to Act as a principal employer. If you place a single contract / agreement to a contractor where he deploy 20/50 or more personnel than he is covered under the Act as a Contractor.

This will be differently applicable in different state. If compliance is not done as per the Act, the area Inspector can impost penalty to you agst Abolition of the Act. The Director of your company may be asked to present before the Commissioner Office. The competent authority have adequate rights to take legal action in such cases. Pls don’t get panic, usually it is not done. But if any accident occurred at site than it is more complex (for both PE and the contractor).

Even if you engaged a single contractor than he has to differently follow the obligation in every state (all locations). You have to issue Form V and valid Agreement for further compliance.

Hope I am cleared to your points. Mr Umakant sir can put more light on the matter.

From India, Delhi
Limited supervision will have to be substantiated by documents if the authority file case for abolition of contract.
From India, Mumbai
Dear Mr Anand, you have to Register your Establishment under The CLRA Act, Only then you can issue Form V to a Contractor for obtaining License.There are instances that application for grant of License to the Contractor is rejected on the ground that the principal Employer is not registered under the CLRA Act
From India, New Delhi
In AP the act is applicable even you engage 5 persons in the state.
From India, Mumbai
thank you all, this has been very helpful.
I have one more query. when it comes to the registration of PE, will i have to get registered in every state individually or can i do registration in the state my corporate offices are located?

From India, Hyderabad
If you do not for under CLRA under central jurisdiction, you will have to register in each state provided the state rules becomes applicable to you because of manpower you engage therein.
In such case you will need to have office in such state(s). Even if you do not have your office, find someone who is ready to share his premises for namesake & address for monthly rent.

From India, Mumbai

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