KK!HR
Management Consultancy
RAMU-HR
Manager-hr

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Respected seniors
This Ramu working as DM-HR in manufacturing sector. Our management has given unit expansion project to L&T company. Accordingly L&T has obtained Contract Labour license. L&T is engaging so many sub contractors for building construction works on piece rates. As per our terms and conditions, L&T has agreed to pay statutory contributions (PF &ESI) in their code only. Statutory records which is required under CLRA Act (Form-A, B, C, &D) also maintaining by L&T. All sub-contract workmen also enrolled in the L&T records
My query is that
Now L&T is offering some portion of work is to " ABC" company. ABC company is denying to remit the statutory contributions in L&T code and said that if we allow like that our PF & ESI codes will be null values till completion of the work.
Then we may be questioned by PF & ESI enforcement authorities for non payment of contributions.
kindly give us your valuable advice on this issue how to follow.
Ramu
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The contractor ABC company has a point in that it is an establishment covered under the PF Act 1952 and is hence subject to compliance audit. They will be answerable to PF authorities regarding their compliance status and it will be cumbersome to explain it by the L&T route. Although it is possible to explain the situation by tallying the unique identity number of all the individual workmen but PF Officials are not known to be very customer friendly and could create a lot of technical issues. So since L&T is only an intermediate contractor and is without any assigned responsibility, it is either the contractor, ABC company or the Principal Employer i.e., the establishment where the work is taking place, who have to answer to the PF authorities, so the plea of the ABC to let them comply is a practical and feasible solution. Otherwise you may find yourself in difficulties at much later time when PF Inspector will take up your compliance inspection. But at any rate, be it L&T or the ABC company pl keep a copy of compliance document and persuade the PF authorities to hold compliance inspection from time to time.
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