ABC company has given a contract to XYZ company. XYZ company has given the same contract (Distributed) to 10 contractors. The total strength of 10 contractors is 110 But only two Contractors have engaged more than 20 labors to rest 8 less than 20. ABC company based on XYZ request has issued form III to 2 contractors (whose strength is more than 20). In this case
a) Does XYZ company needs to take a labor license.
b) IF XYZ company is reluctant to take a labor license does all the remaining 10 subcontractors need to take labor license or only two contractors (whose strength is more than 20)

From Turkey
Labour Law & Hr Consultant
Bhartiya Akhil

Bhartiya Akhil

Dear R1111,
ABC company is a PE and XYZ company is a contractors under the CLRA Act. ABC company is liable to issue Form V to the contractor XYZ company. Certainly contractor XYZ company is liable to take license since under it 110 labours are engaged through various sub-contractors.
The XYZ company can not say that it will not take license and the sub contractors will take it, legally.
However, I have seen practice of issuing labour licence to sub-contractors some places. In my view, this is wrong practise. In India, SAB SE BADHA RUPAIYA.

From India, Mumbai

ABC Company for whom the work gets performed by the contract labor through any contractor is the principal employer under the CLRA Act,1970.. XYZ Company being a contractor to ABC is the contractor under the CLRA Act. Therefore, one cannot be a principal employer and contractor at the same time.
First of all, it is the discretion of the principal employer to permit sub-contracting of certain works. If he does so, he is also liable for the omissions and commissions of the sub-contractors under the Act and in which case, only the principal employer has to issue Form V to the sub-contractors and not the main contractor.
If you see the definition of the term "contractor" u/s 2(c) of the Act, it includes a sub-contractor also. Therefore, if any sub-contractor employs 20 or more no of workmen independently, he has to obtain licence and observe other formalities. However, when the main contractor takes up license in respect of the total no of contract labor employed therein including the sub-contractors' workmen, the sub-contractors need not take up separate licences.

From India, Salem

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