TMayur
9

Dear Sir, Manufacturing Company outsourced a particular task to my firm. The company will pay me based on the number of units processed by my firm and the company doesn't bother whether I am hiring employees or not to complete the task. I have hired 25 employees to complete these tasks. All these employees have to work on the company premises. My Q is: Whether I will be a labor contractor or I will be an independent employer? Whether employees hired by me will be contract employees for the company?
From India, Pune
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Drsivaglobalhr
Doctor Siva Global Hr
TMayur
Professional

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drsivaglobalhr
295

Dear Colleague,

If you read the definition of Contract Labour (R&A) Act 1970 it says under 2(c) “contractor”, in relation to an establishment, means a person who undertakes to produce a given result for the establishment, other than a mere supply of goods of articles of manufacture to such establishment, through contract labour or who supplies contract labour for any work of the establishment and includes a sub-contractor;

Hence if you only supply material to the Parent Company, then you are not a contractor. But you are the Direct Employer for your employees who need to do all compliances as per the Labour Laws if your establishment is coming within the eligibility conditions under Acts like ESI, PF, Factories Act, Employees Compensation Act, Bonus and other such Acts.

In such case you are only a supplier to the Parent Factory and you are called Supplier or Vendor only.

From India, Chennai

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