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We are contractors, we give machinery (forklift) on rent to factories along with drivers. The factory HR where we are giving service asks to furnish PF, esic, salary related data of the drivers on monthly basis. As the drivers are our employees, is their any need to follow the factory HR policies and rules. Please clarify.
From India, Nagpur
Seasoned Ir Professional
Partner - Risk Management
Sr Manager Hr & Compliances
Freelancer In Hr &indirect Taxes For
Plant Hr Head
Agarwal BD
Hr Head


When your service is to lease out the fork lifts, stackers etc, then the question of CLRA Act coming in will not arise. In this arrangement it will be a rent that you will be getting from the company and that rent is inclusive of your drivers' wages, wear and tear of forklifts etc, interest on the capital invested and so many other miscellaneous charges. The contract being contract FOR service, is outside the purview of CLRA Act and hence there is no need to give details of payment of wages and PF/ESI remittances in respect of the drivers.
From India, Kannur

If at all you are engaging lesser than 20/50 based on the respective state CLRA Is not applicable but other compliances like Minimum wages, Payment of Wages, ESI, EPF, PT is Mandatory for all the persons engaged in the factory. If vendor is not complying then responsibility lies under the Factory
From India, Bangalore

That is the dispute. In this contract (a contract for service and not contract OF service) there exists no employer- employee relationship but the relationship is just like a purchaser and seller. It is just like hiring the service of a truck for transporting the goods on a regular basis or hiring service of a cab for the employees. When you hire a taxi, will you ever ask whether the owner of the taxi has paid salary to the driver? It is true if you have a car or truck and in order to run it you hire the services OF a driver and then you pay the concerned agency their bill which should include only the driver's wages plus an amount as service charges. In such an arrangement, the employer/ the factory occupier will become Principal employer in respect of the driver but when the arrangement is that a vehicle is leased out and the fuel, maintenance, wages of the crew etc are met by the agency who owns or possesses the vehicle and in consideration the latter issues an invoice then he is the seller of service in all respect. The factory owner is not at all concerned with the wages, PF or ESI, fuel, maintenance etc but he buys the service in return for a consideration payable based on kilometer run, kilo/ tons of load carried.

However, whether the provisions of the CLRA will apply or not will be finally decided by the agreement between the two parties. It is true that a clause in the agreement to the effect that the driver should inform the factory manager of his absence on any day, the driver should report to an officer of the company, the driver is subject to disciplinary action if he is involved in any misconduct etc will make the agreement take a different status.

From India, Kannur
HR Mohankumar

If you charging for service like "per hour per forklift" or "per month per forklift" then no need to provide individual driver details; but should submit the PF ESI challans along with your Invoice.

If you are charging machinery and manpower separately then all the Drivers' records copy should be submitted to the Factory HR.

Reach me if you require more info...

From India, Chennai

It is interesting to know that when the vendor is charging per kilo the drivers details are not needed but should submit the ESI and PF challans. What does it mean?
From India, Kannur

The Forklift and other machiniariers providing on hiring required to comply with PF, ESIC. Wages act by the service provider contractor.
The HR is right to ask you to submit the details of PF, ESIC, salary related data of the drivers on monthly basis. This is the rule as well as per the act because you are the contractor and the drivers/operators are attached to machiniariers provided by you. The Principal Employer is paying the cost of operation along with the hiring charges, that may be hourly or as per the unit.
The contractor only provides machiniariers but not the operators,required not to comply with PF, ESI & Wages.
Further, if your manpower engaged in hiring machiniariers is 20 or more or less are coming under CL(R&A) Act, because the Establishment of PE is registered under CL(R&A) Act.
But, No CL(R&A)license is required where no is less than 20 but to abide by the CL(R&A) rules of the state.

From India, Mumbai

for this situation you dont need to take the license under the CLRA act as you have only one employee( Driver) is engaged in the factory , but if you have the Registration under the EPF and ESIC ( in respect of total number in your firm for eligibility under the epf and esic then you may submit his monthly contribution and submit it to concenr company.
From India, Rudarpur

In this case, the principal employer and the contractor should first ensure and establish the very purpose of the services they are dealing with.
As the service receiver, PE is hiring the machine and manpower( driver) from the contractor.
Although the contractor is not a manpower services provider, and being a machine provider, he cannot skip the obligation of social security and any other social or regulatory or statutory obligation in respect of any such person he is going to provide along with his machinery which he is providing for contract services to PE within his premises.
Under such circumstances, it is mandatory for PE to establish a contract agreement that binds the service provider in the interest of statutory and regulatory fulfillment.
It is also noteworthy to say that if any person( driver in this case) is working for the contractor as an employee, then it is obligatory for the contractor to cover him under statutory norms and provide wages and compensation in accordance.
Therefore asking for epf / epic challans or any other compliance proof by PE is valid. If he(contractor) does not have any such arrangement of compliance as he is not a manpower provider or for any other reason, he should seek the Solution from the Principal employer.
It is important to understand that one cannot escape statutory obligations in respect of human resources just by saying that since I am providing Machines, I would not be responsible for its operators and escape compliance. The principal employer has all the responsibility to establish the contracts the right way and in the safe interest of both the parties.

From India, Vadodara

Mr. Madhu, I disagree.
Where any person is working in the premises of another, due to an agreement between the direct employer and the owner occupier of the premises. to provide some result other than pure sale of goods, then CLRA Will apply

There is nothing like contract of service or for service. As soon as you have some contractors employee working in that factory, CLRA applies (subject to min number applicable wife the state).

Since it is the responsibility of the occupier to ensure that all workers are paid properly and statutory dues paid, he will ask for the details rather than risk a demand a year or 2 later.

Please note that definition of worker in a factory includes contract workers.

From India, Mumbai
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