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Dear All,
Seeking advise from the seniors that We are a manufacturing company and having many contractors under the contractors’ labour act, 1970. Recently many problems are being faced by us related to this. Some contractor workers filed a complaint against us they did not get their salary and the Conciliation officer sent a letter for the same. Now my query is that the said worker does not have a relationship with us and the ultimately control on them by the contractors. At this junction, we can be responsible for the same and I know that being qua principal it is our onus to distribute contractor’s worker wages as per status. Nevertheless, the letter should be initiated against the contractors. Further it is pertinent to mentioned here that we had complied with all formalities like (RC, License, agreement, etc ) , Thus all are requested to clear the same point that why the labour conciliation officer do not send the letter to contractors. Seeking your valuable suggestions for the same.
Note: I am not negating our onus being principal employer

From India, Chandigarh

Very true, in respect of contract labour, the contractor is the employer and any disputes relating to their employment should be addressed by himself. The Labour Officer should also discuss the issue with the contractor only. But since the workers are working for you and the principal employer cannot escape from his liabilities or obligations to ensure timely payment of wages etc, you can also be called for conciliation. It is also true that principal employer forming part of any dispute shall make the contract sham which may lead to further complications. But it may also be understood that you are not called as a party to the dispute but a witness. The principal employer should have knowledge about the non payment or even late payment of wages. If they are not paid in time, obviously, their contributions towards ESI/ PF should not have been deposited by the contractor. It will also become your liability tomorrow. Therefore, please check that also.

If the workers have filed complaint against you, the possibility of some elements to make the contract sham one cannot be ruled out. If your officers have direct control and supervision over the contractors' workers by way of approving leaves, granting overtime, sanctioning advances, addressing their grievances etc, then it will prove against you.

From India, Kannur

What Mr. Madhu TK has been explained is absolutely right. Please keep in your mind that you can not escape your responsibility after engaging contract labor and then closing your eyes. You must monitor every inch day to day basis regarding payment, statutory compliance ( PF, ESI , Bonus , Gratuity etc. ). Rather it is essential to have one contract labor cell in your organization who will monitor all these things rigidly to avoid any future complications. Organizations like Tata Group, other big industries are doing so to avoid problems who are engaging huge number of contractors / contract labors.

S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531

From India, New Delhi
Thanks for your prompt reply, here let me clear you that we do not have any direct control on the workers of the contractors, and We are monitoring every inch day to day qua compliance under various act. We have even hired an external audit team for the same. But the main question is that the conciliation officer sends a letter for appearance and clarifying our position in regard of contractor’s workers complaint. And further is again pertinent to be mentioned that we are not inclined to wriggle out our onus, but my question is that the conciliation officer does not unimpeachable send letter to us in regard of contractor's workers complaint.
From India, Chandigarh

No, it all depends on how the workers put the complaint. If the workers have portrayed that you were aware of the non payment of wages then shouldn't the conciliation officer call you? Certainly he should call you and that is why I have said that it may not be as a party to the dispute but as a witness the incident of non payment of wages.

If you had not no control over the workers of the contractor, then why should you worry? You can very well appear. But it is just impossible that an organisation who is legally complaint and as even engaged an auditor to monitor the compliances could not find out whether their contract workers have been paid wages or not.

From India, Kannur

Dear Mr Gaurav,
Read out what the following:
FORM V[See Rule XYZ]
Form of Certificate by the Principal Employer:
Certified thet I have engaged the applicant ­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­ as a contractor in my establishment. I undertake to be bound by all the provisions of the
contract labour(Regulation and Abolition) Act, 1970 and the contract Labour
(Regulation and Abolition) XYZ State Rules 197. .., in so far as provisions are
applicable to me respect of the employment of contract labour by the applicant in my establishment.(Hope you understand the reason of calling you by the authority)
The duty of principal employer to ensure that all the workmen under contractor must get their salary within the wage period. The rules speak, all payments to workmen by the contractor to be monitored by the HR/representative of PE.
Now, you pay the unpaid wages on behalf of the contractor and realised the amount from the bill of contractor with penalty(if having clause in work order) . You can not runaway from the responsibility without paying. Pay & submit the wage sheet, not required to attend the proceeding.
Further, don't pay the agency for his poor monitoring of the job assigned to them for which this situation has arisen.

From India, Mumbai
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