Who's Responsible for the Contract Labour License: Main Contractor or Subcontractor?

Dear All,

I would like to know whether CLRA is applicable in the case mentioned below. If yes, who will be responsible for the liability?

We are a contractor with 15 workers engaged at our site. On the same site, we have appointed a subcontractor, on whose muster there are 22 workers. Who is liable to obtain the Contract Labour License?

The contract agreement is between us and the client, not with the subcontractor. We have a normal agreement with the subcontractor.

Please revert.

Thanks,
MCS

Since you have subcontracted 22 employees, while the principal employer (your client) has no legal relationship with the so-called subcontractor, your total number of employees will be deemed to be 37 (15+22). Therefore, you will need to obtain a Contract Licence. On the other hand, if there is a contract between the principal employer and the subcontractor, then you will be exempt, but the subcontractor will be responsible for obtaining the contract license. In this scenario, there will not be a subcontractor; instead, the subcontractor will act as a contractor.

Under both circumstances, the principal employer should also register under the Contract Labour (Regulation and Abolition) Act.

Regards,
Madhu.T.K

[QUOTE=mcs_2008;1207407]
Dear All,

If fewer than 20 contractors' workmen are engaged on a site, there is no need for any registration or labor license. If a contract is entered into with either a sub-contractor or the main contractor, the responsibility will be decided based on the provisions of the terms and conditions of the contract.

I look after all contract labor and statutory compliance. We have awarded the EPC contract to Punj Lloyds, but the said agency has engaged several sub-agencies. How will I keep track of the subcontractors because we have issued Form V to obtain the Labor License as the Principal Employer?

Hi,

I have seen from past experience that on some occasions the Labour Department asks for the registration of subcontractors as a contractor of the Principal Employer. However, since the Principal Employer does not have any legal relationship with the subcontractors, it is not possible to officially list them as contractors in the Registration Certificate of the Contract Labour Regulation and Abolition (CLRA) Act.

I understand that the ultimate responsibility for the workers of the subcontractors also lies with the Principal Employer. My question is, how justified is the claim of the Labour Department to include the names of subcontractors in the CLRA Registration Certificate?

Thank you.

Hi, we also have a subcontractor, but we haven't made any agreement with the subcontractor. Can anybody please provide me with a draft of the agreement to be made between the main contractor and subcontractor?

Thanks,
Shankar

Dear All,

As per the CLRA Act, there is no subcontractor term; every subcontractor will be a direct contractor to the principal employer. In your case, being an immediate employer, you are liable to obtain a labor license.