Can IT Firms Directly Hire Contract Employees or Must They Go Through Third Parties?

Hello everyone, I am working in an IT firm. I want to know whether an employer can directly employ a contract employee or can only employ from a third party. I would request the experts to give suggestions on this.

Thanks, Chandrika

Hi Chandrika Jeena,

The term "contract employee" itself denotes that the employment or engagement of the employee is through a contractor. Therefore, to say that the employer can directly employ a contract employee is a misnomer. My surmise is that you are referring to a case where the employer engages an employee for a fixed period, that is, the appointment order would indicate the date on which the appointment would come to an automatic end. This type of employee is called a "fixed-term employee".

V. HARIKRISHNAN
Joint Commissioner of Labour (Retired)
Government of Tamil Nadu
Labour Law Consultant
Chennai

Please, will you tell me the responsibilities and duties of the principal employer for contract employees?

Dear Sir,

In the case of contract employees, the Principal employer has to ensure that the contractor complies with all the statutory requirements regarding hours of work, payment of wages, weekly holidays, national and festival holidays, minimum wages, etc. In addition, the principal employer has to ensure the requirements of health and safety under the relevant Acts applicable to the establishment. If the contractor defaults in any of his statutory obligations, then the Principal employer could comply with the statutory requirement and then recover the cost from the contractor.

V. HARIKRISHNAN
Joint Commissioner of Labour (Retired)
Government of Tamilnadu
Labour Law Consultant
Chennai

Dear Sir, can you brief for how long a person can be a "fixed-term employee"?

Regards, Tanmaya Panda

An employer can directly employ a contract employee, but they should take care of the employee's ESI and PF, i.e., statutory needs. If the employee is hired through a contractor, the contractor will take care of the statutory requirements.

Regards,
Raghav

Dear Mr. Tanmaya Panda,

The laws, as they stand now, do not prescribe a time limit for which a person can be employed as a fixed-term employee. However, the fixed term cannot be unreasonably long so as to give the impression that the employer, by engaging an employee on a fixed term, is trying to circumvent the laws.