Contract Employee Involved In Theft.

Dear Experts,
Recently one of our Contract employee stole 750ltrs of Diesel and a vehecle and absconded. Our Client insists us to take action on the contract employee, as he was appointed by us. My questions are.
1. What is the extent of responsibility of the contractor in theft/loss cases by contract employee IN SITE LOCATION?
2. Does CLAR have any provision for taking legal action against the contract employee in such cases?
3. Who should report in the police station, the contractor,who just supplied man power, or the principle employer,whose material/goods has been solen/damaged?
4. What is the role of a contractor in such cases?
5. Can a principle employer STOP PAYMENTS to the Contractor showing such incidents or recover the loss from the contractor??
Also PLEASE mention the Acts that are applicable here.
Please experts, i need your valuable answers,Please reply.... A S A P.
Regards,
M S V R K S

The principal employer should not initiate any disciplinary action against an employee engaged through a contractor. If he does so, it will act against him only when a situation arises as to decide whether the contract is a genuine one or sham. A principal employer taking action against a contract labour shall be taken as one of the evidences of sham contract.
In case a contract labour is involved in theft, inform the contractor of the matter and remove him from the workplace and recover the theft amount from the contractor. Let the contractor decide what action should be taken against the employee. Normally, in contract deed such provision will be included.
Informing the police or lodging FIR will not, however, affect the relationship and therefore, if the principal employer has caused loss by way of theft by contract labour, he can inform the police the investigation of which will be entirely different from a domestic enquiry.
Regards,
Madhu.T.K

Once again,Thank you very much Madhu ji... if you can mention the acts applicable & how can we proceed further(we are contractors, we supplied man power to the client)

There is no need of any specific Act to take action. Since the employee involved in theft is your own employee, you can initiate disciplinary action after placing him under suspension. Talk to the Principal employer also in this regard and assure him that amount misappropriated or cost of material stolen by your employee would be reimbursed once the enquiry is over.
Regards,
Madhu.T.K

Dear Mr. Ravikanth

Please check the Form 20 in Contract Labour (R&A)Rules, 1971. You can recover the same from the workmen through the contrator. You can deduct the cost of diesel and other materials he has stolen from you, from the bill of contractor, with some percentage of overhead charges. If you go to police then it will be problem for you, your contractor and the workman. The material from the workmen through police also will not be in the usable condition.

If a contract workman has taken 750 Ltr Diesel from workspot and absconded means, it is not easy to make the theft by a single person. What happened to your security? Have you not deployed any security in Diesel Stores. If not what happened to main gate security. How they have allowed the vehicle go out without checking the vehicle. Four Barrels of Diesel cannot be taken away just simply pouring the diesel in Diesel tank of the vehicle and remove it after reaching outside the gate.

How he has loaded the diesel barrel in any vehicle without the help of manpower or hydra crane.

What is the stand of Stores people in this theft case. You can blacklist that person or contractor to refrain from engaging in your other site offices all over country.

Bhaskar ji,
We are yet to go through a detailed investigation. And yes, as you mentioned, alone that employee may have not done that, there must some inside people who are helping him.
The place is very remote and actually there is a local-non local fight too... so any action taken on the local people(the culprit employee included) from management side would turn the situation worse, we are also recieving sevaral threats from them(some local group, including the employee himself), they cut our site pipe line(of electrical & water) at night,call and abuse our staff,engineers in the site. We thought, the involvement of police is required here. Now this is not just a Theft case,its beyond that. People are just worried about to work there...... forget about the getting back the money!
We do have security,but with limited strength,and even they are non-local.
We have lodged a complaint with the local police station. Waiting for the investigation to start.
Regards,
M S V R K S

In that case the matter will become a very sensitive. Therefore, do not involve directly. It is a fact that the person involved is a contract labour and you as Principal employer has no legal relationship with that employee. But in the eyes of local people he will be an employee of your company only. Therefore, any action taken even by the contractor will reflect on you and it may become a law and order issue. Therefore, it will be advisable to take the assistance of Police on the ground of threats you have received.
Regards,
Madhu.T.K

Madhu ji, exactly.. we are doing the same..... actually we,some time back faced same kind of situation in Kerala & Maharashtra .... ultimately we had to pack-up from there.. with huge losses...... my manager is so worried about this.... but situation can be much better in Andhra,hopefully....
M S V R K S