Who Handles PF and Registration When a Contractor Reassigns Work? Seeking HR Insights

Hello to all,

Dear friends, I have joined this forum today, and it is a really good forum for HR professionals. My query is regarding the contractor. If a contractor has been awarded work that was originally assigned to him, but then he assigns it to another party/contractor, whose name should appear in the register of contractors to be maintained by the principal employer? Also, the liabilities concerning PF deduction and submission to PF authorities will be handled by the original contractor or the second party?

Regards, kdpaliwal

Mr. Paliwal,

Normally, the Principal Employer does not allow a contractor to engage another contractor for the job. In case the main contractor is engaging a contractor, it will be treated as a subcontractor, and the liabilities of Statutory Compliance lie with the main contractor only.

As far as PF, ESI, or WC is concerned, if the subcontractor has a code/policy, there won't be any problem, but ensure that they are depositing the contributions with the authority.

N N Tiwari

The contractor to whom Form V has been issued would be in the register of the principal employer. All liabilities primarily go to him. In the absence of compliance, liability goes to the principal employer.

Two dissimilar pronged strategy

The main contractor in this case is simply a conduit to the award of the contract. He must be hiving off the work into small portions for small contractors/freelancers, etc.

First question: The sourcing strategy of the organization should take into account the track record of the contractor. Refer to various tenders of the Government of India. The prerequisites for a contractor are many: financial, infrastructure, organization track record, etc.

Has your company formulated a "Vendor Code of Conduct" and vendor assessment council?

I am sure not.

Check the website of Michigan University for the same.

"Ethical Trading Initiative" gives good guidelines on the same. I have personally worked in a situation ameliorating the labor conditions wherein there are 6-7 levels of subcontracting and then freelancers, etc.

If you are unable to understand, think about thousands of poor women juggling housework plus embroidery/handwork on garments from several contractors.

The challenges are multiple: many layers of contractors and volatile labor.

How do we provide basic benefits for the poorest workers at the end of the road?

First, we map the entire network down to the last migratory population worker. Next, have a log of each individual homeworker along with contact details, work, and payment details, etc.

We use a Multi-stakeholder initiative in these scenarios to give social benefits to workers, e.g., 25% each of the share is paid by four principal parties, namely Buyer/Client, principal employer in India, main contractor, and then the worker.

The above is the best model as each and every stakeholder understands his role and fulfills his duties.

Let me know if you require further help.

Surya Vrat

9999645755

Dear Mr. Paliwal,

I suggest you must read the Work Order and find out if there is any clause regarding subletting the contract further mentioned in your work order.

Regards,
Bhavin Vahia

My query is, suppose we engaged a driver and we made an agreement with them directly (4-5 individuals). In that case, are we still under the purview of the labor contract act? (We are deducting contractor TDS).