Do You Need a New Labor License for Short-Term Work if You Already Have One?

Labor License Requirement for Short-Term Engagements

Is it necessary to have a labor license for engaging labor for a period of one month for different works, even though the contractor already has a labor license for another work covering the above period?

If the additional work is incidental to the work for which he has taken a labor contract license, then there is no need for taking a separate license. However, if the number of employees proposed to be engaged also changes due to this additional work, he must renew the license by paying additional fees. The license fee is determined based on the number of workers proposed to be engaged.

Regards,
Madhu.T.K

Actually, our case is - if a contractor doing a labor contract work is ended by a particular month with a valid labor license thereto. Subsequently, on an emergency basis, the same contractor is asked to continue to do the same labor contract work for a further one more month for which he does not have a labor license. However, the above contractor already has a valid labor license for another work where he is engaging labor contracts in the same location/premises. So, here our question is, can this labor license be considered for the above extended month without exceeding the maximum number of workers allowable limit, or is it necessary to take a separate labor license for the extended month?

I believe that the license is for one year. If both the contract and the license period have expired, he has to take another license or renew the one in hand by submitting the Form V issued by you. He cannot engage people for you with the license he has taken for another principal employer. At the same time, if the work is in the same premises, and the principal employer is the same, there is no high risk. But legally, it is not correct.

Regards,
Madhu.T.K

In the trade practice, particularly in project, construction, and mining contracts, it is common to avoid legal disputes and ensure continuity of service by not making permanent commitments, employing local workers compulsorily, or making hefty payments through retrenchment. Instead, each contract or a portion of work is usually initiated and completed within a shorter period, followed by the establishment of a new contract under a different name. In such cases, separate licenses are typically obtained. In many instances, more than one contractor is maintained in a roster, and they are assigned piece-rate contracts with a reduced number of workers through rotation. The specifics of these practices vary from one location to another and from one company to another.

Kind regards,
Regards

As far as I understand, your new work premises are the same, and you intend to manage within the licensed limit of contract labor allowable in the license issued by the authority. In my opinion, all you have to do is approach the Licensing Officer of the area with an application stating the nature of the amendment (mentioning your new work) and the reasons thereof. The Licensing Officer is empowered to issue an amended license. Of course, if there is an increase in the engagement of contract labor, you have to pay an additional fee and security deposit.

Regards,
BS Kalsi
Member since Aug 2011

I appreciate your response, but I would like to add that if the work orders are significantly different, then we may need to obtain separate CL licenses.

If the work order has been in favor of a different contractor, then, of course, you have to obtain another license. However, if it is with the same old contractor, the Licensing Officer may agree to issue an amended license incorporating the details of the new work. It depends on the individual; I think you need to discuss the issue with him personally.

Regards,
BS Kalsi
Member since Aug 2011

It might be that what you said is true, but if the Declaration of Import (DoI) and Declaration of Conformity (DoC) conflict in those two given Work Orders within the same premises, especially in SEZ projects, it is safer to obtain two licenses. It all depends on the Form-3 and Form V provided by the clients.

Regards,
Jayesh