Navigating Employer Responsibilities: How to Handle Contract Engineers in Your Factory?

In our organization, which operates in the heavy engines industry, a highly reputed software company is engaged for the implementation of SAP and allied services from time to time. Currently, SAP has been installed. Recently, this software company has been awarded a contract for certain allied services related to SAP, for which 2 software engineers and 2 service engineers from that company will be engaged for 3-4 weeks. Based on this order, those engineers who are employees of that software company will enter our factory premises and work for the specified duration. Therefore, I require the following clarifications:

1. Does this situation create any principal employer and contract labor relations, considering that the involved employees hold higher ranks and are all under the direct employment of that company?

2. What statutory compliances do I need to ensure?

3. Since these employees receive high salaries, they are likely not covered under ESI. In such a case, do we need to provide any other medical benefits for them? Is the Employees' Compensation Act applicable in this scenario?

Regards,
DG

Employer Responsibility in Contractual Engagements

In such cases, the responsibility of the employer, i.e., the company where the employees are engaged, will depend upon the contract of their engagement. Normally, the contract for service will include a clause to this effect. For example, the professionals deputed shall be given accommodation, food, and travel at the cost of the client. The client shall be liable for any injury, including death, caused to the professionals while they are on duty at the client's premises, etc. Therefore, the compensation will depend upon these factors and not on labor law.

Regards,
Madhu.T.K