Who Should Handle the Shop & Establishment License for a Leased Warehouse?

As a logistics provider, we are working on the client's site. The client has taken the premises on lease and appointed us to manage the entire warehouse. The client has no workforce there, and we are managing the warehouse. Now, who will take the S & E license?

You are a vendor partner. Why would you take the S&E RC? The principal employer will take the S&E RC from the respective authority, whether his workforce is there or not.

Licensing Requirements for Principal Employers

The principal employer has to take the S & E License. If the number of employees on the site is more than 20, then the principal employer also has to obtain registration under the Contract Labour Act, and you will have to obtain a license under the said Act.

Clarification on Shops & Establishments Queries

Please note that queries are related to Shops & Establishments, not the Contract Labour Act. If the workforce is more than 20, then it should be discussed separately.

So, a simple question to identify the concerned person to obtain the registration is: Who is responsible for paying the employees' salary?

Regards,
Tushar Swar

From the sketchy information found in your question, shall I presume that your client has just taken the premises on lease, including the building, with an intention to use it as a warehouse but later appointed you entirely to manage it with your own human and other resources? If so, the arrangement seems to be that of a sub-lease of the premises with or without the knowledge or consent of the lessor, which may have the remotest connection to your query.

If I am not mistaken, a license under the S&E Act is required to use any particular premises or building as a shop or establishment. In that case, only the person using the building as the warehouse is the actual user and becomes the employer to the persons employed therein. Please think it over from this perspective in the matter of deciding who the licensee under the S&E Act should be.

Obtaining Form IV and Licensing

Principal employers need to obtain Form IV from the Labour Office and issue it to the contracting firm. The contracting firm needs to obtain a license from the Labor Commissioner by submitting Form IV and all other necessary documents such as the number of persons, salary details, holiday list, etc.

Thank you.

At the outset, I must appreciate Sh. Umakanthan, who has nicely explained the position with regard to your query. Since the query has been raised from Lucknow (U.P.), the U.P. Shops and Commercial Establishments Act shall be made applicable in your case.

Definition of Employer

As per Section 2(7) of the Uttar Pradesh Dookan Aur Vanijya Adhishthan Adhiniyam, 1962, the "Employer" has been defined as a person who owns or who holds charge of, or has ultimate control over the trade, business carried on in a shop or commercial establishment, as the case may be, and includes any other person acting on behalf of the employer in the management or control of such trade, business. As such, you are required to take registration (not the license) from the state labour department by paying the prescribed fee.

I would like to point out that there is no concept of Principal Employer or Form IV as mentioned by Sh. Grpadmasekhar in this case.

Regards,
BS Kalsi
Member since Aug 2011