Navigating PF Codes for Contract Labour: What Legal Challenges Should We Expect?

Dear friends,

Our company is a manufacturing company in Maharashtra, not yet operational. However, we have employed around 500 local people (Contract Labour) through 5 local Contractors. These contractors do not have a permanent work order from us. Also, they have recently opened their Contract enterprises as they were previously engaged in other jobs.

Currently, these contractors do not have a PF Allotment Code (Business No.). Instead of assigning PF Allotment numbers to the 5 contractors, we are considering appointing 1 main contractor under whom these 5 contractors will operate (known as sub-contractors).

I would appreciate any guidance on the legal aspects of this arrangement. I am scheduled to meet with the PF Commissioner very soon, as per my Management's instructions.

Please advise on any potential obstacles or queries that may arise in this regard.

I look forward to your prompt response.

Best regards,
Shaunak Marulkar (9423877450)
Pune

Hi Shaunak,

Regarding your query, you should not encourage only one contractor, and all the other four contractors are under him (and they are locals). If any labor problems arise, all 500 contract laborers will stop, resulting in your production being hampered. To avoid all these problems, it is always better to give out contracts and distribute the huge manpower to avoid litigations. It is better to advise them to obtain their own ESI/PF code numbers and not cover them under your company's code numbers. Finally, do not issue any permanent work orders, and set a timeframe based on the volume of work.

Hope the above is sufficient.

Thanks & Regards