Outsourcing Radiography: Are We Missing Any Compliance Requirements?

Outsourcing Radiography Work and Compliance Requirements

In our factory, the radiography job is outsourced to a vendor as outwork. The vendor takes the plates from our factory to their location, performs the radiography, and returns the material to us. Such work falls under the definition of outwork under the CL(R&A) Act and does not come under any compliance provision as per the CL(R&A) Act. Please guide me on whether this is correct or not.

Furthermore, are there any other compliance requirements (e.g., PF/ESI) that we might need to ensure or that we do not need to take responsibility for as it is outsourced work? Which statute states this?

Regards,
DG

You are right in your approach; such a contract is a contract for service, and employees of such contractors are outworkers. You do not have any liability to comply with the CLRA Act, nor any other compliance under EPF/ESI or EC Act. You don't have any control or supervision over the work done by contractors; it squarely falls under the definition of an outworker—who is an out-worker, that is to say, a person to whom any articles or materials are given out by or on behalf of the principal employer to be made up, cleaned, washed, altered, ornamented, finished, repaired, adapted, or otherwise processed for sale for the purposes of the trade or business of the principal employer. The process is to be carried out either in the home of the out-worker or in some other premises, not being premises under the control and management of the principal employer.

Regards

Licensing and Compliance for Radiography Work

The agency that undertakes such radiography works is licensed, and the Department of Atomic Energy issues certificates to them. They don't engage much manpower but rather licensed technicians. You are not liable for any statutory compliances on their premises.

Regards,
Pon

I have the same problem as mentioned by PON. Some of our work is given to outside vendors who take the goods, manufacture them at their site, bring back the finished goods, and take their payment. As you said, it does not require compliance with PF/ESIC on our part. However, all these expenses are shown as 'Labour Charges' in the balance sheet as per accounting standards.

During the ESIC inspection, the official stated that it is our responsibility to deduct PF/ESIC if the job contractors do not have PF/ESIC numbers. I would appreciate your input on this matter, especially if you can clarify that we are not required to ensure compliance with PF/ESIC for job contractors.

Regards,
Avinash K.