Navigating Subcontractor Licensing: Who Issues Form-V and What Are the Requirements?

We are engaging a certain number of contract laborers in our company through various contractors (we have registration for our company under the CLRA Act, 1970). One of our contractors is engaging a subcontractor for part works. The subcontractor is also engaging more than 20 contract laborers. The main contractor obtained a labor license from the concerned authority under CLRA.

Subcontractor Licensing Requirements

Does the subcontractor need to obtain a license from the said authority as well? If so, what is the procedure and what are the documents required?

Principal Employer and Form-V Issuance

Who is the principal employer for the subcontractor? Who will issue Form-V to the subcontractor?

The contractor will issue the Form V, which the Principal Employer will countersign.

With due respect, Sir, I would like you to review your reply in terms of the following:

CLRA Act Definitions

- The CLRA Act does not define the term "Sub-Contractor."
- The CLRA Act defines the term "Principal Employer."
- The CLRA Act defines the term "Contractor," which includes Sub-Contractor(s).

Form V Details

- The title of Form V is "Form of Certificate by Principal Employer."
- If the Contractor covers the strength of employees by his Sub-Contractor(s) in the license obtained by him (Contractor), are the Sub-Contractor(s) required to obtain a separate license?

Your answer will be a guiding factor to the HR Fraternity.

Regards

Just want to add one point: if the subcontractor's name is included in the Registration Certificate of the Principal Employer, then the PE needs to issue Form V to the subcontractor for obtaining a Labour Licence.

Regards,
Santosh

Dear Bhaskar (Boss) ji, with due respect to you, Sir, I would like you to review your reply in terms of the following:

- The CLRA Act does not define the term Sub-Contractor.
- The CLRA Act defines the term Principal Employer.
- The CLRA Act defines the term Contractor, which includes Sub-Contractor(s).
- The title of Form V is "Form of Certificate by Principal Employer."

If the Contractor covers the strength of employees by his Sub-Contractor(s) in the license obtained by him (Contractor), are the Sub-Contractor(s) required to obtain a separate license?

Your answer will be a guiding factor to the HR Fraternity.

If the contractor secured the contract and wants to do only supervision and hand over the entire job to the sub-contractor, then obviously the sub-contractor must obtain the CL License.

Understanding the Role of Sub-contractors under the Contract Labour (R&A) Act 1970

Under the Contract Labour (R&A) Act 1970, there is no term like "sub-contractor." However, as a principal employer, we must verify whether the contractor has obtained prior permission for such deployment or if their contract agreement permits the deployment of a sub-contractor. According to the Act, the sub-contractor has the same standing as a contractor. In that scenario, the principal employer will issue Form V on the request of the contractor. The principal employer will also assume all liabilities of the contract labor engaged by the sub-contractor. For any compliance under the Act, the contractor will come into the picture as they have engaged the sub-contractor.

Regards,
Sitansu Rath
Bhubaneswar, Odisha

Please read the definition of "Contractor" as defined in Sec 2(c) once. This definition includes the term "subcontractor."

Only the principal employer will issue the Form V.

Pon

According to me, since contractors include subcontractors as well, the following options are available:

1. The Principal Employer can issue Form-V to the main contractor, and the main contractor should include the name and number of employees employed by the subcontractor while applying for a labor license. The only requirement is that there should be a valid subcontract agreement between the contractor and the subcontractor.

2. The Principal Employer can issue Form-V to the subcontractor provided the name of the subcontractor is included in the Principal Employer's certificate. Since, as per the definition, contractors also include subcontractors, in the eyes of the Principal Employer, contractors and subcontractors are considered one and the same.

Since the Principal Employer is responsible for any wrongdoing by both the contractor and the subcontractor, the end result will be the same whether he gives Form V to the subcontractor or main contractor, or if the main contractor gives Form-V to the subcontractor, as far as the Principal Employer is concerned.

Delegation of Authority for Issuing Form V

Any responsible, designated, or authorized employee can be delegated for this purpose on behalf of the principal employer. While issuing Form V, he/she (authorized employee) should verify the issued work order in detail (i.e., specific job, validity period of the contract, strength of the maximum manpower to be deployed, and deployment of any subcontractor with its provision/permission under the issued work order, etc.).

Subcontractor Considerations Under the Contract Labour Act - 1970

Under the Contract Labour Act - 1970, there is no mention of a subcontractor. If a subcontractor is allowed under any circumstances, the footing of the subcontractor will be the same as that of the contractor, and the manpower deployed by the subcontractor will fall under the definition of contract labor.

Regards,
Sitansu Rath
OPGC Ltd.
Bhubaneswar, Odisha
Cell No: [Phone Number Removed For Privacy Reasons]

Thank you very much for the early response, friends. I have a doubt regarding the BOCW Act. Can the principal employer allow laborers to work night shifts? What are the procedures to allow them?

Hi,

Can you help with information on how the principal employer can generate Form V?

Thanks,
Roy