Every Principal employer is taking precautionary measures while awarding the contact that all liabilities towards PF, ESI, Gratuity, Employees' Compensation, Insurance, wages, Bonus etc. are borne by the contractor only. The contractors' Statutory Compliance are carried out by Third Party where all the original documents are verified meeting the compliance and then & then only the bills are release for payment.
The PE ensures that all the contractor employees are provided with appointment letters, payslips, leave wages etc. by the Contractor. Once the employee accepts the offer of the new contractor, his employment ceases with the earlier one and therefore the question of paying gratuity does not arise irrespective of the employee work in the Principal Employer Company premises even for more than 10 years.
Because generally the contract is awarded for a maximum period of 3 years, now days for 2 years. For Gratuity eligibility, you have to serve in one organisation for more than 5 years.
PF, ESI deductions are statutory requirement, so contractor is bound to deduct it.
Now days it is Mandatory to every contractor to have PF & ESI registration no. (Code no.) for pre-qualifying to fill Tender.
Regards,
Suresh