Wage Related Issue Of Drivers Of Hired Vehicle

Our establishment is a central government PSU located in a particular state. We are hiring vehicles from contractors on a contract basis and paying them on a monthly basis as per the terms of the agreement. Can we term the drivers assigned to the vehicles as "contract laborers"?

Since our establishment is in a particular state, should we follow the wage revision of the central government or the state government? Kindly clarify.

As stated by you, you are hiring vehicles from transport contractors. You are paying the agreed amount as per the travelled kilometers. The transport contractor becomes your contractor, not his employees.

The drivers should be paid applicable state minimum wages.

Thank you, sir, but we are paying the contractors monthly on a lump sum basis (as per the agreement amount). The Provident Fund of the drivers is being deducted from the contractors' bills at 24.24% and is deposited into their respective EPF Trust accounts.

My question is, since we are following the central PF rules for their PF, why can we not insist that the contractor pay the wages as per the central government rules?

It is clarified that we are engaging the contractors to supply the vehicle minimum for a period of 3 years continuously depending on their performance. After that, either a new tender is invited, or an extension is granted as per the decision of Management.

Against each vehicle, a minimum of one driver is engaged by the contractor. Drivers are the employees of the Contractors, and the administrative control of the driver rests with the corporation.

The Contract Labour (Regulation and Abolition) Act 1970 Clause 2(b) may please be referred to. As per the provision: "Workmen shall be deemed to be employed... when he is hired in or in connection with such work by or through a contractor with or without the knowledge of the principal employer."

As a central government PSU, you must also engage other contractors. What are you doing in their cases?

If your PSU is registered as an employer under the State Contract Labour Act and is also the contractor, in that case, state minimum wages will be applicable.

If you are paying the contractor as per central minimum wage, you must insist that the employees receive the benefit. Even if you are paying on a lump sum basis, you must have arrived at the figure after some calculations.

Dear Member,

Please clarify your statement that PF Contribution at 24.24% is being deposited to the respective PF Account lying in the PF Trust. Please provide a breakdown of the 24.24%.

Is the Principal Employer remitting PF Contribution to the PF Office or Trust?
Is the Contractor remitting PF Contribution to the PF Office or Trust?
Please clarify, "Are we following the central PF rules?"
You have admitted that you are paying Contractors on a lump sum basis. Please refer to the Tender/Quotation where the Contractor has given the breakdown. Has the Contractor included the Minimum Wages of the State/Central Govt?

Thank you.

Dear member,

Please go through your agreement. If you are hiring a vehicle for a predecided mileage on a monthly or yearly basis, you have liability as the principal employer only. Regarding wage payment, if your company has more than 50% of shares held by the Central Government, then Central minimum wage applies; otherwise, state minimum wage. The contractor can change the driver at his will, and you have no role in it as per the contract since you are only hiring the vehicle. Hope the issue is clarified.

The breakup of hire charge bill is against drivers' salary and the hire charge of the vehicle. The bill is paid on a monthly basis (not on a KM basis).

The PF amount at 24.24% is deducted from the contractor's hire charge bill. Out of which 12% is from the driver's salary and the rest 12.24% from the contractor's account. The PF amount is deducted from the monthly bill and deposited by us in our PF Trust Account.

Our organization is a Central PSU (Government of India). As per the agreement, the driver's salary is to be paid by the owner of the vehicle. As per the agreement, the owner of the vehicle should comply with all the statutory obligations as per the central government/state government rules.

Hi,

Dear members, kindly give your suggestions/views on the issue.

Thank you.