Navigating Contract Licenses for Overseas Clients: Who Provides the Necessary Forms?

Dear All, I am Dilip Kumar, working as an HR Executive. I have a query: our organization is providing third-party services to OEM and Tier-I companies. Our clients are overseas suppliers. As per the CLA Act, I need to obtain CL for 20 members. This means the principal employer will provide Form V, VI-B, and a Purchase Order to obtain CL. Here, my scenario is different: my customers are overseas, and I work with nearly 30 suppliers under establishment. How can I obtain CL? Who will provide the Purchase Order, Form V, and VI-B?

Kindly clarify my doubts.

Determining the Principal Employer

The determining factor is the establishment where work takes place. You are providing third-party services for your 30 principals who are foreign-located OEMs. It is not clear whether your services are part of the PO placed on your principals or if you have independent POs placed on you directly by the indigenous customers. In either case, you need Form V from such customers. In the former case, your principal has to seek Form V for you since there is no direct linkage between you and the customer. Otherwise, you could get it directly from the customer. The principal employer is not the foreign agency for whom you are working, but the indigenous customer in whose premises you are working. However, if you are working abroad, then there is no question of Form V or VI B.

Additional Information Required

Also, please inform us if you are in the Erection & Commissioning, testing, or maintenance business, and provide details about your setup, such as the number of employees, etc.

Dear Sir,

We are an assignment/PO-based customer. Our activities are engaged with multiple customers and involve short-term tasks for each customer. For example, XXX is the OEM, and their supplier is YYY, which is located abroad. We receive assignment orders from YYY to perform activities in XXX's work location. There is no direct relationship between XXX and us. This process continues as we receive activities from various customers. Therefore, we maintain a constant workforce at XXX's work location.

Thank you.

Presuming that XXX is India-based, to perform your tasks at their establishment, you need a Labor License if 20 or more workers (including contract labor) are working there. XXX has to issue you Form V and also register themselves under the CLRA Act. Otherwise, if a Labor Inspector inspects the establishment and finds your workers there, the consequences will be that of non-compliance with the Act.

You don't need to obtain a license under the CL(R&A) Act. Instead, register your firm under the Shops & Commercial Establishment Act. The minimum number of people required to run the office establishment will be your staff/employees. For work of a contractual nature, you can engage a contractor by issuing Form V to get them CL. To protect against the exploitation of people in employment, there needs to be an employer-employee relationship, and those who can be held responsible for any violations. I hope this will give you a better understanding.