Navigating Labor Contracts: How Can We Legally Formalize Our Vendor Agreement?

Dear All,

We have a well-known Trust in Assam that has engaged the services of a contractor from my company for housekeeping services since February 2018. The monthly billing is approximately 590,000/-, and they are providing housekeeping services by deploying 45 people on-site.

The trust has not yet entered into any formal agreement with the contractor. The Trust works directly with the Government of Assam for cancer patients, and the Government will be on board from next month.

Possibility of Entering a Labor Contract

Would it be possible for our company to enter into a labor contract with the vendor for the trust (as the trust is part of the group), and the labor is working solely on the trust's site?

Process and Legal Obligations

If yes, what is the process to follow in this case? What are the legal obligations on us as a company?

Regards,
Ranjeet

The answer to your question is in the question itself. You mentioned that "Govt. will be on board from next month." From your post, it seems that the State Government will contribute or allocate some grants towards the expenses incurred by the trust. In our state, Gujarat, it is mandatory to invite e-tenders for this purpose. It is not advisable to employ workers for the trust without prior written approval from the respective State Government. You are advised to check the terms and conditions on which the Government is allocating funds to the trust.

Regards, A. Prakash

Please refer to your trust deed; there must be specific conditions laid down in it. If not, then please do not deploy any labor before executing a Contract Agreement. In such an event, your trust will be treated as the Principal Employer. You are further advised to obtain various registrations from the manpower agency, such as the registration of the agency with the respective government authority, the agency's P.F. number, E.S.I. number, P.T. registration number, the agency's and laborers' bank account numbers, etc.

Regards, A. Prakash