Shifting Employment Paradigms in Industry
The employment paradigms, such as permanent employees in industry or factory settings, are witnessing a shift due to advancements in technology, a desire for freedom, job hopping, and the engagement of fixed-term contract jobs or the deployment of manpower through manpower service providers in manufacturing activities. This shift acknowledges well-established manpower service providers as 'Customers of the Organization for Goal Achievement,' significantly different from past practices.
The relationship is no longer simple, as contractors must establish their establishments with all necessary registration and licenses, aligning with client establishments. Currently, a manpower service provider has its own staff and field supervisors, who are well qualified. With the contractor's independent code number, their liabilities increase concerning the employees. Upon receiving a code number, the Provident Fund Authorities recognize the contractor as an 'establishment,' having met all prescribed conditions. A principal employer cannot be held responsible for the actions of the contractor’s employees.
Several court rulings have established that the principal employer will not be supervising the workers of the contractor. If the contractor, involved in the supply of manpower, has a valid license under the Contract Labour (Regulation and Abolition) Act, 1970, and all payments and attendance records show payments made by the contractor, the employer-employee relationship will not exist with the principal employer. The relationship between the contractor and the establishment, where manpower is supplied, is of 'principal to principal,' not employer-contractor.
Yet, it is alarming to note that some HR professionals in multinational companies still treat the manpower service provider and their staff as if they are the legal property of the principal employer. The concept of the relationship has changed entirely to 'principal to principal,' not employer-contractor.
The employment paradigms, such as permanent employees in industry or factory settings, are witnessing a shift due to advancements in technology, a desire for freedom, job hopping, and the engagement of fixed-term contract jobs or the deployment of manpower through manpower service providers in manufacturing activities. This shift acknowledges well-established manpower service providers as 'Customers of the Organization for Goal Achievement,' significantly different from past practices.
The relationship is no longer simple, as contractors must establish their establishments with all necessary registration and licenses, aligning with client establishments. Currently, a manpower service provider has its own staff and field supervisors, who are well qualified. With the contractor's independent code number, their liabilities increase concerning the employees. Upon receiving a code number, the Provident Fund Authorities recognize the contractor as an 'establishment,' having met all prescribed conditions. A principal employer cannot be held responsible for the actions of the contractor’s employees.
Several court rulings have established that the principal employer will not be supervising the workers of the contractor. If the contractor, involved in the supply of manpower, has a valid license under the Contract Labour (Regulation and Abolition) Act, 1970, and all payments and attendance records show payments made by the contractor, the employer-employee relationship will not exist with the principal employer. The relationship between the contractor and the establishment, where manpower is supplied, is of 'principal to principal,' not employer-contractor.
Yet, it is alarming to note that some HR professionals in multinational companies still treat the manpower service provider and their staff as if they are the legal property of the principal employer. The concept of the relationship has changed entirely to 'principal to principal,' not employer-contractor.