Security Contractor Shortchanging Manpower: How Should We Address This Breach?

Dear Sir, hope all are safe and staying at home. We seek your valuable opinion on the following issue.

Agreement with Contractor for Security Services

1. We have entered into an agreement with a contractor to provide manpower for security services.

2. Wages and the number of manpower were negotiated before entering the agreement.

3. As per the agreement:

Description Per Head/Per Month Per Shift of 8 hours Number of persons

Security Guard Rs.15,950/- Per Shift of 8 hours 9 persons

Per shift 3 persons for 3 shifts, per shift of 8 hours.

However, the security personnel are working for 12 hours, and the contractor has only employed 6 persons instead of the agreed-upon 9 persons. Billing is being done for 3 persons as per the agreement, i.e., Rs.15,950/- x 3, and overtime is being given. The cost to company (CTC) includes indirect amounts from the employer such as PF 13% (ESI 3.75% adjusted in the OT amount), Gratuity, Leave Salary, National/Festival Holidays, Bonus, and Service charges. The contractor has retained the indirect amount claimed for the 3rd person from the employer, including service charges. When asked for clarification, the contractor stated it is an industrial practice. We are providing security services for 24 hours, but our concern is that the contractor has not provided manpower as per the agreement, i.e., 3 persons, and is operating with 2 security persons for 12 hours.

We seek your clarifications on the same.

Regards, Ganapathy V

Ask the contractor to follow security contract arrangements strictly. Once in a while, doing this arrangement is okay. Overworking people will be bad for security. The alertness of guards will be affected. Give him a warning in writing. As a PE, remember there are OT limits for guards.

The security contractor's contentions are unjustified and against the letter and spirit of the agreement. Please write to him unless he provides 3 men per shift of 8 hours duration per day involving an aggregate total of 9 men with their names and other details within a specified period, say 3 days. The contract will be terminated with due notice as per the agreement.

You, as PE, will be held responsible for the violation of CLRA proviso, for allowing security personnel to work for 22 hours per day, which will eventually exceed the statutory quota of OT hours per quarter. In any case, you must ensure compliance with minimum wages and other statutory payments, in addition to security service charges to the contractors.

Panchsen Senthilkumar
senprithvib6@gmail.com
9884009193

Hi Ganapathy, Your experience is one of the many recurring and common problems faced by private enterprises, especially with security contracts. In this way, contractors try to manage their margins and service charges. As you know, there is cut-throat competition in this activity, and most quotes will have negligible service charges or commissions to remain competitive. There is nothing to cover as the minimum wages are the criteria for evaluation. Members have suggested possible follow-up actions. You should judge by the grade and effective services rendered by the agency. What's important is to safeguard against any claims for non-compliance with legal provisions and ensure legitimate remuneration for overtime, holiday wages, bonuses, etc., as liabilities might ultimately accrue to the private enterprise.

If the contract agreement states Security personnel @ 3 nos/shift for 8 hours duty in three shifts, the security contractor needs to deploy personnel accordingly.

But if the contractor's deployment of personnel is @ 3 nos guard/shift for 12 hours duty in two shifts, please amend the agreement accordingly. The amendment note should be signed by the PE and contractor and filed along with the original agreement.