Contractor at one site frequently be sent for work at another site of the same principal employer

Dear Colleagues,

Can a contract worker under a contractor at one site frequently be sent for work at another site of the same principal employer?

Dear Colleague,

If both are separate entities/separate establishments, then the answer is NO.

If both are different establishments in terms of the Companies Act, Factories Act, PF, ESI, and so on, it is not legally correct. The license issued to the Contractor is establishment-specific with the address of the establishment. The PF/ESI may be covered with the Contractor's code if the contractor has the code. However, in case of any accidents, there will be a lot of complexities. Regarding Contract Labour License and Registration, it is a violation, and the RC and License will be terminated by the authority. It is better to go for a separate contractor or include this contractor in the RC of that establishment and ask him to take a separate license. This is under the present Law.

Once the proposed code on OSH&WC is implemented, then the contractor can apply for one license for multiple locations, but we need to wait until the implementation of the code.

To my opinion, there is no harm in engaging contract labor at any place as long as the employee is under the same contractor's payroll. At the end of the month, the contractor will process the wages, PF, ESI, etc., and pay the contract labor.

There are contractors engaged in plumbing jobs, carpentry jobs, job orders for big houses (Railway jobs from major contractors), etc., where contractors receive orders from various organizations and the work is executed by their employees at different organizations or their premises on different days within a month. Although there are several principal employers involved, the contractor and contract workers remain consistent. In this setup, it is the contractor's responsibility to maintain proper records and take care of their employees. The contractor must have their own PF and ESIC codes for compliance purposes.

This arrangement is commonplace throughout India, especially among those involved in specialized jobs such as robotic gunning (blast furnaces, etc.), special repair, and maintenance.

S K Bandyopadhyay (WB, Howrah) CEO-USD HR Solutions +91 98310 81531 skb@usdhrs.in www.usdhrs.in

I agree with the view of Mr. S.K.B. If we carefully analyze the historical background leading to the passing of the CLRA, 1970, we can understand that though the statutory abolition of indirect labor in perennial nature of jobs is the primary objective of the Act, it is not possible to do so at a single stroke for the system of contract labor has already deep-rooted ubiquitously in the industries. That's why the regulatory aspect was introduced as an initial measure in the Act.

Though exemptions are specified in the Act pinpointing industrial establishments based on their seasonality of functioning and the process or works on their nature of intermittence, the term 'Core activity' has not been defined in the Act with the exception of some State Rules like Andhra Pradesh. Even the definition of core activity in the yet-to-be-enforced OSHWC CODE, 2020, is not intended for total prohibition but rather providing for parity in working conditions for contract labor on par with the regular workmen of the establishment only if simultaneously engaged in core activities due to a sudden increase in workloads. That's why the Registration Certificate and the Contractor's License given under the Act are only work-specific and number-specific and not name-specific concerning the contract labor engaged therein.

Therefore, my submission in the light of the above reasons would be that there is no legal bar on the rotation of the contract labor by the contractor among the different contract works, whether in the same PE's establishment or elsewhere.

The question of the basis for the calculation of wages, leave benefits, and computation of terminal benefits for contract labor is different, as the contractor's entity is a distinct and separate establishment for such purposes.