Dear Folks, I have a few queries about contract labour and would like to have answers for them. Your quick response will be highly appreciated.
1. Differences Between Contract Labour and Outsourcing
What are the differences between contract labour and outsourcing? Which is the better option and why?
2. Applicability of Contract Labour Act
Is the Contract Labour Act applicable when jobs and services are outsourced?
3. Assignable Jobs to Contract Labour
What are the non-perennial and non-permanent jobs that can be assigned to contract labour?
4. Coexistence of Permanent Employees and Contract Labour
Can we have permanent employees and contract labour working side by side on the same job?
5. Ratio of Permanent to Contract Labour
What is the best ratio between permanent and contract labour? Can we engage 100% contract labour?
6. Wage and Terms Differences
Can we have different wages and other terms for permanent employees and contract labour doing the same or similar job?
7. Transfer of Casuals/Temporaries
Can we transfer casuals/temporaries onto the rolls of a contractor?
8. Statutory Benefits and Compliance
What are the applications and implications of P.F., ESI, Bonus, Gratuity, and other statutory benefits to contract labour and casuals, etc., and how to ensure compliance?
9. Ensuring Submission of PF and ESI Returns
How can we ensure the submission of PF and ESI returns by the contractor?
10. Obtaining a New PF Code Number
How do we get a new PF code number from PF authorities?
11. Contract/Voucher Payment for Services
Security, Housekeeping, Drivers, Canteen, Horticulture, etc., on contract/voucher payment. Is there sustainability? Are there any case laws?
12. Liability of Principal Employer
What is the liability of the principal employer for injury, illness, disability, death, etc.?
13. Employer's Role in Selection of Contract Labour
Can and should the employer have a say in the number and selection of contract labour?
14. Disciplinary Action Against Contract Labour
Who is to take disciplinary action against contract labour? Under what rules? Are standing orders applicable to contract labour?
15. Issuance of Employment Cards to Contract Labour
Is it necessary and desirable to issue employment cards/gate passes/identity cards to contract labour? If so, under whose authority/signature? What safeguards are there?
16. Statutory Provisions for Contractors
Each contractor engages less than 20, but together they engage more than 20. Will the provisions of registration, licensing, and other statutory provisions apply?
17. Safeguarding Management Interests
What are the statutory requirements and precautions in awarding contracts for safeguarding management's interests?
18. Legal Implications of Unrenewed Licenses
If a license is not renewed but the contractor continues to work, what are the legal implications, including permanency?
19. Contractor Changes Without Labour Changes
What are the implications and precautions required if the contractor changes but the contract labour does not?
20. Termination Due to Unsatisfactory Performance
If a contract is terminated due to unsatisfactory performance of the contractor and the contractor leaves, can contract labour claim permanency? What should the employer do?
21. Termination Through Settlement
If contract labour is terminated through a settlement, should the principal employer be a party?
22. Managing Abandoned Workforce
When a contractor runs away leaving his workforce and supervisor, how do we manage work and labour, and who is to handle pending conciliation references?
23. Contractor Refusal to Pay Labour
What should we do if the contractor refuses to pay the labour?
24. Post-Abolition Actions
What actions are required to be taken by management after the abolition of contract labour?
25. Challenging Government Decisions
Can management challenge the decision of the appropriate government regarding the abolition of jobs?
26. Rotation of Contractor and Contract Labour
Should the contractor and contract labour be rotated? Why? How often?
27. Reducing Contract Labour
How can we reduce the number of contract labourers?
28. Handling Demands for Permanency
How do we handle contract labour demanding permanency?
29. Demands for Similar Benefits
Is the claim for contract labour demanding similar benefits as permanent employees legally valid?
30. Applicability of Pension Scheme
Is the Pension Scheme also applicable to contract labour?
31. Applicability of Minimum Wages Act
Is the Minimum Wages Act applicable to contract labour?
32. Liability in Sub-Contracting
What is the liability of the Principal Employer in the case of sub-contracting?
33. Supreme Court Judgment Implications
What are the implications of the Supreme Court Judgment in the SAIL case reversing the earlier Air India Judgment?
34. Implications for Temporary Employees
What are the implications and liabilities of temporary/casual/probationer employees/trainees? Is there any maximum duration?
35. Relevance of 180/240 Days
What is the relevance of 180/240 days, and what are the implications of breaks?
Regards, Anthony
From India, Madras
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1. Differences Between Contract Labour and Outsourcing
What are the differences between contract labour and outsourcing? Which is the better option and why?
2. Applicability of Contract Labour Act
Is the Contract Labour Act applicable when jobs and services are outsourced?
3. Assignable Jobs to Contract Labour
What are the non-perennial and non-permanent jobs that can be assigned to contract labour?
4. Coexistence of Permanent Employees and Contract Labour
Can we have permanent employees and contract labour working side by side on the same job?
5. Ratio of Permanent to Contract Labour
What is the best ratio between permanent and contract labour? Can we engage 100% contract labour?
6. Wage and Terms Differences
Can we have different wages and other terms for permanent employees and contract labour doing the same or similar job?
7. Transfer of Casuals/Temporaries
Can we transfer casuals/temporaries onto the rolls of a contractor?
8. Statutory Benefits and Compliance
What are the applications and implications of P.F., ESI, Bonus, Gratuity, and other statutory benefits to contract labour and casuals, etc., and how to ensure compliance?
9. Ensuring Submission of PF and ESI Returns
How can we ensure the submission of PF and ESI returns by the contractor?
10. Obtaining a New PF Code Number
How do we get a new PF code number from PF authorities?
11. Contract/Voucher Payment for Services
Security, Housekeeping, Drivers, Canteen, Horticulture, etc., on contract/voucher payment. Is there sustainability? Are there any case laws?
12. Liability of Principal Employer
What is the liability of the principal employer for injury, illness, disability, death, etc.?
13. Employer's Role in Selection of Contract Labour
Can and should the employer have a say in the number and selection of contract labour?
14. Disciplinary Action Against Contract Labour
Who is to take disciplinary action against contract labour? Under what rules? Are standing orders applicable to contract labour?
15. Issuance of Employment Cards to Contract Labour
Is it necessary and desirable to issue employment cards/gate passes/identity cards to contract labour? If so, under whose authority/signature? What safeguards are there?
16. Statutory Provisions for Contractors
Each contractor engages less than 20, but together they engage more than 20. Will the provisions of registration, licensing, and other statutory provisions apply?
17. Safeguarding Management Interests
What are the statutory requirements and precautions in awarding contracts for safeguarding management's interests?
18. Legal Implications of Unrenewed Licenses
If a license is not renewed but the contractor continues to work, what are the legal implications, including permanency?
19. Contractor Changes Without Labour Changes
What are the implications and precautions required if the contractor changes but the contract labour does not?
20. Termination Due to Unsatisfactory Performance
If a contract is terminated due to unsatisfactory performance of the contractor and the contractor leaves, can contract labour claim permanency? What should the employer do?
21. Termination Through Settlement
If contract labour is terminated through a settlement, should the principal employer be a party?
22. Managing Abandoned Workforce
When a contractor runs away leaving his workforce and supervisor, how do we manage work and labour, and who is to handle pending conciliation references?
23. Contractor Refusal to Pay Labour
What should we do if the contractor refuses to pay the labour?
24. Post-Abolition Actions
What actions are required to be taken by management after the abolition of contract labour?
25. Challenging Government Decisions
Can management challenge the decision of the appropriate government regarding the abolition of jobs?
26. Rotation of Contractor and Contract Labour
Should the contractor and contract labour be rotated? Why? How often?
27. Reducing Contract Labour
How can we reduce the number of contract labourers?
28. Handling Demands for Permanency
How do we handle contract labour demanding permanency?
29. Demands for Similar Benefits
Is the claim for contract labour demanding similar benefits as permanent employees legally valid?
30. Applicability of Pension Scheme
Is the Pension Scheme also applicable to contract labour?
31. Applicability of Minimum Wages Act
Is the Minimum Wages Act applicable to contract labour?
32. Liability in Sub-Contracting
What is the liability of the Principal Employer in the case of sub-contracting?
33. Supreme Court Judgment Implications
What are the implications of the Supreme Court Judgment in the SAIL case reversing the earlier Air India Judgment?
34. Implications for Temporary Employees
What are the implications and liabilities of temporary/casual/probationer employees/trainees? Is there any maximum duration?
35. Relevance of 180/240 Days
What is the relevance of 180/240 days, and what are the implications of breaks?
Regards, Anthony
From India, Madras
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Please help me in the below matter on contract labor. We are the Housekeeping Service Provider for one of the leading MNCs in Bangalore, Pune, Hyderabad, and Chennai. Can you help me with whether we need to take Shops Act License or Contract Labor Licenses? Or do we have to wait until the principal employer gives us Form 5? Also, as a service provider, what registers do we have to maintain from our end?
Looking forward to your response.
Thanks,
Jaheer
From India, Bangalore
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Looking forward to your response.
Thanks,
Jaheer
From India, Bangalore
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Since you are providing services to an MNC in multiple locations, it is advised that you should obtain a Shop Act license. Then you can get Form 5 from the PE to obtain a Contract Labour License. This will not only be helpful for statutory compliance but also for other transactions and the growth of your business.
Registers to be Maintained
Maintenance of registers and records for establishments governed by the Payment of Wages Act, Minimum Wages Act:
- Muster Roll
- Register of Wages
- Register of Deductions
- Register of Overtime
- Register of Fines
- Register of Advances, etc.
Maintenance of registers and records for establishments not governed by the Payment of Wages Act, Minimum Wages Act:
- Muster-roll-cum-wage register
- Attendance card cum wage slip
Feel free to contact me if you require any assistance.
Regards,
Swapnil
From India, Pune
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22Registers to be Maintained
Maintenance of registers and records for establishments governed by the Payment of Wages Act, Minimum Wages Act:
- Muster Roll
- Register of Wages
- Register of Deductions
- Register of Overtime
- Register of Fines
- Register of Advances, etc.
Maintenance of registers and records for establishments not governed by the Payment of Wages Act, Minimum Wages Act:
- Muster-roll-cum-wage register
- Attendance card cum wage slip
Feel free to contact me if you require any assistance.
Regards,
Swapnil
From India, Pune
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Thank you very much for your reply. I have one more query: as we have more than 20 staff members working in each unit (5 different units for the same MNC), do we have to wait until the principal employer gives us Form 5, or is it our responsibility to request it from him? Also, for each different unit, is it necessary to obtain a separate Form 5, or will one suffice?
Thank you,
Jaheer
From India, Bangalore
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Thank you,
Jaheer
From India, Bangalore
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LABOUR CONTRACT AGREEMENT.doc
Contract Labour Act.zip