Can a Courier Contractor work as an employee himself under the same contract?
From India, Kannur
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1From India, Kannur
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In my opinion, it cannot be, for one cannot have a dual relationship as that of a contractor and a contract laborer to the same principal employer. Of course, the contractor can take a portion of the contract amount towards his services rendered along with his contract labor. However, he cannot perform the dual role of contractor cum contract laborer.
From India, Salem
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From India, Salem
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If I understand correctly, you are asking if the courier contractor can do part of the courier work himself. I don't see a problem with that. The contract is generally to deliver a service. There is nothing wrong with the contractor doing a part of the service himself.
From India, Mumbai
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From India, Mumbai
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An example offered to understand whether it is the same as per your query?
Contractor Engagement Example
We engaged Mr. X as the contractor for repairing and erecting a boiler. The contract was given to him because he was a government-certified high-pressure welder, and he was doing all the welding work for the project. There is nothing wrong; a contractor can be an employee in his own firm.
From India, Mumbai
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Contractor Engagement Example
We engaged Mr. X as the contractor for repairing and erecting a boiler. The contract was given to him because he was a government-certified high-pressure welder, and he was doing all the welding work for the project. There is nothing wrong; a contractor can be an employee in his own firm.
From India, Mumbai
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Thank you, @Umakanthan.M, Sir. In my opinion, one cannot be both an employer and an employee simultaneously. Additionally, the master-servant relationship should be carefully managed under Contract Labour, along with ensuring compliance with statutory deductions.
From India, Kannur
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From India, Kannur
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Yes, Ms. Meenaxi, I think that our friends have answered the query from a general perspective of a proprietor working in his own establishment along with his employees. It is correct, but it cannot confer upon him the legal status or position of an employee.
Legal Perspective under the CLRA Act, 1970
Very particularly under the CLRA Act, 1970, the terms 'contractor', 'contract labor', and 'principal employer' do not stand in absolute terms but in relation to one another only. For the purpose of licensing a contractor under the Act, the same person cannot be both a 'contractor' and a 'contract workman'. In addition, the question of coverage of that contractor-cum-contract labor under the EPF and ESI Acts or EC Act would also arise. One cannot be both a 'contractor' and 'contract labor' under the CLRA Act, 1970.
Therefore, my above negative answer to the query is from such a legal perspective only and not about the contractor stepping into the shoes of any one of his contract laborers for the sake of expediency of the contract work.
From India, Salem
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Legal Perspective under the CLRA Act, 1970
Very particularly under the CLRA Act, 1970, the terms 'contractor', 'contract labor', and 'principal employer' do not stand in absolute terms but in relation to one another only. For the purpose of licensing a contractor under the Act, the same person cannot be both a 'contractor' and a 'contract workman'. In addition, the question of coverage of that contractor-cum-contract labor under the EPF and ESI Acts or EC Act would also arise. One cannot be both a 'contractor' and 'contract labor' under the CLRA Act, 1970.
Therefore, my above negative answer to the query is from such a legal perspective only and not about the contractor stepping into the shoes of any one of his contract laborers for the sake of expediency of the contract work.
From India, Salem
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In India, there are contractors who are also contract labor. These contractors are covered under PF & ESIC. They have a labor license and submit half-yearly returns under the CLRA Act regularly, including the contractor's name as contract labor and the contractor signing the returns. This is a reality even in MNCs.
In my career, I have faced inspectors from both PF & ESIC who have advised depositing the contribution of the contractor as he is also considered contract labor. An ESIC inspector made a valid point that in the event of an accident, who would be responsible. However, I have observed such activities mostly in specialized engineering jobs and not so much in courier services.
It is a conflicting situation, but reality is reality.
S K Bandyopadhyay (WB, Howrah)
CEO-USD HR Solutions
From India, New Delhi
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In my career, I have faced inspectors from both PF & ESIC who have advised depositing the contribution of the contractor as he is also considered contract labor. An ESIC inspector made a valid point that in the event of an accident, who would be responsible. However, I have observed such activities mostly in specialized engineering jobs and not so much in courier services.
It is a conflicting situation, but reality is reality.
S K Bandyopadhyay (WB, Howrah)
CEO-USD HR Solutions
From India, New Delhi
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I think your solution is more feasible if the contractor is running a non-proprietary business. If he is a company or a partnership, then he can be an employee of the organization and therefore the contract labor. If he is a proprietor, since he cannot be an employee of himself, he cannot pay himself a salary.
In such a case, the problem for ESIC remains. There is nothing wrong per se for an employee of the contractor to sign the returns, as a manager can sign if authorized. So the contractor signing, being an employee, is also not wrong in law.
Unfortunately, the original post does not give any details, so we are all guessing here...
From India, Mumbai
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In such a case, the problem for ESIC remains. There is nothing wrong per se for an employee of the contractor to sign the returns, as a manager can sign if authorized. So the contractor signing, being an employee, is also not wrong in law.
Unfortunately, the original post does not give any details, so we are all guessing here...
From India, Mumbai
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