Dear All,
I need expert advice to attend below query
“X” Company registered under Factory Act give major job work to “A” company (Registered as a principal employer under contract lab Act) at Factory premises of "X", “A” company distribute work to 10 different contractors for completion of Job and all contractors has taken Labour license based on Form 5 issued by “A” company and maintaining all records as per CL Act. During visit of Factory Inspector, he demands the license of contractor directly on name parent company “X” instead of company “A”. Under CL Act there is no provision of sub contract. Kindly guide what is correct provision for such type business situation and what stand company “X” will take to avoid any NON COMPLIANCE.
Regards
From India, Surat
2I need expert advice to attend below query
“X” Company registered under Factory Act give major job work to “A” company (Registered as a principal employer under contract lab Act) at Factory premises of "X", “A” company distribute work to 10 different contractors for completion of Job and all contractors has taken Labour license based on Form 5 issued by “A” company and maintaining all records as per CL Act. During visit of Factory Inspector, he demands the license of contractor directly on name parent company “X” instead of company “A”. Under CL Act there is no provision of sub contract. Kindly guide what is correct provision for such type business situation and what stand company “X” will take to avoid any NON COMPLIANCE.
Regards
From India, Surat
Dear Ssarora,
When 20 or more workmen are employed or were employed on any day of the preceding 12 months as CONTRACT LABOUR in the factory 'X', then The Contract Labour (Regulation & Abolition) Act, 1970 & Rules become applicable to that factory.
Now, coming to the definition of CONTRACTOR, he should undertake to produce a given result for the factory 'X' thru' CONTRACT LABOUR or who supplies CONTRACT LABOUR to that factory; this definition includes Sub-Contractor also.
As regards the applicability of The Contract Labour (Regulation & Abolition) Act, 1970 & Rules to the Contractor / Sub-Contractor, he should employ 20 or more workmen or had employed 20 or more workmen on any day of the preceding 12 months.
Coming to your query, I'd like to correct you that the PRINCIPAL EMPLOYER is 'X' and not 'A'.
As a Principal Employer, 'X' should have obtained the Registration Certificate up-to-date under Contract Labour Act.
The Contractors each should have obtained the Contract Labour Licence by submitting the Application in Form IV along with the Certificate issued by the Principal Employer ('X')in Form V. Hence, the contention of the Factories Inspector is correct.
There were two wrongs committed:
1.Registration Certificate should have been obtained by the factory 'X' and not the Contractor 'A'.
2.Licence should have been obtained by the individual Contractors based on the Certificate issued in Form V by the factory 'X'(Principal Employer).
The Contractor 'A' has no 'locus standi' to issue Certificates to the ten Contractors in Form V in this case as he is not the Principal Employer.
Regards,
K.A.Thariq Muhamed Salim
(Deputy Chief Inspector of Factories - retd., Chennai)
From India, Chennai
When 20 or more workmen are employed or were employed on any day of the preceding 12 months as CONTRACT LABOUR in the factory 'X', then The Contract Labour (Regulation & Abolition) Act, 1970 & Rules become applicable to that factory.
Now, coming to the definition of CONTRACTOR, he should undertake to produce a given result for the factory 'X' thru' CONTRACT LABOUR or who supplies CONTRACT LABOUR to that factory; this definition includes Sub-Contractor also.
As regards the applicability of The Contract Labour (Regulation & Abolition) Act, 1970 & Rules to the Contractor / Sub-Contractor, he should employ 20 or more workmen or had employed 20 or more workmen on any day of the preceding 12 months.
Coming to your query, I'd like to correct you that the PRINCIPAL EMPLOYER is 'X' and not 'A'.
As a Principal Employer, 'X' should have obtained the Registration Certificate up-to-date under Contract Labour Act.
The Contractors each should have obtained the Contract Labour Licence by submitting the Application in Form IV along with the Certificate issued by the Principal Employer ('X')in Form V. Hence, the contention of the Factories Inspector is correct.
There were two wrongs committed:
1.Registration Certificate should have been obtained by the factory 'X' and not the Contractor 'A'.
2.Licence should have been obtained by the individual Contractors based on the Certificate issued in Form V by the factory 'X'(Principal Employer).
The Contractor 'A' has no 'locus standi' to issue Certificates to the ten Contractors in Form V in this case as he is not the Principal Employer.
Regards,
K.A.Thariq Muhamed Salim
(Deputy Chief Inspector of Factories - retd., Chennai)
From India, Chennai
Dear Mr SS Arora,
I fully agree with the submissions of KA Thariq Muhamed Salim. When the X company is registered under the Factory Act then he is the principal employer. PE permission be obtained in the name of X company.
P K Sharma
From India, Delhi
I fully agree with the submissions of KA Thariq Muhamed Salim. When the X company is registered under the Factory Act then he is the principal employer. PE permission be obtained in the name of X company.
P K Sharma
From India, Delhi
Thanks a lot K.A.Thariq sir for your guidance, I feel that few more information I need to furnish to you for detail understanding and more clarity. 'X' company has already having registration certificate under CL Act and more than 50 contractors are associated directly and having license. This is unique case 'X' allotted the work to 'A' and as a company he initiated and issued form V to his contractors before stating work and without information to 'X'. Now when 'X' demanded with 'A' he convenienced that under Contact Lab Act 'X' will not face any legal issue and he will take care of all compliance part under CL Act but 'X' has a worry under Factory Act.
Can you through more light on same, In condition 'X' will be principal employer who has to take license company 'A' or 10 contractors. 'X' is ready to issue form V but all contractors has already submitted application for license to Labour office.
Best regards
From India, Surat
Can you through more light on same, In condition 'X' will be principal employer who has to take license company 'A' or 10 contractors. 'X' is ready to issue form V but all contractors has already submitted application for license to Labour office.
Best regards
From India, Surat
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