dear all
mr. K.Ramachandra had sumed up the matter superbly. such exchange of ideas not only freshens up our knowldge but also encourages us to make a new foray in the field of contractlabour/PF, makes us bold and equipped. And the forum gets undoubtedly enlightened when members like Jawedalam enters the space. we are privilaged to get him here.
by the way jawed bahi your questions are definitily tricky but le'me try.
now here what we may do is that as the skill set of the contractor is indispensible we can force them to take the PF code under some other vendor and get by-numbers. another thing we may do is that there are supply labours available. these unsklld workers are generally under some contractor/ labor cooprative etc who has a permanent PF number. They may be utilised for the purpose. they will work under the new contractor (who doesnt have PF) but will be paid by the contractor/ labor cooprtv. under whose roll they actually are. But during issuance of gate passes we have to be a bit cautious. Form XIII, pay register will be maintained by the actual contractor/labor cooprtv.
Hope this may be done to suffice the need. However Jawed bhai, I know you may have some other tricky solution. the forum will be enlightened if you share your idea.
Regards,
Shafiq
From India, Calcutta
4mr. K.Ramachandra had sumed up the matter superbly. such exchange of ideas not only freshens up our knowldge but also encourages us to make a new foray in the field of contractlabour/PF, makes us bold and equipped. And the forum gets undoubtedly enlightened when members like Jawedalam enters the space. we are privilaged to get him here.
by the way jawed bahi your questions are definitily tricky but le'me try.
now here what we may do is that as the skill set of the contractor is indispensible we can force them to take the PF code under some other vendor and get by-numbers. another thing we may do is that there are supply labours available. these unsklld workers are generally under some contractor/ labor cooprative etc who has a permanent PF number. They may be utilised for the purpose. they will work under the new contractor (who doesnt have PF) but will be paid by the contractor/ labor cooprtv. under whose roll they actually are. But during issuance of gate passes we have to be a bit cautious. Form XIII, pay register will be maintained by the actual contractor/labor cooprtv.
Hope this may be done to suffice the need. However Jawed bhai, I know you may have some other tricky solution. the forum will be enlightened if you share your idea.
Regards,
Shafiq
From India, Calcutta
Hi Shafiq,
Thanks for your reply. What you are saying is true in ideal situation. But in case of Medium / Small size company, normally there may not be bidding, contract is given to the person who has muscule power / Political power to help the Management in case of any trouble. Since the approval is being granted at top level, Middle level management like us are helpless to create pressure on Contractor. Also PF Insector will definately will point out the breach and may ask for favour. This is the practical problem in most of industry.
Regards,
Avinash K.
From India, Mumbai
Thanks for your reply. What you are saying is true in ideal situation. But in case of Medium / Small size company, normally there may not be bidding, contract is given to the person who has muscule power / Political power to help the Management in case of any trouble. Since the approval is being granted at top level, Middle level management like us are helpless to create pressure on Contractor. Also PF Insector will definately will point out the breach and may ask for favour. This is the practical problem in most of industry.
Regards,
Avinash K.
From India, Mumbai
Dear Mr Shafiq
Thank you for noting the points and your complements.
If such right thoughts help many, it is a great return.
Let us strive to share knowledge professionally.
Mr.Javed Alam
You may engage unskilled or skilled persons as "Fixed Term Employee" (say for 2 years, 3 years) with a fixed salary or as Trainees for a fixed term. Later you may think of either closing their employment/training or regularising them as permanent workers depending on your requirement. This should be clearly told to candidtes at the time of interview itself. However, if you have 10 persons, ESI is applicable and if you engage 20, PF is applicable. As long as you are within this number, you need not have ESI and PF code. Please note, the specified number includes the number of persons already working in your company whether permanent or temporary, contract or otherwise + the new persons whom you are going to engage.
Regards
K.Ramachandra
Bangalore
Thank you for noting the points and your complements.
If such right thoughts help many, it is a great return.
Let us strive to share knowledge professionally.
Mr.Javed Alam
You may engage unskilled or skilled persons as "Fixed Term Employee" (say for 2 years, 3 years) with a fixed salary or as Trainees for a fixed term. Later you may think of either closing their employment/training or regularising them as permanent workers depending on your requirement. This should be clearly told to candidtes at the time of interview itself. However, if you have 10 persons, ESI is applicable and if you engage 20, PF is applicable. As long as you are within this number, you need not have ESI and PF code. Please note, the specified number includes the number of persons already working in your company whether permanent or temporary, contract or otherwise + the new persons whom you are going to engage.
Regards
K.Ramachandra
Bangalore
Hi Shafiq,
Its always good to hear good compliment but not for thsoe which u don't deserv. Bytheway shafiq ur suggestion is correct I think but what Avinash has pointed out is also true for some of companies.
Regarding my query I think it would be better if the process which Shafiq has suggested may be elaborated step wise.
From the HR prespective there are three things which need to lookin for engagement of Contractor:
1) Job
2) Labour Laws compliance
3) last but not least Industrial Relations.
So our first objective is to get the job done at any cost.
Secondly we will have to see also that the there may not be any gross violation of Labour laws as far as possible.
thirdly the Industrial Relations of the company may not be hamphered (which Avinash has pointed Power & Politics) for engagement of contractors.
Regarding job:
1. If the job is very specialised or we can not change contractor due to any reason and simultenously the contractor is having no PF Code then:
a) we may estimate the labour cost involved in that job including PF, Bonus and other statutory liabilities.
b) ask any labour co-operative / contractor who is having PF Code through your main contractor for labour supply
at that cost with some profite margin. If agreed then issue a work order for labour supply through your main
contractor.
c) Issue Form V for obtaining Labour Licence to the Labour Co-operative/2nd level contractor but make sure that
the Form IV which is required to be submitted to ALC office has to be forwarded by the Main Contractor and keep
a office copy of the same with your office. Formate of Form V must be for sub-contractors.
d) get an indemity bond from the main contractor where ur company has been indemnify through all statutory
liabilities in case any dispute arises in future due to engagement of Labour Co-operative or 2nd level contrator.
When the Labour Co-operative/2nd level contrator obtained labour licence Your task regarding starting of the job has been almost done. Now the task of issuance of Gate Pass comes into play:
a) Always issue Gate Passes for the workers through application of Labour Co-operative/contractor and make sure
that the main contractor has forwarded that application. Never issue gate passes through an application made by
your main contractor and always the workers will be in the head of labour co-operative/2nd level contractor (Form
XIII as per CL (R&A) RULES.
Now the checking of documents towards submission of PF and wages comes into picture after an interval of 45 days:
a) Verify whether all PF contribution have been remitted in various A/Cs as per Act through Labour Co-opeartive/2nd
level contractors by asking for copies of PF Challans, Para-22, Wages Sheet and Master Roll. But make sure that
all the copy has to be signed by the main contractor which are being submitted at your end for verification.
b) Verify whether PF Challans is being submitted within stipulated time frame as per PF Act.
If all the above task are done then I guess there may not be any problem in future regarding PF Act (I hope).
Then also if there will be any dispute relted to submission of PF comes, you may keep a provision of Security Deposite amount which will be released after expiration of 6 months to 12 months by and recommendation of HR Dept. regarding IR will tell you all in next comment.
I hope these step will work...
regards.
Jawed Alam.
From India, Dhanbad
Its always good to hear good compliment but not for thsoe which u don't deserv. Bytheway shafiq ur suggestion is correct I think but what Avinash has pointed out is also true for some of companies.
Regarding my query I think it would be better if the process which Shafiq has suggested may be elaborated step wise.
From the HR prespective there are three things which need to lookin for engagement of Contractor:
1) Job
2) Labour Laws compliance
3) last but not least Industrial Relations.
So our first objective is to get the job done at any cost.
Secondly we will have to see also that the there may not be any gross violation of Labour laws as far as possible.
thirdly the Industrial Relations of the company may not be hamphered (which Avinash has pointed Power & Politics) for engagement of contractors.
Regarding job:
1. If the job is very specialised or we can not change contractor due to any reason and simultenously the contractor is having no PF Code then:
a) we may estimate the labour cost involved in that job including PF, Bonus and other statutory liabilities.
b) ask any labour co-operative / contractor who is having PF Code through your main contractor for labour supply
at that cost with some profite margin. If agreed then issue a work order for labour supply through your main
contractor.
c) Issue Form V for obtaining Labour Licence to the Labour Co-operative/2nd level contractor but make sure that
the Form IV which is required to be submitted to ALC office has to be forwarded by the Main Contractor and keep
a office copy of the same with your office. Formate of Form V must be for sub-contractors.
d) get an indemity bond from the main contractor where ur company has been indemnify through all statutory
liabilities in case any dispute arises in future due to engagement of Labour Co-operative or 2nd level contrator.
When the Labour Co-operative/2nd level contrator obtained labour licence Your task regarding starting of the job has been almost done. Now the task of issuance of Gate Pass comes into play:
a) Always issue Gate Passes for the workers through application of Labour Co-operative/contractor and make sure
that the main contractor has forwarded that application. Never issue gate passes through an application made by
your main contractor and always the workers will be in the head of labour co-operative/2nd level contractor (Form
XIII as per CL (R&A) RULES.
Now the checking of documents towards submission of PF and wages comes into picture after an interval of 45 days:
a) Verify whether all PF contribution have been remitted in various A/Cs as per Act through Labour Co-opeartive/2nd
level contractors by asking for copies of PF Challans, Para-22, Wages Sheet and Master Roll. But make sure that
all the copy has to be signed by the main contractor which are being submitted at your end for verification.
b) Verify whether PF Challans is being submitted within stipulated time frame as per PF Act.
If all the above task are done then I guess there may not be any problem in future regarding PF Act (I hope).
Then also if there will be any dispute relted to submission of PF comes, you may keep a provision of Security Deposite amount which will be released after expiration of 6 months to 12 months by and recommendation of HR Dept. regarding IR will tell you all in next comment.
I hope these step will work...
regards.
Jawed Alam.
From India, Dhanbad
Dear Mr. Sudip Sahu
Please obtain the Paysheet from the Sub-contractors by 03 of every month. or Prepare the Paysheet as per the attendance with in time and out time you are maintaining.
Make a summary of all the workmen sub-contractorwise and consolidate in PF Summary stating the details of S/C Name, No of Workmen, Total Basic Wages Total 12 PF Deducted, No of person in Form 5, No of person in Form 10.
Prepare the PF challan with the above details stating the No of workmen, Basic Amount, PF Amount 12% EPS 8.33% Employer PF 3.67% Administration charges and Tax part 1.61% and remit with the stipulated Bank and submit with respective PF commissionerate office.
Whoever left the service, for them submit the Form 10.
Every year submit the PF Details to PF Commissionerate alongwith the PF numbers individualwise with monthly subscription details.
You cannot expect all the sub-contractors can do PF Registration, as they may not have much knowledge about PF or ESI.
With warm regards
S. Bhaskar
9099024667
From India, Kumbakonam
Please obtain the Paysheet from the Sub-contractors by 03 of every month. or Prepare the Paysheet as per the attendance with in time and out time you are maintaining.
Make a summary of all the workmen sub-contractorwise and consolidate in PF Summary stating the details of S/C Name, No of Workmen, Total Basic Wages Total 12 PF Deducted, No of person in Form 5, No of person in Form 10.
Prepare the PF challan with the above details stating the No of workmen, Basic Amount, PF Amount 12% EPS 8.33% Employer PF 3.67% Administration charges and Tax part 1.61% and remit with the stipulated Bank and submit with respective PF commissionerate office.
Whoever left the service, for them submit the Form 10.
Every year submit the PF Details to PF Commissionerate alongwith the PF numbers individualwise with monthly subscription details.
You cannot expect all the sub-contractors can do PF Registration, as they may not have much knowledge about PF or ESI.
With warm regards
S. Bhaskar
9099024667
From India, Kumbakonam
Dear Pradyumna Kumar Atri
that u r new to this pf issue (as you ve written before) explanations/ elaborations of Jawed bhai will be of great help. its, i think, a very good step by step "dos" and "donts" which one may follow in tackling day to day pf issues.
Area pointed out by mr. Avinash and Mr. Jawed alam ie. power and politics is a very important issue which every HR officer has to take care of. The issue has spreaded it tentacles in each and every sects of life, has affected every decisions taken/tobe taken by the management. now whether the effect is congineal or adverse is matter of debate. but that it has influenced is known to us. thats why in my previous jottings i ve mentioned that these are not so easy as we are thinking. always we ve to take care of IR/ union issues. and we have to remember that we are no lawyers that we have to follow the rules in toto. but we have to find loops of the law and get the job done in a way that we dont break the law. theres we HR mangers cut an edge over the lawyers. this was what i was taught by my seniors.
sometime we would like to start a forum over the effect of power and politics on management decisions. keep going freinds.
regards,
shafiq
From India, Calcutta
that u r new to this pf issue (as you ve written before) explanations/ elaborations of Jawed bhai will be of great help. its, i think, a very good step by step "dos" and "donts" which one may follow in tackling day to day pf issues.
Area pointed out by mr. Avinash and Mr. Jawed alam ie. power and politics is a very important issue which every HR officer has to take care of. The issue has spreaded it tentacles in each and every sects of life, has affected every decisions taken/tobe taken by the management. now whether the effect is congineal or adverse is matter of debate. but that it has influenced is known to us. thats why in my previous jottings i ve mentioned that these are not so easy as we are thinking. always we ve to take care of IR/ union issues. and we have to remember that we are no lawyers that we have to follow the rules in toto. but we have to find loops of the law and get the job done in a way that we dont break the law. theres we HR mangers cut an edge over the lawyers. this was what i was taught by my seniors.
sometime we would like to start a forum over the effect of power and politics on management decisions. keep going freinds.
regards,
shafiq
From India, Calcutta
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HC All - Trainees not covered for PF -2010.pdf
PF Ledger.xls