Dear All,
With reference to the subject, we are in the manufacturing industry and have more than 2500 permanent and contractual workers. Now, our management wants to reduce some manpower by outsourcing certain processes as job contracts to another party so that manpower could be reduced.
My question is, can we outsource specific processes or core activities of the factory through job contracts? Are there any legal implications associated with this decision?
Please share your valuable suggestions here.
Thanks & Regards,
Awdhesh Kumar
From India
Acknowledge(0)
Amend(0)
2With reference to the subject, we are in the manufacturing industry and have more than 2500 permanent and contractual workers. Now, our management wants to reduce some manpower by outsourcing certain processes as job contracts to another party so that manpower could be reduced.
My question is, can we outsource specific processes or core activities of the factory through job contracts? Are there any legal implications associated with this decision?
Please share your valuable suggestions here.
Thanks & Regards,
Awdhesh Kumar
From India
Acknowledge(0)Amend(0)
When you outsource some of the activities, especially the core activities in which a good number of employees are regularly employed, there would arise a labour dispute. It is okay if you outsource a new process in which no worker was earlier engaged and you do not know the results. Since you are outsourcing a process which was earlier carried out by your own workers you cannot have any defence. Therefore, I don’t find any merit in your decision to outsource an existing process.
Madhu.T.K
From India, Kannur
Acknowledge(0)Amend(0)
Madhu.T.K
From India, Kannur
Acknowledge(0)Amend(0)
Good evening, Madhu Sir,
Thank you for your inputs. Actually, we will use the surplus permanent workmen somewhere else, so that is not a problem for us. These matters have already been discussed, and written consent has been obtained from the union as well. I am a bit confused about the job contract/system of core activities. Could you please shed some light on this?
Regards,
Awdhesh Kumar
From India
Acknowledge(0)Amend(0)
Thank you for your inputs. Actually, we will use the surplus permanent workmen somewhere else, so that is not a problem for us. These matters have already been discussed, and written consent has been obtained from the union as well. I am a bit confused about the job contract/system of core activities. Could you please shed some light on this?
Regards,
Awdhesh Kumar
From India
Acknowledge(0)Amend(0)
You are not allowed to contract out core activity. The provision in the act is for out workers. That refers to work done by a contractor at a location other than your factory. In such a case, they do not come under contract manufacturing.
That means you can take a partly made item, ship it out to a contract manufacturing site, and get it done there. But you cannot employ contract labor for a peripheral and definitely not for a core function.
From India, Mumbai
Acknowledge(0)Amend(0)
That means you can take a partly made item, ship it out to a contract manufacturing site, and get it done there. But you cannot employ contract labor for a peripheral and definitely not for a core function.
From India, Mumbai
Acknowledge(0)Amend(0)
Dear Friend,
I suppose these are two separate activities:
1. Contracting your work as a job contract.
2. Letting an existing worker go.
Why have you signed a contract with the existing worker for activity 2? You must fulfill those conditions as per the factory act or the worker's contract with the existing worker. Contracting core or other processes to a third party should require legal binding unless you have signed a contract.
It is your moral responsibility, I suppose, to provide compensation or offer them other work if you find them or they request it. Any buffer period for individual workers should make them feel satisfied by moral and legal conditions of the contract worker.
Legal intricacies may sometimes lead to confrontations between HR and the union. However, human practice and legal practice should help you gain a better understanding to make decisions in your scenarios.
These are just suggestions; I am not a legal practitioner.
From India, Delhi
Acknowledge(0)Amend(0)
I suppose these are two separate activities:
1. Contracting your work as a job contract.
2. Letting an existing worker go.
Why have you signed a contract with the existing worker for activity 2? You must fulfill those conditions as per the factory act or the worker's contract with the existing worker. Contracting core or other processes to a third party should require legal binding unless you have signed a contract.
It is your moral responsibility, I suppose, to provide compensation or offer them other work if you find them or they request it. Any buffer period for individual workers should make them feel satisfied by moral and legal conditions of the contract worker.
Legal intricacies may sometimes lead to confrontations between HR and the union. However, human practice and legal practice should help you gain a better understanding to make decisions in your scenarios.
These are just suggestions; I am not a legal practitioner.
From India, Delhi
Acknowledge(0)Amend(0)
Dear Mr. Awdhesh,
As I understand, the matter has already been discussed with the operating unions, and written consent has also been obtained with the good motive that existing employees are to be deployed suitably. In my opinion, you could also separate that part from your main process and award that job to a contractor by completing the formalities of engaging the contractor.
Regards,
AKS
From India, Rourkela
Acknowledge(0)Amend(0)
As I understand, the matter has already been discussed with the operating unions, and written consent has also been obtained with the good motive that existing employees are to be deployed suitably. In my opinion, you could also separate that part from your main process and award that job to a contractor by completing the formalities of engaging the contractor.
Regards,
AKS
From India, Rourkela
Acknowledge(0)Amend(0)Looking for something specific? - Join & Be Part Of Our Community and get connected with the right people who can help. Our AI-powered platform provides real-time fact-checking, peer-reviewed insights, and a vast historical knowledge base to support your search.