Dear Sirs, Seeks clarifications on the following:
As a Company we have entered agreement with a Security Contractor for supplying manpower for security. The Contractor supplying more than 30 persons as detailed below and does not have a licence. The Location details also entered in the agreement.
1. Main Factory 18 Nos
2. MD House 3 Nos
3. Godown outside the factory locations: 6 nos (2 godowns 10 KMs away from the factory)
4. Windmill- 6 persons.
We seek your clarifications whether he has to apply for a Licence or not. In Company RC also they have mentioned 18 manpower. Due to this, the contractor is not having a licence. He is raising one invoice in Company Name for supplying manpower. (No separate invoice for different locations)
We seek your clarifications on applicability of licence and amendment of RC.
Regards,
Ganapathy V
From India
1As a Company we have entered agreement with a Security Contractor for supplying manpower for security. The Contractor supplying more than 30 persons as detailed below and does not have a licence. The Location details also entered in the agreement.
1. Main Factory 18 Nos
2. MD House 3 Nos
3. Godown outside the factory locations: 6 nos (2 godowns 10 KMs away from the factory)
4. Windmill- 6 persons.
We seek your clarifications whether he has to apply for a Licence or not. In Company RC also they have mentioned 18 manpower. Due to this, the contractor is not having a licence. He is raising one invoice in Company Name for supplying manpower. (No separate invoice for different locations)
We seek your clarifications on applicability of licence and amendment of RC.
Regards,
Ganapathy V
From India
Dear Colleague,
The magic number 20 is comprising of adding contract workers deputed by different contractors from the perspective of "Principal Employer" for his establishment and if the number touch 20 then Registration to be done.
In case of the Contractor if he deputes 20 contract workers adding all number deputed for the "Principal Employer for his Establishment" then he need to apply and get License under the Act.
Here whether the Factory, MD House, Wind Mill, Godown Outside factory premises to be examined carefully and we can not get a direct clue from the definition under the Act as it is generic in nature:
2(e) "establishment" means--
(ii) any place where any industry, trade, business, manufacture or occupation is carried on;
Practically you may examine :
1. Whether the security guards are rotated from all these entities internally by the Contractor
2. Whether all the entities are under one " establishment" registered under the Companies Act
3. Whether all payments to the different entities are from your Factory Accounts
4. Whether Wind Mill, Godown, Factory all payments are managed by Factory Accounts only
5. How the PF, ESI are remitted by the Contractor whether under same code number etc
Even though it is practically possible to split the invoices, show the numbers as different etc, which is a "hiding number game" only to avoid the process of License, it is not advisable from my perspective. Normally in practical scenario it is very safe to engage " Licensed Contractors" only when the number in total touches 20. This will be helpful to have a very effective Contract Labour System which will always protect interest of Principal Employer in the long run.
From the given information it is suggested to go for Registration by the Employer and License by the Contractor where you can rotate the security guards within these entities and pay in one invoice etc. ( The Labour Code which is going to come in near future the number will get increased to 50 at that time you may review further but when the Code is going to come into force is not clear yet)
From India, Chennai
The magic number 20 is comprising of adding contract workers deputed by different contractors from the perspective of "Principal Employer" for his establishment and if the number touch 20 then Registration to be done.
In case of the Contractor if he deputes 20 contract workers adding all number deputed for the "Principal Employer for his Establishment" then he need to apply and get License under the Act.
Here whether the Factory, MD House, Wind Mill, Godown Outside factory premises to be examined carefully and we can not get a direct clue from the definition under the Act as it is generic in nature:
2(e) "establishment" means--
(ii) any place where any industry, trade, business, manufacture or occupation is carried on;
Practically you may examine :
1. Whether the security guards are rotated from all these entities internally by the Contractor
2. Whether all the entities are under one " establishment" registered under the Companies Act
3. Whether all payments to the different entities are from your Factory Accounts
4. Whether Wind Mill, Godown, Factory all payments are managed by Factory Accounts only
5. How the PF, ESI are remitted by the Contractor whether under same code number etc
Even though it is practically possible to split the invoices, show the numbers as different etc, which is a "hiding number game" only to avoid the process of License, it is not advisable from my perspective. Normally in practical scenario it is very safe to engage " Licensed Contractors" only when the number in total touches 20. This will be helpful to have a very effective Contract Labour System which will always protect interest of Principal Employer in the long run.
From the given information it is suggested to go for Registration by the Employer and License by the Contractor where you can rotate the security guards within these entities and pay in one invoice etc. ( The Labour Code which is going to come in near future the number will get increased to 50 at that time you may review further but when the Code is going to come into force is not clear yet)
From India, Chennai
First, get your RC amended if he has more than 18 contract workers deployed.
I do not know which state you are in, but most states in India have changed the limit for license to 50 workers.
But you need to be clear where your establishment is (or more correctly what it extends to).
If you have a factory license, then do all those places get included in it? If yes, then the number is 30. If not, the number is restricted to the actual number of contract workers deployed in the factory.
The rider - you need to have a separate RC for each location (if you have more than 20 in that location)
And you need to ensure you are having separate payroll (or contractor maintains separate payroll) for each location along with all relevant documents required under various acts.
From India, Mumbai
I do not know which state you are in, but most states in India have changed the limit for license to 50 workers.
But you need to be clear where your establishment is (or more correctly what it extends to).
If you have a factory license, then do all those places get included in it? If yes, then the number is 30. If not, the number is restricted to the actual number of contract workers deployed in the factory.
The rider - you need to have a separate RC for each location (if you have more than 20 in that location)
And you need to ensure you are having separate payroll (or contractor maintains separate payroll) for each location along with all relevant documents required under various acts.
From India, Mumbai
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