"M/s A" is the License Holder under the Contract Labour Act, and also holds PF and ESI codes. The Gate Pass is in the name of "M/s A".
"M/s A" has engaged workmen through the Sub-Agency "M/s B" for construction activity.
However, wage payments for the workmen have been disbursed by "M/s B" and PF & ESI contributions have been deposited under "M/s A" establishment code.
My question is, can "M/s B" pay wages to the workmen? Will the Principal Employer accept it?
From India, undefined
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"M/s A" has engaged workmen through the Sub-Agency "M/s B" for construction activity.
However, wage payments for the workmen have been disbursed by "M/s B" and PF & ESI contributions have been deposited under "M/s A" establishment code.
My question is, can "M/s B" pay wages to the workmen? Will the Principal Employer accept it?
From India, undefined
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Here it is three-party - PE, Contractor & Sub-contractor. Usually, who pays the salary/wages - they are also responsible for PF, ESIC, etc. compliance.
Here the arrangement is not proper. In case of any audit, it will appear that the employees are under the payroll of the Sub-contractor, but compliance is done under the code of the Contractor. It is almost like the Contractor has failed to comply, as such the PE is complying in their code. As per the CLRA Act, Contractor includes sub-contractor.
So far as PE is concerned, to them, there is no existence of the sub-contractor as all compliance is done by the contractor.
The entire above arrangements are confusing, and in case of detailed enquiry, the PE and statutory body may raise objections regarding the present arrangement. For all practical purposes, the presence of the Sub-contractor will raise one big question, and all employees will be considered as contractor's employees.
My organization USD HR Solutions is a sub-contractor to Tata Steel where the Contractor is Vesuvius India Ltd. (MNC). We engage people and pay salaries as well as comply with all statutory needs - PF, ESIC, Bonus & Gratuity. We have been allotted one Vendor code by Tata Steel. We have no commercial agreement with Tata Steel, but we have the same with Vesuvius India Ltd. in detail. In my opinion, this is the right arrangement.
S K Bandyopadhyay (WB, Howrah) CEO-USD HR Solutions +91 98310 81531
USD HR Solutions – To Strive towards excellence with effort and integrity
From India, New Delhi
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366Here the arrangement is not proper. In case of any audit, it will appear that the employees are under the payroll of the Sub-contractor, but compliance is done under the code of the Contractor. It is almost like the Contractor has failed to comply, as such the PE is complying in their code. As per the CLRA Act, Contractor includes sub-contractor.
So far as PE is concerned, to them, there is no existence of the sub-contractor as all compliance is done by the contractor.
The entire above arrangements are confusing, and in case of detailed enquiry, the PE and statutory body may raise objections regarding the present arrangement. For all practical purposes, the presence of the Sub-contractor will raise one big question, and all employees will be considered as contractor's employees.
My organization USD HR Solutions is a sub-contractor to Tata Steel where the Contractor is Vesuvius India Ltd. (MNC). We engage people and pay salaries as well as comply with all statutory needs - PF, ESIC, Bonus & Gratuity. We have been allotted one Vendor code by Tata Steel. We have no commercial agreement with Tata Steel, but we have the same with Vesuvius India Ltd. in detail. In my opinion, this is the right arrangement.
S K Bandyopadhyay (WB, Howrah) CEO-USD HR Solutions +91 98310 81531
From India, New Delhi
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Dear Santosh, It is totally wrong, Employer will not allow and accept such type of activity.
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