Hello, I am the principal employer of the contractual construction company working under me for the renovation of the building work inside the factory located in Gujarat.
My Client never asked for such labour compliance. We are asking our contractor to secure ourselves from future complications.
The duration of the project is about eight months. Worked strength was 25 – 30 numbers.
The engaged contractor didn’t comply with any labour law in this period. To minimize the risk of future indemnity, what should I do to protect myself? Is there any affidavit or declaration from a contractor? As the project ended last month, Kindly suggest a solution for that.
From India, Surat
My Client never asked for such labour compliance. We are asking our contractor to secure ourselves from future complications.
The duration of the project is about eight months. Worked strength was 25 – 30 numbers.
The engaged contractor didn’t comply with any labour law in this period. To minimize the risk of future indemnity, what should I do to protect myself? Is there any affidavit or declaration from a contractor? As the project ended last month, Kindly suggest a solution for that.
From India, Surat
You should have ensured that the contractor who engages workers in your plant has ESI, PF registrations and has obtained licence under CLRA Act. The failure will be a non compliance on your part only. having completed the project, you are responsible for payment of contributions. It is true that workers engaged in a construction site are not covered by ESI. But when they are engaged in the construction of or renovation of building within the boundaries of a factory, they will come under the purview of ESI Act. Similarly, the payments would attract PF also. It is defendable that these contributions are made only in respect of those who come under the scope of the respective Acts by means of wages drawn per month. When the matter is raised by the ESIC or EPFO, you will have to establish that the workers were hired on salary above the threshold limits of Rs 21000 for ESi and Rs 15000 for EPF. Then you may be asked to produce the Workmen Compensation Policy in respect of these workers. If not covered they should be covered under the Employees Compensation Act. Above all when you engage a contractor to supply or engage 20 or more workers, you should have a regsitration under CLRA Act. And since you have given the work to one contractor and he is engaging more than 20 workers at a time, he should have a licence also. all these are non compliances.
In respect of projects completed, the ESI will allow a one time settlement by paying the required contribution of 4 percent of the 60% of the cost of project. There is no such settlement under EPF. But in the absence of inspection and the client being not at all worried about legal compliances, you can also keep silent. Still, when you take another project, please ensure that compliances would make you feeel good though it costs you a few amount.
From India, Kannur
4249In respect of projects completed, the ESI will allow a one time settlement by paying the required contribution of 4 percent of the 60% of the cost of project. There is no such settlement under EPF. But in the absence of inspection and the client being not at all worried about legal compliances, you can also keep silent. Still, when you take another project, please ensure that compliances would make you feeel good though it costs you a few amount.
From India, Kannur
Dear Sir,
Thank you for your brief explanation. Is there a provision to secure my company from future damage? can we make an agreement on stamp paper between the company and the contractor? declaring that all future damage or penalty would be borne through the contractor. otherwise if there any other alternative to safeguard ourselves.
From India, Surat
Thank you for your brief explanation. Is there a provision to secure my company from future damage? can we make an agreement on stamp paper between the company and the contractor? declaring that all future damage or penalty would be borne through the contractor. otherwise if there any other alternative to safeguard ourselves.
From India, Surat
Past liabilities cannot be put on the contractor. For future projects, you can make a contract which is legally binding and which will make the contractor solely responsible for contributions and payments due on his employees.
From India, Kannur
From India, Kannur
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Additional Compliance For Employees Engaged By Or Through Contractors.pdf