Dear friends
In a NTPC Project the main contractor has engaged a sub-contractor and offloaded some part of the work. The sub-contractor is recovering the PF contributions from his employees and depositing under his PF code regularly. The sub-contractors' labors are covered under the labour license of the Main contractor. NTPC is asking the Main contractor to deposit the PF under their PF code or to issue Form V to the Sub-contractor to enable them to obtain the labour license.
Please advice me on the following
1. Is it mandatory that the PF contributions to be deposited with the Main contractors PF code only even if the S/c is having aPF registration.
2. Whether the S/c should have a labour license for depositing the contribution under his PF code.
Regards.
Krishnan
From India, Bharuch
3In a NTPC Project the main contractor has engaged a sub-contractor and offloaded some part of the work. The sub-contractor is recovering the PF contributions from his employees and depositing under his PF code regularly. The sub-contractors' labors are covered under the labour license of the Main contractor. NTPC is asking the Main contractor to deposit the PF under their PF code or to issue Form V to the Sub-contractor to enable them to obtain the labour license.
Please advice me on the following
1. Is it mandatory that the PF contributions to be deposited with the Main contractors PF code only even if the S/c is having aPF registration.
2. Whether the S/c should have a labour license for depositing the contribution under his PF code.
Regards.
Krishnan
From India, Bharuch
Dear all,
This is a very interesting situation but quite often HR executives come accross in their professional life.
This issue involves applicability of two labour statutes.
1. The Employee's Provident Fund & Misc. Provision Act,1952 and
2. TheContract Labour (R&A) Act,1970.
The EPF Act for the purpose of compliance registers all such establishments which qualify all the terms and conditions stipulated in the Act for registration. Such establishments could be of a Service taker or service provider( contractor and sub contractors). Once the establishment is registered under the Act and accordingly it is complying the Act in respect of it's employees, it would continue to be responsible for each and every responsibilities under the Act as a registered establishment. Such responsibilities would not depend on nature of job the establishment is doing(whether service provider or service taker).
Therefore, in the instant case, if the subcontractor is complying the EPF Act as a seperate legal entity( registered establishment under PF Act), they would continue to do so.
As regards Labour License and requirement of Form V to be issued by the main contractor as insisted upon by NTPC, I would like to clarify that form V is a contract specific documents and can be issued only by the PE(NTPC) to their contractor. The contract between the main contractor and sub contractor is for providing Manpower to the main contractor, however, as that manpower is not deployed in the establishment of main contractor, such contract will not be covered under the Contract Labour Act and the main contractor cannot be held Principal Employer in this case. Thus, he may not be insisted for form V.
Based on form V issued by NTPC, the main contractor has already obtained requisite license for all the contract labour deployed by the main contractor whether engaged directly or indirectly.Hence, compliance of the Act as far as obtaining License is concerned is complete.
From India, Pune
This is a very interesting situation but quite often HR executives come accross in their professional life.
This issue involves applicability of two labour statutes.
1. The Employee's Provident Fund & Misc. Provision Act,1952 and
2. TheContract Labour (R&A) Act,1970.
The EPF Act for the purpose of compliance registers all such establishments which qualify all the terms and conditions stipulated in the Act for registration. Such establishments could be of a Service taker or service provider( contractor and sub contractors). Once the establishment is registered under the Act and accordingly it is complying the Act in respect of it's employees, it would continue to be responsible for each and every responsibilities under the Act as a registered establishment. Such responsibilities would not depend on nature of job the establishment is doing(whether service provider or service taker).
Therefore, in the instant case, if the subcontractor is complying the EPF Act as a seperate legal entity( registered establishment under PF Act), they would continue to do so.
As regards Labour License and requirement of Form V to be issued by the main contractor as insisted upon by NTPC, I would like to clarify that form V is a contract specific documents and can be issued only by the PE(NTPC) to their contractor. The contract between the main contractor and sub contractor is for providing Manpower to the main contractor, however, as that manpower is not deployed in the establishment of main contractor, such contract will not be covered under the Contract Labour Act and the main contractor cannot be held Principal Employer in this case. Thus, he may not be insisted for form V.
Based on form V issued by NTPC, the main contractor has already obtained requisite license for all the contract labour deployed by the main contractor whether engaged directly or indirectly.Hence, compliance of the Act as far as obtaining License is concerned is complete.
From India, Pune
Dear Krishnan, To add further to the replies, the PF deposited by the sub-contractor suffices for the PE and main contractor as regards the labour deployed by the Sub-contractor. But for the labour deployed by the main contractor , PF has to be deposited by them. For depositing PF by the sub-contractor there is no need for labour license in his favour. Regards
KK
From India, Bhopal
KK
From India, Bhopal
Dear All,
Mr. Krishnan has asked clarification for two points :
1. Principal Employer (PE) NTPC is asking for EPF Challan from Main Contractor to whom Work / Contract Order has been issued
2. Issuance of Form V by main contractor to Sub Contractor
Regarding first point, my explanation is as under:
If the main contractor has sub let the work to sub contractor and the said sub contractor is depositing PF Challans for the covered workmen on his EPF Code Number , there is nothing wrong in doing the same, provided the main contractor must have entered into valid agreement with his sub contractor mentioing all theses terms & conditions of compliances matter in the said agreement .
Further while submitting the challan copies; ECR uploads details;remittance confirmation slip ; muster roll cum wage register ; wage slip copies & other applicable compliance docs under various labour acts/ rules must be signed by authorised represntative of both i.e.main contractor & sub contractor.
Regarding 2nd point , my explanation would be as under :
Issuanace of Form V is prime prerogative & responsibility of Principal Employer.In this case , PE (i.e.NTPC) is only and only authorised to issue Form V to main contractor or sub contractor. Here ,if PE requies Labour Licence from his sub contractor, first PE should amend his RC incorporating the said sub contractor name and subsequently after RC Amendment , PE can issue Form V to the said sub contractor .After receiving Form V from PE & amended RC copy, sub contractor apply for labour licence after completing all formalities as prescribed under the Contract Labour ( R & A) Act/ Rules .
Hope , my the above explanation is just an effort to address the said query. If members are not convinced / satisfied , they are encouraged and requested to give their valuable inputs / points so that this matter may be made more interesting .
Thks,
Anil Sharma
Manager- Compliance
From India, Pune
Mr. Krishnan has asked clarification for two points :
1. Principal Employer (PE) NTPC is asking for EPF Challan from Main Contractor to whom Work / Contract Order has been issued
2. Issuance of Form V by main contractor to Sub Contractor
Regarding first point, my explanation is as under:
If the main contractor has sub let the work to sub contractor and the said sub contractor is depositing PF Challans for the covered workmen on his EPF Code Number , there is nothing wrong in doing the same, provided the main contractor must have entered into valid agreement with his sub contractor mentioing all theses terms & conditions of compliances matter in the said agreement .
Further while submitting the challan copies; ECR uploads details;remittance confirmation slip ; muster roll cum wage register ; wage slip copies & other applicable compliance docs under various labour acts/ rules must be signed by authorised represntative of both i.e.main contractor & sub contractor.
Regarding 2nd point , my explanation would be as under :
Issuanace of Form V is prime prerogative & responsibility of Principal Employer.In this case , PE (i.e.NTPC) is only and only authorised to issue Form V to main contractor or sub contractor. Here ,if PE requies Labour Licence from his sub contractor, first PE should amend his RC incorporating the said sub contractor name and subsequently after RC Amendment , PE can issue Form V to the said sub contractor .After receiving Form V from PE & amended RC copy, sub contractor apply for labour licence after completing all formalities as prescribed under the Contract Labour ( R & A) Act/ Rules .
Hope , my the above explanation is just an effort to address the said query. If members are not convinced / satisfied , they are encouraged and requested to give their valuable inputs / points so that this matter may be made more interesting .
Thks,
Anil Sharma
Manager- Compliance
From India, Pune
Dear All,
I cent percent agree with Shri. Anil Sharma ji. It is totally wrong on the part of PE, to my views, asking the PF compliance of sub contractor in the code of his contractor when the sub contractor is having a code number allotted to him.
When any establishment is allotted any social security code by the respective authority, appropriate compliance is expected to be under the said code allotted to it and not under the code allotted to any other establishment.
License under CLA is a separate subject which has no relation to PF compliance. PE can issue Form V to it's sub contractor if so desired. If sub contractor apply for license with form V allotted to him by PE, the authority has to issue the license to the said sub contractor.
Members are requested to contribute to this discussion.
From India, Mumbai
I cent percent agree with Shri. Anil Sharma ji. It is totally wrong on the part of PE, to my views, asking the PF compliance of sub contractor in the code of his contractor when the sub contractor is having a code number allotted to him.
When any establishment is allotted any social security code by the respective authority, appropriate compliance is expected to be under the said code allotted to it and not under the code allotted to any other establishment.
License under CLA is a separate subject which has no relation to PF compliance. PE can issue Form V to it's sub contractor if so desired. If sub contractor apply for license with form V allotted to him by PE, the authority has to issue the license to the said sub contractor.
Members are requested to contribute to this discussion.
From India, Mumbai
Dear All,
I would like to add my views to the above discussion as under;-
The term 'contractor' has been very clearly defined in Section 2(1)(c) of Contract Labour (Regulations and Abolition) Act,1970 where a sub contractor has been included. As such all the labour laws formalities has to be complied with, which a main contractor follows.In this case as the agreement or contract has been between two parties i.e.NTPC, who is the Principal Employer & the Main contractor.It is better if the main contractor enter into agreement with his sub contractor and approaches the Principal Employer for getting Form-V issued in favour of the sub contractor,who can apply for the licence to the appropriate licensing authority.One should not be confused between the two Acts as both are separate & independent Acts.The Employees' Provident Funds and Miscellaneous Provisions Act,1952 deals with the provisions regulating to the provident Funds mattes and on the other hand the Contract Labour (Regulations and Abolition) Act,1970 deal with the registration, licencing of the establishments and regulatory provisions of the term & conditions of service of the contract Labour. As regards advise to your query in concerned. My answer to 1st query is that it is not necessary to deposit the PF contribution with the Main contractor,rather it is more appropriate to be deposit in S/c head of PF.The 2nd query has already been replied in the preceding para above.
BS Kalsi
From India, Mumbai
I would like to add my views to the above discussion as under;-
The term 'contractor' has been very clearly defined in Section 2(1)(c) of Contract Labour (Regulations and Abolition) Act,1970 where a sub contractor has been included. As such all the labour laws formalities has to be complied with, which a main contractor follows.In this case as the agreement or contract has been between two parties i.e.NTPC, who is the Principal Employer & the Main contractor.It is better if the main contractor enter into agreement with his sub contractor and approaches the Principal Employer for getting Form-V issued in favour of the sub contractor,who can apply for the licence to the appropriate licensing authority.One should not be confused between the two Acts as both are separate & independent Acts.The Employees' Provident Funds and Miscellaneous Provisions Act,1952 deals with the provisions regulating to the provident Funds mattes and on the other hand the Contract Labour (Regulations and Abolition) Act,1970 deal with the registration, licencing of the establishments and regulatory provisions of the term & conditions of service of the contract Labour. As regards advise to your query in concerned. My answer to 1st query is that it is not necessary to deposit the PF contribution with the Main contractor,rather it is more appropriate to be deposit in S/c head of PF.The 2nd query has already been replied in the preceding para above.
BS Kalsi
From India, Mumbai
Dear All such professionals who are suggesting for the Principal Employer to issue separate form V under Contract Labour(R&A) Act,1970 to the sub contractor.
I would like to clarify that Form V by the PE can be issued only to an entity who has been awarded a contract by the PE. At the same time form V is contract specific. It is infact , if you read its content, it is a certificate by the PE that he has awarded a contract to M/s XXXXX.............
In the absence of any contract between the PE and the sub contractor, it will be totally out of place if he issues a separate form V to the sub contractor.
The sub contractor is operating in the establishment of NTPC by virtue of his understanding or agreement with the main contractor to which PE is not a party.
The responsibility of PE under the Act will be for all such contact labour,who have been engaged and deployed by the main contractor in the establishment of PE, including those of sub contractor. Likewise, the main contractor shall obtain the license for all the contract labour either engaged directly by him or through his sub contractor and be responsible for his part of responsibilities under the Act for all such labour.
From India, Pune
I would like to clarify that Form V by the PE can be issued only to an entity who has been awarded a contract by the PE. At the same time form V is contract specific. It is infact , if you read its content, it is a certificate by the PE that he has awarded a contract to M/s XXXXX.............
In the absence of any contract between the PE and the sub contractor, it will be totally out of place if he issues a separate form V to the sub contractor.
The sub contractor is operating in the establishment of NTPC by virtue of his understanding or agreement with the main contractor to which PE is not a party.
The responsibility of PE under the Act will be for all such contact labour,who have been engaged and deployed by the main contractor in the establishment of PE, including those of sub contractor. Likewise, the main contractor shall obtain the license for all the contract labour either engaged directly by him or through his sub contractor and be responsible for his part of responsibilities under the Act for all such labour.
From India, Pune
Dear Rana ji and Dear Devbrat Jha ji,
Thanks for raising query.
According to me, sub contractor can apply for labour licence under CLA. The requirement for obtaining a licence is Form V issued by Principal Employer.
To suffice my statement, I have following points to say.
Definition of Contractor as under:
Section 2 ( c ) : "contractor", in relation to an establishment, means a person who undertakes to produce a given result for the establishment, other than a mere supply of goods or articles of manufacture to such establishment, through contract labour or who supplies contract labour for any work of the establishment and includes a sub-contractor;
Section 12 deals with licensing of Contractors. Sub Section 1 which says as under:
With effect from such date as the appropriate Government may, by notification in the Official Gazette, appoint, no contractor to whom this Act applies, shall undertake or execute any work through contract labour except under and in accordance with a licence issued in that behalf by the licensing officer.
Section 21 deals with application for licence as under:
(1) Every application by a contractor for the grant of licence shall be made in triplicate in Form IV, to the licensing officer of the area in which the establishment, in relation to which he is the contractor, is located.
(2) Every application for the grant of a licence shall be accompanied by a certificate by the principal employer in Form V to the effect that the applicant has been employed by him as a contractor in relation to his establishment and that he undertakes to be bound by all the provisions of the Act and the rules made thereunder in so far as the provisions are applicable to him as principal employer in respect of the employment of contract labour by the applicant.
The definition of Contractor is inclusive definition which includes even sub-contractors in it. The criteria to apply for Licence is that such application shall be accompanied by certificate by Principal Employer in Form V. If you being sub-contractor, apply for licence with certificate by Principal Employer in Form V and the authority reject the same you can challenge the rejection.
I am attaching herewith one Circular by Labour Commissionerate, Mumbai in this subject which is in Marathi and also not readable. For ready reference of you and other members, the translation of the said circular is given as under:
----------------------------------------------------------------------------------------------------------
Office of the Labour Commissioner,
Commerce Centre, Tardeo,
Mumbai 400 034.
CIRCULAR
Sub: Contract Labour (R&A) Act 1960
Issue of licence to sub contractor – Reg.
It is noticed that there is an ambiguity in issuing labour licence to the sub contractors appointed by the contractors under the Contract Labour (R&A) Act and Maharashtra Rules made thereunder.
In this regards the Government has issued necessary directions and accordingly it is being inform that the definition of contractor under section 2(1) (c) includes sub contractor also. If the contractor appoints any sub contractor for the work awarded to him, licence under the Act may be given to such sub contractor.
There should not be any objection in issuing a licence to such sub contractor who apply for licence to the authority accompanied with a certificate by Principal Employer in prescribed format under rule 21 (2).
Necessary steps are to be taken according to the directions of Government and all the pending issues are to be disposed off.
SD/-
Commissioner of Labour
----------------------------------------------------------------------------------------------------------
Hope you and other members have convinced to my point of view.
Further discussion and Comments are welcome. In this regards you can view my earlier posting link- https://www.citehr.com/430531-info-c...dont-fall.html
From India, Mumbai
Thanks for raising query.
According to me, sub contractor can apply for labour licence under CLA. The requirement for obtaining a licence is Form V issued by Principal Employer.
To suffice my statement, I have following points to say.
Definition of Contractor as under:
Section 2 ( c ) : "contractor", in relation to an establishment, means a person who undertakes to produce a given result for the establishment, other than a mere supply of goods or articles of manufacture to such establishment, through contract labour or who supplies contract labour for any work of the establishment and includes a sub-contractor;
Section 12 deals with licensing of Contractors. Sub Section 1 which says as under:
With effect from such date as the appropriate Government may, by notification in the Official Gazette, appoint, no contractor to whom this Act applies, shall undertake or execute any work through contract labour except under and in accordance with a licence issued in that behalf by the licensing officer.
Section 21 deals with application for licence as under:
(1) Every application by a contractor for the grant of licence shall be made in triplicate in Form IV, to the licensing officer of the area in which the establishment, in relation to which he is the contractor, is located.
(2) Every application for the grant of a licence shall be accompanied by a certificate by the principal employer in Form V to the effect that the applicant has been employed by him as a contractor in relation to his establishment and that he undertakes to be bound by all the provisions of the Act and the rules made thereunder in so far as the provisions are applicable to him as principal employer in respect of the employment of contract labour by the applicant.
The definition of Contractor is inclusive definition which includes even sub-contractors in it. The criteria to apply for Licence is that such application shall be accompanied by certificate by Principal Employer in Form V. If you being sub-contractor, apply for licence with certificate by Principal Employer in Form V and the authority reject the same you can challenge the rejection.
I am attaching herewith one Circular by Labour Commissionerate, Mumbai in this subject which is in Marathi and also not readable. For ready reference of you and other members, the translation of the said circular is given as under:
----------------------------------------------------------------------------------------------------------
Office of the Labour Commissioner,
Commerce Centre, Tardeo,
Mumbai 400 034.
CIRCULAR
Sub: Contract Labour (R&A) Act 1960
Issue of licence to sub contractor – Reg.
It is noticed that there is an ambiguity in issuing labour licence to the sub contractors appointed by the contractors under the Contract Labour (R&A) Act and Maharashtra Rules made thereunder.
In this regards the Government has issued necessary directions and accordingly it is being inform that the definition of contractor under section 2(1) (c) includes sub contractor also. If the contractor appoints any sub contractor for the work awarded to him, licence under the Act may be given to such sub contractor.
There should not be any objection in issuing a licence to such sub contractor who apply for licence to the authority accompanied with a certificate by Principal Employer in prescribed format under rule 21 (2).
Necessary steps are to be taken according to the directions of Government and all the pending issues are to be disposed off.
SD/-
Commissioner of Labour
----------------------------------------------------------------------------------------------------------
Hope you and other members have convinced to my point of view.
Further discussion and Comments are welcome. In this regards you can view my earlier posting link- https://www.citehr.com/430531-info-c...dont-fall.html
From India, Mumbai
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