ESI and PF for Contract employees - candidate as a 'Contract employee' for period of three months?

Hi, Our company is registered under the Factories Act, but we do not have registration or a license for contract employment.

1. Is it possible to appoint a candidate as a 'Contract employee' for a period of three months?
2. What are the procedures to appoint a candidate on a contract basis?
3. What about the PF and ESI for the contract employees?

Thank you.

Hi Md. Asif,

How many employees are in your factory? And how many are you going to engage on a contract basis temporarily for 3 months? I presume you are going to hire individuals on a temporary basis directly, without involving a 'contractor' whose business is supplying workers on a contract basis to you indirectly. There is no need for you to register as a 'contractor' since you will be hiring them directly, and their status will be that of an 'employee' for a limited period (fixed term). You can recruit them directly through an advertisement specifying 'temporary basis - only for 3 months.' However, they will be eligible for EPF/ESI benefits like any of your regular employees, who are also expected to adhere to all the rules of your factory like any other employees. Different provisions will apply for gratuity, bonus, and leave regulations.

Please let me know if you need any further clarification or assistance.

Best regards,

[Your Name]

@ loginmiraclelogistics: We have 65 employees at present (regular). A maximum of 3 employees are planned to be hired as contract employees. As per your comment, we need to consider hiring candidates as regular employees but with a mention of "3 months only".

Yes, you are free to follow the regular recruitment process, but the employment notification can be issued to those who have completed their apprenticeship or training in your factory or from the employment exchange. The notification should clearly state the following:

i) The position is temporary and only for 3 months.
ii) The employee is not eligible for termination compensation or other benefits.
iii) Proportionate leave encashment, gratuity, and bonus can be considered, but the employee will not be eligible for a claim to permanency.