Contractor Labour and Abolition Act - share your views about issuing only Form V Contractors or Contractors subcontractors

Dear Team,

Kindly share your views on the following query.

We are the main contractor supplying manpower to a manufacturing unit in Maharashtra. We have engaged subcontractors to provide workers to our client, and three employees are deployed to monitor our subcontractors. Currently, we have a total of 49 individuals, including our employees. Our client has requested an increase in manpower to 15 to 20 individuals.

According to Maharashtra State regulations, if 50 or more workers are engaged in any industry, a labor license is required. Therefore, we kindly request the client to issue Form V under the name of our subcontractor. However, the client issued Form V to us instead of our subcontractor's name. Your input on whether Form V should only be issued to contractors or subcontractors would be appreciated.

Regards,
S. Mahadevan

Dear S Mahadevan,

Under the Contract Labour Act, two parties exist: one is the Principal Employer (owner of the establishment) and the other is the Contractor (who engages workers or performs the work on a contract).

To comply with the act, the principal employer obtains registration for the engagement of labor or work through a contractor. Based on the registration, the principal employer issues Form V to the contractor to obtain a labor license to engage workers (20 or 50, as the case may be) under him to perform the work.

In order to engage the contractor, the principal employer issues a work order (including work and cost details along with terms and conditions).

Therefore, the Principal Employer is least concerned about where the manpower supply is coming from to perform the allotted work. The PE will hold you responsible for any violations of the terms of the work order. The subcontractor is your responsibility rather than that of the principal employer.

In this case, the decision of your client to issue Form V to you instead of your subcontractors is correct and justified.

Prabhat
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