General Contractor says he has several contractors and if the labor strength is more than 20 then they will avail the labor license

1. If any organization appoints a contractor for executing a job and the contractor further appoints subcontractors to carry out the prescribed job the who is responsible to take the labor license.
2. If the contractors appointed sub-contractors labor license is acceptable.
3. Appointed General Contractor is telling that he has several contractors and if the labor strength is more than 20 then they will avail the labor license. Is this arrangement is agreed as per the act? In such a case what should the organization communicate to the contractor?

Q1. If any organization appoints a contractor for executing a job and the contractor further appoints subcontractors to carry out the prescribed job the who is responsible to take the labor license.
Ans-1: The contractor to whom the Principal employer issued the work order to execute the job.

Q2. If the contractors appointed sub-contractors labor license is acceptable.
Ans-2: The contractor can not engage sub-contractor without the subletting clause in work order. The contractor has to take license for total man power including the sub-contractors manpower.

Q3. Appointed General Contractor is telling that he has several contractors and if the labor strength is more than 20 then they will avail the labor license.
Ans-3: The version of Contractor has no substance because he is the contractor for the principal employer, since he has been awarded the work order to execute the job. The contractor has to take the labour license, if he engages workmen more than 20 or 50 (including workmen of sub-contractor) as per the set rules of the state.
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Dear Member,

I do agree with Point No. 2 of Mr Prabhat regarding contractor can not engage Sub-Contractor without the subletting clause in the WO.

For others I would like to clear below points:-

1. In Maharashtra the Labour Licence is applicable on 50 or more contractual employees.

2. The sub-contractor can also take Labour Licence, but in such case the PE has to issue Form V in the favour of the sub-contractor. There PE will mention M/s XXXXXXX (sub-contractor) engage for XXXX job through M/s XXXXXX (Main-Contractor)......... On basis of the Form V, the sub-contractor can also apply for Labour Licence.

3. If permissible in the contract than the Main Contractor can award various sub-contracts. But there must be some basic (Technical or other) justification. If at any point it is proved that the job sub-let just to avoid Labour Licence and Legal Obligations than both (PE and Main Contractor) can be penalized.

Senior members can give more inputs.

Thank you, Mr. Prabhat, and Mr. Pan Singh.
I have another question on a similar line but it's about Workmen compensation. Legally, this must be taken from the Principle contractor appointed by the Client, But some of the principal contractors are submitting the WCP availed from Sub-contractors and PC is submitting the WCP only for their staff.
What should be the correct process to be followed as per legal requirements?

Workman compensation policy is intended to protect the employer from claims of compensation.
As long as the WCP is enforceable and the insurance company will be forced to pay the amount, then it does not matter whether the main contractor or the sub contractor takes the policy