Company having contract with other company are we employees in that

702 votes

Prima facie, such employees cannot claim to be employees of the other company. However, these employees will be considered to be agents of the first company working on its behalf at second company's premises. The agreement between the two companies will be required to be examined and also the facts such as the second company is not making any direct payments to such employees, etc., in order to arrive at a logical conclusion.

Advocate Shivam Tandon LawRato

558 votes

Definition of employer under section 2(e) of the PF Act defines employer as a person having 'ultimate control over the affairs of the establishment'. To establish ultimate control few things have to considered like: who is issuing employment contracts; pays wages and other allowances to the employee etc..
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Advocate Akshay Saxena LawRato

614 votes

Let us go by way of an example in this case.
Mr. A was hired by ABC Corporation for his professional skills. The business domain of ABC Corporation is of such nature that it lends its staff and others to another organisation for on site work or for manpower or for labour requirements.
Mr. A who is an accountant at ABC Corporation is being asked to work for XYZ Corporation where he will be maintaining the payroll accounts of all those employees (labour/manpower) who have been forwarded to the front for some site construction work.
In this case Mr. A will still remain the employee of ABC Corporation and will not become an employee of the XYZ Corporation just by the virtue of the fact that he is working for XYZ Corporation at their site. ABC Corporation is responsible for his monthly salary, perks, incentives and other facilities.
Does this mean that XYZ Corporation has no role to play in Mr. A's on site work?
No. XYZ Corporation under the labour and compliance law of India will be responsible to look after all the affairs of the site work and is also responsible to provide all facilities which are required to do work on the site. Since Mr. A is being engaged as an accountant at the premises of XYZ Corporation so XYZ Corporation will be known as Principal employer in this case. In case any tragedy (death, accidents etc.) happens then XYZ Corporation will take ownership of the same along with ABC Corporation and will pay the damages as per the law of the land.
But in no circumstances Mr. A will be known to be an employee of XYZ Corporation. He will always remain an employee of ABC Corporation.

Advocate Pulkit Prakash LawRato