Company having contract with other company are we employees in that
24-Feb-2023 (In Corporate Law)
There is a company who has employees an the employees have a contract with that company only but the company provides manpower to another company. Can the employees claim that they are employees of the other company as well? Any case that talks about such matter
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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.
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