Manpower Supply Agreement

What Is A Manpower Supply Agreement?

A manpower supply agreement is a legal document signed between an organisation and a contractor in order to supply temporary manpower. According to the Contract Labour Act, 1970, the company in the contract shall be mentioned as the principal employer and the workmen shall be considered as employees of the principal employer. The agreement must contain the requirements specified by the company including the commitment made by the contractor.

Usually, a contractor engages with the company as an independent contractor and not as an employee of the company. The workmen supplied by the contractor are also not to be considered as employees of the company.

Legal Validity

Manpower supply agreement is India is regulated through The Contract Labour (Regulation and Abolition) Act, 1970. The Act was passed  to provide better recognition to temporary manpower and to abolish contract labour in certain industries where primitive working conditions still prevail. The Act provides for minimum wages for temporary labourers and is applicable to only industries that employ more than 20 persons as contract labourers in a year.

What A Manpower Supply Agreement Must Include?

Purpose Of The Agreement

It is important to mention the purpose of the agreement including the requirement of labourers engaging in short and long term contracts. Both, the company as well as the contractor need to be identified along with the type of organisation and nature of businesses that intends to be carried out.

Prior Notification

It is also critical that the company gives a prior notification to the contractor whenever there is a requirement of workmen and also to specify the number of skilled, semi-skilled or unskilled workmen that are required.

Transportation

Details regarding the person incharge for the transportation of manpower should be specified in the agreement. Either the company or the contractor will be responsible to transport workers to the work site. Thus, whoever has taken the responsibility to transport workers must be specified in the contract.

Backup Manpower

A crucial aspect when it comes to manpower management is having a backup in case workers don’t turn up to work. This will ensure speedy continuation of the work and a feeling that a contractor does not have to rely on a previous worker to keep work in progress. A contractor must also reserve an adequate number of workmen in reserve in case of any emergency relating to worker absenteeism.

Quality Of Manpower

A contractor should ensure that the workmen are in sound health (physically and mentally) in order to carry out the work allotted to them. The Child Labour (Prohibition and Regulation) Amendment Act, 2016, prohibits the engagement of children under 14 and adolescents below 18 in hazardous occupations. Thus children below 14 are prohibited to work in chemical factories, battery recycling units, cotton farms and brick kilns etc.

Supervision Of Workmen

Supervision of labour on contract is of utmost importance. The contractor may appoint a supervisor to oversee the work carried out by workmen, as per rules laid forth in the agreement. This will ensure, speedy, yet work clarity and performance rating of labourers. 

Payment For Manpower

The amount to be paid on a daily, weekly or monthly basis must be clearly specified with break-ups. These break-ups must be categorized into skilled, semi-skilled, and unskilled workers.

The contractor is the person who generally distributes the wages to the workmen from the consideration paid by the company. Thus the payment cycle must be mentioned. 

Miscellaneous Features

Miscellaneous features like attendance, time limit, reporting managers, penalty against contract, replacement of workers, code of conduct, theft, identity cards/badges; must also be included in a manpower supply agreement.