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LAWYER GANESH MALUR (Junior Lawyer)     17 June 2010

Can 'A’ Company indemnify to Wipro on behalf of ‘B’ Company

MOST URGENT

 

Dear Members,

 

Please share your expertise on my query;

 

‘A’ is coffee company and appointed ‘B’ man power agency to operate ‘A’ companies Tea/Coffee vending machine at ‘Wipro Technologies’ premises.

 

A & B executed the ‘Service Agreement’. In this agreement

(1)B will appoint some 3 to 4 operators to handle Tea/Coffee vending  machine at WIPRO.

(2) There will be no employee & employer relationship between A & B (as per my knowledge).

(3) A has taken Indemnity form B company for no claims form its employee.

 

But question is here

1)      WIPRO Company is asking to A to execute Indemnity Deed to indemnify from the claims raises from B man power agency(like salary, P.F., ESI, etc). Is it correct or acceptable under Law.

2)      How ‘A’ Company can indemnify to Wipro on behalf of ‘B’ Company employees, is it okay?

3)      Labour Inspector has sent the notice to WIPRO to produce related documents on this issue, like asking agreement between Wipro & ‘A’ Company, and between A & B Company .

4)      Now what would be the status of A Company.

5)      And what steps to are available for A Company to escape from Labour Inspector?

 

 

 

Kindly post draft Deed of Indemnity on this transaction, if any    

 

Urgent please

Regards

LAWYER GANESH MALUR

early reply shall be appociated please



Learning

 3 Replies

Basavaraj (Asst, Manager-Legal)     19 June 2010

My answer to your query is” Negative”.

‘B’ company employees are not under pay roll of ‘A’ company.

Just ‘A’ Company appointed ‘B’ company to provide service or man power at Wipro under the Service agreement, so it does not create an employee and employers relationship between A & B.

There will be no legal sanctity in entering Indemnity deed with Wipro because ‘A’ Company cannot Indemnify to Wipro on behalf of ‘B’ Company employees for any claims arises against WIPRO from ‘B’ Company employees.

I do not think so Principal does not have any right to indemnify to for its agents acts and deeds to third party.

A Company cannot interfere with the Labour Inspector proceedings, B Company has to produce and comply all the applicable laws.

I think in order to escape from the Inspector better than late avoid to deal with directly with the Inspector, let him send a written notice than only you reply otherwise don not produce any documents pertaining to this issue.

Better you avoid Indemnity deed with Wipro because tomorrow something happens A Company will be held responsible for all acts or deeds arises from B Company.

 

Important thing is that B Company appointing operators to depute at Wipro premises. In case any of one operator dies in Wipro premises then Wipro may ask A Company to indemnify cause.

 

Please avoid to executing Indemnity bond.        

    

LAWYER GANESH MALUR (Junior Lawyer)     19 June 2010

Basavaraj sir, thanks for your reply

V. VASUDEVAN (LEGAL COUNSEL)     12 August 2010

As per the information given by you, the contract for service is between A & B and the premises/field of service being WIPRO's, WIPRO has only permitted the service. Also the service carried out is as per certain agreement between A company and WIPRO.

Hence A should, as the principal employer of B's service personnel, take the onus and provide an appropriate indemnity as sought for by WIPRO. As regards the Labour authorities, A company and B company should produce relevant records with proper legal advice and take course correction in case the process is defective. Do consult  a labour consultant like Aprajatha Services, operating Pan India.


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