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Illustrative example

Using contract workers without the right licence

A factory relies on a contractor for a large share of its workforce and finds the licence position unclear.

Scenario type: Packaging and processing unit. This is a hypothetical example, not a real client.

The situation

A unit engages a contractor who supplies most of its shop floor workers. Neither side is sure who holds which licence or who is responsible for wages and contributions.

The challenges

  • Principal employer responsibility is not well understood
  • The contractor's own filings are not checked
  • Wage and contribution disputes could fall back on the factory

How it is typically handled

  1. 1Confirm whether the arrangement falls under contract labour rules for this unit
  2. 2Check the contractor's licence, registrations, and contribution filings
  3. 3Add clauses on compliance, proof of payment, and indemnity to the contract
  4. 4Set a monthly routine to collect proof that wages and contributions were paid

What a good outcome looks like

The factory knows what it must verify each month and holds documents that show it did, which protects it if a worker or authority raises a claim.

Key takeaways

  • Outsourcing labour does not outsource responsibility
  • Ask for proof of payment every month
  • The contract should state compliance duties clearly

This scenario is general information for illustration. Rules, thresholds and deadlines change and depend on your facts, so confirm the position for your own situation with a qualified professional.

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