Form V – Certificate by Principal Employer to Contractor: Meaning, Applicability & Example

In India, many companies hire contract workers for roles like housekeeping, security, drivers, IT support, and more. While this is a common business practice, it brings certain legal responsibilities for both employers and contractors under the Contract Labour (Regulation and Abolition) Act, 1970.

One of the key compliance documents under this Act is Form V, a certificate issued by the Principal Employer to the Contractor.

In this article, we will help both employers and employees understand:

• What is Form V?
• When and why is it required?
• Who issues and who uses it?
• A real-world example
• Legal references and state-wise applicability

What is Form V?

Form V is a certificate issued by the Principal Employer to the Contractor, authorising them to apply for a Contract Labour Licence from the Labour Department under the Contract Labour (Regulation and Abolition) Act, 1970 and relevant state rules.

Without Form V, a contractor cannot legally apply for a labour licence to supply contract workers to the principal employer’s establishment.

Legal Reference

Form V is a compliance requirement under the rules framed as per the Contract Labour (Regulation and Abolition) Act, 1970.

As per Rule 21(2), the contractor’s licence application must be accompanied by a certificate issued by the principal employer in the prescribed format — which is Form V.

Who Issues and Who Uses Form V?

When is Form V Required?

Form V is required only when the Contract Labour Act and Rules apply to the establishment. This depends on the number of contract workers engaged and the applicability threshold of the state.

General Rule (Central Government & Most States):

The Contract Labour (Regulation and Abolition) Act, 1970 applies when 20 or more contract workers are employed on any day in the preceding 12 months.

However, some states have prescribed different thresholds under their respective State Rules, as shown below:

Always verify the latest notification/rules from the respective State Labour Department for updates.

Real-Life Example

Let’s say XYZ Manpower Pvt. Ltd. is a contractor that supplies staff to two different companies in different states:

• ✅ ABC and DEF must issue Form V since the threshold is met.
• ❌ GHI doesn’t need to issue Form V, as the number of workers is below the threshold.

What Does Form V Contain?

Form V typically includes:

• Name and address of the Principal Employer
• Name and address of the Contractor
• Type and location of work
• Number of contract workers to be engaged
• Declaration that the contractor is authorised to apply for a licence

Where to Submit Form V?

The contractor submits Form V along with the application for a labour licence to the concerned Labour Department (either state or central, depending on jurisdiction).

It is submitted:

• Offline at the State Labour Office, or
• Online via the Shram Suvidha Portal or the respective State Labour Portal

Final Thoughts

Form V is a legally important document in contract labour compliance. It establishes a clear relationship between the principal employer and contractor and ensures that the contractor is operating within the law.

🔐 For Principal Employers: If your establishment falls under the threshold, you must issue Form V to the contractor for them to obtain the licence.

📑 For Contractors: Always collect Form V before applying for a licence. Without it, your licence application will be rejected.

By following these simple but essential steps, both parties stay compliant and protect themselves from penalties or future legal issues.

FAQs

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