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Can company change Third party for outsourcing ?
Human Resources » HR Outsourcing

Chrm Message From: dharm Total Posts: 27 Join Date: 26/05/2008
Rank: Executive Post Date: 19/11/2008 19:47:50 Points: 135 Location: United States

Please guide on this issue - can a company change third party out sourced vendor for exisitng employees who were hired mentioning another third party and have been receiving salary slip from the old third party.

Inputs awaited


Chrm Message From: nina123 Total Posts: 2 Join Date: 26/05/2008  
Rank: Beginner Post Date: 19/11/2008 19:51:28 Points: 10 Location: United States

Hi dharm,

It is possible but certain issues has to be sorted out. Before firing the existing 3rd party, ensure u have another 3rd party in hand who is willing to give his name for hiring the same set of people. this generally should not be a problem given the proliferation of such manpower supply agency and so long as hi commission is flowing. Now dehire the existing 3rd party only after ceasation of the contract period and not prematuredly to avoid any litigation (if however u have firm evidence of violation of contract norms, then the contract can be terminated prematuredly). Then u have 2 ensure that the existing set of people are interested to desert their previous employer and accept offer from the new supplier. Though theoretically speaking, on termination of a particular contract a outsourcing agency is expected to relocate his employee to any of his other work point and the employee in the process maintain perpetuity and not loose out on long term benefits like gratuity, truly speaking thats an utopia. Outsourcing agency engage people on specific asignment basis (for jobs of generally non technical in nature particularly in ervice industry) and would generally dump his workforce on expiry of the assignment. So the employees should not mind to join the new outfit if his emuneration remains identical.

Recieving salary slip is mandatory under shop and establishment act but that in no way deter the employee from switching allegiance so long as you as principal employer continue to fulfill your statutory obligation. however before changing your 3rd party, let me know why r u changing. is it because of deficiency in service or is it just a veil to pay less to your employees through a new 3rd party vendor. if the case is latter, u have to look at the possible ramification considering the threat perception of your employee mix. otherwise merely changing the 3rd party while keping the same set of people for your business interest should not be a problem.