X Co. Ltd. intends to hire the operational staff like Malis, Sweepers, Security Guards, Typists etc. for its office in New Delhi. As a Company Secretary in practice, advice the management of X Co. Ltd. about the benefits

Outsourcing is the contracting out of a company's non-core, non-revenue producing activities to specialists. It differs from contracting in that outsourcing is a strategic management tool that involves the restructuring of an organization around what it does best - its core competencies. Two common types of outsourcing are Information Technology (IT) outsourcing and Business Process Outsourcing (BPO). BPO includes outsourcing related to accounting, human resources, benefits, payroll, and finance functions and activities. Knowledge Process outsourcing (KPO) includes outsourcing related to legal, paralegal, and other highly skilled activities. The benefits of outsourcing are as under: Direct hiring of the staff becomes a permanent liability. It is very difficult to select right type of persons and it is equally difficult to remove them in case of any trouble. Recruitment and selection is costly and time consuming. Hiring through outsourcing is comparatively very convenient and cost effective. Lot of flexibility is there for hiring through outsourcing where as in direct recruitment, there is hardly any flexibility. Staff hired through Service Provider is more sincere, active and efficient as compared to own staff. Outsourcing Agreement This Agreement is made on this ............ day of June ..., 2017 between ABC Co. Ltd. (hereinafter referred to as the 'Company'), registered under the Companies Act, 1956, having registered office at Orchard Road, Modern Complex, New Delhi and acting through Mr. Mohan, Managing Director of the Company and M/s Lotus Service Providers (hereinafter referred to as 'Service Provider'), a Partnership Firm having its office at S6- Defence Enclave, New Delhi and acting through Mr. Karan, Managing Partner of the Firm. Whereas the Company is in need of the operational staff like typist, mails, sweepers, security guards, etc. for its registered office at Orchard Road, New Delhi And Whereas the Service Provider has approached the Company for hiring and providing of the desired operational staff on outsourcing basis. Now it is agreed by and between the parties hereto as follows: I. Obligations of the Service Provider That the service provider will hire and depute requisite number of staff like typist, malis, sweepers, security guards, etc. as and when demanded by the Company. That the staff to be hired and deputed should be in the age group of 25-35 years of age and should have a minimum of 2 years experience. That due compliance of labour laws like contribution to PF, ESI, etc. will be the responsibility of the service provider. Proof for the payment of PF and ESI contribution will have to be submitted alongwith the monthly bills to be raised for claiming the wages of the deputed staff. That the staff so deputed should have proper police verification and resident / identity proof. That the Service Provider will be liable for the work and conduct of the staff deputed with the company. If case any request is received for change or substitution of any person, the same is attended immediately. II. Obligations of the Company That the Company will pay wages equivalent to the minimum wages as fixed by the Labour Department from time to time. That the Service Provider will be allowed commission of 10% on the total salary/ wages bill for each month based upon the minimum wages fixed by the Labour Department. That the company will make demand for the require staff atleast 10 days in advance to the Service Provider so as to enable it to hire and depute the staff. That the staff deputed by the Service Provider would be eligible for weekly off and other holidays as per the rules of the Company. III. That in case any dispute arises with respect to the interpretation of any terms and conditions, the matter would be referred for arbitration. Each party will have a right to appoint one of their representatives as the arbitrator. The arbitration proceedings would be as provided under Arbitration and Conciliation Act, 1996. In witness whereof, both the parties, set their hands, this .... day of ......... 2017. Witness 1 For and on behalf of the Company Witness 2 For and on behalf of the Service Provider