Dear All
IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES
What can keep Staffing Companies secure from litigation wherever a claim is received from the Temporary Employee ?
At the first instance when Legal notice or claim is received from the temporary Employee without waiting for the Client to take a stand work out a settlement with the candidate in compliance of Legal Provisions of Sec 25(F) of the Industrial Disputes Act and corresponding provision of the Shops and Establishments Act.
This is where specialist legal advice is required .The problem will be solved then and there.Due to the monetary factor involved as to who is to bear the liability whether Client or the Staffing Company the matter gets dragged to Court and Staffing Companies will have to pay through their nose. In cases where the Client is made to bear the liability the Staffing Entity will lose the business.
With Regards
V.Sounder Rajan
Advocates & Notaries -Legal Consultants
E-mail : rajanassociates@eth,net,
.
From India, Bangalore
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204IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES
What can keep Staffing Companies secure from litigation wherever a claim is received from the Temporary Employee ?
At the first instance when Legal notice or claim is received from the temporary Employee without waiting for the Client to take a stand work out a settlement with the candidate in compliance of Legal Provisions of Sec 25(F) of the Industrial Disputes Act and corresponding provision of the Shops and Establishments Act.
This is where specialist legal advice is required .The problem will be solved then and there.Due to the monetary factor involved as to who is to bear the liability whether Client or the Staffing Company the matter gets dragged to Court and Staffing Companies will have to pay through their nose. In cases where the Client is made to bear the liability the Staffing Entity will lose the business.
With Regards
V.Sounder Rajan
Advocates & Notaries -Legal Consultants
E-mail : rajanassociates@eth,net,
.
From India, Bangalore
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Dear All
IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES
The Supreme Court on 14-12-2010 in the matter of General Manager (OSD), Bengal Nagpur Cotton Mills Rajnandgaon Vs. Bharat Lal & anr decided has laid down the law on Two of the well-recognized tests to find out whether the Contract Labour are the direct employees of the principal employer are
(i) Whether the Principal Employer pays the salary instead of the contractor; and
(ii) Whether the Principal Employer controls and supervises the work of the employee.
Now it is therefore for the Principal Employer [Client] and Contractor [Staffing Company] to avoid the risk of the Contract Employees being termed as Direct Employees of the Principal Employer [Client].
This is definitely a Grey area where Specialist Legal advice will be required for the Staffing Companies on a continuing basis .Top Management of every Staffing Company needs to have a compliance Audit on applying the test enunciated by the Apex Court on each and every contract.
On the other side Principal Employers also need to conduct a similar Compliance Audit for availing a 100 % compliance by their Contract so that unwittingly they are not caught napping and running the risk of the Contract Employees being termed as Direct Employees of the Principal Employer [Client].
With Regards
V.Sounder Rajan
Advocates & Notaries -Legal Consultants
E-mail : rajanassociates@eth,net,
From India, Bangalore
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IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES
The Supreme Court on 14-12-2010 in the matter of General Manager (OSD), Bengal Nagpur Cotton Mills Rajnandgaon Vs. Bharat Lal & anr decided has laid down the law on Two of the well-recognized tests to find out whether the Contract Labour are the direct employees of the principal employer are
(i) Whether the Principal Employer pays the salary instead of the contractor; and
(ii) Whether the Principal Employer controls and supervises the work of the employee.
Now it is therefore for the Principal Employer [Client] and Contractor [Staffing Company] to avoid the risk of the Contract Employees being termed as Direct Employees of the Principal Employer [Client].
This is definitely a Grey area where Specialist Legal advice will be required for the Staffing Companies on a continuing basis .Top Management of every Staffing Company needs to have a compliance Audit on applying the test enunciated by the Apex Court on each and every contract.
On the other side Principal Employers also need to conduct a similar Compliance Audit for availing a 100 % compliance by their Contract so that unwittingly they are not caught napping and running the risk of the Contract Employees being termed as Direct Employees of the Principal Employer [Client].
With Regards
V.Sounder Rajan
Advocates & Notaries -Legal Consultants
E-mail : rajanassociates@eth,net,
From India, Bangalore
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Dear All
IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES
Mere filing of an Appeal before the Appellate Authority will not operate as Stay of Recovery of EPF dues.
EPF Organization has come out with this Important Circular
EMPLOYEES’ PROVIDENT FUND ORGANISATION
(Ministry of Labour & Employment, Govt. of India), Head Office – Bhavishya Nidhl Bhawan, 14, Bhlkaiji Camaji Place, New Delhi – 110 066.
LC/4/Cir. Judgement/2011/ 19184 dated 25/07/2011
Sub: Forwarding of landmark judgment delivered by Hon’ble Division Bench of Gujarat High Court in LPA No. 12/2010 in SCA No. 3347/2009 reg.
Sir,
Please find enclosed herewith a copy of judgment dated 15/6/2011 delivered by Hon’ble Division Bench of Gujarat High Court in the matter of EPFO Vs. Rollwell Forge Ltd. on the issue of initiating recovery action before expiry of limitation period of appeal prescribed under Sec.7-1 of the Act. While overturning the decision of Single Bench,
Hon’ble Division Bench has held that:
I. In the absence of any specific provision in the Act prohibiting or restraining the authorities from taking any further action of recovery of the amount due and payable by the employer, it is always permissible for the authorities to proceed ahead without waiting for the expiry of the statutory time period of appeal as provided under Section 7-1 of the Act. Any other interpretation in this regard would render provisions and the object of the Act otiose.
2. Mere filing of appeal without obtaining any relief from the Appellate authority shall not preclude or prohibit the authorities to proceed further in the matter for recovery of the amount.
The above judgment may be utilized for expediting recovery action and relied upon in similar situation cases.
End: As above
Yours faithfully,
(Anils S. Dixit)
Regional PF Commissioner-I(Legal)
For Staffing Entities the High Court apart from laying down the law that mere filing of appeal without obtaining any relief from the Appellate authority shall not preclude or prohibit the authorities to proceed further in the matter for recovery of the amount the Circular has also a serious impact on Staffing Companies as immediately on fixation of the liability the Department can also go for recovery action as in the absence of any specific provision in the Act prohibiting or restraining the authorities from taking any further action of recovery of the amount due and payable by the employer, it is always permissible for the authorities to proceed ahead without waiting for the expiry of the statutory time period of appeal as provided under Section 7-1 of the Act.
With Regards
V.Sounder Rajan
Advocates & Notaries -Legal Consultants
E-mail : rajanassociates@eth,net,
From India, Bangalore
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IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES
Mere filing of an Appeal before the Appellate Authority will not operate as Stay of Recovery of EPF dues.
EPF Organization has come out with this Important Circular
EMPLOYEES’ PROVIDENT FUND ORGANISATION
(Ministry of Labour & Employment, Govt. of India), Head Office – Bhavishya Nidhl Bhawan, 14, Bhlkaiji Camaji Place, New Delhi – 110 066.
LC/4/Cir. Judgement/2011/ 19184 dated 25/07/2011
Sub: Forwarding of landmark judgment delivered by Hon’ble Division Bench of Gujarat High Court in LPA No. 12/2010 in SCA No. 3347/2009 reg.
Sir,
Please find enclosed herewith a copy of judgment dated 15/6/2011 delivered by Hon’ble Division Bench of Gujarat High Court in the matter of EPFO Vs. Rollwell Forge Ltd. on the issue of initiating recovery action before expiry of limitation period of appeal prescribed under Sec.7-1 of the Act. While overturning the decision of Single Bench,
Hon’ble Division Bench has held that:
I. In the absence of any specific provision in the Act prohibiting or restraining the authorities from taking any further action of recovery of the amount due and payable by the employer, it is always permissible for the authorities to proceed ahead without waiting for the expiry of the statutory time period of appeal as provided under Section 7-1 of the Act. Any other interpretation in this regard would render provisions and the object of the Act otiose.
2. Mere filing of appeal without obtaining any relief from the Appellate authority shall not preclude or prohibit the authorities to proceed further in the matter for recovery of the amount.
The above judgment may be utilized for expediting recovery action and relied upon in similar situation cases.
End: As above
Yours faithfully,
(Anils S. Dixit)
Regional PF Commissioner-I(Legal)
For Staffing Entities the High Court apart from laying down the law that mere filing of appeal without obtaining any relief from the Appellate authority shall not preclude or prohibit the authorities to proceed further in the matter for recovery of the amount the Circular has also a serious impact on Staffing Companies as immediately on fixation of the liability the Department can also go for recovery action as in the absence of any specific provision in the Act prohibiting or restraining the authorities from taking any further action of recovery of the amount due and payable by the employer, it is always permissible for the authorities to proceed ahead without waiting for the expiry of the statutory time period of appeal as provided under Section 7-1 of the Act.
With Regards
V.Sounder Rajan
Advocates & Notaries -Legal Consultants
E-mail : rajanassociates@eth,net,
From India, Bangalore
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(Fact Checked)-The user reply contains accurate information regarding the EPF recovery action and the impact on Staffing Companies based on the circular and judgment provided. No corrections are needed. (1 Acknowledge point)
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(Fact Checked)-[B]Response[/B]: The information provided regarding EPF dues recovery and the High Court judgment is accurate and pertinent to Indian staffing companies. (1 Acknowledge point)
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Dear All
IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES
PF Department has recently come out with the following Circular:
EMPLOYEES’ PROVIDENT FUND ORGANISATION
(Ministry of Labour & Employment, Govt. of India), Head Office
Bhavishya Nidhl Bhawan, 14, Bhlkaiji Camaji Place, New Delhi – 110 066.
No. Coord./4(6)2003/Clarification/Vol.II/2482 Dated: 21.06.2011
Sub: Forwarding of Landmark Judgment delivered by the Hon’ble Division Bench of Madhya Pradesh High Court on the issue of considerable components of Basic Wages – regarding
Sir,
Please find enclosed herewith a copy of Judgment dated 24.03.2011 in the matter of Montage Enterprises Pvt. Ltd versus Employees Provident Fund, Indore & one another delivered by the Hon’ble Divisional Bench of Madhya Pradesh High Court Bench at Gwalior whereby, the Hon’ble Court has laid down a principle for treatment of certain allowances like Conveyance/Transportation allowance, Special Allowance etc. as component of “Basic Wages” for the purpose of Provident Fund liabilities if the same are being paid uniformly, necessarily and ordinarily to all employees. The same may be utilized as per merits of the case.
Yours faithfully
End: As above.
(Anita S. Dixit)
Regional PF Commissioner-I (Coord.)
Staffing Entities need to adhere to this dictum of Hon’ble Divisional Bench of Madhya Pradesh High Court Bench at Gwalior whereby, the Hon’ble Court has laid down a principle for treatment of certain allowances like Conveyance/Transportation allowance, Special Allowance etc. as component of “Basic Wages” for the purpose of Provident Fund liabilities if the same are being paid uniformly, necessarily and ordinarily to all employees apart from laying down the law .
The Department can re-open the Returns for earlier period of non compliance and the penal provisions will be incurred.
The rate of penal damages for belated payment of EPF dues is as follows:
If the period of default less than 2 months -5 %
If the period of default is 2 months above but less than 4 months – 10 %
If the period of default is 4 months above but less than 6 months – 15 %
If the period of default is 6 months above–25 %
The above is in addition to 12 % simple interest .
Apart from the above the further consequences for default are:
Attachment of Bank Accounts
Realization of dues from Debtors[ Garnishee Order]
Attachment of moveable and immovable properties.
Arrest and detention in Prison.
Action under section 406/409 of the Indian Penal Code[ Criminal Law] and Section 110 of Cr .P.C
Prosecution.Prosecution for Non payment of contributions normally end in favour of the Department.Mandatory punishment of detention in Prison is provided .
Managing Director or CEO of Staffing entities on their part need to direct their Head of Compliance to file adherence reports on the Circular issued by the Department and arrange for a Board of Directors directed Compliance Audit on the following EPF Circulars :
1. No.: Coord/4(6)2003/Clarification/Vol-II/ Dated: 23-05-2011
2. No. Coord./4(6)2003/Clarification/Vol.II/2482 Dated: 21.06.2011
If a negative report on compliance of the above EPF Department Circulars is indicated by the Board directed compliance Audit Team then immediate remedial action is to be taken to avoid penal action by the Department.
With Regards
V.Sounder Rajan
Advocates & Notaries -Legal Consultants
E-mail : rajanassociates@eth,net,
From India, Bangalore
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IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES
PF Department has recently come out with the following Circular:
EMPLOYEES’ PROVIDENT FUND ORGANISATION
(Ministry of Labour & Employment, Govt. of India), Head Office
Bhavishya Nidhl Bhawan, 14, Bhlkaiji Camaji Place, New Delhi – 110 066.
No. Coord./4(6)2003/Clarification/Vol.II/2482 Dated: 21.06.2011
Sub: Forwarding of Landmark Judgment delivered by the Hon’ble Division Bench of Madhya Pradesh High Court on the issue of considerable components of Basic Wages – regarding
Sir,
Please find enclosed herewith a copy of Judgment dated 24.03.2011 in the matter of Montage Enterprises Pvt. Ltd versus Employees Provident Fund, Indore & one another delivered by the Hon’ble Divisional Bench of Madhya Pradesh High Court Bench at Gwalior whereby, the Hon’ble Court has laid down a principle for treatment of certain allowances like Conveyance/Transportation allowance, Special Allowance etc. as component of “Basic Wages” for the purpose of Provident Fund liabilities if the same are being paid uniformly, necessarily and ordinarily to all employees. The same may be utilized as per merits of the case.
Yours faithfully
End: As above.
(Anita S. Dixit)
Regional PF Commissioner-I (Coord.)
Staffing Entities need to adhere to this dictum of Hon’ble Divisional Bench of Madhya Pradesh High Court Bench at Gwalior whereby, the Hon’ble Court has laid down a principle for treatment of certain allowances like Conveyance/Transportation allowance, Special Allowance etc. as component of “Basic Wages” for the purpose of Provident Fund liabilities if the same are being paid uniformly, necessarily and ordinarily to all employees apart from laying down the law .
The Department can re-open the Returns for earlier period of non compliance and the penal provisions will be incurred.
The rate of penal damages for belated payment of EPF dues is as follows:
If the period of default less than 2 months -5 %
If the period of default is 2 months above but less than 4 months – 10 %
If the period of default is 4 months above but less than 6 months – 15 %
If the period of default is 6 months above–25 %
The above is in addition to 12 % simple interest .
Apart from the above the further consequences for default are:
Attachment of Bank Accounts
Realization of dues from Debtors[ Garnishee Order]
Attachment of moveable and immovable properties.
Arrest and detention in Prison.
Action under section 406/409 of the Indian Penal Code[ Criminal Law] and Section 110 of Cr .P.C
Prosecution.Prosecution for Non payment of contributions normally end in favour of the Department.Mandatory punishment of detention in Prison is provided .
Managing Director or CEO of Staffing entities on their part need to direct their Head of Compliance to file adherence reports on the Circular issued by the Department and arrange for a Board of Directors directed Compliance Audit on the following EPF Circulars :
1. No.: Coord/4(6)2003/Clarification/Vol-II/ Dated: 23-05-2011
2. No. Coord./4(6)2003/Clarification/Vol.II/2482 Dated: 21.06.2011
If a negative report on compliance of the above EPF Department Circulars is indicated by the Board directed compliance Audit Team then immediate remedial action is to be taken to avoid penal action by the Department.
With Regards
V.Sounder Rajan
Advocates & Notaries -Legal Consultants
E-mail : rajanassociates@eth,net,
From India, Bangalore
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(Fact Checked)-[response] The user's reply is accurate in detailing the legal implications and obligations for staffing companies regarding Provident Fund liabilities as per the judgment of the Madhya Pradesh High Court. The information provided aligns with current legal requirements. (1 Acknowledge point)
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(Fact Checked)-[response] The user reply contains accurate information regarding the legal implications of the Provident Fund circular and the consequences of non-compliance. It emphasizes the importance of adhering to the circulars issued by the EPF Department to avoid penalties and legal actions. (1 Acknowledge point)
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Dear All
NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES
Clients want the Staffing Entities you to Hire and fire? Is it possible?
Yes when Staffing Companies have their Associates on their permanent rolls and can be moved from one Client to another .This is a long shot. In the present Industrial Law scenario this is not feasible. The Indian Staffing Industry should aim for this.
In that scenario the Staffing Entity can have the following dedicated class of workmen/Staff on their pay roll coming within the following parameters
Classification of workmen.--(a) Workmen /Staff shall be classified as --
(1) permanent,
(2) Probationers,
(3) badlis,
(4) temporary,
(5) casual,
(6) apprentices.
(b) A “permanent workman” is a workman who has been engaged on a permanent basis and includes any person who has satisfactorily completed a probationary period of three months in the same or another occupation in the industrial establishment, including breaks due to sickness, accident, leave, lock-out, strike (not being an illegal strike) or involuntary closure of the establishment.
(c) A “probationer” is a workman who is provisionally employed to fill a permanent vacancy in a post and has not completed three months’ service therein. If a permanent employee is employed as a probationer in a new post he may, at any time during the probationary period of three months, be reverted to his old permanent post.
(d) A “badli” is a workman who is appointed in the post of a permanent workman or probationer who is temporarily absent.
(e) A “temporary workman” is a workman who has been engaged for work which is of an essentially temporary nature likely to be finished within a limited period.
(f) A “casual workman” is a workman whose employment is of a casual nature.
(g) An “apprentice” is a learner who is paid an allowance during the period of his training.
The Recruitment of personnel for deputation for the Staffing Entity should be on the above classification and the letter of Appointment [LOA] needs to be issued on the classification. The terms of Termination needs to be embedded in the LOA .Of course specialist legal help will be required to mould the Hiring and Firing process.
With Regards
V.Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail : rajanassociates@eth,net,
-9025792684-9025792634
From India, Bangalore
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NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES
Clients want the Staffing Entities you to Hire and fire? Is it possible?
Yes when Staffing Companies have their Associates on their permanent rolls and can be moved from one Client to another .This is a long shot. In the present Industrial Law scenario this is not feasible. The Indian Staffing Industry should aim for this.
In that scenario the Staffing Entity can have the following dedicated class of workmen/Staff on their pay roll coming within the following parameters
Classification of workmen.--(a) Workmen /Staff shall be classified as --
(1) permanent,
(2) Probationers,
(3) badlis,
(4) temporary,
(5) casual,
(6) apprentices.
(b) A “permanent workman” is a workman who has been engaged on a permanent basis and includes any person who has satisfactorily completed a probationary period of three months in the same or another occupation in the industrial establishment, including breaks due to sickness, accident, leave, lock-out, strike (not being an illegal strike) or involuntary closure of the establishment.
(c) A “probationer” is a workman who is provisionally employed to fill a permanent vacancy in a post and has not completed three months’ service therein. If a permanent employee is employed as a probationer in a new post he may, at any time during the probationary period of three months, be reverted to his old permanent post.
(d) A “badli” is a workman who is appointed in the post of a permanent workman or probationer who is temporarily absent.
(e) A “temporary workman” is a workman who has been engaged for work which is of an essentially temporary nature likely to be finished within a limited period.
(f) A “casual workman” is a workman whose employment is of a casual nature.
(g) An “apprentice” is a learner who is paid an allowance during the period of his training.
The Recruitment of personnel for deputation for the Staffing Entity should be on the above classification and the letter of Appointment [LOA] needs to be issued on the classification. The terms of Termination needs to be embedded in the LOA .Of course specialist legal help will be required to mould the Hiring and Firing process.
With Regards
V.Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail : rajanassociates@eth,net,
-9025792684-9025792634
From India, Bangalore
Acknowledge(0)Amend(0)CiteHR.AI
(Fact Checked)-The user reply contains accurate information regarding the classification of workmen in an industrial establishment. The details provided align with the Industrial Disputes Act, 1947, and the legal categories of workmen specified in the act. (1 Acknowledge point)
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Dear HR Professionals
NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES
Recently the Gujarat High Court in the case of Medical vs Dashrathsinh decided on 10 May, 2011 has held
“If the workman is retrenched by an oral order or communication or he is simply asked not to come for duty, the employer will be required to lead tangible and substantive evidence to prove compliance of Clauses (a) and (b) of Section 25-F of the Act.”
The above reference is to the Industrial Disputes Act .Therefore Staffing Industry Professionals need to impress upon their Clients not to indulge in the practice of oral order or communication of termination of the Temporary Employee without getting clearance from them for termination as the burden of proof of Statutory Compliance would rest on the Employer. In case the Staffing Company points out the hand to the Client then the Principal Employer will become liable to compensate the Staffing Company for any out flow .Of course in such a scenario the Staffing Company may lose the Client .In the context of Staffing Companies working on wafer thin margins the liability arising on the Staffing Company by Client generated retrenchment arising out of an oral order or communication will eat into their Margins and ultimately claims emerging out of illegal retrenchment arising out of an oral order or communication may result in the Staffing Contracts ending with minus margins.
The success of a Staffing Company is to anticipate contingencies of illegal retrenchment arising out of an oral order or communication by Client and include clauses in the Staffing Contract to pass on the liability to the Client. For this the Staffing Company needs to have well tailored Staffing Contracts with a solid legal foundation.
With Regards
V.Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail : rajanassociates@eth,net,
-9025792684-9025792634
From India, Bangalore
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NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES
Recently the Gujarat High Court in the case of Medical vs Dashrathsinh decided on 10 May, 2011 has held
“If the workman is retrenched by an oral order or communication or he is simply asked not to come for duty, the employer will be required to lead tangible and substantive evidence to prove compliance of Clauses (a) and (b) of Section 25-F of the Act.”
The above reference is to the Industrial Disputes Act .Therefore Staffing Industry Professionals need to impress upon their Clients not to indulge in the practice of oral order or communication of termination of the Temporary Employee without getting clearance from them for termination as the burden of proof of Statutory Compliance would rest on the Employer. In case the Staffing Company points out the hand to the Client then the Principal Employer will become liable to compensate the Staffing Company for any out flow .Of course in such a scenario the Staffing Company may lose the Client .In the context of Staffing Companies working on wafer thin margins the liability arising on the Staffing Company by Client generated retrenchment arising out of an oral order or communication will eat into their Margins and ultimately claims emerging out of illegal retrenchment arising out of an oral order or communication may result in the Staffing Contracts ending with minus margins.
The success of a Staffing Company is to anticipate contingencies of illegal retrenchment arising out of an oral order or communication by Client and include clauses in the Staffing Contract to pass on the liability to the Client. For this the Staffing Company needs to have well tailored Staffing Contracts with a solid legal foundation.
With Regards
V.Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail : rajanassociates@eth,net,
-9025792684-9025792634
From India, Bangalore
Acknowledge(0)Amend(0)CiteHR.AI
(Fact Checked)-The user reply contains accurate information regarding the burden of proof and compliance requirements under Section 25-F of the Industrial Disputes Act as highlighted in the Gujarat High Court case of Medical vs Dashrathsinh. The recommendation to have well-tailored Staffing Contracts to address potential contingencies is sound advice. (1 Acknowledge point)
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(Fact Checked)-The user reply correctly emphasizes the importance of complying with the Industrial Disputes Act to avoid legal repercussions when terminating temporary employees. It highlights the burden of proof on the employer and the need for proper documentation. The suggestion to include liability clauses in staffing contracts is also valid. (1 Acknowledge point)
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Dear All The Tamil Nadu Govt has come out with amendments to the State CLRA Rules . Pls see the Attachment .Compliance of the rules is necessitated for the Staffing Industry. rajanlawfirm
From India, Madras
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From India, Madras
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Dear All
NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES
In our recent post we had highlighted the need for the Staffing Entity to comply with Sec 25 F of the Industrial Disputes Act while retrenching a Temporary Employee by an oral order or communication or he is simply asked not to come for duty, the employer will be required to lead tangible and substantive evidence to prove compliance of Clauses (a) and (b) of Section 25-F of the Ac as decided by the Gujarat High Court in the case of Medical vs Dashrathsinh decided on 10 May, 2011.
There is a request from an experienced Staffing Professional from one of the prime players in the Industry to highlight the relevance of Section 25 F of the ID Act vis-a-vis the Staffing Industry .The same is dealt with in this post:
For Compliance of Sec 25 F of the ID Act the following is to be done :
i. The employee of the Staffing Entity sent for work to the Client on oral or verbal termination by the Client or Staffing Entity must be given a one month's notice in writing, indicating the reasons for retrenchment. The retrenchment can take effect only after the notice period has expired, or if the employee of the Staffing Entity sent for work to the Client on oral or verbal termination by the Client or Staffing Entity has been paid wages in lieu of such notice.
ii. The employee of the Staffing Entity sent for work to the Client on oral or verbal termination by the Client or Staffing Entity must be paid, at the time of retrenchment, compensation, which is equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months.
iii. A notice must be served in the prescribed manner, on the appropriate Government. (Section 25F of the ID Act).It has become a practice in the Industry to dispense with this Notice.Government can take steps to delete this provision .
Absolutely it is a water tight process and a safeguard for avoidance of wrongful Termination claims/litigation arising out of on oral or verbal termination by the Client or Staffing Entity .In the field you will find Clients will hesitate to minimum provide the 15 days’ notice for terminating the candidate.
Developing a well secured Exit/termination Policy for any Staffing Company is an intangible asset and a Marketing advantage .
With Regards
V.Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail : rajanassociates@eth,net,
-9025792684.
From India, Bangalore
Acknowledge(0)Amend(0)
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NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES
In our recent post we had highlighted the need for the Staffing Entity to comply with Sec 25 F of the Industrial Disputes Act while retrenching a Temporary Employee by an oral order or communication or he is simply asked not to come for duty, the employer will be required to lead tangible and substantive evidence to prove compliance of Clauses (a) and (b) of Section 25-F of the Ac as decided by the Gujarat High Court in the case of Medical vs Dashrathsinh decided on 10 May, 2011.
There is a request from an experienced Staffing Professional from one of the prime players in the Industry to highlight the relevance of Section 25 F of the ID Act vis-a-vis the Staffing Industry .The same is dealt with in this post:
For Compliance of Sec 25 F of the ID Act the following is to be done :
i. The employee of the Staffing Entity sent for work to the Client on oral or verbal termination by the Client or Staffing Entity must be given a one month's notice in writing, indicating the reasons for retrenchment. The retrenchment can take effect only after the notice period has expired, or if the employee of the Staffing Entity sent for work to the Client on oral or verbal termination by the Client or Staffing Entity has been paid wages in lieu of such notice.
ii. The employee of the Staffing Entity sent for work to the Client on oral or verbal termination by the Client or Staffing Entity must be paid, at the time of retrenchment, compensation, which is equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months.
iii. A notice must be served in the prescribed manner, on the appropriate Government. (Section 25F of the ID Act).It has become a practice in the Industry to dispense with this Notice.Government can take steps to delete this provision .
Absolutely it is a water tight process and a safeguard for avoidance of wrongful Termination claims/litigation arising out of on oral or verbal termination by the Client or Staffing Entity .In the field you will find Clients will hesitate to minimum provide the 15 days’ notice for terminating the candidate.
Developing a well secured Exit/termination Policy for any Staffing Company is an intangible asset and a Marketing advantage .
With Regards
V.Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail : rajanassociates@eth,net,
-9025792684.
From India, Bangalore
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(Fact Checked)-The information provided in the user reply regarding the compliance of Section 25F of the Industrial Disputes Act is accurate and provides relevant details on retrenchment procedures for temporary employees. No amendments are needed. (1 Acknowledge point)
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Dear All
LEGAL UPDATE -EPF prosecution statistics
The Minister of State for Labour and Employment Shri Mallikarjun Kharge in reply to a question in the Lok Sabha during August 2011 has provided the following :
As per the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952, it is mandatory for the establishments covered under the Act to submit the Provident Fund returns as per the time stipulated in this respect. However, there are cases where the management of various companies do not submit returns or submit the returns after due dates. As a result, the workers become victims as they do not get up-to-date statement of their Provident Fund accounts in the form of account slips in time.
LIST OF COMPANIES (STATE-WISE) WHERE PF RETURNS ARE PENDING
S. No. Name of the State No. of establishments defaulted in submission of PF returns
1. Andhra Pradesh 20213
2 Bihar 927
3. Chhattisgarh 570
4. Delhi 11842
5. Goa 500
6. Gujarat 6165
7. Haryana 4508
8. Himachal Pradesh 1230
9. Jharkhand 1573
10. Karnataka 8068
11. Kerala 3696
12. Madhya Pradesh 3489
13. Maharashtra 18666
14. North East Regions 78
15. Orissa 1780
16. Punjab 7285
17. Rajasthan 2237
18. Tamil Nadu 13734
19. Uttar Pradesh 8757
20. Uttaranchal 638
21. West Bengal 4209
TOTAL 120165
As per section 14(2) of the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952 read with para 76 of the Employees’ Provident Fund Scheme, 1952 default in submission of return is a punishable offence and liable for prosecution.
The number of prosecution cases filed against chronic defaulting establishments including non-submission of returns are mentioned is given below:-
PROSECUTION CASES – AS ON 31.03.2010
Region EPF Emp- Pension ELDI
Dehradun 4 4 4
Delhi – North 382 264 210
Delhi – South 300 130 181
Chandigarh 424 251 452
Ludhiana 498 306 319
Shimla 75 0 0
Kanpur 152 45 40
Meerut 55 55 55
Patna 1546 1336 1336
Faridabad 334 302 296
Gurgaon 187 177 186
Jaipur 334 80 85
Ahmedabad 1419 216 203
Baroda 489 346 442
Indore 1378 1013 1412
Surat 369 161 167
Kandivali 517 77 76
Mumbai- I Bandra 657 327 344
Mumbai– II Thane 70 70 70
Nagpur 202 172 77
Pune 1270 1252 1272
Raipur 516 283 356
Bangalore 491 436 400
Gulbarga 549 370 353
Mangalore 561 243 248
Panaji 168 178 153
Peenya 178 178 175
Bhubaneshwar 906 477 617
Guntur 344 326 317
Hyderabad 2219 1780 1343
Nizamabad 178 149 139
Chennai 270 233 250
Coimbatore 640 303 306
Madurai 467 321 237
Tambaram 223 227 226
Thiruvananthapuram 1318 954 759
Guwahati 647 470 589
Jalpaiguri 838 838 838
Kolkata 1746 431 417
Ranchi 856 854 726
During the year 2010-11, 1,56,578 complaints were received of which 1,38,745 complaints were disposed off.
The Hon'ble Minister further stated that the Employees’ Provident Fund Organisation deals with the Employees Provident Fund (EPF) and not PPF. Rate of interest is declared on the basis of earnings and balance available in the Interest Suspense Account. Since balance in the Interest Suspense Account was sufficient to allow 9.5 percent rate of interest, hence 9.5 percent rate of interest was declared for the year 2010-11.
With Regards
V.Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail : rajanassociates@eth,net,
-9025792684.
From India, Bangalore
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LEGAL UPDATE -EPF prosecution statistics
The Minister of State for Labour and Employment Shri Mallikarjun Kharge in reply to a question in the Lok Sabha during August 2011 has provided the following :
As per the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952, it is mandatory for the establishments covered under the Act to submit the Provident Fund returns as per the time stipulated in this respect. However, there are cases where the management of various companies do not submit returns or submit the returns after due dates. As a result, the workers become victims as they do not get up-to-date statement of their Provident Fund accounts in the form of account slips in time.
LIST OF COMPANIES (STATE-WISE) WHERE PF RETURNS ARE PENDING
S. No. Name of the State No. of establishments defaulted in submission of PF returns
1. Andhra Pradesh 20213
2 Bihar 927
3. Chhattisgarh 570
4. Delhi 11842
5. Goa 500
6. Gujarat 6165
7. Haryana 4508
8. Himachal Pradesh 1230
9. Jharkhand 1573
10. Karnataka 8068
11. Kerala 3696
12. Madhya Pradesh 3489
13. Maharashtra 18666
14. North East Regions 78
15. Orissa 1780
16. Punjab 7285
17. Rajasthan 2237
18. Tamil Nadu 13734
19. Uttar Pradesh 8757
20. Uttaranchal 638
21. West Bengal 4209
TOTAL 120165
As per section 14(2) of the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952 read with para 76 of the Employees’ Provident Fund Scheme, 1952 default in submission of return is a punishable offence and liable for prosecution.
The number of prosecution cases filed against chronic defaulting establishments including non-submission of returns are mentioned is given below:-
PROSECUTION CASES – AS ON 31.03.2010
Region EPF Emp- Pension ELDI
Dehradun 4 4 4
Delhi – North 382 264 210
Delhi – South 300 130 181
Chandigarh 424 251 452
Ludhiana 498 306 319
Shimla 75 0 0
Kanpur 152 45 40
Meerut 55 55 55
Patna 1546 1336 1336
Faridabad 334 302 296
Gurgaon 187 177 186
Jaipur 334 80 85
Ahmedabad 1419 216 203
Baroda 489 346 442
Indore 1378 1013 1412
Surat 369 161 167
Kandivali 517 77 76
Mumbai- I Bandra 657 327 344
Mumbai– II Thane 70 70 70
Nagpur 202 172 77
Pune 1270 1252 1272
Raipur 516 283 356
Bangalore 491 436 400
Gulbarga 549 370 353
Mangalore 561 243 248
Panaji 168 178 153
Peenya 178 178 175
Bhubaneshwar 906 477 617
Guntur 344 326 317
Hyderabad 2219 1780 1343
Nizamabad 178 149 139
Chennai 270 233 250
Coimbatore 640 303 306
Madurai 467 321 237
Tambaram 223 227 226
Thiruvananthapuram 1318 954 759
Guwahati 647 470 589
Jalpaiguri 838 838 838
Kolkata 1746 431 417
Ranchi 856 854 726
During the year 2010-11, 1,56,578 complaints were received of which 1,38,745 complaints were disposed off.
The Hon'ble Minister further stated that the Employees’ Provident Fund Organisation deals with the Employees Provident Fund (EPF) and not PPF. Rate of interest is declared on the basis of earnings and balance available in the Interest Suspense Account. Since balance in the Interest Suspense Account was sufficient to allow 9.5 percent rate of interest, hence 9.5 percent rate of interest was declared for the year 2010-11.
With Regards
V.Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail : rajanassociates@eth,net,
-9025792684.
From India, Bangalore
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(Fact Checked)-The user's reply contains accurate information regarding EPF prosecution statistics and defaulting establishments. The details provided align with the Employees' Provident Funds & Miscellaneous Provisions Act, 1952. The mention of prosecution cases and state-wise defaulting establishments is factually correct. (1 Acknowledge point)
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Subject - Latest supreme court decision on contract labour
Dear Friends
Here is the latest decision of the Hon'ble Supreme Court of India of their Lordships Markandey Katju, Chandramauli Kr. Prasad in the matter of Bhilwara Dugdh Utpadak Sahakari ... vs Vinod Kumar Sharma Dead By Lrs & decided on on 1 September, 2011 wherein the Honble Supreme Court was deciding an Appeal which had been filed against the impugned judgments dated 23.08.2004 and dated 21.09.2004 passed by the High Court of Judicature at Rajasthan.
The Apex Court has held as follows :
"This Appeal reveals the unfortunate state of affairs prevailing in the field of labour relations in our country. In order to avoid their liability under various labour statutes employers are very often resorting to subterfuge by trying to show that their employees are, in fact, the employees of a contractor. It is high time that this subterfuge must come to an end. Labour statutes were meant to protect the employees/workmen because it was realised that the employers and the employees are not on an equal bargaining position. Hence, protection of employees was required so that they may not be exploited. However, this new technique of subterfuge has been adopted by some employers in recent years in order to deny the rights of the workmen under various labour statutes by showing that the concerned workmen are not their employees but are the employees/workmen of a contractor, or that they are merely daily wage or short term or casual employees when in fact they are doing the work of regular employees. This Court cannot countenance such practices any more. Globalization/liberalization in the name of growth cannot be at the human cost of exploitation of workers. The facts of the case are given in the judgment of the High Court dated 23.08.2004 and we are not repeating the same here. It has been clearly stated therein that subterfuge was resorted to by the appellant to show that the workmen concerned were only workmen of a contractor. The Labour Court has held that the workmen were the employees of the appellant and not employees of the contractor. Cogent reasons have been given by the Labour Court to come to this finding. The Labour Court has held that, in fact, the concerned workmen were working under the orders of the officers of the appellant, and were being paid Rs 70/- per day, while the workmen/employees of the contractor were paid Rs. 56/- per day.
We are of the opinion that the High Court has rightly refused to interfere with this finding of fact recorded by the Labour court.
The Judgment of this Court in Steel Authority of India vs. National Union Waterfront Workers (2001) 7 SCC 1 has no application in the present case. In that decision the question was whether in view of Section 10 of the Contract Labour (Regulation and Abolition) Act, 1970 the employees of contractors stood automatically absorbed in the service of the principal employer. Overruling the decision in Air India Statutory Corporation vs. United Labour Union, (1997) 9 SCC 377 this Court held that they did not.
In the present case that is not the question at all. Here the finding of fact of the Labour Court is that the respondents were not the contractor's employees but were the employees of the appellant. The SAIL judgment (Supra) applies where the employees were initially employees of the contractor and later claim to be absorbed in the service of the principal employer. That judgment was considerating the effect of the notification under Section 10 of the Act. That is not the case here. Hence, that decision is clearly distinguishable.
Mr. Puneet Jain, learned counsel for the appellant submitted that the High Court has wrongly held that the appellant resorted to a subterfuge, when there was no such finding by the Labour Court. The Labour Court has found that the plea of the employer that the respondents were employees of a contractor was not correct, and in fact they were the employees of the appellant. In our opinion, therefore, it is implicit in this finding that there was subterfuge by the appellant to avoid its liabilities under various labour statutes. For the reasons given above, there is no infirmity in the impugned judgment of the High Court. The Appeal is dismissed accordingly. No costs. "
This decision can be considered to be a landmark decision and importance need to be given to the finding in the Judgment of their Lordships "In order to avoid their liability under various labour statutes employers are very often resorting to subterfuge by trying to show that their employees are, in fact, the employees of a contractor. It is high time that this subterfuge must come to an end. Labour statutes were meant to protect the employees/workmen because it was realised that the employers and the employees are not on an equal bargaining position. Hence, protection of employees was required so that they may not be exploited. However, this new technique of subterfuge has been adopted by some employers in recent years in order to deny the rights of the workmen under various labour statutes by showing that the concerned workmen are not their employees but are the employees/workmen of a contractor, or that they are merely daily wage or short term or casual employees when in fact they are doing the work of regular employees. This Court cannot countenance such practices any more. Globalization/liberalization in the name of growth cannot be at the human cost of exploitation of workers.The facts of the case are given in the judgment of the High Court dated 23.08.2004 and we are not repeating the same here. It has been clearly stated therein that subterfuge was resorted to by the appellant to show that the workmen concerned were only workmen of a contractor. The Labour Court has held that the workmen were the employees of the appellant and not employees of the contractor. Cogent reasons have been given by the Labour Court to come to this finding. The Labour Court has held that, in fact, the concerned workmen were working under the orders of the officers of the appellant, and were being paid Rs 70/- per day, while the workmen/employees of the contractor were paid Rs. 56/- per day. "
HR Professionals need to take note of this Landmark decision ..
With Regards
V.Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail : rajanassociates@eth,net,
-9025792684.
From India, Bangalore
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Dear Friends
Here is the latest decision of the Hon'ble Supreme Court of India of their Lordships Markandey Katju, Chandramauli Kr. Prasad in the matter of Bhilwara Dugdh Utpadak Sahakari ... vs Vinod Kumar Sharma Dead By Lrs & decided on on 1 September, 2011 wherein the Honble Supreme Court was deciding an Appeal which had been filed against the impugned judgments dated 23.08.2004 and dated 21.09.2004 passed by the High Court of Judicature at Rajasthan.
The Apex Court has held as follows :
"This Appeal reveals the unfortunate state of affairs prevailing in the field of labour relations in our country. In order to avoid their liability under various labour statutes employers are very often resorting to subterfuge by trying to show that their employees are, in fact, the employees of a contractor. It is high time that this subterfuge must come to an end. Labour statutes were meant to protect the employees/workmen because it was realised that the employers and the employees are not on an equal bargaining position. Hence, protection of employees was required so that they may not be exploited. However, this new technique of subterfuge has been adopted by some employers in recent years in order to deny the rights of the workmen under various labour statutes by showing that the concerned workmen are not their employees but are the employees/workmen of a contractor, or that they are merely daily wage or short term or casual employees when in fact they are doing the work of regular employees. This Court cannot countenance such practices any more. Globalization/liberalization in the name of growth cannot be at the human cost of exploitation of workers. The facts of the case are given in the judgment of the High Court dated 23.08.2004 and we are not repeating the same here. It has been clearly stated therein that subterfuge was resorted to by the appellant to show that the workmen concerned were only workmen of a contractor. The Labour Court has held that the workmen were the employees of the appellant and not employees of the contractor. Cogent reasons have been given by the Labour Court to come to this finding. The Labour Court has held that, in fact, the concerned workmen were working under the orders of the officers of the appellant, and were being paid Rs 70/- per day, while the workmen/employees of the contractor were paid Rs. 56/- per day.
We are of the opinion that the High Court has rightly refused to interfere with this finding of fact recorded by the Labour court.
The Judgment of this Court in Steel Authority of India vs. National Union Waterfront Workers (2001) 7 SCC 1 has no application in the present case. In that decision the question was whether in view of Section 10 of the Contract Labour (Regulation and Abolition) Act, 1970 the employees of contractors stood automatically absorbed in the service of the principal employer. Overruling the decision in Air India Statutory Corporation vs. United Labour Union, (1997) 9 SCC 377 this Court held that they did not.
In the present case that is not the question at all. Here the finding of fact of the Labour Court is that the respondents were not the contractor's employees but were the employees of the appellant. The SAIL judgment (Supra) applies where the employees were initially employees of the contractor and later claim to be absorbed in the service of the principal employer. That judgment was considerating the effect of the notification under Section 10 of the Act. That is not the case here. Hence, that decision is clearly distinguishable.
Mr. Puneet Jain, learned counsel for the appellant submitted that the High Court has wrongly held that the appellant resorted to a subterfuge, when there was no such finding by the Labour Court. The Labour Court has found that the plea of the employer that the respondents were employees of a contractor was not correct, and in fact they were the employees of the appellant. In our opinion, therefore, it is implicit in this finding that there was subterfuge by the appellant to avoid its liabilities under various labour statutes. For the reasons given above, there is no infirmity in the impugned judgment of the High Court. The Appeal is dismissed accordingly. No costs. "
This decision can be considered to be a landmark decision and importance need to be given to the finding in the Judgment of their Lordships "In order to avoid their liability under various labour statutes employers are very often resorting to subterfuge by trying to show that their employees are, in fact, the employees of a contractor. It is high time that this subterfuge must come to an end. Labour statutes were meant to protect the employees/workmen because it was realised that the employers and the employees are not on an equal bargaining position. Hence, protection of employees was required so that they may not be exploited. However, this new technique of subterfuge has been adopted by some employers in recent years in order to deny the rights of the workmen under various labour statutes by showing that the concerned workmen are not their employees but are the employees/workmen of a contractor, or that they are merely daily wage or short term or casual employees when in fact they are doing the work of regular employees. This Court cannot countenance such practices any more. Globalization/liberalization in the name of growth cannot be at the human cost of exploitation of workers.The facts of the case are given in the judgment of the High Court dated 23.08.2004 and we are not repeating the same here. It has been clearly stated therein that subterfuge was resorted to by the appellant to show that the workmen concerned were only workmen of a contractor. The Labour Court has held that the workmen were the employees of the appellant and not employees of the contractor. Cogent reasons have been given by the Labour Court to come to this finding. The Labour Court has held that, in fact, the concerned workmen were working under the orders of the officers of the appellant, and were being paid Rs 70/- per day, while the workmen/employees of the contractor were paid Rs. 56/- per day. "
HR Professionals need to take note of this Landmark decision ..
With Regards
V.Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail : rajanassociates@eth,net,
-9025792684.
From India, Bangalore
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Hi, Please let me know what are the HR / LEGAL compliances involved in R&D companies, do we have to register under companies Act, kindly let me know.
From India, Bangalore
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Dear All,
In one of our earlier posts, we had highlighted the exemption provisions of the EPF Act which are once again emphasized:
Section 17 provides for it:
17. Power of exempt
(1) The appropriate government may, by notification in the Official Gazette and subject to such conditions as may be specified in the notification, exempt, whether prospectively or retrospectively, from the operation of all or any of the provisions of any Scheme:
(a) any establishment to which this Act applies if, in the opinion of the appropriate government, the rules of its provident fund with respect to the rates of contribution are not less favorable than those specified in section 6, and the employees are also enjoying other provident fund benefits which, on the whole, are not less favorable to the employees than the benefits provided under this Act or any Scheme in relation to the employees in any other establishment of similar character, or
(b) any establishment enjoying benefits in the nature of provident fund pension or gratuity, and the appropriate government is of the opinion that such benefits, separately or jointly, are, on the whole, not less favorable to such employees than the benefits provided under this Act or any Scheme in relation to the employees in any other establishment of a similar character:
Provided that no such exemption shall be made except after consultation with the Central Board which, on such consultation, shall forward its views on exemption to the appropriate government within such time limit as may be specified in the Scheme.
Sec 17 1 (a) is with reference to exemption from PF Contribution and Sec 17 1 (b) is with reference to Pension and Gratuity.
A common question arises in preparing payroll for Temporary Employees by Staffing Entities: whether exemption from coverage under EPF Act of any Temporary Employee is the right of the Staffing Company?
Yes. But substantiating evidence by way of documents has to be provided to the EPF Department for claiming the exemption. Initially, if the same is rejected by the Department, then it is better to opt for the coverage, thereby limiting the liability. Furthermore, the Delhi High Court in the case of J K College of Nursing & Paramedicals vs. UOI & ORS, decided on 24th May 2011 by the Judgment of His Lordship Mr. Justice Rajiv Sahai Endlaw, has held that if any establishment or employer claims not to be covered under the said Act, then it is for the employer to present sufficient cogent and convincing material before the designated authority in an inquiry under Section 7A of the Act, in order to satisfy the Authority regarding the non-applicability of the Act. It was further held that the EPF authorities, under no circumstances, can be in possession of necessary records evidencing the extent of employment strength in any particular establishment.
It was also held that in matters like this, the question of the burden of proof is immaterial; the Provident Funds Commissioner is an authority created by the statute who has to administer the statutory provisions according to law and, for this purpose, is entitled to collect material by resorting to powers under various provisions of the law, including by examining the books of accounts and other records of establishments.
The next time any Employer is before the PF authority under Section 7A, the burden of proof is on the Employer, and the Employer has to provide all details/proof to claim exemption. Time need not be wasted to assert that the Authority has to prove their assertion.
With Regards,
V. Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail: rajanassociates@eth.net
-9025792684
From India, Bangalore
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In one of our earlier posts, we had highlighted the exemption provisions of the EPF Act which are once again emphasized:
Section 17 provides for it:
17. Power of exempt
(1) The appropriate government may, by notification in the Official Gazette and subject to such conditions as may be specified in the notification, exempt, whether prospectively or retrospectively, from the operation of all or any of the provisions of any Scheme:
(a) any establishment to which this Act applies if, in the opinion of the appropriate government, the rules of its provident fund with respect to the rates of contribution are not less favorable than those specified in section 6, and the employees are also enjoying other provident fund benefits which, on the whole, are not less favorable to the employees than the benefits provided under this Act or any Scheme in relation to the employees in any other establishment of similar character, or
(b) any establishment enjoying benefits in the nature of provident fund pension or gratuity, and the appropriate government is of the opinion that such benefits, separately or jointly, are, on the whole, not less favorable to such employees than the benefits provided under this Act or any Scheme in relation to the employees in any other establishment of a similar character:
Provided that no such exemption shall be made except after consultation with the Central Board which, on such consultation, shall forward its views on exemption to the appropriate government within such time limit as may be specified in the Scheme.
Sec 17 1 (a) is with reference to exemption from PF Contribution and Sec 17 1 (b) is with reference to Pension and Gratuity.
A common question arises in preparing payroll for Temporary Employees by Staffing Entities: whether exemption from coverage under EPF Act of any Temporary Employee is the right of the Staffing Company?
Yes. But substantiating evidence by way of documents has to be provided to the EPF Department for claiming the exemption. Initially, if the same is rejected by the Department, then it is better to opt for the coverage, thereby limiting the liability. Furthermore, the Delhi High Court in the case of J K College of Nursing & Paramedicals vs. UOI & ORS, decided on 24th May 2011 by the Judgment of His Lordship Mr. Justice Rajiv Sahai Endlaw, has held that if any establishment or employer claims not to be covered under the said Act, then it is for the employer to present sufficient cogent and convincing material before the designated authority in an inquiry under Section 7A of the Act, in order to satisfy the Authority regarding the non-applicability of the Act. It was further held that the EPF authorities, under no circumstances, can be in possession of necessary records evidencing the extent of employment strength in any particular establishment.
It was also held that in matters like this, the question of the burden of proof is immaterial; the Provident Funds Commissioner is an authority created by the statute who has to administer the statutory provisions according to law and, for this purpose, is entitled to collect material by resorting to powers under various provisions of the law, including by examining the books of accounts and other records of establishments.
The next time any Employer is before the PF authority under Section 7A, the burden of proof is on the Employer, and the Employer has to provide all details/proof to claim exemption. Time need not be wasted to assert that the Authority has to prove their assertion.
With Regards,
V. Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail: rajanassociates@eth.net
-9025792684
From India, Bangalore
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(Fact Checked)-The user's reply is factually correct, citing Section 17 of the EPF Act and referencing the Delhi High Court judgment in the case of J K College of Nursing & Paramedicals. The information provided aligns with the latest laws and regulations. (1 Acknowledge point)
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(Fact Checked)-The user's reply contains accurate information regarding the exemption provisions under the EPF Act, including the burden of proof on the employer to claim exemption. The reference to the Delhi High Court case of J K College of Nursing & Paramedicals vs. UOI & ORS is relevant and supports the explanation provided. (1 Acknowledge point)
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Dear Friends,
As per the ID Act Amendment, Section 9C was introduced. By that, setting up a Grievance Redressal Machinery became a statutory need.
Section 9C is extracted as follows:
9C. (1) Every industrial establishment employing twenty or more workmen shall have one or more Grievance Redressal Committee for the resolution of disputes arising out of individual grievances.
(2) The Grievance Redressal Committee shall consist of an equal number of members from the employer and the workmen.
(3) The chairperson of the Grievance Redressal Committee shall be selected from the employer and from among the workmen alternatively on a rotation basis every year.
(4) The total number of members of the Grievance Redressal Committee shall not exceed more than six:
Provided that there shall be, as far as practicable, one woman member if the Grievance Redressal Committee has two members, and in case the number of members is more than two, the number of women members may be increased proportionately.
(5) Notwithstanding anything contained in this section, the setting up of Grievance Redressal Committee shall not affect the right of the workman to raise an industrial dispute on the same matter under the provisions of this Act.
(6) The Grievance Redressal Committee may complete its proceedings within thirty days on receipt of a written application by or on behalf of the aggrieved party.
(7) The workman who is aggrieved by the decision of the Grievance Redressal Committee may prefer an appeal to the employer against the decision of the Grievance Redressal Committee, and the employer shall, within one month from the date of receipt of such appeal, dispose of the same and send a copy of his decision to the workman concerned.
HR professionals may provide their feedback in this thread on their experience in setting up this Grievance Redressal Machinery in their respective organization.
rajanlawfirm
From India, Madras
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As per the ID Act Amendment, Section 9C was introduced. By that, setting up a Grievance Redressal Machinery became a statutory need.
Section 9C is extracted as follows:
9C. (1) Every industrial establishment employing twenty or more workmen shall have one or more Grievance Redressal Committee for the resolution of disputes arising out of individual grievances.
(2) The Grievance Redressal Committee shall consist of an equal number of members from the employer and the workmen.
(3) The chairperson of the Grievance Redressal Committee shall be selected from the employer and from among the workmen alternatively on a rotation basis every year.
(4) The total number of members of the Grievance Redressal Committee shall not exceed more than six:
Provided that there shall be, as far as practicable, one woman member if the Grievance Redressal Committee has two members, and in case the number of members is more than two, the number of women members may be increased proportionately.
(5) Notwithstanding anything contained in this section, the setting up of Grievance Redressal Committee shall not affect the right of the workman to raise an industrial dispute on the same matter under the provisions of this Act.
(6) The Grievance Redressal Committee may complete its proceedings within thirty days on receipt of a written application by or on behalf of the aggrieved party.
(7) The workman who is aggrieved by the decision of the Grievance Redressal Committee may prefer an appeal to the employer against the decision of the Grievance Redressal Committee, and the employer shall, within one month from the date of receipt of such appeal, dispose of the same and send a copy of his decision to the workman concerned.
HR professionals may provide their feedback in this thread on their experience in setting up this Grievance Redressal Machinery in their respective organization.
rajanlawfirm
From India, Madras
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(Fact Checked)-The user's reply is accurate and provides a detailed explanation of Section 9C of the Industrial Disputes Act Amendment. Great job in outlining the key provisions. Thank you for sharing your insights. (1 Acknowledge point)
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(Fact Checked)-The user's reply accurately reflects the requirements set out in Section 9C of the Industrial Disputes Act Amendment. Well done! (1 Acknowledge point)
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Immediate question for Staffing Entities
Dear All,
What can keep Staffing Entities secure from litigation?
At the first instance when a legal notice or claim is received from the Temporary Employee or his/her Advocate, the Staffing Entity, without waiting for the Client to take a stand, should work out a settlement with the Temporary Employee in compliance with the legal provisions of Sec 25(F) of the Industrial Disputes Act and corresponding provisions of the Shops and Establishments Act. Staffing Entities need to seek specialist legal advice from their own Legal Department or outside Counsel. The problem will be solved then and there, thereby saving a huge outflow later.
Unfortunately, due to the monetary factor involved in deciding whether the Staffing Entity or the Client is to bear the liability, the matter gets dragged to court. In fact, Staffing Entities hesitate to portray the correct position to the Client for fear of losing business. This must be avoided.
Observing the trend of court decisions, wherever proper retrenchment compensation is paid at the time of retrenchment, i.e., when the Temporary Employee is fired, the Employers have been protected.
However, every Employer will learn the hard way. For example, if a Temporary Employee has worked for 3 years when he is fired, the Temporary Employee should be given one month's notice or pay together with 45 days' salary as retrenchment compensation. But this may not be paid, and he will be let go just like that. In the event of the Temporary Employee going to court and the case pending for 2 years, claiming for reinstatement with back wages, and winning the case, then the Employer has to pay 2 years back wages together with the retrenchment compensation or even reinstate the employee. By this time, the Staffing Entity would have finished their contract with the Client, and the whole liability would be on their head. In fact, through this settlement, whatever the Staffing Entity earned in the whole contract will be lost.
The success of Staffing Business is to foresee this risk and curtail it.
With Regards,
V. Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail: rajanassociates@eth.net
-9025792684.
From India, Bangalore
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Dear All,
What can keep Staffing Entities secure from litigation?
At the first instance when a legal notice or claim is received from the Temporary Employee or his/her Advocate, the Staffing Entity, without waiting for the Client to take a stand, should work out a settlement with the Temporary Employee in compliance with the legal provisions of Sec 25(F) of the Industrial Disputes Act and corresponding provisions of the Shops and Establishments Act. Staffing Entities need to seek specialist legal advice from their own Legal Department or outside Counsel. The problem will be solved then and there, thereby saving a huge outflow later.
Unfortunately, due to the monetary factor involved in deciding whether the Staffing Entity or the Client is to bear the liability, the matter gets dragged to court. In fact, Staffing Entities hesitate to portray the correct position to the Client for fear of losing business. This must be avoided.
Observing the trend of court decisions, wherever proper retrenchment compensation is paid at the time of retrenchment, i.e., when the Temporary Employee is fired, the Employers have been protected.
However, every Employer will learn the hard way. For example, if a Temporary Employee has worked for 3 years when he is fired, the Temporary Employee should be given one month's notice or pay together with 45 days' salary as retrenchment compensation. But this may not be paid, and he will be let go just like that. In the event of the Temporary Employee going to court and the case pending for 2 years, claiming for reinstatement with back wages, and winning the case, then the Employer has to pay 2 years back wages together with the retrenchment compensation or even reinstate the employee. By this time, the Staffing Entity would have finished their contract with the Client, and the whole liability would be on their head. In fact, through this settlement, whatever the Staffing Entity earned in the whole contract will be lost.
The success of Staffing Business is to foresee this risk and curtail it.
With Regards,
V. Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail: rajanassociates@eth.net
-9025792684.
From India, Bangalore
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(Fact Checked)-The user's reply contains accurate information regarding the legal provisions related to grievance redressal committees and industrial disputes. The advice provided for staffing entities on handling legal notices and settlements aligns with legal requirements under Sec 25(F) of the Industrial Disputes Act. The mention of retrenchment compensation and potential liabilities is also in line with legal considerations. (1 Acknowledge point)
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(Fact Checked)-[response] The user's reply contains accurate information regarding the legal provisions of Sec 25(F) of the Industrial Disputes Act and the importance of settling disputes promptly to avoid future liabilities. It emphasizes the need for legal advice and proactive measures to mitigate risks effectively. (1 Acknowledge point)
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Dear,
Please see 9C. (1) Every industrial establishment employing twenty or more workmen shall have one or more Grievance Redressal Committee for the resolution of disputes arising out of individual grievances.
(4) The total number of members of the Grievance Redressal Committee shall not exceed more than six:
Pointing out to "one or more Grievance Redressal Committee" and "The total number of members of the Grievance Redressal Committee shall not exceed more than six."
- rajanlawfirm
From India, Madras
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Please see 9C. (1) Every industrial establishment employing twenty or more workmen shall have one or more Grievance Redressal Committee for the resolution of disputes arising out of individual grievances.
(4) The total number of members of the Grievance Redressal Committee shall not exceed more than six:
Pointing out to "one or more Grievance Redressal Committee" and "The total number of members of the Grievance Redressal Committee shall not exceed more than six."
- rajanlawfirm
From India, Madras
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(Fact Checked)-The user reply correctly highlights the requirement for an Industrial establishment to have a Grievance Redressal Committee for resolving individual grievances, with a maximum of six members. No amendments needed. (1 Acknowledge point)
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Hi Manish,
Thank you for your query. In response to your question, whether one Grievance Redressal Committee of six members is sufficient for 1000 employees or if additional committees need to be established, it is recommended to assess the workload and complexity of grievances faced by the employees.
Typically, for a large workforce like 1000 employees, having multiple committees could be more effective in ensuring timely and thorough grievance resolution. The criteria for determining the number of committees required may include factors such as the nature of grievances, geographical dispersion of employees, and the intricacy of internal processes.
I hope this information helps. If you have any further questions or need clarification, feel free to ask.
Thanks & Regards,
From India, Patiala
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Thank you for your query. In response to your question, whether one Grievance Redressal Committee of six members is sufficient for 1000 employees or if additional committees need to be established, it is recommended to assess the workload and complexity of grievances faced by the employees.
Typically, for a large workforce like 1000 employees, having multiple committees could be more effective in ensuring timely and thorough grievance resolution. The criteria for determining the number of committees required may include factors such as the nature of grievances, geographical dispersion of employees, and the intricacy of internal processes.
I hope this information helps. If you have any further questions or need clarification, feel free to ask.
Thanks & Regards,
From India, Patiala
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(Fact Checked)-The Grievance Redressal Committee for an industrial establishment employing twenty or more workmen should consist of equal members from employer and workmen, not to exceed six members. There should be one woman member if the committee has two members, increasing proportionately with more members. The committee should complete proceedings within thirty days. The number of committees needed for 1000 employees would depend on the number of workmen in different sections or departments to ensure effective grievance redressal. (1 Acknowledge point)
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Dear,
The section does not provide any cap. Depending upon the class of workmen, you can have multiple GRM. It is for the management to decide. Starting with one GRM may be ideal. If the complaints are not manageable, then you can go in for the multiple mode.
Rajan Law Firm
From India, Madras
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The section does not provide any cap. Depending upon the class of workmen, you can have multiple GRM. It is for the management to decide. Starting with one GRM may be ideal. If the complaints are not manageable, then you can go in for the multiple mode.
Rajan Law Firm
From India, Madras
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Immediate concern for Staffing Entities
Dear All,
The Gujarat High Court in the matter of Chemical vs Secretary, decided on 26 April 2011 by Honourable Mr. Justice H.K. Rathod, described the possibilities of a Contract worker raising an Industrial Dispute before the Industrial Dispute has listed out the following contingencies:
In this connection, it will be necessary to note that even if contract labor is in vogue in a concern, employees employed by the contractor can validly raise the following contentions which may buttress their grievance that even though they are the direct employees of the principal employer, they have wrongly been treated as employees of the contractor who is not a real intermediary. Such types of disputes under the ID Act can legitimately be raised in the following cases which are mentioned by way of illustrations only without suggesting that they are exhaustive:
(1) when it is alleged that the employees were directly employed by the principal employer and subsequently contract system was introduced for the same activities resulting in snapping of relationship of employee-employer between the workmen on the one hand and the main employer on the other, thus violating sec. 9A of the ID Act.
(2) When there is absence of proper registration of the concerned principal employer under the Contract Labour Act.
(3) When there is absence of proper licensing of the concerned contractor who employs contract labor at a given point of time.
(4) Even though the principal employer may be a registered employer under the Act and the concerned contractor may be a licensed contractor under the Act, his license may not cover the activity which is carried on by the contract labor.
(5) Even though the principal employer may be a registered employer under the Contract Labour Act and the contractor may be having a valid license to employ contract labor under the Contract Labour Act, for a given activity, still, the license issued to him may not cover the exact number of permissible employees employed by him, meaning thereby the number of permissible employees under the license may be less than the number of employees actually employed and qua such excess number of employees, the protective umbrella of the license would not be available to the contractor so far as the activity covered by the license is concerned.
(6) Even though the principal employer may be a registered employer and the contractor may be a licensed contractor and the workmen employed by him might be covered by the permissible number of employees as recognized by the license and even though such activities may be covered by the license, in fact and in substance, control including disciplinary control and supervision of the entire activity may be with the principal employer and the wages of the employees may, in fact, be coming out of the coffers of the principal employer and may be getting paid through the contractor who may operate as a mere conduit pipe. Such type of control, supervision, and payments being outside the scope of sec. 10(2) read with secs. 20 and 21 of the Contract Labour Act would give rise to a legitimate contention that the principal employer is in fact and substance the real employer and the so-called contract is an eyewash.
Staffing Industry professionals need to note the above Industrial adjudication possibilities and steer clear of them.
With Regards,
V. Sounder Rajan
Advocates & Notaries & Legal Consultants
Email: rajanassociates@eth.net
9025792684.
From India, Bangalore
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Dear All,
The Gujarat High Court in the matter of Chemical vs Secretary, decided on 26 April 2011 by Honourable Mr. Justice H.K. Rathod, described the possibilities of a Contract worker raising an Industrial Dispute before the Industrial Dispute has listed out the following contingencies:
In this connection, it will be necessary to note that even if contract labor is in vogue in a concern, employees employed by the contractor can validly raise the following contentions which may buttress their grievance that even though they are the direct employees of the principal employer, they have wrongly been treated as employees of the contractor who is not a real intermediary. Such types of disputes under the ID Act can legitimately be raised in the following cases which are mentioned by way of illustrations only without suggesting that they are exhaustive:
(1) when it is alleged that the employees were directly employed by the principal employer and subsequently contract system was introduced for the same activities resulting in snapping of relationship of employee-employer between the workmen on the one hand and the main employer on the other, thus violating sec. 9A of the ID Act.
(2) When there is absence of proper registration of the concerned principal employer under the Contract Labour Act.
(3) When there is absence of proper licensing of the concerned contractor who employs contract labor at a given point of time.
(4) Even though the principal employer may be a registered employer under the Act and the concerned contractor may be a licensed contractor under the Act, his license may not cover the activity which is carried on by the contract labor.
(5) Even though the principal employer may be a registered employer under the Contract Labour Act and the contractor may be having a valid license to employ contract labor under the Contract Labour Act, for a given activity, still, the license issued to him may not cover the exact number of permissible employees employed by him, meaning thereby the number of permissible employees under the license may be less than the number of employees actually employed and qua such excess number of employees, the protective umbrella of the license would not be available to the contractor so far as the activity covered by the license is concerned.
(6) Even though the principal employer may be a registered employer and the contractor may be a licensed contractor and the workmen employed by him might be covered by the permissible number of employees as recognized by the license and even though such activities may be covered by the license, in fact and in substance, control including disciplinary control and supervision of the entire activity may be with the principal employer and the wages of the employees may, in fact, be coming out of the coffers of the principal employer and may be getting paid through the contractor who may operate as a mere conduit pipe. Such type of control, supervision, and payments being outside the scope of sec. 10(2) read with secs. 20 and 21 of the Contract Labour Act would give rise to a legitimate contention that the principal employer is in fact and substance the real employer and the so-called contract is an eyewash.
Staffing Industry professionals need to note the above Industrial adjudication possibilities and steer clear of them.
With Regards,
V. Sounder Rajan
Advocates & Notaries & Legal Consultants
Email: rajanassociates@eth.net
9025792684.
From India, Bangalore
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(Fact Checked)-The user reply contains accurate information regarding the possibilities of contract workers raising industrial disputes. The details provided align with key factors affecting such disputes as per labor laws. (1 Acknowledge point)
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(Fact Checked)-The information provided in the user reply is factually correct and aligns well with the Industrial Disputes Act and the scenarios outlined by the Gujarat High Court. The details shared are relevant for staffing industry professionals. (1 Acknowledge point)
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Immediate Concern for Staffing Entities
Dear All,
Are there any state government statutes providing for claiming permanency?
A: Yes. The State Government of Tamil Nadu, by the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981, has conferred this power on the Industrial Adjudicators. The State of Assam also has the Assam Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1985, which provides for employees to claim permanency. However, there is a procedure for it. These enactments were enacted before the advent of globalization.
With Regards,
V. Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail: rajanassociates@eth,net - 9025792684
From India, Bangalore
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Dear All,
Are there any state government statutes providing for claiming permanency?
A: Yes. The State Government of Tamil Nadu, by the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981, has conferred this power on the Industrial Adjudicators. The State of Assam also has the Assam Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1985, which provides for employees to claim permanency. However, there is a procedure for it. These enactments were enacted before the advent of globalization.
With Regards,
V. Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail: rajanassociates@eth,net - 9025792684
From India, Bangalore
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(Fact Checked)-The information provided in the user reply regarding the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981 and the Assam Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1985 is [B]correct[/B]. (1 Acknowledge point)
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(Fact Checked)-The information provided in the user's reply regarding the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981 and the Assam Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1985 is factually correct based on the original post. (1 Acknowledge point)
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The Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981 [Tamil Nadu Act 46 of 1981] was upheld by the Hon'ble Supreme Court in State of Tamil Nadu vs Nellai Cotton Mills Limited.
Rajan Law Firm
From India, Madras
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Rajan Law Firm
From India, Madras
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Dear All,
Are there any decisions of Indian Courts referring to contractors being used to be changed, but the new contractors were required under the terms of the agreement to retain the workers of the predecessor contractors?
Yes, in R. K. Panda v. Steel Authority of India Ltd. (1994) 5 SCC 304: (1994 AIR SCW 2460), the contract labourers, by filing a writ petition under Article 32, claimed parity in pay with direct employees and also regularization in the employment of the respondent-authority. They had been continuing in employment for periods ranging from 10 to 20 years. The contractors used to be changed, but the new contractors were required under the terms of the agreement to retain the workers of the predecessor contractors. The workers were employed through the contractors for different purposes like construction and maintenance of roads and buildings within plant premises, public health, horticulture, water supply, etc. In the agreement with the contractors, it was stated that the parties shall be governed by the provisions of the Act as well as by the provisions of the Payment of Bonus Act.
On these facts, the Apex Court observed as follows (at p. 2466 of AIR): "It is true that with the passage of time and purely with a view to safeguard the interests of workers, many principal employers, while renewing the contracts, have been insisting that the contractor or the new contractor retains the old employees. In fact, such a condition is incorporated in the contract itself. However, such a clause in the contract, which is benevolently inserted in the contract to protect the continuance of the source of livelihood of the contract labour, cannot by itself give rise to a right to regularization in the employment of the principal employer. Whether the contract labourers have become the employees of the principal employer in the course of time and whether the engagement and employment of labourers through a contractor is a mere camouflage and a smokescreen, as has been urged in this case, is a question of fact and has to be established by the contract labourers on the basis of the requisite material. It is not possible for the High Court or this Court, while exercising writ jurisdiction or jurisdiction under Article 136 to decide such questions, only on the basis of the affidavits. It need not be pointed out that in all such cases, the labourers are initially employed and engaged by the contractors. As such, at what point of time a direct link is established between the contract labourers and the principal employer, eliminating the contractor from the scene, is a matter which has to be established on material produced before the Court. Normally, the Labour Court and the Industrial Tribunal, under the Industrial Disputes Act, are competent to adjudicate such disputes on the basis of the oral and documentary evidence produced before them.
It is now imperative for the Indian Contract Staffing Industry to evolve a Code of Inherent risks so that Principal Employers are forewarned in deploying Contract Staff.
With Regards,
Advocates and Notaries & Legal Consultants for Recruiting & Staffing Industry
E-mail: rajanassociates@eth.net
Phone: 9025792684, 9025792634
From India, Bangalore
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Are there any decisions of Indian Courts referring to contractors being used to be changed, but the new contractors were required under the terms of the agreement to retain the workers of the predecessor contractors?
Yes, in R. K. Panda v. Steel Authority of India Ltd. (1994) 5 SCC 304: (1994 AIR SCW 2460), the contract labourers, by filing a writ petition under Article 32, claimed parity in pay with direct employees and also regularization in the employment of the respondent-authority. They had been continuing in employment for periods ranging from 10 to 20 years. The contractors used to be changed, but the new contractors were required under the terms of the agreement to retain the workers of the predecessor contractors. The workers were employed through the contractors for different purposes like construction and maintenance of roads and buildings within plant premises, public health, horticulture, water supply, etc. In the agreement with the contractors, it was stated that the parties shall be governed by the provisions of the Act as well as by the provisions of the Payment of Bonus Act.
On these facts, the Apex Court observed as follows (at p. 2466 of AIR): "It is true that with the passage of time and purely with a view to safeguard the interests of workers, many principal employers, while renewing the contracts, have been insisting that the contractor or the new contractor retains the old employees. In fact, such a condition is incorporated in the contract itself. However, such a clause in the contract, which is benevolently inserted in the contract to protect the continuance of the source of livelihood of the contract labour, cannot by itself give rise to a right to regularization in the employment of the principal employer. Whether the contract labourers have become the employees of the principal employer in the course of time and whether the engagement and employment of labourers through a contractor is a mere camouflage and a smokescreen, as has been urged in this case, is a question of fact and has to be established by the contract labourers on the basis of the requisite material. It is not possible for the High Court or this Court, while exercising writ jurisdiction or jurisdiction under Article 136 to decide such questions, only on the basis of the affidavits. It need not be pointed out that in all such cases, the labourers are initially employed and engaged by the contractors. As such, at what point of time a direct link is established between the contract labourers and the principal employer, eliminating the contractor from the scene, is a matter which has to be established on material produced before the Court. Normally, the Labour Court and the Industrial Tribunal, under the Industrial Disputes Act, are competent to adjudicate such disputes on the basis of the oral and documentary evidence produced before them.
It is now imperative for the Indian Contract Staffing Industry to evolve a Code of Inherent risks so that Principal Employers are forewarned in deploying Contract Staff.
With Regards,
Advocates and Notaries & Legal Consultants for Recruiting & Staffing Industry
E-mail: rajanassociates@eth.net
Phone: 9025792684, 9025792634
From India, Bangalore
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(Fact Checked)-The information provided in the user reply is factually correct based on the Supreme Court decision in R. K. Panda v. Steel Authority of India Ltd. (1994) 5 SCC 304. The reply accurately reflects the situation of contractors retaining workers under the terms of the agreement. Well done! (1 Acknowledge point)
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(Fact Checked)-The user reply accurately cites the case of R. K. Panda v. Steel Authority of India Ltd. (1994) 5 SCC 304 regarding the retention of workers by new contractors as per terms of the agreement. The reply also correctly emphasizes the need for the Contract Staffing Industry to establish a Code of Inherent risks. (1 Acknowledge point)
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Dear Friends,
For more details, please see the link: (https://www.citehr.com/366609-p-f-contributions-minimum-wages-stay-ap-high-court.html).
Rajan Law Firm
Please also visit: (https://www.citehr.com/285737-legal-compliances-required-staffing-industry.html).
From India, Madras
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For more details, please see the link: (https://www.citehr.com/366609-p-f-contributions-minimum-wages-stay-ap-high-court.html).
Rajan Law Firm
Please also visit: (https://www.citehr.com/285737-legal-compliances-required-staffing-industry.html).
From India, Madras
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Dear All
Extracting the copy of the EPF Circular that has been stayed in the interim by the Hon'ble Delhi & AP High Court:
EMPLOYEES’ PROVIDENT FUND ORGANISATION
EMPLOYEES’ PROVIDENT FUND ORGANISATION, (Ministry of Labour & Employment, Govt. of India), Head Office, Bhavrshya Yidhr Bhawan, 14, Bhikaiji Cama Place. New Delhi - 110 066.
No.: Coord/4(6)2003/Clarification/Vol-II/ Dated: 23-05-2011
Sub:Splitting of Minimum Wages for the purpose of PF contribution not permissible.
Sir,
Attention of all concerned is invited towards this office circular no. Coord./4(6)2003/Clarification/13633 dated 06.06.2008 vide which it was advised to ensure that P.F. Contributions on at least Minimum Wages are remitted by the establishments. It was also directed to review all such cases disposed of u/s 7A of the Act where determination of dues has taken place on wages lesser than Minimum Wages.
2. However, it has been observed that still uniform approach in this regard is not followed by all the field offices which is viewed seriously. It is also observed that the field offices are not duly defending the issue in spite of the fact that the Division Bench of Hon’ble High Court, Karnataka in the matter of Group 4 Securities Guarding Ltd Vs. RPFC has categorically upheld the view that RPFCs u/s 7A of the Act can examine and look into the nature of contract entered between the employer and its employees as well as the pay structure to decide whether the pay is being split up under several heads as a subterfuge to avoid PF Contribution.
3. The order of the Division Bench was challenged by the establishment before the Apex Court. While tentatively upholding the order of the Division Bench, the Hon’ble Supreme Court in its order dated 23.07.2004 again granted liberty to the authorities to decide the matter in accordance with law on its merits. As such the authorities have to consider the order of the Division Bench of Hon’ble High Court, Karnataka unless there is substantial evidence to lead otherwise.
4. Accordingly, the matter has been examined in view of the Apex Court’s direction and the following guidelines are issued which should be adhered to and followed by all strictly.
5. The EPF & MP Act, 1952 is a beneficial social security legislation. In construing the provisions of the Act, it has already been settled earlier* that where ever two views are reasonably possible, the view which helps the achievement of the object should be preferred and accordingly the assessing authority while determining dues under Section 7A should curb any attempt to curtail the legitimate social security benefits of the employees. It is needless to reiterate the impact of contribution on lesser wages by splitting the wages into different heads, which results in lesser accumulations in PF account and miniscule pension to the member/family.
[*The RPFC, Punjab Vs Shibu Metal Works — 1965 (1) LU.473].
6. As you are aware, section 2(b) of EPF & MP Act, 1952 defines the basic wage which excludes all kind of allowances from being considered as basic wage. As the term suggests, ‘basic wage’ or ‘basic salary’ is the base salary which is provided to a person in lieu of his services. It is without any allowances which may or may not be added to basic wages in terms of employment.
7. However, it appears that some confusion is prevailing among field offices as to whether basic wages can be lower than the minimum wages or whether an establishment paying minimum wages to its employees can be allowed to split up the wages into various allowances reducing the PF contribution by making it a part of ” terms of employment or Contract” .
8. It would be worth to see that the terms ‘basic’, ‘basic wage’and ‘minimum wage’ are defined in Oxford Dictionary as below:
(i). “basic. Adj.1. forming an essential foundation; fundamental. 2. consisting of the minimum required or offered”
(ii). “basic wage . n. 1 a minimum wage earned before additional payments such as overtime. 2. Austral/NZ/ the minimum living wage, as determined by industrial tribunal”
(iii). “minimum wage, n. the lowest wage permitted by law or by agreement.”
9. Thus, whereas the minimum wage is the lowest permitted wage ought to be paid to a worker as per law as upheld and revisited on various occasions by the Hon`ble Supreme Court *, basic wage is only relevant for allowing additional allowances by treating it (basic wage) as a basic/floor level.
(*Crown Aluminum Works Vs Workers Union, [1958 Vola LU,
Page I], Unichoyi Vs State of Kerala [1961 Voll LL.3 P. 631], Kaman’ Metals & Alloys Ltd. Vs. Their Work Men [1967 Vil.11- 55; (1967) 2 SCR Page 463]).
10. Another aspect of basic wage/salary i5 that it is provided to all classes of employees irrespective of quantum of their salary and its quantum varies with every class/post of an employee where as minimum wage is prescribed only for the lowest paid employee to whom any lesser payment of wages is not permitted by law.
11. From above, it is abundantly clear that basic wage in no case can be lesser than the minimum wage as the same is not only contrary to law of land but is also beyond logic and rationale that an establishment which can not pay even minimum wages to its employees, would be willing to pay allowances to them and if such instances exist, there is certainly a malafide motive which may be considered as knowingly making or causing to make false statement/representation punishable u/s 14(1) of EPF & MP Act, 1952. It may also attract the provision of section 418 of IPC.
12. Further, it also needs to be kept in mind that any agreement which negates any law of land is ab-initio-void and would have effect of non-existence. Therefore, any such terms of agreement for employment where minimum wages is splitted to reduce the liability under EPF & MP Act, 1952 would be governed by the same logic as it is against the provisions of Minimum Wages Act and hence illegal.
13. Also Minimum Wage being a state matter, clarifications were sought from various state Governments. The replies received reveal that minimum wage is a lump sum composite amount arrived at by following the permissible procedure of fixation as revised from time to time and it can not be segregated and reclassified. Thus the State governments have also observed that splitting of minimum wages is not permissible in the eye of law,
14. Accordingly, all concerned are directed to ensure that P.F. Contributions are not remitted on wages less than Minimum Wages since every employer is legally bound to pay at least minimum wages to his/her employees and minimum wages are not amenable to split up. It is one pay package.*
(*Civil Appeal 4259 of 1999 Air Freight Ltd. Vs State of Karnataka and Ors., 1999 Supp. (1) SCR 22]
15. It is needless to mention that wherever the matter regarding splitting of wages is challenged or pending in a court of law, the stand of department along with all rules and guidelines of Hon’ble Supreme Court should be effectively utilized to defend the case. It is also mentioned that nothing said above shall come in way of implementation/execution of any order of a court of law.
16. The assessing officers shall examine full facts about the wage structure, minimum wages prescribed by the appropriate govt. for the relevant class and provide reasonable opportunity to the establishment before deciding the subterfuge, if any.
All the concerned officials/officers are requested to strictly comply with above said guidelines in regard to subject matter.
Please acknowledge receipt.
(This issues with the approval of CPFC)
(K.C. Pandey)
Addl. Central P.F. Commissioner(Compliance)
----------------------------------------------------------------------------------------------------------------------------
Copy to:
• FA & CAO/ CVO
• All Add I. CPFC5, Head Office
• Director, NATRSS
• All RPFC-I ,Head Office
• All RPFC II, HO
• All DD (Vig.)/DD ( Audit)
• All RPFCs (ZTIs)
• Web Administrator for uploading the circular on the central website of EPFO.
• DD (OL.), Head Office – for release of Hindi Version
(Anita S. Dixit)
Regional P.F. Commissioner-I(Coordination)
rajanlawfirm
From India, Madras
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Extracting the copy of the EPF Circular that has been stayed in the interim by the Hon'ble Delhi & AP High Court:
EMPLOYEES’ PROVIDENT FUND ORGANISATION
EMPLOYEES’ PROVIDENT FUND ORGANISATION, (Ministry of Labour & Employment, Govt. of India), Head Office, Bhavrshya Yidhr Bhawan, 14, Bhikaiji Cama Place. New Delhi - 110 066.
No.: Coord/4(6)2003/Clarification/Vol-II/ Dated: 23-05-2011
Sub:Splitting of Minimum Wages for the purpose of PF contribution not permissible.
Sir,
Attention of all concerned is invited towards this office circular no. Coord./4(6)2003/Clarification/13633 dated 06.06.2008 vide which it was advised to ensure that P.F. Contributions on at least Minimum Wages are remitted by the establishments. It was also directed to review all such cases disposed of u/s 7A of the Act where determination of dues has taken place on wages lesser than Minimum Wages.
2. However, it has been observed that still uniform approach in this regard is not followed by all the field offices which is viewed seriously. It is also observed that the field offices are not duly defending the issue in spite of the fact that the Division Bench of Hon’ble High Court, Karnataka in the matter of Group 4 Securities Guarding Ltd Vs. RPFC has categorically upheld the view that RPFCs u/s 7A of the Act can examine and look into the nature of contract entered between the employer and its employees as well as the pay structure to decide whether the pay is being split up under several heads as a subterfuge to avoid PF Contribution.
3. The order of the Division Bench was challenged by the establishment before the Apex Court. While tentatively upholding the order of the Division Bench, the Hon’ble Supreme Court in its order dated 23.07.2004 again granted liberty to the authorities to decide the matter in accordance with law on its merits. As such the authorities have to consider the order of the Division Bench of Hon’ble High Court, Karnataka unless there is substantial evidence to lead otherwise.
4. Accordingly, the matter has been examined in view of the Apex Court’s direction and the following guidelines are issued which should be adhered to and followed by all strictly.
5. The EPF & MP Act, 1952 is a beneficial social security legislation. In construing the provisions of the Act, it has already been settled earlier* that where ever two views are reasonably possible, the view which helps the achievement of the object should be preferred and accordingly the assessing authority while determining dues under Section 7A should curb any attempt to curtail the legitimate social security benefits of the employees. It is needless to reiterate the impact of contribution on lesser wages by splitting the wages into different heads, which results in lesser accumulations in PF account and miniscule pension to the member/family.
[*The RPFC, Punjab Vs Shibu Metal Works — 1965 (1) LU.473].
6. As you are aware, section 2(b) of EPF & MP Act, 1952 defines the basic wage which excludes all kind of allowances from being considered as basic wage. As the term suggests, ‘basic wage’ or ‘basic salary’ is the base salary which is provided to a person in lieu of his services. It is without any allowances which may or may not be added to basic wages in terms of employment.
7. However, it appears that some confusion is prevailing among field offices as to whether basic wages can be lower than the minimum wages or whether an establishment paying minimum wages to its employees can be allowed to split up the wages into various allowances reducing the PF contribution by making it a part of ” terms of employment or Contract” .
8. It would be worth to see that the terms ‘basic’, ‘basic wage’and ‘minimum wage’ are defined in Oxford Dictionary as below:
(i). “basic. Adj.1. forming an essential foundation; fundamental. 2. consisting of the minimum required or offered”
(ii). “basic wage . n. 1 a minimum wage earned before additional payments such as overtime. 2. Austral/NZ/ the minimum living wage, as determined by industrial tribunal”
(iii). “minimum wage, n. the lowest wage permitted by law or by agreement.”
9. Thus, whereas the minimum wage is the lowest permitted wage ought to be paid to a worker as per law as upheld and revisited on various occasions by the Hon`ble Supreme Court *, basic wage is only relevant for allowing additional allowances by treating it (basic wage) as a basic/floor level.
(*Crown Aluminum Works Vs Workers Union, [1958 Vola LU,
Page I], Unichoyi Vs State of Kerala [1961 Voll LL.3 P. 631], Kaman’ Metals & Alloys Ltd. Vs. Their Work Men [1967 Vil.11- 55; (1967) 2 SCR Page 463]).
10. Another aspect of basic wage/salary i5 that it is provided to all classes of employees irrespective of quantum of their salary and its quantum varies with every class/post of an employee where as minimum wage is prescribed only for the lowest paid employee to whom any lesser payment of wages is not permitted by law.
11. From above, it is abundantly clear that basic wage in no case can be lesser than the minimum wage as the same is not only contrary to law of land but is also beyond logic and rationale that an establishment which can not pay even minimum wages to its employees, would be willing to pay allowances to them and if such instances exist, there is certainly a malafide motive which may be considered as knowingly making or causing to make false statement/representation punishable u/s 14(1) of EPF & MP Act, 1952. It may also attract the provision of section 418 of IPC.
12. Further, it also needs to be kept in mind that any agreement which negates any law of land is ab-initio-void and would have effect of non-existence. Therefore, any such terms of agreement for employment where minimum wages is splitted to reduce the liability under EPF & MP Act, 1952 would be governed by the same logic as it is against the provisions of Minimum Wages Act and hence illegal.
13. Also Minimum Wage being a state matter, clarifications were sought from various state Governments. The replies received reveal that minimum wage is a lump sum composite amount arrived at by following the permissible procedure of fixation as revised from time to time and it can not be segregated and reclassified. Thus the State governments have also observed that splitting of minimum wages is not permissible in the eye of law,
14. Accordingly, all concerned are directed to ensure that P.F. Contributions are not remitted on wages less than Minimum Wages since every employer is legally bound to pay at least minimum wages to his/her employees and minimum wages are not amenable to split up. It is one pay package.*
(*Civil Appeal 4259 of 1999 Air Freight Ltd. Vs State of Karnataka and Ors., 1999 Supp. (1) SCR 22]
15. It is needless to mention that wherever the matter regarding splitting of wages is challenged or pending in a court of law, the stand of department along with all rules and guidelines of Hon’ble Supreme Court should be effectively utilized to defend the case. It is also mentioned that nothing said above shall come in way of implementation/execution of any order of a court of law.
16. The assessing officers shall examine full facts about the wage structure, minimum wages prescribed by the appropriate govt. for the relevant class and provide reasonable opportunity to the establishment before deciding the subterfuge, if any.
All the concerned officials/officers are requested to strictly comply with above said guidelines in regard to subject matter.
Please acknowledge receipt.
(This issues with the approval of CPFC)
(K.C. Pandey)
Addl. Central P.F. Commissioner(Compliance)
----------------------------------------------------------------------------------------------------------------------------
Copy to:
• FA & CAO/ CVO
• All Add I. CPFC5, Head Office
• Director, NATRSS
• All RPFC-I ,Head Office
• All RPFC II, HO
• All DD (Vig.)/DD ( Audit)
• All RPFCs (ZTIs)
• Web Administrator for uploading the circular on the central website of EPFO.
• DD (OL.), Head Office – for release of Hindi Version
(Anita S. Dixit)
Regional P.F. Commissioner-I(Coordination)
rajanlawfirm
From India, Madras
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ORIGIN OF 240 DAYS CLAUSE
The 240 days clause has its birth from Sec.25-B of the Industrial Disputes Act which is extracted below:
25-B. Definition of continuous service: -- For the purpose of this Chapter,-
(1) a workman shall be said to be in continuous service for a period if he is, for that period, in uninterrupted service, including service which may be interrupted on account of sickness or authorized leave or an accident or a strike which is not illegal, or a lock-out or a cessation of work which is not due to any fault on the part of the workman;
(2) Where a workman is not in continuous service within the meaning of clause (1) for a period of one year or six months, he shall be deemed to be in continuous service under an employer—
(a) for a period of one year, if the workman, during a period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than—
(i) one hundred and ninety days in the case of a workman employed below ground in a mine; and
(ii) two hundred and forty days, in any other case;
(b) for a period of six months, if the workman, during a period of six calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than—
(i) ninety five days, in the case of a workman employed below ground in a mine; and
(ii) one hundred and twenty days, in any other case;
Explanation: -- For the purpose of clause (2), the number of days on which a workman has actually worked under an employer shall include the days on which—
(i) he has been laid-off under an agreement or as permitted by standing orders made under the Industrial Employment [Standing Orders] Act, 1946 (20 of 1946), or under this Act or under any other law applicable to the Industrial establishment;
(ii) he has been on leave with full wages, earned in the previous years;
(iii) he has been absent due to temporary disablement caused by accident arising out of and in the course of his employment; and
(iv) in the case of a female, she has been on maternity leave; so, however, that the total period of such maternity leave does not exceed twelve weeks.
Continuous Service is applied in Section 25 F
25-F. Continuous precedent to retrenchment of workmen.—No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until—
(a) the workman has been given one month’s notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice:
(b) the workman has been paid, at the time, of retrenchment, compensation which shall be equivalent to fifteen days’ average pay [for every completed year of continuous service] or any part thereof in excess of six months; and
(c) notice in the prescribed manner is served on the appropriate Government [or such authority as may be specified by the appropriate Government by notification in the Official Gazette.]
Both the definition and the application has been extracted.Viewers would need to understand the Statutory provision in its original form and reach their own understanding.
rajanlawfirm
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The 240 days clause has its birth from Sec.25-B of the Industrial Disputes Act which is extracted below:
25-B. Definition of continuous service: -- For the purpose of this Chapter,-
(1) a workman shall be said to be in continuous service for a period if he is, for that period, in uninterrupted service, including service which may be interrupted on account of sickness or authorized leave or an accident or a strike which is not illegal, or a lock-out or a cessation of work which is not due to any fault on the part of the workman;
(2) Where a workman is not in continuous service within the meaning of clause (1) for a period of one year or six months, he shall be deemed to be in continuous service under an employer—
(a) for a period of one year, if the workman, during a period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than—
(i) one hundred and ninety days in the case of a workman employed below ground in a mine; and
(ii) two hundred and forty days, in any other case;
(b) for a period of six months, if the workman, during a period of six calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than—
(i) ninety five days, in the case of a workman employed below ground in a mine; and
(ii) one hundred and twenty days, in any other case;
Explanation: -- For the purpose of clause (2), the number of days on which a workman has actually worked under an employer shall include the days on which—
(i) he has been laid-off under an agreement or as permitted by standing orders made under the Industrial Employment [Standing Orders] Act, 1946 (20 of 1946), or under this Act or under any other law applicable to the Industrial establishment;
(ii) he has been on leave with full wages, earned in the previous years;
(iii) he has been absent due to temporary disablement caused by accident arising out of and in the course of his employment; and
(iv) in the case of a female, she has been on maternity leave; so, however, that the total period of such maternity leave does not exceed twelve weeks.
Continuous Service is applied in Section 25 F
25-F. Continuous precedent to retrenchment of workmen.—No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until—
(a) the workman has been given one month’s notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice:
(b) the workman has been paid, at the time, of retrenchment, compensation which shall be equivalent to fifteen days’ average pay [for every completed year of continuous service] or any part thereof in excess of six months; and
(c) notice in the prescribed manner is served on the appropriate Government [or such authority as may be specified by the appropriate Government by notification in the Official Gazette.]
Both the definition and the application has been extracted.Viewers would need to understand the Statutory provision in its original form and reach their own understanding.
rajanlawfirm
From India, Madras
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(Fact Checked)-The user's reply provides accurate information regarding the 240 days clause and its origin from Sec. 25-B of the Industrial Disputes Act. The explanation is clear and aligns with the relevant legal provisions. (1 Acknowledge point)
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Extracting the relevant portion of the Andhra Pradesh Govt State Policy:
Review of Labour Laws
The strength of the small-scale units lies in their flexibility in production. However, the existing labour laws restrict such flexibility. There is a multiplicity of labour laws enacted by the Central and State Governments that need to be reviewed and combined into one single piece of legislation. The One Man Commission has examined this issue. The recommendations will be examined, and action will be taken to simplify the laws and, wherever necessary, communicated to the Government of India.
The AP Govt has appointed a One Man Commission, and the Govt will examine the recommendations. Action is expected to be taken to simplify the laws.
Rajan Law Firm
From India, Madras
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Review of Labour Laws
The strength of the small-scale units lies in their flexibility in production. However, the existing labour laws restrict such flexibility. There is a multiplicity of labour laws enacted by the Central and State Governments that need to be reviewed and combined into one single piece of legislation. The One Man Commission has examined this issue. The recommendations will be examined, and action will be taken to simplify the laws and, wherever necessary, communicated to the Government of India.
The AP Govt has appointed a One Man Commission, and the Govt will examine the recommendations. Action is expected to be taken to simplify the laws.
Rajan Law Firm
From India, Madras
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Hi, I am working with an IT company and being in HR, I am asked to find out statutory compliances related to an IT (US Staffing) company and certifications that can be acquired by such companies like ISO, etc. I would really appreciate it if somebody could provide an expert opinion on this.
Thanks and Regards, Deepali HR Executive
From United States, Fremont
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Thanks and Regards, Deepali HR Executive
From United States, Fremont
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IMPORTANT ISSUES IN CONTRACT STAFFING INDUSTRY -F & F SETTLEMENT
Dear All
The essence of compliance of Section 25 F of the Industrial Disputes Act has been made clear by the Supreme Court of India in the reported case of Pramod Jha & others Vs State of Bihar reported in 2003(3) SBR 617. To quote the very words of the Supreme Court it has been held that
“the underlying object of Section 25 F[ the retrenchment provision in the Industrial Disputes Act] is two fold. Firstly, retrenched employee and must have one month's time available at his disposal to search for alternative employment, and so, either he should be given one months notice of the proposed termination or he should be paid wages for the notice period. Secondly the worker must be paid retrenchment compensation at the time of retrenchment, or before, so that once having been retrenched there should be no need for him to go to his employer demanding retrenchment compensation and the compensation so paid is not only a reward earned for his previous services rendered to the employer but is also a sustenance to the worker for the period which may be spent in searching for another employment."
Retrenchment can be simply termed as termination .Two points therefore emerge ;
Firstly, terminated Contract Staffing employee must have one month's time available at his disposal to search for alternative employment, and so, either he should be given one months notice of the proposed termination or he should be paid salary for the notice period.
Secondly the Contract Staffing Employee must be paid retrenchment compensation at the time of retrenchment, or before, so that once having been retrenched there should be no need for him to go to the Contract Staffing Company demanding retrenchment compensation and the compensation so paid is not only a reward earned for his/her previous services rendered to the Contract Staffing Company but is also a sustenance to the Contract Staffing Employee for the period which may be spent in searching for another employment.
With Regards
V.Sounder Rajan ,
Advocates and Notaries & Legal Consultants
E-mail : rajanassociates@eth,net,
-9025792684-9025792634
From India, Bangalore
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Dear All
The essence of compliance of Section 25 F of the Industrial Disputes Act has been made clear by the Supreme Court of India in the reported case of Pramod Jha & others Vs State of Bihar reported in 2003(3) SBR 617. To quote the very words of the Supreme Court it has been held that
“the underlying object of Section 25 F[ the retrenchment provision in the Industrial Disputes Act] is two fold. Firstly, retrenched employee and must have one month's time available at his disposal to search for alternative employment, and so, either he should be given one months notice of the proposed termination or he should be paid wages for the notice period. Secondly the worker must be paid retrenchment compensation at the time of retrenchment, or before, so that once having been retrenched there should be no need for him to go to his employer demanding retrenchment compensation and the compensation so paid is not only a reward earned for his previous services rendered to the employer but is also a sustenance to the worker for the period which may be spent in searching for another employment."
Retrenchment can be simply termed as termination .Two points therefore emerge ;
Firstly, terminated Contract Staffing employee must have one month's time available at his disposal to search for alternative employment, and so, either he should be given one months notice of the proposed termination or he should be paid salary for the notice period.
Secondly the Contract Staffing Employee must be paid retrenchment compensation at the time of retrenchment, or before, so that once having been retrenched there should be no need for him to go to the Contract Staffing Company demanding retrenchment compensation and the compensation so paid is not only a reward earned for his/her previous services rendered to the Contract Staffing Company but is also a sustenance to the Contract Staffing Employee for the period which may be spent in searching for another employment.
With Regards
V.Sounder Rajan ,
Advocates and Notaries & Legal Consultants
E-mail : rajanassociates@eth,net,
-9025792684-9025792634
From India, Bangalore
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(Fact Checked)-[response] The user's reply provides an accurate explanation of the essence of compliance with Section 25F of the Industrial Disputes Act regarding retrenchment provisions. The user correctly outlines the two-fold purpose of Section 25F as interpreted by the Supreme Court in the case of Pramod Jha & others vs. State of Bihar. The user's explanation of the requirements for terminated contract staffing employees aligns with the legal provisions. (1 Acknowledge point)
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Subject: Central Minimum Wages
In view of the fact that minimum wages have a bearing on the contract staffing industry, please visit https://www.citehr.com/369020-latest-central-wages.html for the latest revision. You can find the downloads in the post by Major (Retired) D. Bhushan Rao.
Thanks to Major.
Rajan Associates
From India, Bangalore
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In view of the fact that minimum wages have a bearing on the contract staffing industry, please visit https://www.citehr.com/369020-latest-central-wages.html for the latest revision. You can find the downloads in the post by Major (Retired) D. Bhushan Rao.
Thanks to Major.
Rajan Associates
From India, Bangalore
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IMMEDIATE ISSUES FOR CONTRACT STAFFING ENTITIES
What are the circumstances in which the Central Government can prohibit the employment of Contract Labour under CLRA?
Prohibition
Apart from the regulatory action under the Contract Labour (Abolition Regulation) Act, CLRA provides the Authority, the "appropriate Government" under Sec 10(1) after consultation with the Central or State Board employing agency to prohibit any establishment in a Process operation or other work. Such restrictions are often adopted based on the following criteria:
- if the work is in the nature of perennial;
- if the work is incidental or necessary for the work of an Operation;
- if the work is sufficient to employ a significant number of full-time workers;
- if the work is usually done through periodic Workers at this factory, or a similar setting.
The Central Government, on the recommendations of the Central Advisory Board, has prohibited the employment of contract labor in various operations and categories of jobs in different establishments. These details are available by checking the Notifications.
With Regards,
V. Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail: rajanassociates@eth.net
9025792684 - 9025792634
From India, Bangalore
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What are the circumstances in which the Central Government can prohibit the employment of Contract Labour under CLRA?
Prohibition
Apart from the regulatory action under the Contract Labour (Abolition Regulation) Act, CLRA provides the Authority, the "appropriate Government" under Sec 10(1) after consultation with the Central or State Board employing agency to prohibit any establishment in a Process operation or other work. Such restrictions are often adopted based on the following criteria:
- if the work is in the nature of perennial;
- if the work is incidental or necessary for the work of an Operation;
- if the work is sufficient to employ a significant number of full-time workers;
- if the work is usually done through periodic Workers at this factory, or a similar setting.
The Central Government, on the recommendations of the Central Advisory Board, has prohibited the employment of contract labor in various operations and categories of jobs in different establishments. These details are available by checking the Notifications.
With Regards,
V. Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail: rajanassociates@eth.net
9025792684 - 9025792634
From India, Bangalore
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(Fact Checked)-The information provided in the user reply is accurate and aligns with the Contract Labour (Regulation and Abolition) Act. Well done! (1 Acknowledge point)
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Certain important provisions that Payroll of a Staffing Company may overlook under the ESI Act include:
Legal Provisions:
Section 72:
Section 72 of the Act places a bar on the powers of an employer regarding the reduction of wages of an employee for reasons of his liability to pay contributions.
Section 73:
Under Section 73, an employer cannot dismiss or punish an employee during the period of his certified sickness, etc. Contravention of these provisions attracts penalties provided under Section 85 of the Act.
Many times, clients report sick cases as absconding, leading to legal complications.
Regulation 97:
Regulation 97 permits an employer to discontinue or reduce benefits payable to his employees under conditions of their service which are similar to the benefits conferred by the Act, to the extent specified below, namely:
a) From the date of the commencement of the first benefit period following the Appointed Day for his factory or establishment:
- Sick leave on half pay to the full extent;
- Such proportion of any combined general purposes and sick leave on half pay as may be assigned as sick leave but in any case not exceeding 50 percent of such combined leave.
b) Any maternity benefits granted to a woman employee to the extent to which such a woman employee may become entitled to the Maternity Benefit under the ESI Act.
When an employee avails himself/herself of any leave from the employer for sickness, maternity, or temporary disablement, the employer shall be entitled to deduct from the leave salary of the employee the amount of benefit to which he/she may be entitled under the Act for the corresponding period.
It is only when a workman actually obtains or receives cash benefits under the ESI Scheme that the employer can exercise his right to make a suitable deduction from the wages due to him by way of leave salary.
Rajan Law Firm
From India, Madras
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Legal Provisions:
Section 72:
Section 72 of the Act places a bar on the powers of an employer regarding the reduction of wages of an employee for reasons of his liability to pay contributions.
Section 73:
Under Section 73, an employer cannot dismiss or punish an employee during the period of his certified sickness, etc. Contravention of these provisions attracts penalties provided under Section 85 of the Act.
Many times, clients report sick cases as absconding, leading to legal complications.
Regulation 97:
Regulation 97 permits an employer to discontinue or reduce benefits payable to his employees under conditions of their service which are similar to the benefits conferred by the Act, to the extent specified below, namely:
a) From the date of the commencement of the first benefit period following the Appointed Day for his factory or establishment:
- Sick leave on half pay to the full extent;
- Such proportion of any combined general purposes and sick leave on half pay as may be assigned as sick leave but in any case not exceeding 50 percent of such combined leave.
b) Any maternity benefits granted to a woman employee to the extent to which such a woman employee may become entitled to the Maternity Benefit under the ESI Act.
When an employee avails himself/herself of any leave from the employer for sickness, maternity, or temporary disablement, the employer shall be entitled to deduct from the leave salary of the employee the amount of benefit to which he/she may be entitled under the Act for the corresponding period.
It is only when a workman actually obtains or receives cash benefits under the ESI Scheme that the employer can exercise his right to make a suitable deduction from the wages due to him by way of leave salary.
Rajan Law Firm
From India, Madras
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Gratuity Entitlement for Contract Staff
Dear Friends,
Recently, Mr. Justice K. Chandru of the Madras High Court - Madurai Bench, in the matter of Special Officer-Srirangam Co-operative Urban Bank Ltd, has held that every employee who has worked in an organization for five or more years is entitled to gratuity, irrespective of the following:
- superannuation;
- retirement;
- resignation;
- death;
- disablement; or
- any other terminology used by the employer to terminate the employee's service.
The only exception is under Section 4(6) of the Payment of Gratuity Act, which enables the employer to forfeit the gratuity under certain circumstances and by following a specified procedure if the employee had not been allowed to retire or reached the age of superannuation.
Our understanding of the verdict on its application in the Contract Staffing Industry is that invocation of Section 4(6) of the Payment of Gratuity Act may be particularly challenging due to the contract staff being deployed with a client.
Consequently, the entitlement for gratuity of the contract staff cannot be denied on any account.
With Regards,
V. Sounder Rajan
Advocates & Notaries & Legal Consultants
Email: rajanassociates@eth.net
9025792684 / 9025792634
From India, Bangalore
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Dear Friends,
Recently, Mr. Justice K. Chandru of the Madras High Court - Madurai Bench, in the matter of Special Officer-Srirangam Co-operative Urban Bank Ltd, has held that every employee who has worked in an organization for five or more years is entitled to gratuity, irrespective of the following:
- superannuation;
- retirement;
- resignation;
- death;
- disablement; or
- any other terminology used by the employer to terminate the employee's service.
The only exception is under Section 4(6) of the Payment of Gratuity Act, which enables the employer to forfeit the gratuity under certain circumstances and by following a specified procedure if the employee had not been allowed to retire or reached the age of superannuation.
Our understanding of the verdict on its application in the Contract Staffing Industry is that invocation of Section 4(6) of the Payment of Gratuity Act may be particularly challenging due to the contract staff being deployed with a client.
Consequently, the entitlement for gratuity of the contract staff cannot be denied on any account.
With Regards,
V. Sounder Rajan
Advocates & Notaries & Legal Consultants
Email: rajanassociates@eth.net
9025792684 / 9025792634
From India, Bangalore
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Section 4(6)(b) of The Payment of Gratuity Act, 1972 is extracted below:
(b) The gratuity payable to an employee may be wholly or partially forfeited if:
(i) the services of such an employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or
(ii) the services of such an employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment.
The termination has to be done after the conduct of a Domestic Enquiry by appointing an Enquiry Officer. In the Contract Staffing Industry, the conduct of a Domestic Enquiry is next to impossible. Therefore, Section 4(6)(b) of The Payment of Gratuity Act, 1972 literally becomes inapplicable.
- rajanlawfirm
From India, Madras
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(b) The gratuity payable to an employee may be wholly or partially forfeited if:
(i) the services of such an employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or
(ii) the services of such an employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment.
The termination has to be done after the conduct of a Domestic Enquiry by appointing an Enquiry Officer. In the Contract Staffing Industry, the conduct of a Domestic Enquiry is next to impossible. Therefore, Section 4(6)(b) of The Payment of Gratuity Act, 1972 literally becomes inapplicable.
- rajanlawfirm
From India, Madras
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Sub: Non Payment of Salary-Illegal Deduction from Salary of Contract Staff
Dear Friends
The Contract Staffing Industry may note that under the Payment of Wages Act, 1936 in case of delay in payment of wages or unlawful deductions in Salary of the Contract workers there is a remedy under Section 15 of the Payment of Wages Act, 1936 which is extracted below:
15. Claims arising out of deductions from wages or delay in payment of wages and penalty for malicious or vexatious claims -
(1) The State Government may by notification in the Official Gazette appoint a presiding officer of any Labour Court or Industrial Tribunal constituted under the Industrial Disputes Act 1947 (14 of 1947) or under any corresponding law relating to the investigation and settlement of industrial disputes in force in the State or any Commissioner for Workmen's Compensation or other officer with experience as a Judge of a Civil Court or as a Stipendiary Magistrate to be the authority to hear and decide for any specified area all claims arising out of deductions from the wages or delay in payment of the wages of persons employed or paid in that area including all matters incidental to such claims :
Provided that where the State Government considers it necessary so to do it may appoint more than one authority for any specified area and may by general or special order provide for the distribution or allocation of work to be performed by them under this Act.
(2) Where contrary to the provisions of this Act any deduction has been made from the wages of an employed person or any payment of wages has been delayed such person himself or any legal practitioner or any official of a registered trade union authorised in writing to act on his behalf or any Inspector under this Act or any other person acting with the permission of the authority appointed under sub-section (1) may apply to such authority for a direction under sub-section (3) :
Provided that every such application shall be presented within twelve months from the date on which the deduction from the wages was made or from the date on which the payment of the wages was due to be made as the case may be :
Provided Further that any application may be admitted after the said period of twelve months when the applicant satisfies the authority that he had sufficient cause for not making the application within such period.
(3) When any application under sub-section (2) is entertained the authority shall hear the applicant and the employer or other person responsible for the payment of wages under section 3 or give them an opportunity of being heard and after such further inquiry (if any) as may be necessary may without prejudice to any other penalty to which such employer or other person is liable under this Act direct the refund to the employed person of the amount deducted or the payment of the delayed wages together with the payment of such compensation as the authority may think fit not exceeding ten times the amount deducted in the former case and not exceeding twenty-five rupees in the latter and even if the amount deducted or the delayed wages are paid before the disposal of the application direct the payment of such compensation as the authority may think fit not exceeding twenty-five rupees :
Provided that no direction for the payment of compensation shall be made in the case of delayed wages if the authority is satisfied that the delay was due to -
(a) a bonafide error or bonafide dispute as to the amount payable to the employed person or
(b) the occurrence of an emergency or the existence of exceptional circumstances such that the person responsible for the payment of the wages was unable though exercising reasonable diligence to make prompt payment or
(c) the failure of the employed person to apply for or accept payment.
(4) If the authority hearing an application under this section is satisfied -
(a) that the application was either malicious or vexatious the authority may direct that a penalty not exceeding fifty rupees be paid to the employer or other person responsible for the payment of wages by the person presenting the application; or
(b) that in any case in which compensation is directed to be paid under sub-section (3) the applicant ought not to have been compelled to seek redress under this section the authority may direct that a penalty not exceeding fifty rupees be paid to the State Government by the employer or other person responsible for the payment of wages.
(4A) Where there is any dispute as to the person or persons being the legal representative or representatives of the employer or of the employed person the decision of the authority on such dispute shall be final.
(4B) Any inquiry under this section shall be deemed to be a judicial proceeding within the meaning of sections 193 219 and 228 of the Indian Penal Code (45 of 1860).
(5) Any amount directed to be paid under this section may be recovered -
(a) if the authority is a Magistrate by the authority as if it were a fine imposed by him as Magistrate and
(b) if the authority is not a Magistrate by any Magistrate to whom the authority makes application in this behalf as if it were a fine imposed by such Magistrate.
There is also a provision for class action under Section 16 of the Payment of Wages Act, 1936 which is also extracted below:
16. Single application in respect of claims from unpaid group -
(1) Employed persons are said to belong to the same unpaid group if they are borne on the same establishment and if deductions have been made from their wages in contravention of this Act for the same cause and during the same wage-period or periods or if their wages for the same wage-period or periods have remained unpaid after the day fixed by section 5.
(2) A single application may be presented under section 15 on behalf or in respect of any number of employed persons belonging to the same unpaid group and in such case every person on whose behalf such application is presented may be awarded maximum compensation to the extent specified in sub-section (3) of section 15.
(3) The authority may deal with any number of separate pending applications presented under section 15 in respect of persons belonging to the same unpaid group as a single application presented under sub-section (2) of this section and the provisions of that sub-section shall apply accordingly.
In case the Employer delays the payment of Salary or F & F the aggrieved Employee will normally send a demand or a Legal Notice and the Contract Staffing Company would need to comply with the demand to avoid the Legal proceedings .On failure it would be followed up with an application to the Local Appropriate Authority under the Payment of Wages Act as extracted below:
Form of Individual Application
[See sub-section (2) of section 15 of the Payment of Wages Act]
In the Court of the Authority appointed under the Payment of Wages Act, 1936 (4 of 1936) for ……………….. area.
Application No. ……….. of …….
Between A.B.C. ………………………………….. Applicant (through a legal practitioner/an official of …………………………….. which is a registered Trade Union.)
And X.Y.Z………………………………………………………opposite party:
The applicant states as follows:
1. A.B.C. is a person employed in the/on the factory/railway/industrial establishment entitled and resides at ……………………………………..
The address of the applicant for the service of all notices and processes is:
…………………………………………………………………………………
2. X.Y.Z., the opposite party, is the person responsible for the payment of his wages under section 3 of the Act, and his address for the service of all notices and processes is:…………………………………………………………………………………..
3. (1) The applicant’s wages have not been paid for the following wage-period(s)………………………………….(give dates)
Or A sum of Rs…………….. has been unlawfully deducted from his wages of amount for the wage-period(s) which ended on ……………… (give dates)
(2) [Here give any further claim or explanation].
4. The applicant estimates the value of the relief sought by him at the sum of Rs………………
5. The applicant prays that a direction may be issued under sub-section (3) of section 15 for –
(a) Payment of delayed wages as estimated or such greater or lesser amount as the Authority may find to be due.
Or Refund of the amount illegally deducted.
(b) Compensation amounting to ………………………
The Applicant certifies that the statement of facts contained in this application is to the best of his knowledge and belief accurate.
Signature or thumb impression of the
employed person, or legal practitioner or official
of a registered trade union duly authorized.
There is also a provision for Group action as per the following format :
Form of Group Application
[See sub-section (2) of sections 15 and 16 of Payment of Wages Act]
In the Court of the Authority appointed under the Payment of Wages, Act, 1936 (4 of 1936) for ………………….. area
application No………………… of …………
Between A.B.C…………………………………………………
Applicants
A legal practitioner
(through a legal practitioner/an official of …………………………….. which is a registered union).
And X.Y.Z………………………………………………. Opposite Party.
The applicants state as follows:
1. [The applicants whose names and permanent addresses] appear in the attached schedule are persons employed in the /on the /factory/railway/insustrial establishment entitled and resides at …………………………….
The address of the applicants for service of all notice and processes is:
………………………………………………………………………….
2. X.Y.Z. the opposite party, is the person responsible for the payment of wages under section 3 of the Act, and his address for the service of all notices and processes is:
…………………………………………………………………………….
3. The applicants’ wages have not been paid for the following wage-period(s):
……………………………………………………………………………..
4. The applicants estimate the value of the relief sought by them at the sum of Rs…
5. The applicants pray that a direction may be issued under sub-section (3) of section 15 for:
(a) Payment of the applicants’ delayed wages as estimated……………. or such greater or lesser amount as the Authority may find to be due.
(b) Compensation amounting to…………….
The Applicants certify that the statement of facts contained in this application is, to the best of their knowledge and belief, accurate.
Signature of thumb impression of two of the
Applicants, or legal practitioner, or an official of
A registered trade union duly authorized.
SCHEDULE
__________________________________________________ ______________________
S.No. Name of Applicant Permanent Address
__________________________________________________ ______________________
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rajanlawfirm
From India, Madras
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Dear Friends
The Contract Staffing Industry may note that under the Payment of Wages Act, 1936 in case of delay in payment of wages or unlawful deductions in Salary of the Contract workers there is a remedy under Section 15 of the Payment of Wages Act, 1936 which is extracted below:
15. Claims arising out of deductions from wages or delay in payment of wages and penalty for malicious or vexatious claims -
(1) The State Government may by notification in the Official Gazette appoint a presiding officer of any Labour Court or Industrial Tribunal constituted under the Industrial Disputes Act 1947 (14 of 1947) or under any corresponding law relating to the investigation and settlement of industrial disputes in force in the State or any Commissioner for Workmen's Compensation or other officer with experience as a Judge of a Civil Court or as a Stipendiary Magistrate to be the authority to hear and decide for any specified area all claims arising out of deductions from the wages or delay in payment of the wages of persons employed or paid in that area including all matters incidental to such claims :
Provided that where the State Government considers it necessary so to do it may appoint more than one authority for any specified area and may by general or special order provide for the distribution or allocation of work to be performed by them under this Act.
(2) Where contrary to the provisions of this Act any deduction has been made from the wages of an employed person or any payment of wages has been delayed such person himself or any legal practitioner or any official of a registered trade union authorised in writing to act on his behalf or any Inspector under this Act or any other person acting with the permission of the authority appointed under sub-section (1) may apply to such authority for a direction under sub-section (3) :
Provided that every such application shall be presented within twelve months from the date on which the deduction from the wages was made or from the date on which the payment of the wages was due to be made as the case may be :
Provided Further that any application may be admitted after the said period of twelve months when the applicant satisfies the authority that he had sufficient cause for not making the application within such period.
(3) When any application under sub-section (2) is entertained the authority shall hear the applicant and the employer or other person responsible for the payment of wages under section 3 or give them an opportunity of being heard and after such further inquiry (if any) as may be necessary may without prejudice to any other penalty to which such employer or other person is liable under this Act direct the refund to the employed person of the amount deducted or the payment of the delayed wages together with the payment of such compensation as the authority may think fit not exceeding ten times the amount deducted in the former case and not exceeding twenty-five rupees in the latter and even if the amount deducted or the delayed wages are paid before the disposal of the application direct the payment of such compensation as the authority may think fit not exceeding twenty-five rupees :
Provided that no direction for the payment of compensation shall be made in the case of delayed wages if the authority is satisfied that the delay was due to -
(a) a bonafide error or bonafide dispute as to the amount payable to the employed person or
(b) the occurrence of an emergency or the existence of exceptional circumstances such that the person responsible for the payment of the wages was unable though exercising reasonable diligence to make prompt payment or
(c) the failure of the employed person to apply for or accept payment.
(4) If the authority hearing an application under this section is satisfied -
(a) that the application was either malicious or vexatious the authority may direct that a penalty not exceeding fifty rupees be paid to the employer or other person responsible for the payment of wages by the person presenting the application; or
(b) that in any case in which compensation is directed to be paid under sub-section (3) the applicant ought not to have been compelled to seek redress under this section the authority may direct that a penalty not exceeding fifty rupees be paid to the State Government by the employer or other person responsible for the payment of wages.
(4A) Where there is any dispute as to the person or persons being the legal representative or representatives of the employer or of the employed person the decision of the authority on such dispute shall be final.
(4B) Any inquiry under this section shall be deemed to be a judicial proceeding within the meaning of sections 193 219 and 228 of the Indian Penal Code (45 of 1860).
(5) Any amount directed to be paid under this section may be recovered -
(a) if the authority is a Magistrate by the authority as if it were a fine imposed by him as Magistrate and
(b) if the authority is not a Magistrate by any Magistrate to whom the authority makes application in this behalf as if it were a fine imposed by such Magistrate.
There is also a provision for class action under Section 16 of the Payment of Wages Act, 1936 which is also extracted below:
16. Single application in respect of claims from unpaid group -
(1) Employed persons are said to belong to the same unpaid group if they are borne on the same establishment and if deductions have been made from their wages in contravention of this Act for the same cause and during the same wage-period or periods or if their wages for the same wage-period or periods have remained unpaid after the day fixed by section 5.
(2) A single application may be presented under section 15 on behalf or in respect of any number of employed persons belonging to the same unpaid group and in such case every person on whose behalf such application is presented may be awarded maximum compensation to the extent specified in sub-section (3) of section 15.
(3) The authority may deal with any number of separate pending applications presented under section 15 in respect of persons belonging to the same unpaid group as a single application presented under sub-section (2) of this section and the provisions of that sub-section shall apply accordingly.
In case the Employer delays the payment of Salary or F & F the aggrieved Employee will normally send a demand or a Legal Notice and the Contract Staffing Company would need to comply with the demand to avoid the Legal proceedings .On failure it would be followed up with an application to the Local Appropriate Authority under the Payment of Wages Act as extracted below:
Form of Individual Application
[See sub-section (2) of section 15 of the Payment of Wages Act]
In the Court of the Authority appointed under the Payment of Wages Act, 1936 (4 of 1936) for ……………….. area.
Application No. ……….. of …….
Between A.B.C. ………………………………….. Applicant (through a legal practitioner/an official of …………………………….. which is a registered Trade Union.)
And X.Y.Z………………………………………………………opposite party:
The applicant states as follows:
1. A.B.C. is a person employed in the/on the factory/railway/industrial establishment entitled and resides at ……………………………………..
The address of the applicant for the service of all notices and processes is:
…………………………………………………………………………………
2. X.Y.Z., the opposite party, is the person responsible for the payment of his wages under section 3 of the Act, and his address for the service of all notices and processes is:…………………………………………………………………………………..
3. (1) The applicant’s wages have not been paid for the following wage-period(s)………………………………….(give dates)
Or A sum of Rs…………….. has been unlawfully deducted from his wages of amount for the wage-period(s) which ended on ……………… (give dates)
(2) [Here give any further claim or explanation].
4. The applicant estimates the value of the relief sought by him at the sum of Rs………………
5. The applicant prays that a direction may be issued under sub-section (3) of section 15 for –
(a) Payment of delayed wages as estimated or such greater or lesser amount as the Authority may find to be due.
Or Refund of the amount illegally deducted.
(b) Compensation amounting to ………………………
The Applicant certifies that the statement of facts contained in this application is to the best of his knowledge and belief accurate.
Signature or thumb impression of the
employed person, or legal practitioner or official
of a registered trade union duly authorized.
There is also a provision for Group action as per the following format :
Form of Group Application
[See sub-section (2) of sections 15 and 16 of Payment of Wages Act]
In the Court of the Authority appointed under the Payment of Wages, Act, 1936 (4 of 1936) for ………………….. area
application No………………… of …………
Between A.B.C…………………………………………………
Applicants
A legal practitioner
(through a legal practitioner/an official of …………………………….. which is a registered union).
And X.Y.Z………………………………………………. Opposite Party.
The applicants state as follows:
1. [The applicants whose names and permanent addresses] appear in the attached schedule are persons employed in the /on the /factory/railway/insustrial establishment entitled and resides at …………………………….
The address of the applicants for service of all notice and processes is:
………………………………………………………………………….
2. X.Y.Z. the opposite party, is the person responsible for the payment of wages under section 3 of the Act, and his address for the service of all notices and processes is:
…………………………………………………………………………….
3. The applicants’ wages have not been paid for the following wage-period(s):
……………………………………………………………………………..
4. The applicants estimate the value of the relief sought by them at the sum of Rs…
5. The applicants pray that a direction may be issued under sub-section (3) of section 15 for:
(a) Payment of the applicants’ delayed wages as estimated……………. or such greater or lesser amount as the Authority may find to be due.
(b) Compensation amounting to…………….
The Applicants certify that the statement of facts contained in this application is, to the best of their knowledge and belief, accurate.
Signature of thumb impression of two of the
Applicants, or legal practitioner, or an official of
A registered trade union duly authorized.
SCHEDULE
__________________________________________________ ______________________
S.No. Name of Applicant Permanent Address
__________________________________________________ ______________________
1 2 3
rajanlawfirm
From India, Madras
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(Fact Checked)-The information provided is accurate and aligns with the Payment of Wages Act, 1936. The details about the provisions for individual and group applications under Sections 15 and 16 are correct. (1 Acknowledge point)
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Penal provisions the punishment for non compliance of the ESI Act ?
Dear All
The ESI Act contains adequate provisions to Employers for violating its provisions. The relevant penal sections, so far as violations in the matter of coverage, are sections 84, 85, 85-A, 86 and 86-A. The prosecutions under these sections can be filled in the criminal courts and adjudication of the same matter by Employee’s Insurance Court is not a condition precedent.
Contract Staffing Companies who qualify for coverage need to strictly adhere to this.When they are concentrating on securing more Business they tend to over-look the coverage under ESI Act.
The important provisions are these:-
Section 84: This section inter alia states that whoever, for the purpose of avoiding any payment to be made by himself under the said Act or enabling any other person to avoid any such payment, knowingly makes or causes to be made any false statement or false representations, shall be punishable with imprisonment for a term which may extend to six months or with fine not exceeding two thousand rupees, or with both.
Thus, if any employer, whose factory or establishment is coverable, knowingly makes a false representation / statement about the coverage, he is liable to be punished under this section.
Section-85: Under this section, inter alia, any person who is guilty of any contravention of or non-compliance with any of the requirements of the Act/rules/regulations, shall be punishable with imprisonment for a term which may extend to one year or with fine which may extend to four thousand rupees, or with both.
Section-85-A: This section lay down that if any person, already convicted for any offence punishable under the Act, commits the same offence, he shall be punished with imprisonment for a term which may extend to two years and with a fine of five thousand rupees.
Section-86: According to this section, the prosecution against employer or any other person shall be instituted with the previous sanction of the Insurance Commissioner or any other authorized officer of the Corporation. Under this provision, the power to sanction prosecution has been delegated to the Regional Directors and in charges of sub-regions.
A complaint for any offence under the Act has to be filed in writing in any court having jurisdiction but not inferior to that of Metropolitan Magistrate or First Class Judicial Magistrate.
This apart the Penal provisions of the Indian Penal Code which is stringent are there .It is found in Explanation 2 :
Section 405. Criminal breach of trust
Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or willfully suffers any other person so to do, commits "criminal breach of trust".
xxxx
Explanation 2
A person, being an employer, who deducts the employees' contribution from the wages payable to the employee for credit to the Employees' State Insurance Fund held and administered by the Employees' State Insurance Corporation established under the Employees' State Insurance Act, 1948 (34 of 1948), shall be deemed to have been entrusted with the amount of the contribution so deducted by him and if he makes default in the payment of such contribution to the said Fund in violation of the said Act, shall be deemed to have dishonestly used the amount of the said contribution in violation of a direction of law as aforesaid.
With Regards
Advocates & Notaries & Legal Consultants
E-mail : rajanassociates@eth,net,
-9025792684-9025792634
From India, Bangalore
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Dear All
The ESI Act contains adequate provisions to Employers for violating its provisions. The relevant penal sections, so far as violations in the matter of coverage, are sections 84, 85, 85-A, 86 and 86-A. The prosecutions under these sections can be filled in the criminal courts and adjudication of the same matter by Employee’s Insurance Court is not a condition precedent.
Contract Staffing Companies who qualify for coverage need to strictly adhere to this.When they are concentrating on securing more Business they tend to over-look the coverage under ESI Act.
The important provisions are these:-
Section 84: This section inter alia states that whoever, for the purpose of avoiding any payment to be made by himself under the said Act or enabling any other person to avoid any such payment, knowingly makes or causes to be made any false statement or false representations, shall be punishable with imprisonment for a term which may extend to six months or with fine not exceeding two thousand rupees, or with both.
Thus, if any employer, whose factory or establishment is coverable, knowingly makes a false representation / statement about the coverage, he is liable to be punished under this section.
Section-85: Under this section, inter alia, any person who is guilty of any contravention of or non-compliance with any of the requirements of the Act/rules/regulations, shall be punishable with imprisonment for a term which may extend to one year or with fine which may extend to four thousand rupees, or with both.
Section-85-A: This section lay down that if any person, already convicted for any offence punishable under the Act, commits the same offence, he shall be punished with imprisonment for a term which may extend to two years and with a fine of five thousand rupees.
Section-86: According to this section, the prosecution against employer or any other person shall be instituted with the previous sanction of the Insurance Commissioner or any other authorized officer of the Corporation. Under this provision, the power to sanction prosecution has been delegated to the Regional Directors and in charges of sub-regions.
A complaint for any offence under the Act has to be filed in writing in any court having jurisdiction but not inferior to that of Metropolitan Magistrate or First Class Judicial Magistrate.
This apart the Penal provisions of the Indian Penal Code which is stringent are there .It is found in Explanation 2 :
Section 405. Criminal breach of trust
Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or willfully suffers any other person so to do, commits "criminal breach of trust".
xxxx
Explanation 2
A person, being an employer, who deducts the employees' contribution from the wages payable to the employee for credit to the Employees' State Insurance Fund held and administered by the Employees' State Insurance Corporation established under the Employees' State Insurance Act, 1948 (34 of 1948), shall be deemed to have been entrusted with the amount of the contribution so deducted by him and if he makes default in the payment of such contribution to the said Fund in violation of the said Act, shall be deemed to have dishonestly used the amount of the said contribution in violation of a direction of law as aforesaid.
With Regards
Advocates & Notaries & Legal Consultants
E-mail : rajanassociates@eth,net,
-9025792684-9025792634
From India, Bangalore
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(Fact Checked)-The penal provisions mentioned for non-compliance with the ESI Act in the user reply are accurate and provide a clear overview of the consequences. The information aligns with the legal requirements. (1 Acknowledge point)
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(Fact Checked)-The user reply contains accurate information regarding the penal provisions for non-compliance with the ESI Act, citing relevant sections and penalties. The explanation provided aligns with the legal requirements. (1 Acknowledge point)
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Dear, I have a doubt regarding the following:
(6) any activity of the Government relatable to the sovereign functions of the Government including all the activities carried on by the departments of the Central Government dealing with defence research, atomic energy, and space; or Though it is incorporated, it is not gazetted and hence not operative.
1) Hon. Supreme Court has also kept this portion in abeyance.
2) Group of Ministers and Group of Secretaries differed, and
3) In the Parliament, it was presented that this portion is inoperative. It is hanging in the fire because an alternative remedy is not shown. Hence, please check and guide us.
From India, Nellore
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(6) any activity of the Government relatable to the sovereign functions of the Government including all the activities carried on by the departments of the Central Government dealing with defence research, atomic energy, and space; or Though it is incorporated, it is not gazetted and hence not operative.
1) Hon. Supreme Court has also kept this portion in abeyance.
2) Group of Ministers and Group of Secretaries differed, and
3) In the Parliament, it was presented that this portion is inoperative. It is hanging in the fire because an alternative remedy is not shown. Hence, please check and guide us.
From India, Nellore
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The Supreme Court, in the matter of State Of U.P vs Jai Bir Singh on 5 May 2005, comprising the Bench of Honorable Justices N S Hegde, K.G Balakrishnan, D Dharmadhikari, and A Kumar, had this to say on the definition of 'industry,' by including within its meaning some activities of the government and excluding some other specified governmental activities and 'public utility services' involving sovereign functions:
"In response to the Bangalore Water Supply and Sewerage Board case, the Parliament intervened and substituted the definition of 'industry' by including within its meaning some activities of the government and excluding some other specified governmental activities and 'public utility services' involving sovereign functions. For the past 23 years, the amended definition has remained unenforced on the statute book. The government has been experiencing difficulty in bringing into effect the new definition. Issuance of notification as required by sub-section 2 of sub-section 1 of Amendment Act, 1982 has been withheld so far. It is, therefore, high time for the court to reexamine the judicial interpretation given by it to the definition of 'industry.' The Legislature should be allowed greater freedom to come forward with a more comprehensive legislation to meet the demands of employers and employees in the public and private sectors. The inhibition and the difficulties which are being exercised by the legislature and the executive in bringing into force the amended Industrial Law, more due to judicial interpretation of the definition of 'industry' in the Bangalore Water Supply and Sewerage Board case, need to be removed. The experience of the working of the provisions of the Act would serve as a guide for a better and more comprehensive law on the subject to be brought into force without inhibition.
The word 'industry' seems to have been redefined under the Amendment Act keeping in view the judicial interpretation of the word industry in the case of Bangalore water. Had there been no such expansive definition of industry given in the Bangalore Water case, it would have been open to the parliament to bring in either a more expansive or a more restrictive definition of industry by confining it or not confining it to industrial activities other than sovereign functions and public welfare activities of the State and its departments. Similarly, employment generated in the carrying on of liberal professions could be clearly included or excluded depending on social conditions and demands of social justice. Comprehensive change in law and/or enactment of new law had not been possible because of the interpretation given to the definition of industry in the Bangalore Water case. The judicial interpretation seems to have been one of the inhibiting factors in the enforcement of the amended definition of the Act for the last 23 years.
In the Bangalore Water case, not all the judges in interpreting the definition clause invoked the doctrine of noscitur-a-sociis. We are inclined to accept the view expressed by the six judges' Bench in the case of the Management of Safdarjung Hospital (supra) that keeping in view the other provisions of the Act and words used in the definition clause, although profit motive is irrelevant, in order to encompass the activity within the word industry, the activity must be 'analogous to trade or business in a commercial sense.' We also agree that the mere enumeration of 'public utility services' in section 2(n) read with the First Schedule should not be held decisive. Unless the public utility service answers the test of it being an 'industry' as defined in clause (j) of section 2, the enumeration of such public utility service in the First Schedule to the Act would not make it an 'industry.' The six judges also considered the inclusion of services such as hospitals and dispensaries as public utility services in the definition under section 2(n) of the Act and rightly observed thus:
'When Parliament added the sixth clause under which other services could be brought within the protection afforded by the Act to public utility services, it did not intend that the entire concept of industry in the Act could be ignored and anything brought in. Therefore, it said that only an industry could be declared to be a public utility service. But what could be so declared had to be an industry in the first place.'
The decision in the case of Management of Safdarjung Hospital (supra) was a unanimous decision of all the six judges, and we are inclined to agree with the following observations in the interpretation of the definition clause:
'But in the collocation of the terms and their definitions, these terms have a definite economic content of a particular type and on the authorities of this Court have been uniformly accepted as excluding professions and are only concerned with the production, distribution, and consumption of wealth and the production and availability of material services. Industry has thus been accepted to mean only trade and business, manufacture, or undertaking analogous to trade or business for the production of material goods or wealth and material services.'
The six judges unanimously upheld the observations in the Gymkhana Club case (supra):
'... before the work engaged in can be described as an industry, it must bear the definite character of 'trade' or 'business' or 'manufacture' or 'calling' or must be capable of being described as an undertaking resulting in material goods or material services.'
In construing the definition clause and determining its ambit, one has not to lose sight of the fact that in activities like hospitals and education, concepts like the right of the workers to go on 'strike' or the employer's right to 'close down' and 'lay off' are not contemplated because they are services in which the motto is 'service to the community.' If the patients or students are to be left to the mercy of the employer and employees exercising their rights at will, the very purpose of the service activity would be frustrated.
We are respectfully inclined to agree with the observation of Shri Justice P.B. Gajendragadkar [AIR 1964 SC 903 at pg. 906] in the case of Harinagar Cane Farm (supra):
'As we have repeatedly emphasized, in dealing with industrial matters, industrial adjudication should refrain from enunciating any general principles or adopting any doctrinaire considerations. It is desirable that industrial adjudication should deal with problems as and when they arise and confine its decisions to the points which strictly arise on the pleadings between the parties. .....'
We conclude agreeing with the conclusion of the honorable judges in the case of Hospital Mazdoor Sabha and Ors. (supra):
'Though section 2(j) used words of very wide denotation, a line would have to be drawn in a fair and just manner so as to exclude some calling service or undertakings. ...'
This Court must, therefore, reconsider where the line should be drawn and what limitations can and should be reasonably implied in interpreting the wide words used in section 2(j). That no doubt is rather a difficult problem to resolve, more so when both the legislature and executive are silent and have kept an important amended provision of law dormant on the statute book.
We do not consider it necessary to say anything more and leave it to the larger Bench to give such meaning and effect to the definition clause in the present context with the experience of all these years and keeping in view the amended definition of 'industry' kept dormant for long 23 years. Pressing demands of the competing sectors of employers and employees and the helplessness of the legislature and executive in bringing into force the Amendment Act compel us to make this reference.
Let the cases be now placed before the Honorable Chief Justice of India for constituting a suitable larger Bench for reconsideration of the judgment of this Court in the case of Bangalore Water (supra).
From India, Madras
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"In response to the Bangalore Water Supply and Sewerage Board case, the Parliament intervened and substituted the definition of 'industry' by including within its meaning some activities of the government and excluding some other specified governmental activities and 'public utility services' involving sovereign functions. For the past 23 years, the amended definition has remained unenforced on the statute book. The government has been experiencing difficulty in bringing into effect the new definition. Issuance of notification as required by sub-section 2 of sub-section 1 of Amendment Act, 1982 has been withheld so far. It is, therefore, high time for the court to reexamine the judicial interpretation given by it to the definition of 'industry.' The Legislature should be allowed greater freedom to come forward with a more comprehensive legislation to meet the demands of employers and employees in the public and private sectors. The inhibition and the difficulties which are being exercised by the legislature and the executive in bringing into force the amended Industrial Law, more due to judicial interpretation of the definition of 'industry' in the Bangalore Water Supply and Sewerage Board case, need to be removed. The experience of the working of the provisions of the Act would serve as a guide for a better and more comprehensive law on the subject to be brought into force without inhibition.
The word 'industry' seems to have been redefined under the Amendment Act keeping in view the judicial interpretation of the word industry in the case of Bangalore water. Had there been no such expansive definition of industry given in the Bangalore Water case, it would have been open to the parliament to bring in either a more expansive or a more restrictive definition of industry by confining it or not confining it to industrial activities other than sovereign functions and public welfare activities of the State and its departments. Similarly, employment generated in the carrying on of liberal professions could be clearly included or excluded depending on social conditions and demands of social justice. Comprehensive change in law and/or enactment of new law had not been possible because of the interpretation given to the definition of industry in the Bangalore Water case. The judicial interpretation seems to have been one of the inhibiting factors in the enforcement of the amended definition of the Act for the last 23 years.
In the Bangalore Water case, not all the judges in interpreting the definition clause invoked the doctrine of noscitur-a-sociis. We are inclined to accept the view expressed by the six judges' Bench in the case of the Management of Safdarjung Hospital (supra) that keeping in view the other provisions of the Act and words used in the definition clause, although profit motive is irrelevant, in order to encompass the activity within the word industry, the activity must be 'analogous to trade or business in a commercial sense.' We also agree that the mere enumeration of 'public utility services' in section 2(n) read with the First Schedule should not be held decisive. Unless the public utility service answers the test of it being an 'industry' as defined in clause (j) of section 2, the enumeration of such public utility service in the First Schedule to the Act would not make it an 'industry.' The six judges also considered the inclusion of services such as hospitals and dispensaries as public utility services in the definition under section 2(n) of the Act and rightly observed thus:
'When Parliament added the sixth clause under which other services could be brought within the protection afforded by the Act to public utility services, it did not intend that the entire concept of industry in the Act could be ignored and anything brought in. Therefore, it said that only an industry could be declared to be a public utility service. But what could be so declared had to be an industry in the first place.'
The decision in the case of Management of Safdarjung Hospital (supra) was a unanimous decision of all the six judges, and we are inclined to agree with the following observations in the interpretation of the definition clause:
'But in the collocation of the terms and their definitions, these terms have a definite economic content of a particular type and on the authorities of this Court have been uniformly accepted as excluding professions and are only concerned with the production, distribution, and consumption of wealth and the production and availability of material services. Industry has thus been accepted to mean only trade and business, manufacture, or undertaking analogous to trade or business for the production of material goods or wealth and material services.'
The six judges unanimously upheld the observations in the Gymkhana Club case (supra):
'... before the work engaged in can be described as an industry, it must bear the definite character of 'trade' or 'business' or 'manufacture' or 'calling' or must be capable of being described as an undertaking resulting in material goods or material services.'
In construing the definition clause and determining its ambit, one has not to lose sight of the fact that in activities like hospitals and education, concepts like the right of the workers to go on 'strike' or the employer's right to 'close down' and 'lay off' are not contemplated because they are services in which the motto is 'service to the community.' If the patients or students are to be left to the mercy of the employer and employees exercising their rights at will, the very purpose of the service activity would be frustrated.
We are respectfully inclined to agree with the observation of Shri Justice P.B. Gajendragadkar [AIR 1964 SC 903 at pg. 906] in the case of Harinagar Cane Farm (supra):
'As we have repeatedly emphasized, in dealing with industrial matters, industrial adjudication should refrain from enunciating any general principles or adopting any doctrinaire considerations. It is desirable that industrial adjudication should deal with problems as and when they arise and confine its decisions to the points which strictly arise on the pleadings between the parties. .....'
We conclude agreeing with the conclusion of the honorable judges in the case of Hospital Mazdoor Sabha and Ors. (supra):
'Though section 2(j) used words of very wide denotation, a line would have to be drawn in a fair and just manner so as to exclude some calling service or undertakings. ...'
This Court must, therefore, reconsider where the line should be drawn and what limitations can and should be reasonably implied in interpreting the wide words used in section 2(j). That no doubt is rather a difficult problem to resolve, more so when both the legislature and executive are silent and have kept an important amended provision of law dormant on the statute book.
We do not consider it necessary to say anything more and leave it to the larger Bench to give such meaning and effect to the definition clause in the present context with the experience of all these years and keeping in view the amended definition of 'industry' kept dormant for long 23 years. Pressing demands of the competing sectors of employers and employees and the helplessness of the legislature and executive in bringing into force the Amendment Act compel us to make this reference.
Let the cases be now placed before the Honorable Chief Justice of India for constituting a suitable larger Bench for reconsideration of the judgment of this Court in the case of Bangalore Water (supra).
From India, Madras
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Dear All,
Regarding the Splitting up of Minimum Wages and EPF Contribution:
Mr. B. Murugavel, Manager HR at Hyundai Hysco India, sent this email to us on 31-10-2011, which we would like to share:
"All of you are aware that the EPF Appellate Tribunal is the right forum to decide on EPF contribution and any related grievances. The Appellate Tribunal has given a clear verdict that minimum wages can be split as allowances, and the authority has no power to question or equate the definition of basic wages as per the EPF and Minimum/Payment of Wages Act. Therefore, there is no need to worry about an interim stay and its review."
Attached is the news item with the case reference.
rajanlawfirm
From India, Madras
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Regarding the Splitting up of Minimum Wages and EPF Contribution:
Mr. B. Murugavel, Manager HR at Hyundai Hysco India, sent this email to us on 31-10-2011, which we would like to share:
"All of you are aware that the EPF Appellate Tribunal is the right forum to decide on EPF contribution and any related grievances. The Appellate Tribunal has given a clear verdict that minimum wages can be split as allowances, and the authority has no power to question or equate the definition of basic wages as per the EPF and Minimum/Payment of Wages Act. Therefore, there is no need to worry about an interim stay and its review."
Attached is the news item with the case reference.
rajanlawfirm
From India, Madras
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(Fact Checked)-The information provided in the user reply is accurate based on the EPF Appellate Tribunal's decision regarding the splitting of minimum wages for EPF contribution. No corrections needed. (1 Acknowledge point)
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For the purpose of EPF, it is debated whether we can split the minimum wage and DA or ADA or living allowance, and others. But from the Labor Authority's point of view, the minimum wage is the barest minimum and not possible to split. Splitting, I mean, other allowances such as HRA, CA, etc., but not the minimum wage and living allowance. If you get into the ingredients of the minimum wage and splitting, it will be opening Pandora's box. If the minimum wage is allowed, each company works out its own minimum wage, which puts the worker at a disadvantage in the case of PF, bonus, and other benefits.
Regards.
From India, Nellore
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Regards.
From India, Nellore
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(Fact Checked)-The user's reply contains accurate information regarding the inability to split the minimum wage according to the Labour Authority. This aligns with the principles of minimum wage regulations and benefits entitlement. Well done! (1 Acknowledge point)
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This is to inform that Mr. Prithviraj has received the salary for 15 days, amounting to Rs. 7,500, and absconded without receiving the payslip or writing his resignation letter. The company is not liable for any misuse of the company name by him in the future, as he has already misused his ex-company's name during his employment.
If you become aware that he is misusing the name, please inform Mr. Prabhu, Advocate High Court, at legaldesk@sparkinfotech.in.
From India, Bangalore
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If you become aware that he is misusing the name, please inform Mr. Prabhu, Advocate High Court, at legaldesk@sparkinfotech.in.
From India, Bangalore
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Dear All,
Section 9C was introduced in the Industrial Disputes (Amendment) Act, 2010 (No. 24 of 2010) of the Industrial Disputes Act. A Grievance Redressal Machinery has been introduced by the insertion of Section 9C. We are inquiring whether Section 9C comes into effect after the issue of a notification.
We find that the wordings used in Section 9C are self-operative, as seen below, and a further notification may become superfluous as the provision is clear:
Setting up of Grievance Redressal Machinery
9C. (1) Every industrial establishment employing twenty or more workmen shall have one or more Grievance Redressal Committees for the resolution of disputes arising out of individual grievances.
(2) The Grievance Redressal Committee shall consist of an equal number of members from the employer and the workmen.
(3) The chairperson of the Grievance Redressal Committee shall be selected from the employer and from among the workmen alternatively on a rotation basis every year.
(4) The total number of members of the Grievance Redressal Committee shall not exceed more than six:
Provided that there shall be, as far as practicable, one woman member if the Grievance Redressal Committee has two members, and in case the number of members is more than two, the number of women members may be increased proportionately.
(5) Notwithstanding anything contained in this section, the setting up of the Grievance Redressal Committee shall not affect the right of the workman to raise an industrial dispute on the same matter under the provisions of this Act.
(6) The Grievance Redressal Committee may complete its proceedings within thirty days of receiving a written application by or on behalf of the aggrieved party.
(7) The workman who is aggrieved by the decision of the Grievance Redressal Committee may prefer an appeal to the employer against the decision of the Grievance Redressal Committee, and the employer shall, within one month from the date of receipt of such appeal, dispose of the same and send a copy of his decision to the workman concerned.
Furthermore, Section 9C has already been notified.
Rajan Associates
From India, Bangalore
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Section 9C was introduced in the Industrial Disputes (Amendment) Act, 2010 (No. 24 of 2010) of the Industrial Disputes Act. A Grievance Redressal Machinery has been introduced by the insertion of Section 9C. We are inquiring whether Section 9C comes into effect after the issue of a notification.
We find that the wordings used in Section 9C are self-operative, as seen below, and a further notification may become superfluous as the provision is clear:
Setting up of Grievance Redressal Machinery
9C. (1) Every industrial establishment employing twenty or more workmen shall have one or more Grievance Redressal Committees for the resolution of disputes arising out of individual grievances.
(2) The Grievance Redressal Committee shall consist of an equal number of members from the employer and the workmen.
(3) The chairperson of the Grievance Redressal Committee shall be selected from the employer and from among the workmen alternatively on a rotation basis every year.
(4) The total number of members of the Grievance Redressal Committee shall not exceed more than six:
Provided that there shall be, as far as practicable, one woman member if the Grievance Redressal Committee has two members, and in case the number of members is more than two, the number of women members may be increased proportionately.
(5) Notwithstanding anything contained in this section, the setting up of the Grievance Redressal Committee shall not affect the right of the workman to raise an industrial dispute on the same matter under the provisions of this Act.
(6) The Grievance Redressal Committee may complete its proceedings within thirty days of receiving a written application by or on behalf of the aggrieved party.
(7) The workman who is aggrieved by the decision of the Grievance Redressal Committee may prefer an appeal to the employer against the decision of the Grievance Redressal Committee, and the employer shall, within one month from the date of receipt of such appeal, dispose of the same and send a copy of his decision to the workman concerned.
Furthermore, Section 9C has already been notified.
Rajan Associates
From India, Bangalore
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(Fact Checked)-The user's reply is accurate. The information provided aligns with the Industrial Disputes (Amendment) Act, 2010 and Section 9C regarding the Grievance Redressal Machinery. Well done! (1 Acknowledge point)
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Dear All
Sub: Changes in Section 1(6) of the Payment of Wages Act-
Recently, the Government of India issued a Notification S.O. No.2260(E) dated 20th September, 2012 by which Section 1(6) of the Payment of Wages Act has been amended. The monthly ceiling on the wages is now Rs.18,000/- per month.
What is the effect of the amendment?
By this change, the payment of Wages Act provisions does not apply to those drawing Rs.18,000/- per month and above. Those below the ceiling alone will have the benefit of the provisions of the Payment of Wages Act.
Similar to what is done now by the Central Govt when the ceiling was increased the Andhra High Court in the matter of The Singareni Collieries ... vs The Singareni Collieries Company decided on 7 th July, 2011, the HON'BLE SRI JUSTICE K.C.BHANU has held as follows:
“Therefore, when the Central Government issued a Gazette notification extending all the provisions of the Act to all classes of persons, it can be made applicable to all the persons working in the first respondent company irrespective of their wages. While substituting the present provision under Section 1(6) of the Act, the statement of objects and reasons of the Amendment Act 1947 of 2003 is very clear that, the then existing ceiling of Rs.1,000/- per month was last revised to Rs.1,600/0 per month in 1982 and since then a large number of persons have gone out of the purview of the Act due to successive rise in wage levels resulting from rise in the cost of living, and with a view to cover more employed persons, it is proposed to enhance the wage ceiling from Rs.1,600/- per month to Rs.6,500/- per month. So, the legislature thought it fit to regulate the payment of wages to certain classes of persons as indicated in this Act so as to benefit certain classes of employed persons.”
Further His Lordship Mr Justice K.Chandru of the Madras High Court in a recent judgment of 28.02.2011 in the matter of P.Palani vs The District Manager on 28 February, 2011 has observed that:
“Under Section 1(6) of the Payment of Wages Act, the Act has been made applicable to persons who are drawing wages not exceeding Rs.10000/- per month which limit can be increased periodically at the interval of every five years. The said notification has been issued on 8.8.2007 by the Central Government's notification in S.O.1380 (E).”
With Regards
V.Sounder Rajan
Advocate -Labour & HR & Consumer Law Consultant -Chennai
Legal Consultant for Indian Staffing & Recruiting Industry
By appreciation, we make excellence in others our own property.
Voltaire
From India, Bangalore
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Sub: Changes in Section 1(6) of the Payment of Wages Act-
Recently, the Government of India issued a Notification S.O. No.2260(E) dated 20th September, 2012 by which Section 1(6) of the Payment of Wages Act has been amended. The monthly ceiling on the wages is now Rs.18,000/- per month.
What is the effect of the amendment?
By this change, the payment of Wages Act provisions does not apply to those drawing Rs.18,000/- per month and above. Those below the ceiling alone will have the benefit of the provisions of the Payment of Wages Act.
Similar to what is done now by the Central Govt when the ceiling was increased the Andhra High Court in the matter of The Singareni Collieries ... vs The Singareni Collieries Company decided on 7 th July, 2011, the HON'BLE SRI JUSTICE K.C.BHANU has held as follows:
“Therefore, when the Central Government issued a Gazette notification extending all the provisions of the Act to all classes of persons, it can be made applicable to all the persons working in the first respondent company irrespective of their wages. While substituting the present provision under Section 1(6) of the Act, the statement of objects and reasons of the Amendment Act 1947 of 2003 is very clear that, the then existing ceiling of Rs.1,000/- per month was last revised to Rs.1,600/0 per month in 1982 and since then a large number of persons have gone out of the purview of the Act due to successive rise in wage levels resulting from rise in the cost of living, and with a view to cover more employed persons, it is proposed to enhance the wage ceiling from Rs.1,600/- per month to Rs.6,500/- per month. So, the legislature thought it fit to regulate the payment of wages to certain classes of persons as indicated in this Act so as to benefit certain classes of employed persons.”
Further His Lordship Mr Justice K.Chandru of the Madras High Court in a recent judgment of 28.02.2011 in the matter of P.Palani vs The District Manager on 28 February, 2011 has observed that:
“Under Section 1(6) of the Payment of Wages Act, the Act has been made applicable to persons who are drawing wages not exceeding Rs.10000/- per month which limit can be increased periodically at the interval of every five years. The said notification has been issued on 8.8.2007 by the Central Government's notification in S.O.1380 (E).”
With Regards
V.Sounder Rajan
Advocate -Labour & HR & Consumer Law Consultant -Chennai
Legal Consultant for Indian Staffing & Recruiting Industry
By appreciation, we make excellence in others our own property.
Voltaire
From India, Bangalore
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(Fact Checked)-The user reply contains accurate information regarding the changes in Section 1(6) of the Payment of Wages Act. The references to the Andhra High Court and Madras High Court judgments support the explanation provided. (1 Acknowledge point)
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CiteHR.AI
(Fact Checked)-The user's reply contains accurate information regarding the changes in Section 1(6) of the Payment of Wages Act and the effects of the amendment. The references to the judgments by the Andhra High Court and Madras High Court are also relevant. (1 Acknowledge point)
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Subject: Need for Indian Labour Contract Law
Dear All
The topic ‘Does India require faster Labour Law Reforms ” is a much debated topic at every Global and Indian Contract Staffing Forum.
Recently in the October 2012 in the Annual conference of the Indian staffing Federation in their Indian Staffing Industry Research Paper 2012 the items where specific reforms are required has been outlined .In fact the need for adopting the The Private Employment Agency Convention of International Labour Organisation (Convention No. 181 of 1997) was raised in the same document. By adopting the The Private Employment Agency Convention of International Labour Organisation (Convention No. 181 of 1997) it will be a step forward in giving Statutory recognition to the Contract Staffing Industry .
Adapting and adopting Indian Laws to International Conventions has been an ongoing process .It is a simple legislative process .But adopting The Private Employment Agency Convention of International Labour Organisation (Convention No. 181 of 1997) will have serious resistance from the Trade Unions.
Everyone echoes that India should follow the China example in Economic reforms and the path of globalization .Then without waiting for the adoption of The Private Employment Agency Convention of International Labour Organisation (Convention No. 181 of 1997) we can just replicate the Labor Contract Law (LCL) which was enacted by the Chinese Parliament during 2008.The Chinese Political system modeled on the socialist pattern has enacted a Labor Contract Law (LCL) and adopting a similar one in India may not be difficult for the Government to convince the Trade Unions . The Trade Unions will support the move as it contains many pro-labour provisions and provides better bargaining strength for the Unions .
The further reason for the delay for India to implement the reforms in the Labour Law sphere is due to the fact that changes in Laws are to be brought about by the Centre for the Central acts and the respective State Governments for the State laws.This is a time consuming process. Before making any change the stake holders have to be consulted. It is a long drawn process .It would be better to start the process by enacting a similar law as done in China .For enacting this law the Contract Labour (Regulation & Abolition ) Act has to be either amended suitably or a New law enacted on the Chinese model .
Who can be the movers for enacting the Indian Labor Contract Law (ILCL).Definitely it will be the Business Associations and each of the Indian Staffing companies in India need to move the Government to enact a special law. The Association and Federations of Employers can take up this cause as they are the ultimate Principal Employers who will employ the Contract Labour.
To narrate the history when the Chinese Law was enacted the Chinese legislature during March 2006 launched the public consultation process for its draft Labor Contract Law. By April the legislators received 191,849 responses, a majority of them from workers. Meanwhile, foreign investors and commercial groups also studied the draft law and submitted their comments. The process included recommendations from the following bodies:
European Union Chamber of Commerce in China (EUCCC)
American Chamber of Commerce in Shanghai (ACCS)
U.S China Business Council
The first two largest foreign investors’ organizations in China and both of them submitted recommendations and opinion papers on the Draft Labour Contract Law to the Legal Affairs Committee of the Standing Committee of the National People's Congress.ACCS is said to represent over 1,300 corporations, including 150 Fortune 500 companies and the big names include Dell, Ford, General Electric, Microsoft and Nike. EUCCC in China represents more than 860 members. The U.S.-China Business Council represents 250 U.S. companies doing business across all sectors in China.
In India the Trade Unions have more stakes in Labour Law legislative process more than the Industry or its Association and Forum. Therefore the whole legislative process hinges on Trade Union acceptance /consent. The Association Federation would need invite the Top Trade Union Leaders of the Country for a dialogue on a Draft Labour Contract Law to be drafted by the Federation .This needs to be done on an emergent basis
Until the reforms are implemented Staffing business in India have to operate within the existing parameters of labour laws. The Business and legal team of every Staffing Company would need to tune operations to the existing provisions and help the business team to operate in an optimum manner within the prevalent labour law frame work without incurring additional cost till the reforms are implemented. This is where the success of any Staffing entity is.
With Regards
V.Sounder Rajan
Advocate -Labour & HR & Consumer Law Consultant -Chennai
Legal Consultant for Indian Staffing & Recruiting Industry
From India, Bangalore
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Dear All
The topic ‘Does India require faster Labour Law Reforms ” is a much debated topic at every Global and Indian Contract Staffing Forum.
Recently in the October 2012 in the Annual conference of the Indian staffing Federation in their Indian Staffing Industry Research Paper 2012 the items where specific reforms are required has been outlined .In fact the need for adopting the The Private Employment Agency Convention of International Labour Organisation (Convention No. 181 of 1997) was raised in the same document. By adopting the The Private Employment Agency Convention of International Labour Organisation (Convention No. 181 of 1997) it will be a step forward in giving Statutory recognition to the Contract Staffing Industry .
Adapting and adopting Indian Laws to International Conventions has been an ongoing process .It is a simple legislative process .But adopting The Private Employment Agency Convention of International Labour Organisation (Convention No. 181 of 1997) will have serious resistance from the Trade Unions.
Everyone echoes that India should follow the China example in Economic reforms and the path of globalization .Then without waiting for the adoption of The Private Employment Agency Convention of International Labour Organisation (Convention No. 181 of 1997) we can just replicate the Labor Contract Law (LCL) which was enacted by the Chinese Parliament during 2008.The Chinese Political system modeled on the socialist pattern has enacted a Labor Contract Law (LCL) and adopting a similar one in India may not be difficult for the Government to convince the Trade Unions . The Trade Unions will support the move as it contains many pro-labour provisions and provides better bargaining strength for the Unions .
The further reason for the delay for India to implement the reforms in the Labour Law sphere is due to the fact that changes in Laws are to be brought about by the Centre for the Central acts and the respective State Governments for the State laws.This is a time consuming process. Before making any change the stake holders have to be consulted. It is a long drawn process .It would be better to start the process by enacting a similar law as done in China .For enacting this law the Contract Labour (Regulation & Abolition ) Act has to be either amended suitably or a New law enacted on the Chinese model .
Who can be the movers for enacting the Indian Labor Contract Law (ILCL).Definitely it will be the Business Associations and each of the Indian Staffing companies in India need to move the Government to enact a special law. The Association and Federations of Employers can take up this cause as they are the ultimate Principal Employers who will employ the Contract Labour.
To narrate the history when the Chinese Law was enacted the Chinese legislature during March 2006 launched the public consultation process for its draft Labor Contract Law. By April the legislators received 191,849 responses, a majority of them from workers. Meanwhile, foreign investors and commercial groups also studied the draft law and submitted their comments. The process included recommendations from the following bodies:
European Union Chamber of Commerce in China (EUCCC)
American Chamber of Commerce in Shanghai (ACCS)
U.S China Business Council
The first two largest foreign investors’ organizations in China and both of them submitted recommendations and opinion papers on the Draft Labour Contract Law to the Legal Affairs Committee of the Standing Committee of the National People's Congress.ACCS is said to represent over 1,300 corporations, including 150 Fortune 500 companies and the big names include Dell, Ford, General Electric, Microsoft and Nike. EUCCC in China represents more than 860 members. The U.S.-China Business Council represents 250 U.S. companies doing business across all sectors in China.
In India the Trade Unions have more stakes in Labour Law legislative process more than the Industry or its Association and Forum. Therefore the whole legislative process hinges on Trade Union acceptance /consent. The Association Federation would need invite the Top Trade Union Leaders of the Country for a dialogue on a Draft Labour Contract Law to be drafted by the Federation .This needs to be done on an emergent basis
Until the reforms are implemented Staffing business in India have to operate within the existing parameters of labour laws. The Business and legal team of every Staffing Company would need to tune operations to the existing provisions and help the business team to operate in an optimum manner within the prevalent labour law frame work without incurring additional cost till the reforms are implemented. This is where the success of any Staffing entity is.
With Regards
V.Sounder Rajan
Advocate -Labour & HR & Consumer Law Consultant -Chennai
Legal Consultant for Indian Staffing & Recruiting Industry
From India, Bangalore
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(Fact Checked)-[response] The information provided regarding the need for Indian Labor Contract Law and referencing the Chinese Labor Contract Law is factually correct and well-analyzed within the context of labor law reforms. The user has provided a detailed and insightful perspective on potential legislative changes in India's labor laws. (1 Acknowledge point)
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Dear All,
Recently, there was a furore at the Employees' Provident Fund Organisation (Ministry of Labour & Employment, Govt. of India) Head Office dated 30th November 2012 regarding internal instructions given for assessment under Section 7A of the EPF Act.
The aspect of the Circular that has a significant impact on the Payrolling in the Contract Staffing Industry is as follows:
SPLITTING OF WAGES - Basic wages, by its own definition, encompass all payments except the specified exclusions. All such allowances that are ordinarily, necessarily, and uniformly paid to employees are to be treated as part of the basic wages. The confusion in the definition of wages (and hence the issue of splitting of wages) primarily arises from the expression "commission or any other similar allowance payable to the employee" in Section 2(b)(ii) of the Act. "Commission" and "any other similar allowance" are often read as two separate expressions, leading "any other allowance" to be interpreted as an omnibus exclusion, thus promoting the practice of splitting wages to avoid PF liabilities.
The expression "commission or any other similar allowance payable to the employee" is one continuous term, meaning commission or any other "commission"-like allowance regardless of the nomenclature used. Therefore, "basic wages" are subject to exclusions expressly mentioned in the above definition and no others.
These instructions were quite drastic, giving the Department the freedom to calculate contributions based on the gross salary instead of basic plus DA, including all or any allowance regardless of its name.
Fortunately, on 14-12-2012, a news report in The Hindu stated that the Hon'ble Minister for Labour has assured that the Circular is being put on hold. This is good news for the Principal Employers and Contract Staffing players. As of now, there is nothing to worry about.
Rajan Associates
From India, Bangalore
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Recently, there was a furore at the Employees' Provident Fund Organisation (Ministry of Labour & Employment, Govt. of India) Head Office dated 30th November 2012 regarding internal instructions given for assessment under Section 7A of the EPF Act.
The aspect of the Circular that has a significant impact on the Payrolling in the Contract Staffing Industry is as follows:
SPLITTING OF WAGES - Basic wages, by its own definition, encompass all payments except the specified exclusions. All such allowances that are ordinarily, necessarily, and uniformly paid to employees are to be treated as part of the basic wages. The confusion in the definition of wages (and hence the issue of splitting of wages) primarily arises from the expression "commission or any other similar allowance payable to the employee" in Section 2(b)(ii) of the Act. "Commission" and "any other similar allowance" are often read as two separate expressions, leading "any other allowance" to be interpreted as an omnibus exclusion, thus promoting the practice of splitting wages to avoid PF liabilities.
The expression "commission or any other similar allowance payable to the employee" is one continuous term, meaning commission or any other "commission"-like allowance regardless of the nomenclature used. Therefore, "basic wages" are subject to exclusions expressly mentioned in the above definition and no others.
These instructions were quite drastic, giving the Department the freedom to calculate contributions based on the gross salary instead of basic plus DA, including all or any allowance regardless of its name.
Fortunately, on 14-12-2012, a news report in The Hindu stated that the Hon'ble Minister for Labour has assured that the Circular is being put on hold. This is good news for the Principal Employers and Contract Staffing players. As of now, there is nothing to worry about.
Rajan Associates
From India, Bangalore
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(Fact Checked)-The user reply correctly addresses the issue of splitting of wages under the EPF Act, providing insights into the impact on payrolling in the Contract Staffing Industry. The mention of the Circular being kept in abeyance by the Minister for Labour is accurate based on the latest information. (1 Acknowledge point)
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(Fact Checked)-The user's reply is factually correct based on the latest laws and regulations regarding the splitting of wages under the Employees' Provident Fund Act. The concern raised and the subsequent assurance from the Honorable Minister for Labour are accurately depicted. (1 Acknowledge point)
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Any activity of the government relatable to the sovereign functions of the government, including all the activities carried out by the departments of the Central Government dealing with defence research, atomic energy, and space. I request the respectable VS Rajan Associates to check this particular paragraph as it is not gazetted and hence not in operation. In response to one of the RTI queries, the Labour department clarified that it is not gazetted. Furthermore, in the first paragraph itself, it is stated that it will come into operation from the date of gazettification. Please check and confirm.
Regards.
From India, Nellore
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Regards.
From India, Nellore
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Dear HR Friends It was informed earlier that the EPF Circular of 30 th November 2012 has been kept in abeyance.The Abeyance Circular is attached for reference. rajanassociates
From India, Bangalore
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From India, Bangalore
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Dear Seniors,
I am working in the private sector with an external union. Over the last few months, there have been repeated demands for overtime to be started for workers, raised officially by the union leaders. We have an optimum workforce and do not require overtime from the workers.
Please guide me on how to handle this issue. Can we ask workers to stay for overtime every day, at least 3-4 hours?
Thank you.
From India, Pune
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I am working in the private sector with an external union. Over the last few months, there have been repeated demands for overtime to be started for workers, raised officially by the union leaders. We have an optimum workforce and do not require overtime from the workers.
Please guide me on how to handle this issue. Can we ask workers to stay for overtime every day, at least 3-4 hours?
Thank you.
From India, Pune
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Extracting the News report in CLR Posted in Labour Law :News on May 28, 2013 which is also reported in the Times of India of even date:-
The Employees Provident Fund Organization(EPFO) readying to re-notify a new definition of “compensation” that will include all allowances. Currently, employers contribute only 12% of the basic salary and dearness allowance, which in fact is not paid by most companies currently, towards their share of “matching” provident fund and the Employees Pension Scheme contribution. Hence, for several thousands of employees, the basic salary actually remains constant, while increments are passed by way of enhanced or new allowances. In most cases, the tax liability for the employee goes up due to the salary hike — and companies earn tax credits on salary-related expenses over the same — however the statutory provident fund contribution remains unchanged in most cases.
As a result of the above stated logic, EPFO had notified similar changes last year. They
From India, Bangalore
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The Employees Provident Fund Organization(EPFO) readying to re-notify a new definition of “compensation” that will include all allowances. Currently, employers contribute only 12% of the basic salary and dearness allowance, which in fact is not paid by most companies currently, towards their share of “matching” provident fund and the Employees Pension Scheme contribution. Hence, for several thousands of employees, the basic salary actually remains constant, while increments are passed by way of enhanced or new allowances. In most cases, the tax liability for the employee goes up due to the salary hike — and companies earn tax credits on salary-related expenses over the same — however the statutory provident fund contribution remains unchanged in most cases.
As a result of the above stated logic, EPFO had notified similar changes last year. They
From India, Bangalore
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(Fact Checked)-The user's reply contains accurate information regarding the Employees Provident Fund Organization (EPFO) redefining compensation to include all allowances, impacting tax liabilities and provident fund contributions. Well done! (1 Acknowledge point)
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(Fact Checked)-[The user reply contains accurate information regarding the EPFO's plan to redefine "compensation" to include all allowances, impacting provident fund contributions and tax liabilities for employees.] (1 Acknowledge point)
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Dear Friend,
Kindly contact us for any disciplinary matters, compliance, industrial disputes, or HR process-related queries. We assure you of the best solution for the same.
Regards,
For Red Star Group
9910503928
From India, New Delhi
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Kindly contact us for any disciplinary matters, compliance, industrial disputes, or HR process-related queries. We assure you of the best solution for the same.
Regards,
For Red Star Group
9910503928
From India, New Delhi
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Dear Friends
We are starting this multi - part over view of Contract Staffing law in the light of judicial precedents and the Contract Labour (Abolition and Regulation Act 1970) sure it will be informative for the Indian Contract Staffing Industry players .
Many Staffing Industry players are not aware of the earliest Case Law in Outsourcing as decided by the Indian Supreme Court.
Earliest Apex Court decision on Out-sourcing-
Way back in 1968 the case law was laid down by the Hon’ble Supreme Court in the matter of GHATGE & PATIL CONCERN\'S EMPLOYEES\' UNION Vs. GHATGE & PATIL (TRANSPORTS) PRIVATE LTD. & ANR.It is a very interesting case .
The facts are like this:-
GHATGE & PATIL (TRANSPORTS) PRIVATE LTD the Company carried on the business of transport and removal of goods by road. It owned a fleet of trucks and employed drivers and cleaners to run them. In 1963, finding difficulty in observing the provisions of the Motor Transport Workers Act 1961 GHATGE & PATIL (TRANSPORTS) introduced a scheme whereby the trucks, instead of being run by the them were hired out to contractors at a fixed rate per mile. It is the first reported case of organized Out-sourcing in India.To aid the process of out-sourcing employees of the company who were engaged in running the trucks resigned their jobs and most of them who had been erst-while drivers became contractors under the scheme. This Out-sourcing move was resisted by the Union GHATGE & PATIL CONCERN\'S EMPLOYEES\' UNION.The Union raised a dispute asking for the reinstatement of the ex-employees who had been given work on contract basis. The matter was agitated in the Tribunal .Th e Tribunal held that the contract system could not be said to be an unfair labour practice, for the ex-employees were never coerced or forced to resign their jobs, and they got more benefits from the contract system than from their original contract of employment.
In appeal to the Apex Court the GHATGE & PATIL CONCERN\'S EMPLOYEES\' UNION contended that the ex-employees of the company continued to be workmen notwithstanding that they were posed as independent contractors and the beneficent legislation conceived in the interests of transport workers was being set at naught by the Management and that the setting up of the contract system amounted to unfair labour practice.
In our next part we will deal with the manner in which the Hon\'ble Bench of the Apex Court steered the matter for a landmark resolution when the very word \"out-sourcing\" was unknown.
From India, Pune
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We are starting this multi - part over view of Contract Staffing law in the light of judicial precedents and the Contract Labour (Abolition and Regulation Act 1970) sure it will be informative for the Indian Contract Staffing Industry players .
Many Staffing Industry players are not aware of the earliest Case Law in Outsourcing as decided by the Indian Supreme Court.
Earliest Apex Court decision on Out-sourcing-
Way back in 1968 the case law was laid down by the Hon’ble Supreme Court in the matter of GHATGE & PATIL CONCERN\'S EMPLOYEES\' UNION Vs. GHATGE & PATIL (TRANSPORTS) PRIVATE LTD. & ANR.It is a very interesting case .
The facts are like this:-
GHATGE & PATIL (TRANSPORTS) PRIVATE LTD the Company carried on the business of transport and removal of goods by road. It owned a fleet of trucks and employed drivers and cleaners to run them. In 1963, finding difficulty in observing the provisions of the Motor Transport Workers Act 1961 GHATGE & PATIL (TRANSPORTS) introduced a scheme whereby the trucks, instead of being run by the them were hired out to contractors at a fixed rate per mile. It is the first reported case of organized Out-sourcing in India.To aid the process of out-sourcing employees of the company who were engaged in running the trucks resigned their jobs and most of them who had been erst-while drivers became contractors under the scheme. This Out-sourcing move was resisted by the Union GHATGE & PATIL CONCERN\'S EMPLOYEES\' UNION.The Union raised a dispute asking for the reinstatement of the ex-employees who had been given work on contract basis. The matter was agitated in the Tribunal .Th e Tribunal held that the contract system could not be said to be an unfair labour practice, for the ex-employees were never coerced or forced to resign their jobs, and they got more benefits from the contract system than from their original contract of employment.
In appeal to the Apex Court the GHATGE & PATIL CONCERN\'S EMPLOYEES\' UNION contended that the ex-employees of the company continued to be workmen notwithstanding that they were posed as independent contractors and the beneficent legislation conceived in the interests of transport workers was being set at naught by the Management and that the setting up of the contract system amounted to unfair labour practice.
In our next part we will deal with the manner in which the Hon\'ble Bench of the Apex Court steered the matter for a landmark resolution when the very word \"out-sourcing\" was unknown.
From India, Pune
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(Fact Checked)-The user's reply contains accurate information about the early Supreme Court decision related to outsourcing in India. The case of GHATGE & PATIL CONCERN'S EMPLOYEES' UNION Vs. GHATGE & PATIL (TRANSPORTS) PRIVATE LTD is correctly summarized. (1 Acknowledge point)
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Dear V.S. Rajan
I have no words to express my sincere appreciation on your contribution !!!
Its a gem !!!
"Way back in 1968 the case law was laid down by the Hon’ble Supreme Court in the matter of GHATGE & PATIL CONCERN\'S EMPLOYEES\' UNION Vs. GHATGE & PATIL (TRANSPORTS) PRIVATE LTD. & ANR.It is a very interesting case ."
attribution https://www.citehr.com/285737-legal-...#ixzz2k46LotSD
I am waiting for the next installment of your post.
The Hon'ble Supreme Court has been so futuristic and amazing in its judgement on an issue which was unknown at that time but would become so ubiquitous fifty years later !!!
Warm regards.
From India, Delhi
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I have no words to express my sincere appreciation on your contribution !!!
Its a gem !!!
"Way back in 1968 the case law was laid down by the Hon’ble Supreme Court in the matter of GHATGE & PATIL CONCERN\'S EMPLOYEES\' UNION Vs. GHATGE & PATIL (TRANSPORTS) PRIVATE LTD. & ANR.It is a very interesting case ."
attribution https://www.citehr.com/285737-legal-...#ixzz2k46LotSD
I am waiting for the next installment of your post.
The Hon'ble Supreme Court has been so futuristic and amazing in its judgement on an issue which was unknown at that time but would become so ubiquitous fifty years later !!!
Warm regards.
From India, Delhi
Acknowledge(0)Amend(0)Sub:EPFO Circular dated 8th October 2013
Recent Circular No C.III/110001/4/3 (71)Misc./2013/DL/12802 dated 8th October 2013 issued by EPFO to all Regional P.F. Commissioners is creating ripples amongst the PF remitters and most particularly the Staffing Industry.
On going through the circular we find that the circular is addressed to various Government Departments, the Undertakings and Autonomous bodies (Principal Employers-PE )for the activities like watch-ward, Housekeeping, data entry, etc. The intent of the circular appears to be aimed at Principal employers who pay the contribution on the whole of the salary or Rs.6,500/- whichever is lower and make that component part of the payment to the Contractor whereas the Contractor splits up the wage and deposit the contribution on a less basic salary. Therefore, the EPFO is asking PE’s to check up whether the contractors are depositing the contributions collected from the PE. Special attention may be made in para 5 & 7 of the Circular which is extracted below:
\" 5. Instances have come to notice that the placement agencies and security agencies, which provide guards and other personnel to Government Departments, Undertakings and Autonomous Bodies often take employer’s contribution on full wages from these employers and then bifurcate the wages of the personnel provided by them in to basic wages and various other allowances which do not form part of basic wages to evade the provident fund. This diversion of residual employer’s contribution tantamount to pilfering of provident fund money. Thus, Governments Departments, Undertakings and Autonomous Bodies, which settle the periodic bills of agencies and contractors, unwillingly become a party to this pilferage.
7. In this background, all the Regional Provident Fund Commissioners In-Charge of Regional/Sub Regional Offices are advised to start a dialogue with the Government Departments, Undertakings and Autonomous Bodies functioning under your jurisdiction about their duties and responsibilities while engaging personnel for watch-ward, housekeeping, data entry etc. through various agencies and contractors to check such pilferage of provident fund monies. The Officer-in-charge are also advised to collect the details of personnel engaged through various agencies and contractors from these Government Departments, Undertakings and Autonomous Bodies and check with the records available in their own offices about such agencies and contractors. Wherever pilfering of provident fund money is noticed, immediate action shall be initiated against the erring agencies and contractors to check such unhealthy practices harming the interest of the workers.”
In the light of the above the move of the Department is to ensure that there is no pilferage of PF contribution and to initiate action against the erring contractors more particularly serving various Government Departments, the Undertakings and Autonomous bodies who receive more from the PE and remit less or who do not remit at all .Those who are compliant need not fret on the Circular.
If you needs a copy of the Circular on request we can forward a copy.
With Regards
V.Sounder Rajan
Advocate -Labour & HR & Consumer Law Consultant -Chennai
Legal Consultant for Indian Staffing & Recruiting Industry
From India, Pune
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(Fact Checked)-The user's reply contains accurate information regarding the EPFO Circular dated 8th October 2013 and its implications for the Staffing Industry. The circular addresses concerns about PF contribution pilferage by contractors working with Government Departments and Autonomous Bodies. The user's explanation aligns with the content of the circular. (1 Acknowledge point)
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Dear All
In this part, we are continuing with the first reported case of outsourcing in India in the matter of GHATGE & PATIL CONCERN\'S EMPLOYEES\' UNION Vs. GHATGE & PATIL (TRANSPORTS) PRIVATE LTD. & ANR and it has been decided by the Hon’ble Supreme Court of India way back in 1968.
The most striking portion of the Judgment which is an eye opener and a biblical pronouncement .If an abridged version is provided the reader will not get the impetus of the actual words spoken by the Hon’ble Apex Court. Therefore, we extract the following relevant portion for your own comprehension:-
“ The apprehension of the Company is- that some of the regulatory provisions of the Act are incapable of being observed properly in the case of drivers and cleaners going on long journeys because there is no means of enforcing them. For example, the provisions about hours of work, hours of rest etc. are not easy to enforce enroute or at far off places. Therefore, rather than run the risk of losing the permit for want of compliance with the Motor Transport Workers Act, the Company has decided not to run transport trucks itself but to let them be run by independent hirers. There does not appear to be any bar in law to such action. Section 59 of the Motor Vehicles Act contemplates the transfer of permits with the permission of the Transport Authorities and this enables any person to whom a vehicle covered by the permit is transferred to get the right to use the vehicle in the manner authorized by the permit. Here the vehicle is not transferred but is only let out on hire and hence there is prima facie no need for permission. The Union made no attempt before us to establish that the inauguration of the contract system offended the Motor Vehicles Act or was prohibited under it. No objection to the system by the Authorities under the Motor Vehicles Act was proved in the case. The operators also seem to be happy because no operator appeared to complain and the only dissatisfaction has been registered by the Union, which apparently lost the allegiance of some of its former members and even office bearers. In view of the findings of the Tribunal, which we see no reason to disapprove, it must be held that the drivers voluntarily resigned and entered into the agreements since they apparently considered them to be more favourable than the terms of their former employment. In this view of the matter it is difficult to hold that the Tribunal was wrong in its conclusion that there was no ex- ploitation of the drivers. It is also equally true that there is no bar in law to the introduction of the system. The Union, however, contends that on the analogy of some cases of this Court in which contract labour was put down as unfair labour practice because it involved exploitation of labour, we should declare this system also to be harmful to the interests of labour. Contract labour was declared in this Court to be an unfair labour practice because the intention was to introduce a middle man to avoid observance of laws and to deny to labour the advantages it had acquired by bargaining or as a result of awards. Such is hardly the case here. The two systems were there for the drivers to choose. It is reasonable to think that the drivers must have chosen a system which was considered by them to be more beneficial to themselves. There was no compulsion for the drivers to resign their jobs and they did so voluntarily obviously thinking that the new system was more profitable to them. We cannot lose sight of the fact that some of the office-bearers of the Union were among the first to resign. Many of the drivers resigned the jobs and entered into agreements even after the dispute was taken up by the Union. The present case is, therefore, not analogous to the case of contract labour where employment of labour through a contractor or middleman put the labour at a disadvantage in collective bargaining and thus robbed labour of an important weapon in its armoury.
The matter of dispute no doubt referred in the second part to ex-drivers but it referred generally to the new system in the first. The Tribunal was wrong in thinking that the first part also referred to the ex-drivers (now operators). On the whole, however, it is clear that the Company has not done anything illegal. A person must be considered free to so arrange his business that he avoids a regulatory law and its penal consequences which he has, without the arrangement, no proper means of obeying. This, of course, he can do only so long as he does not break that or any other law. The Company has declared before us that it is quite prepared, if it was not already doing so, to apply and observe the provisions of the Motor Transport Workers Act in respect of its employees proper where such provisions can be made applicable. In view of this declaration we see no reason to interfere, because Parliament has not chosen to say that transport trucks will be run only through paid employees and not independent operators. The appeal fails but in the circumstances of the case we make no order as to costs.
In our next part in a nut-shell we will deal with questions that arose for consideration in the above case and the decision rendered .
With Regards
V.Sounder Rajan
Advocate -Labour & HR & Consumer Law Consultant -Chennai
Legal Consultant for Indian Staffing & Recruiting Industry
From India, Pune
Acknowledge(0)Amend(0)
In this part, we are continuing with the first reported case of outsourcing in India in the matter of GHATGE & PATIL CONCERN\'S EMPLOYEES\' UNION Vs. GHATGE & PATIL (TRANSPORTS) PRIVATE LTD. & ANR and it has been decided by the Hon’ble Supreme Court of India way back in 1968.
The most striking portion of the Judgment which is an eye opener and a biblical pronouncement .If an abridged version is provided the reader will not get the impetus of the actual words spoken by the Hon’ble Apex Court. Therefore, we extract the following relevant portion for your own comprehension:-
“ The apprehension of the Company is- that some of the regulatory provisions of the Act are incapable of being observed properly in the case of drivers and cleaners going on long journeys because there is no means of enforcing them. For example, the provisions about hours of work, hours of rest etc. are not easy to enforce enroute or at far off places. Therefore, rather than run the risk of losing the permit for want of compliance with the Motor Transport Workers Act, the Company has decided not to run transport trucks itself but to let them be run by independent hirers. There does not appear to be any bar in law to such action. Section 59 of the Motor Vehicles Act contemplates the transfer of permits with the permission of the Transport Authorities and this enables any person to whom a vehicle covered by the permit is transferred to get the right to use the vehicle in the manner authorized by the permit. Here the vehicle is not transferred but is only let out on hire and hence there is prima facie no need for permission. The Union made no attempt before us to establish that the inauguration of the contract system offended the Motor Vehicles Act or was prohibited under it. No objection to the system by the Authorities under the Motor Vehicles Act was proved in the case. The operators also seem to be happy because no operator appeared to complain and the only dissatisfaction has been registered by the Union, which apparently lost the allegiance of some of its former members and even office bearers. In view of the findings of the Tribunal, which we see no reason to disapprove, it must be held that the drivers voluntarily resigned and entered into the agreements since they apparently considered them to be more favourable than the terms of their former employment. In this view of the matter it is difficult to hold that the Tribunal was wrong in its conclusion that there was no ex- ploitation of the drivers. It is also equally true that there is no bar in law to the introduction of the system. The Union, however, contends that on the analogy of some cases of this Court in which contract labour was put down as unfair labour practice because it involved exploitation of labour, we should declare this system also to be harmful to the interests of labour. Contract labour was declared in this Court to be an unfair labour practice because the intention was to introduce a middle man to avoid observance of laws and to deny to labour the advantages it had acquired by bargaining or as a result of awards. Such is hardly the case here. The two systems were there for the drivers to choose. It is reasonable to think that the drivers must have chosen a system which was considered by them to be more beneficial to themselves. There was no compulsion for the drivers to resign their jobs and they did so voluntarily obviously thinking that the new system was more profitable to them. We cannot lose sight of the fact that some of the office-bearers of the Union were among the first to resign. Many of the drivers resigned the jobs and entered into agreements even after the dispute was taken up by the Union. The present case is, therefore, not analogous to the case of contract labour where employment of labour through a contractor or middleman put the labour at a disadvantage in collective bargaining and thus robbed labour of an important weapon in its armoury.
The matter of dispute no doubt referred in the second part to ex-drivers but it referred generally to the new system in the first. The Tribunal was wrong in thinking that the first part also referred to the ex-drivers (now operators). On the whole, however, it is clear that the Company has not done anything illegal. A person must be considered free to so arrange his business that he avoids a regulatory law and its penal consequences which he has, without the arrangement, no proper means of obeying. This, of course, he can do only so long as he does not break that or any other law. The Company has declared before us that it is quite prepared, if it was not already doing so, to apply and observe the provisions of the Motor Transport Workers Act in respect of its employees proper where such provisions can be made applicable. In view of this declaration we see no reason to interfere, because Parliament has not chosen to say that transport trucks will be run only through paid employees and not independent operators. The appeal fails but in the circumstances of the case we make no order as to costs.
In our next part in a nut-shell we will deal with questions that arose for consideration in the above case and the decision rendered .
With Regards
V.Sounder Rajan
Advocate -Labour & HR & Consumer Law Consultant -Chennai
Legal Consultant for Indian Staffing & Recruiting Industry
From India, Pune
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Dear All
In our earlier part we had captured the verbatim operative portion of the land mark Judgment of the Bench of Hon’ble Justices Mr HIDAYATULLAH, Mr M. BHARGAVA, Mr VASHISHTHA in the matter of GHATGE & PATIL CONCERN\'S EMPLOYEES\' UNION Vs. GHATGE & PATIL (TRANSPORTS) PRIVATE LTD. & ANR which is the first recorded case on outsourcing .In continuation of our earlier part we capture the following questions which arose for consideration in the case by the Hon’ble Court and the gist of the decision :
1) Whether an Independent contractor can be considered to be the workers of the Undertaking?
For this the Hon’ble Apex Court held that on account of the drivers resigning their jobs it cannot be concluded that they are employed in the Motor Transport Undertaking. If one sees the definition of word ‘employed’ term worker is used in the padagrim to keep the person in an employer’s service. Substantially, the Apex Court concluded that the outsourced individuals are independent as they hired the vehicle of the company for their own operation for which the company pays them on the basis of fixed hire per mile.
2) Whether there was any prohibition in introduction of the Contract system ?
For this the Apex Court came to the conclusion that there was no bar in law to the introduction of the contract system. A person must be considered free to so arrange his business that he avoids a regulatory law and its penal consequences which he has without the arrangement, no proper means of obeying. This, of course, he can do only so long as he does not break that or any other law.
3) The last and important question is as to whether the new system is an Unfair Labour Practice.
The Apex Court categorically held there was no exploitation of ex-employees and should resign had done so voluntarily and they get substantial benefit under the new system.
In our opinion the laissez –faire approach of the Hon’ble Supreme Court as early as 1968 is sonorous in the following words:
…. “On the whole, however, it is clear that the Company has not done anything illegal. A person must be considered free to so arrange his business that he avoids a regulatory law and its penal consequences which he has, without the arrangement, no proper means of obeying. This, of course, he can do only so long as he does not break that or any other law.”……..
In our next part we will deal with the post 1968 scenario and the evolution of the first ever Contract Labour Law in India .
From India, Pune
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In our earlier part we had captured the verbatim operative portion of the land mark Judgment of the Bench of Hon’ble Justices Mr HIDAYATULLAH, Mr M. BHARGAVA, Mr VASHISHTHA in the matter of GHATGE & PATIL CONCERN\'S EMPLOYEES\' UNION Vs. GHATGE & PATIL (TRANSPORTS) PRIVATE LTD. & ANR which is the first recorded case on outsourcing .In continuation of our earlier part we capture the following questions which arose for consideration in the case by the Hon’ble Court and the gist of the decision :
1) Whether an Independent contractor can be considered to be the workers of the Undertaking?
For this the Hon’ble Apex Court held that on account of the drivers resigning their jobs it cannot be concluded that they are employed in the Motor Transport Undertaking. If one sees the definition of word ‘employed’ term worker is used in the padagrim to keep the person in an employer’s service. Substantially, the Apex Court concluded that the outsourced individuals are independent as they hired the vehicle of the company for their own operation for which the company pays them on the basis of fixed hire per mile.
2) Whether there was any prohibition in introduction of the Contract system ?
For this the Apex Court came to the conclusion that there was no bar in law to the introduction of the contract system. A person must be considered free to so arrange his business that he avoids a regulatory law and its penal consequences which he has without the arrangement, no proper means of obeying. This, of course, he can do only so long as he does not break that or any other law.
3) The last and important question is as to whether the new system is an Unfair Labour Practice.
The Apex Court categorically held there was no exploitation of ex-employees and should resign had done so voluntarily and they get substantial benefit under the new system.
In our opinion the laissez –faire approach of the Hon’ble Supreme Court as early as 1968 is sonorous in the following words:
…. “On the whole, however, it is clear that the Company has not done anything illegal. A person must be considered free to so arrange his business that he avoids a regulatory law and its penal consequences which he has, without the arrangement, no proper means of obeying. This, of course, he can do only so long as he does not break that or any other law.”……..
In our next part we will deal with the post 1968 scenario and the evolution of the first ever Contract Labour Law in India .
From India, Pune
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(Fact Checked)-The user's reply contains accurate information regarding the landmark judgment in GHATGE & PATIL CONCERN'S EMPLOYEES' UNION Vs. GHATGE & PATIL (TRANSPORTS) PRIVATE LTD. & ANR. The details provided align with the Supreme Court's decision on outsourcing and contract systems. (1 Acknowledge point)
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LABOUR LAW REFORMS-STEP FOR THE FUTURE TO GENERATE EMPLOYMENT AND MAKE INDIA GLOBALLY COMPETITIVE
Recently the Union Cabinet on 31-07-2014 approved the changes to three important labour laws:
FACTORIES ACT:
Proposed changes in the Factories Act are:
(i) Employee’s safety at work place
(ii) Doubling the provisions of overtime from 50 hours a quarter to 100 hours in some cases and 75 hours to 125 hours in work of public interest
(iii) Increasing penalty for violation of the provision of the Act
(iv) Relaxing norms for workmen in some industries at night
(v) Reducing from 90 to 240 days the number of days, an employee needs to work to become eligible for the benefit like live with pay
APPRENTICES ACT:
The scope of employment as apprentices now restricted to Shop floors will be expanded to induction of Non-Engineers as Apprentices. There is a possibility of open the door of other sectors to Apprentices.
Stipend paid to Apprentices is also being increased and in the first year apprentices will get 70% what semi skilled workers get and the second year 80% and third year 90% and for those employees in small scale unit and the Government will pay 50% and the employer the balance.
LABOUR LAWS (EXEMPTION FROM FURNISHING
RETURNS AND MAINTAINING REGISTERS BY CERTAIN ESTABLISHMENTS)
ACT, 1988
The changes to the Act will enable Employer especially thousands of small scale industries to file just one return for compliance of the following labour laws
It will also exempt small-scale industries with less than 40 workers to comply separately with each of the laws. A single page return on compliance is what the amendment seeks to fulfill.The covered laws are as follows:
(1) The Payment of Wages Act, 1936
(2) The Weekly Holidays Act 1942
(3) The Minimum Wages Act, 1948
(4) The Factories Act, 1948
(5) The Plantations Labour Act, 1961
(6) The Working Journalists and Other Newspaper Employees
(Conditions of Service) and Miscellaneous Provisions Act, 1955
(7) The Contract Labour (Regulation and Abolition) Act, 1970
(8) The Sales Promotion Employees (Conditions of Service) Act, 1976
(9) The Equal Remuneration Act, 1976
Stakes for the Contract Staffing Industry on the amendments:-
(i) Blue Collared Staffing will get an impetus on Overtime from Doubling the provisions of overtime from 50 hours a quarter to 100 hours in some cases and 75 hours to 125 hours in work of public interest .
(ii) Due to inclusion of Apprentices in the Non Engineering domain ie other sectors Staffing Industry will be benefited. .
(iii) Implementation of apprenticeship training scheme in those organisations which are operating business/trade in more than four States, will rest with Central Government.Therefore Contract Staffing Companies operating business/trade in more than four States will be benefited.
(iv) The proposal to allow registers/records to be maintained in computer, floppy, diskette or on other electronic media and return submitted through email can be proceeded with.
With Regards
V.Sounder Rajan
Advocate -Labour & HR & Consumer Law Consultant -Chennai
Legal Consultant for Indian Staffing & Recruiting Industry
From India, Chennai
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Recently the Union Cabinet on 31-07-2014 approved the changes to three important labour laws:
FACTORIES ACT:
Proposed changes in the Factories Act are:
(i) Employee’s safety at work place
(ii) Doubling the provisions of overtime from 50 hours a quarter to 100 hours in some cases and 75 hours to 125 hours in work of public interest
(iii) Increasing penalty for violation of the provision of the Act
(iv) Relaxing norms for workmen in some industries at night
(v) Reducing from 90 to 240 days the number of days, an employee needs to work to become eligible for the benefit like live with pay
APPRENTICES ACT:
The scope of employment as apprentices now restricted to Shop floors will be expanded to induction of Non-Engineers as Apprentices. There is a possibility of open the door of other sectors to Apprentices.
Stipend paid to Apprentices is also being increased and in the first year apprentices will get 70% what semi skilled workers get and the second year 80% and third year 90% and for those employees in small scale unit and the Government will pay 50% and the employer the balance.
LABOUR LAWS (EXEMPTION FROM FURNISHING
RETURNS AND MAINTAINING REGISTERS BY CERTAIN ESTABLISHMENTS)
ACT, 1988
The changes to the Act will enable Employer especially thousands of small scale industries to file just one return for compliance of the following labour laws
It will also exempt small-scale industries with less than 40 workers to comply separately with each of the laws. A single page return on compliance is what the amendment seeks to fulfill.The covered laws are as follows:
(1) The Payment of Wages Act, 1936
(2) The Weekly Holidays Act 1942
(3) The Minimum Wages Act, 1948
(4) The Factories Act, 1948
(5) The Plantations Labour Act, 1961
(6) The Working Journalists and Other Newspaper Employees
(Conditions of Service) and Miscellaneous Provisions Act, 1955
(7) The Contract Labour (Regulation and Abolition) Act, 1970
(8) The Sales Promotion Employees (Conditions of Service) Act, 1976
(9) The Equal Remuneration Act, 1976
Stakes for the Contract Staffing Industry on the amendments:-
(i) Blue Collared Staffing will get an impetus on Overtime from Doubling the provisions of overtime from 50 hours a quarter to 100 hours in some cases and 75 hours to 125 hours in work of public interest .
(ii) Due to inclusion of Apprentices in the Non Engineering domain ie other sectors Staffing Industry will be benefited. .
(iii) Implementation of apprenticeship training scheme in those organisations which are operating business/trade in more than four States, will rest with Central Government.Therefore Contract Staffing Companies operating business/trade in more than four States will be benefited.
(iv) The proposal to allow registers/records to be maintained in computer, floppy, diskette or on other electronic media and return submitted through email can be proceeded with.
With Regards
V.Sounder Rajan
Advocate -Labour & HR & Consumer Law Consultant -Chennai
Legal Consultant for Indian Staffing & Recruiting Industry
From India, Chennai
Acknowledge(0)Amend(0)CiteHR.AI
(Fact Checked)-The user reply contains accurate information regarding the changes to the Factories Act, Apprentices Act, and Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by Certain Establishments) Act, 1988. The amendments mentioned align with the provisions of the respective laws. (1 Acknowledge point)
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CiteHR.AI
(Fact Checked)-[The user's reply contains accurate information regarding the proposed changes in the Factories Act, Apprentices Act, and Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by Certain Establishments) Act, 1988. The details provided align with the labor law reforms and the implications for the Contract Staffing Industry.] (1 Acknowledge point)
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EPF Limit increased from Rs.6,500 to Rs.15,000/-
W.e.f 01.09.2014 Government of India, Ministry of Labour and Employment notification dated 22.08.2014 Employee Provident Fund (amendment scheme 2014) has enhanced the EPF ceiling limit from Rs.6,500/- to Rs.15,000/-.
Consequently, the changes have been made in the following:
EPF Scheme 1952
Wherever the words Rs.6,500/- occurs in the scheme it is now replaced by Rs.15,000/-.
Similarly amendments have been made to Employees Pension Scheme 1995, Employees Deposit Linked Insurance Scheme 1976.
Therefore Employer’s and Employee contribution will now be calculated on the revised ceiling of Rs.15,000/-.
Contract Staffing Pay-rolling policy will now require the changes to be made and the ceiling enhancement given effect to from 1-09-2014.
V.Sounder Rajan
Advocate -Labour & HR & Consumer Law Consultant -Chennai
Legal Consultant for Indian Staffing & Recruiting Industry
From India, Chennai
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W.e.f 01.09.2014 Government of India, Ministry of Labour and Employment notification dated 22.08.2014 Employee Provident Fund (amendment scheme 2014) has enhanced the EPF ceiling limit from Rs.6,500/- to Rs.15,000/-.
Consequently, the changes have been made in the following:
EPF Scheme 1952
Wherever the words Rs.6,500/- occurs in the scheme it is now replaced by Rs.15,000/-.
Similarly amendments have been made to Employees Pension Scheme 1995, Employees Deposit Linked Insurance Scheme 1976.
Therefore Employer’s and Employee contribution will now be calculated on the revised ceiling of Rs.15,000/-.
Contract Staffing Pay-rolling policy will now require the changes to be made and the ceiling enhancement given effect to from 1-09-2014.
V.Sounder Rajan
Advocate -Labour & HR & Consumer Law Consultant -Chennai
Legal Consultant for Indian Staffing & Recruiting Industry
From India, Chennai
Acknowledge(1)Amend(0)CiteHR.AI
(Fact Checked)-The user's reply about the EPF limit increase from Rs.6,500 to Rs.15,000 is correct as per the Employee Provident Fund (amendment scheme 2014) by the Government of India. Good job! (1 Acknowledge point)
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CiteHR.AI
(Fact Checked)-[The information provided regarding the increase in EPF limit from Rs.6,500 to Rs.15,000 effective from 01.09.2014 is accurate based on the latest Government notification and schemes. The amendments made to EPF Scheme 1952, Employees Pension Scheme 1995, and Employees Deposit Linked Insurance Scheme 1976 align with the revised ceiling. Employers' and employees' contributions will now be calculated based on the new limit. The reference to contract staffing pay-rolling policy adjustments is also valid.] (1 Acknowledge point)
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Hi
Recently a Manufacturing Company wanted to hire apprentices through their Staffing Service Provider.
The COO called his Procurement Head and told him to hire Apprentices for the shop floor .
Immediately the Procurement Head – Krishna lost no time and talked to the Head of Business of the Staffing Service Provider Company -Arjun and wanted a quote . Immediately Krishna and Arjun had an interesting conversation .
Krishna- I expect a good quote from you to maintain my margins.
Arjun- Yes, I need to give the quote on the Apprentice –Month Model strictly based on some new developments in the law.
Krishna:- What is that !
Arjun : Do you know -New Apprenticeship (Second Amendment) Rules, 2014 have come into effect on 22-09-2014.The whole pay out is now Apprentice friendly.
Krishna-You are getting on my nerves –Tell me how does it affect my procurement pricing.
Arjun- Hey Krishna listen –Now you need to pay the following rates to the seconded Apprentices:-
(1) The minimum rate of stipend per month payable to trade apprentices shall be follows, namely:—
(a) During the first year of training : Seventy per cent. of minimum wage of semi-skilled workers notified by the respective State or Union territory
(b) During the second year of training : Eighty per cent. of minimum wage of semi-skilled workers notified by the respective State or Union territory
(c) During the third and fourth year of training : Ninety per cent. of minimum wage of semi-skilled workers notified by the respective State or Union territory:
Krishna - Thanks a lot Arjun for this valuable info –But can you tell me about the old rates !.
Arjun – The old rates were like this:-
During the first year of training -Rs 2100/-per month
During the second year of training –Rs 2400/- per month
During the third year of training –Rs 2800/- per month
During the Fourth year of training –Rs 3100/- per month.
Krishna- Well if what you said is true .Now our CTC per Apprentice goes for a spin , I will need to get back to you after re-working my whole annual budget for Apprentices. I will also get a legal update from my Legal Team on these changes.
Arjun- Okay shall wait for your call.
With Regards
V.Sounder Rajan
Advocate -Labour & HR & Consumer Law Consultant -Chennai
Legal Consultant for Indian Staffing & Recruiting Industry
From India, Chennai
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Recently a Manufacturing Company wanted to hire apprentices through their Staffing Service Provider.
The COO called his Procurement Head and told him to hire Apprentices for the shop floor .
Immediately the Procurement Head – Krishna lost no time and talked to the Head of Business of the Staffing Service Provider Company -Arjun and wanted a quote . Immediately Krishna and Arjun had an interesting conversation .
Krishna- I expect a good quote from you to maintain my margins.
Arjun- Yes, I need to give the quote on the Apprentice –Month Model strictly based on some new developments in the law.
Krishna:- What is that !
Arjun : Do you know -New Apprenticeship (Second Amendment) Rules, 2014 have come into effect on 22-09-2014.The whole pay out is now Apprentice friendly.
Krishna-You are getting on my nerves –Tell me how does it affect my procurement pricing.
Arjun- Hey Krishna listen –Now you need to pay the following rates to the seconded Apprentices:-
(1) The minimum rate of stipend per month payable to trade apprentices shall be follows, namely:—
(a) During the first year of training : Seventy per cent. of minimum wage of semi-skilled workers notified by the respective State or Union territory
(b) During the second year of training : Eighty per cent. of minimum wage of semi-skilled workers notified by the respective State or Union territory
(c) During the third and fourth year of training : Ninety per cent. of minimum wage of semi-skilled workers notified by the respective State or Union territory:
Krishna - Thanks a lot Arjun for this valuable info –But can you tell me about the old rates !.
Arjun – The old rates were like this:-
During the first year of training -Rs 2100/-per month
During the second year of training –Rs 2400/- per month
During the third year of training –Rs 2800/- per month
During the Fourth year of training –Rs 3100/- per month.
Krishna- Well if what you said is true .Now our CTC per Apprentice goes for a spin , I will need to get back to you after re-working my whole annual budget for Apprentices. I will also get a legal update from my Legal Team on these changes.
Arjun- Okay shall wait for your call.
With Regards
V.Sounder Rajan
Advocate -Labour & HR & Consumer Law Consultant -Chennai
Legal Consultant for Indian Staffing & Recruiting Industry
From India, Chennai
Acknowledge(1)Amend(0)CiteHR.AI
(Fact Checked)-The information provided in the user reply is accurate based on the latest laws and rules regarding apprentice wages as per the New Apprenticeship Rules, 2014. No corrections needed. (1 Acknowledge point)
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(Fact Checked)-The user's reply is correct regarding the updated rates for stipend for trade apprentices as per the New Apprenticeship (Second Amendment) Rules, 2014. No amendments needed. (1 Acknowledge point)
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Reference to the News Report in the Hindustan Times - Sat Nov 15, 2014
Labour contractors to get permits within three days: Govt
PTI Mumbai, November 14, 2014
Maharashtra chief minister Devendra Fadnavis on Friday approved necessary changes in rules to enable applicants like labour contractors, traders, and industrialists to get necessary permits in three days.
"Now, those applying for permits under the Shops and Establishment license and permits to start factories will get them in three days," an official release said.
Failure to grant permits within this period would be deemed as "permit granted," the release said.
Fadnavis has also decided to modify the Contract Labour (Regulation and Abolition) Rules, 1971 to enable a labour contractor to get a registration permit within three days of application, it said.
Earlier, labour contractors used to get such permissions for a one-year period, but as per the latest norms, they would get these for an indefinite period.
Our View
This is a very good news and beginning for the Contract Staffing Industry in Maharashtra. We eagerly await the follow-up action from the Maharashtra Govt Labour Department.
From India, Chennai
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Labour contractors to get permits within three days: Govt
PTI Mumbai, November 14, 2014
Maharashtra chief minister Devendra Fadnavis on Friday approved necessary changes in rules to enable applicants like labour contractors, traders, and industrialists to get necessary permits in three days.
"Now, those applying for permits under the Shops and Establishment license and permits to start factories will get them in three days," an official release said.
Failure to grant permits within this period would be deemed as "permit granted," the release said.
Fadnavis has also decided to modify the Contract Labour (Regulation and Abolition) Rules, 1971 to enable a labour contractor to get a registration permit within three days of application, it said.
Earlier, labour contractors used to get such permissions for a one-year period, but as per the latest norms, they would get these for an indefinite period.
Our View
This is a very good news and beginning for the Contract Staffing Industry in Maharashtra. We eagerly await the follow-up action from the Maharashtra Govt Labour Department.
From India, Chennai
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(Fact Checked)-The information provided in the user reply is accurate in terms of the changes in rules for obtaining permits for labour contractors in Maharashtra as of November 2014. (1 Acknowledge point)
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Sub:- Labour Law environment is becoming compliance friendly for Contract Staffing Business
The Labour Law environment is becoming compliance friendly for Contract Staffing Business being part of the Indian Contract Staffing Industry. In the first stage of Labour law reforms the Central Government has gone ahead with a five point agenda.
The text of the Prime Minister’s announcement on 16th October 2014 has been officially released through PIB. The announcement centers on five points:
(1) A dedicated Shram Suvidha Portal:- This would allot Labour Identification Number to nearly 6 lakhs units and allow them to file online compliance for 16 out of 44 labour laws
(2) All-new Random Inspection Scheme:- This would utilize Information technology to eliminate human discretion in selection of units for Inspection, and uploading of Inspection Reports within 72 hours of inspection mandatory
(3) Universal Account Number [UAN] for EPF Subscribers: - This will enable 4.17 crore employees to have their Provident Fund account portable, hassle-free and universally accessible.
(4) Apprentice Protsahan Yojana:- This will be mainly supporting manufacturing units and other establishments by reimbursing 50% of the stipend paid to apprentices during first two years of their training
(5)Revamped Rashtriya Swasthya Bima Yojana:- This will introduce a Smart Card for the workers in the unorganized sector seeded with details of two more social security schemes
Now let us analyze the takeaways for Contract Staffing Business .
Shram Suvidha Portal
The most important takeaway is the dedicated Shram Suvidha Portal. By this will be allotted Labour Identification Number and online compliance for 16 out of 44 labour laws can be adverted to.The salient features as indicated in the PIB Press Note are:-
Shram Suvidha Portal ( not yet operational) in central sphere to create a conducive environment for industrial development. The four main features of this Portal are:
a. Unique labour identification number (LIN) will be allotted to Units to facilitate online registration.
b. Filing of self-certified and simplified Single Online Return by the industry. Now Units will only file a single consolidated Return online instead of filing 16 separate Returns.
c. Mandatory uploading of inspection Reports within 72 hours by the Labour inspectors.
d. Timely redressal of grievances will be ensured with the help of the portal.
This will bring in the necessary ease in compliance of provisions related to labour and will be a step forward in promoting the ease of doing Contract Staffing Business .
The complete database available centrally at unified portal will also add to the informed policy process.
The portal will be operative in four central organizations namely Chief Labour Commissioner, Directorate General of Mines Safety, Employee Provident Fund and Employees’ State insurance Corporation. In this endeavor of the Ministry, complete information of all 11 lakh units for these organizations has been collected, digitized and de-duplicated reducing the total number to 6-7 lakh. It is proposed to allot LIN to all these 6-7 lakh units.
Random Inspection Scheme
The second takeaway is the benefit of the random inspection scheme. Computers generated targets and not the present form of targeting the employers for the sake of harassment and other collateral purposes will do the inspection of selected units.
Further, under all new random inspection schemes, within 72 hours of inspection, the inspection report of the inspectors who carried the inspection shall be uploaded in the specified portal.The highlights of the proposed scheme listed in the PIB Press Note are:-
Labour Inspection Scheme: So far, the units for inspection were selected locally without any objective criteria. To bring in transparency in labour inspection, a transparent Labour Inspection scheme is being developed. The four features of the inspection scheme are:
(i) Serious matters are to be covered under the mandatory inspection list.
(ii) A computerized list of inspections will be generated randomly based on pre-determined objective criteria.
(iii) Complaints based inspections will also be determined centrally after examination based on data and evidence.
(iv) There will be provision of Emergency List for inspection of serious cases in specific circumstances.
A transparent Inspection Scheme will provide a check on the arbitrariness in compliance mechanism. Immediately on inauguration, sms/email was sent to 1800 Labour inspectors of these enforcement agencies on behalf of the Prime Minister.
Portability of UAN-[EPF]
The third takeaway for Staffing Business is the portability of UAN whereby all Employees will be allotted one number that will be theirs for lifetime.
UAN will be linked with the bank account and other KYC details.
By this for the Contract Staffing Business , the earlier system of depending upon the declaration of the employee for exempting them from contribution will be regulated as if, if an employee is exempted, he will not have an UAN number at all.
The balance two items of Apprentice Protsahan Yojana and Revamped Rashtriya Swasthya Bima Yojana are not relevant for as apprentice Protsahan Yojana will support manufacturing units. Similarly, Revamped Rashtriya Swasthya Bima Yojana is for smart card for the workers in the unorganized sectors that mean that those who are covered by EPF will not come under Revamped Rashtriya Swasthya Bima Yojana.
Follow up Notification –
When the follow up notification is issued by the Ministry of Labour then the exact details and its working can be measured.
For the present, the most important points being the first three will be subject to the amendment to the three major labour laws that were presented to Parliament during the monsoon session of Parliament.
Once the amendment becomes law, the whole scheme will become clear for the Contract Staffing Business .
We need to record that again this implementation is in the Central Sphere i.e Central CLRA domain and for Staffing Business to benefit similar Amendments are to be replicated by the concerned State Government with reference to many compliance's in State based Labour Law enactments more particularly the Shops and Establishments Act of each and every State .
With Regards
V.Sounder Rajan
Advocate -Labour & HR & Consumer Law Consultant -Chennai
Legal Consultant for Indian Contract Staffing & Recruiting Industry
From India, Chennai
Acknowledge(0)Amend(0)
0
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0
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The Labour Law environment is becoming compliance friendly for Contract Staffing Business being part of the Indian Contract Staffing Industry. In the first stage of Labour law reforms the Central Government has gone ahead with a five point agenda.
The text of the Prime Minister’s announcement on 16th October 2014 has been officially released through PIB. The announcement centers on five points:
(1) A dedicated Shram Suvidha Portal:- This would allot Labour Identification Number to nearly 6 lakhs units and allow them to file online compliance for 16 out of 44 labour laws
(2) All-new Random Inspection Scheme:- This would utilize Information technology to eliminate human discretion in selection of units for Inspection, and uploading of Inspection Reports within 72 hours of inspection mandatory
(3) Universal Account Number [UAN] for EPF Subscribers: - This will enable 4.17 crore employees to have their Provident Fund account portable, hassle-free and universally accessible.
(4) Apprentice Protsahan Yojana:- This will be mainly supporting manufacturing units and other establishments by reimbursing 50% of the stipend paid to apprentices during first two years of their training
(5)Revamped Rashtriya Swasthya Bima Yojana:- This will introduce a Smart Card for the workers in the unorganized sector seeded with details of two more social security schemes
Now let us analyze the takeaways for Contract Staffing Business .
Shram Suvidha Portal
The most important takeaway is the dedicated Shram Suvidha Portal. By this will be allotted Labour Identification Number and online compliance for 16 out of 44 labour laws can be adverted to.The salient features as indicated in the PIB Press Note are:-
Shram Suvidha Portal ( not yet operational) in central sphere to create a conducive environment for industrial development. The four main features of this Portal are:
a. Unique labour identification number (LIN) will be allotted to Units to facilitate online registration.
b. Filing of self-certified and simplified Single Online Return by the industry. Now Units will only file a single consolidated Return online instead of filing 16 separate Returns.
c. Mandatory uploading of inspection Reports within 72 hours by the Labour inspectors.
d. Timely redressal of grievances will be ensured with the help of the portal.
This will bring in the necessary ease in compliance of provisions related to labour and will be a step forward in promoting the ease of doing Contract Staffing Business .
The complete database available centrally at unified portal will also add to the informed policy process.
The portal will be operative in four central organizations namely Chief Labour Commissioner, Directorate General of Mines Safety, Employee Provident Fund and Employees’ State insurance Corporation. In this endeavor of the Ministry, complete information of all 11 lakh units for these organizations has been collected, digitized and de-duplicated reducing the total number to 6-7 lakh. It is proposed to allot LIN to all these 6-7 lakh units.
Random Inspection Scheme
The second takeaway is the benefit of the random inspection scheme. Computers generated targets and not the present form of targeting the employers for the sake of harassment and other collateral purposes will do the inspection of selected units.
Further, under all new random inspection schemes, within 72 hours of inspection, the inspection report of the inspectors who carried the inspection shall be uploaded in the specified portal.The highlights of the proposed scheme listed in the PIB Press Note are:-
Labour Inspection Scheme: So far, the units for inspection were selected locally without any objective criteria. To bring in transparency in labour inspection, a transparent Labour Inspection scheme is being developed. The four features of the inspection scheme are:
(i) Serious matters are to be covered under the mandatory inspection list.
(ii) A computerized list of inspections will be generated randomly based on pre-determined objective criteria.
(iii) Complaints based inspections will also be determined centrally after examination based on data and evidence.
(iv) There will be provision of Emergency List for inspection of serious cases in specific circumstances.
A transparent Inspection Scheme will provide a check on the arbitrariness in compliance mechanism. Immediately on inauguration, sms/email was sent to 1800 Labour inspectors of these enforcement agencies on behalf of the Prime Minister.
Portability of UAN-[EPF]
The third takeaway for Staffing Business is the portability of UAN whereby all Employees will be allotted one number that will be theirs for lifetime.
UAN will be linked with the bank account and other KYC details.
By this for the Contract Staffing Business , the earlier system of depending upon the declaration of the employee for exempting them from contribution will be regulated as if, if an employee is exempted, he will not have an UAN number at all.
The balance two items of Apprentice Protsahan Yojana and Revamped Rashtriya Swasthya Bima Yojana are not relevant for as apprentice Protsahan Yojana will support manufacturing units. Similarly, Revamped Rashtriya Swasthya Bima Yojana is for smart card for the workers in the unorganized sectors that mean that those who are covered by EPF will not come under Revamped Rashtriya Swasthya Bima Yojana.
Follow up Notification –
When the follow up notification is issued by the Ministry of Labour then the exact details and its working can be measured.
For the present, the most important points being the first three will be subject to the amendment to the three major labour laws that were presented to Parliament during the monsoon session of Parliament.
Once the amendment becomes law, the whole scheme will become clear for the Contract Staffing Business .
We need to record that again this implementation is in the Central Sphere i.e Central CLRA domain and for Staffing Business to benefit similar Amendments are to be replicated by the concerned State Government with reference to many compliance's in State based Labour Law enactments more particularly the Shops and Establishments Act of each and every State .
With Regards
V.Sounder Rajan
Advocate -Labour & HR & Consumer Law Consultant -Chennai
Legal Consultant for Indian Contract Staffing & Recruiting Industry
From India, Chennai
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(Fact Checked)-The user's reply contains accurate and detailed information regarding the Labour Law environment and the recent reforms affecting the Contract Staffing Business in India. The details provided align with the latest developments and initiatives introduced by the Central Government to enhance compliance and ease of operations for businesses in the staffing sector. (1 Acknowledge point)
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(Fact Checked)-[The user's reply provides accurate and detailed information regarding the Labor Law environment and reforms for the Contract Staffing Business in India. The user correctly explains the key points such as the Shram Suvidha Portal, Universal Account Number for EPF subscribers, and Apprentice Protsahan Yojana. The information aligns with the latest laws and regulations. Well done!] (1 Acknowledge point)
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Subject: EPF Appellate Tribunal Bench at Bengaluru - Reg
The Government of India, through a notification dated 7.11.2014 in S.O.2838(E), has established the Employees' Provident Fund Appellate Tribunal in Bengaluru for entertaining appeals against the final orders of the EPF Authorities regarding establishments located within the territories of the States of Karnataka, Tamil Nadu, Kerala, Andhra Pradesh, Telangana, and Goa, as well as the Union Territories of Andaman & Nicobar and Puducherry.
Furthermore, the same notification states that all pending cases before the Central Tribunal in New Delhi will be transferred to the Bengaluru Tribunal.
Takeaway: There is no need to travel all the way to New Delhi to file an appeal. Legal redressal of EPFO orders is now more employer-friendly.
With Regards,
V. Sounder Rajan
Advocate - Labour & HR, Consumer Law Consultant - Chennai
From India, Chennai
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The Government of India, through a notification dated 7.11.2014 in S.O.2838(E), has established the Employees' Provident Fund Appellate Tribunal in Bengaluru for entertaining appeals against the final orders of the EPF Authorities regarding establishments located within the territories of the States of Karnataka, Tamil Nadu, Kerala, Andhra Pradesh, Telangana, and Goa, as well as the Union Territories of Andaman & Nicobar and Puducherry.
Furthermore, the same notification states that all pending cases before the Central Tribunal in New Delhi will be transferred to the Bengaluru Tribunal.
Takeaway: There is no need to travel all the way to New Delhi to file an appeal. Legal redressal of EPFO orders is now more employer-friendly.
With Regards,
V. Sounder Rajan
Advocate - Labour & HR, Consumer Law Consultant - Chennai
From India, Chennai
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(Fact Checked)-The information provided in the user reply regarding the EPF Appellate Tribunal at Bengaluru is factually correct based on the latest laws and notifications. (1 Acknowledge point)
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(Fact Checked)-The information provided in the user reply is accurate regarding the constitution of the Employees Provident Fund Appellate Tribunal at Bengaluru and the transfer of pending cases. No corrections needed. (1 Acknowledge point)
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Contract Staffing-Legal Knowledge base -EPF Act
Shri Shankar Aggarwal, Secretary, MOL&E through the PIB has come out with the following Press Note post the Second Round of Tripartite Consultations on March 31st, 2015 Employees Provident Fund and Miscellaneous Provisions Act,1952 (EPF &MP Act) Amendments amongst the following stake holders:-
Prsence of : Shri Bandaru Dattatreya, the Minister of State, Labour & Employment (I/C) & Shri Shankar Aggarwal, Secretary, MOL&E
a.Trade Unions- Shri A.K. Padmanabhan, CITU, Shri A.D. Nagpal, HMS, Shri B.L Sachdeva, AITUC, Shri Ashok Singh, INTUC
b.Industry- Shri Sharad Patil, EFI (Employers Federation of India), Shri S.S. Patil, AIMA (All India Manufacturers Association), Shri Bhardwaj, Laghu Udhyog Bharati, Shri Sushant Singh, CII (Confederation of Indian Industries),
c-State Govts- Representatives of various state governments
The Second Round of Tripartite Consultations on Employees Provident Fund and Miscellaneous Provisions Act,1952 (EPF &MP Act) Amendments was held on March 31st, 2015. Shri Bandaru Dattatreya, the Minister of State, Labour & Employment (I/C) chaired the second round of tripartite consultations on EPF & MP Act Amendments. The consultations gain greater importance in view of the new amendments proposed in the backdrop of the Union budget proposals impacting the functioning of EPFO.
Inaugurating the consultations, Shri Dattatreya briefly dwelt upon the major changes being mulled in the proposals. They include bringing down the minimum no. of employees required for coverage under the Act from the existing 20 to 10, doing away with the Schedule Head for coverage and bringing in a negative list instead, special provisions for encouraging the functioning of small-scale units, provisions for setting up of multiple Appellate Authorities under the Act, removing ambiguities in the implementation of the Act, ensuring greater clarity in the definitions under the Act, especially with regard to wages which qualify for deduction for the purposes of the Act, introducing greater transparency and accountability in the enforcement of the Act by having an objective inspection scheme, introducing a scheme for unorganized workers and providing a choice to the worker by giving an option to join NPS / EPFO, which is in tune with the proposals mentioned in the Union Budget.
Taking part in the discussions, the representatives of the employers’ associations and federations generally welcomed the various proposals contained in the amendments under consideration. They generally voiced the opinion that the introduction of NPS would mean greater choice for the worker. However, there were also views that NPS cannot match the benefits offered by EPFO and therefore, are not comparable. It was also felt that the amendments would help in sharpening the competitiveness of Indian Industry and would enable India to become a manufacturing hub. However, there was a need to further encourage the concessions granted to the small-scale industries. Increase of coverage also received wide acceptance, both from employers’ and employees’ side.
Opposing certain amendments proposed, representatives of the Trade Unions expressed reservations especially to the move to introduce NPS as a substitute to EPFO. They also expressed reservations regarding the inspection scheme which they argued brought about centralization in the decision making process which is contrary to the prevailing wisdom which favours decentralization.
Summing up the discussions, Shri Shankar Aggarwal, Secretary, MOL&E assured that the concerns of all stakeholders will be addressed when giving final touches to the legislative amendments. Further, the objective behind bringing in the changes is to further strengthen the delivery of social security benefits.
In his concluding remarks, Shri Dattatreya stressed upon the need to focus on the unorganized sector of the workforce which constitutes 93% of the total workforce. He said that the need of the hour is to include more segments of the workforce like Anganwadi works into the ambit of social security legislations. He also informed that the Ministry is contemplating issue of smart cards to the labour workforce so that social security benefits reach each intended beneficiary. He also assured that the Act would be amended taking into account the sensitivities of all concerned.
Shri Sharad Patil, EFI (Employers Federation of India), Shri S.S. Patil, AIMA (All India Manufacturers Association), Shri Bhardwaj, Laghu Udhyog Bharati, Shri Sushant Singh, CII (Confederation of Indian Industries), Shri A.K. Padmanabhan, CITU, Shri A.D. Nagpal, HMS, Shri B.L Sachdeva, AITUC, Shri Ashok Singh, INTUC were some of the notable representatives of employers’ associations and employees’ associations (trade unions) who took part in the deliberations in addition to the representatives of various state governments.
Our views:
The most important point in the Agenda was the move to introduce NPS as a substitute to EPFO which means that there has to be a an exemption provision introduced in the EPF Act to exempt those persons opting to switch over to NPS.The Govt has a duty to convince the Trade Unions and seek their consent so that the exemption provision when introduced has a smooth sailing in both Houses of Parliament.
Regards
V.Sounder Rajan
Advocate
From India, Chennai
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Shri Shankar Aggarwal, Secretary, MOL&E through the PIB has come out with the following Press Note post the Second Round of Tripartite Consultations on March 31st, 2015 Employees Provident Fund and Miscellaneous Provisions Act,1952 (EPF &MP Act) Amendments amongst the following stake holders:-
Prsence of : Shri Bandaru Dattatreya, the Minister of State, Labour & Employment (I/C) & Shri Shankar Aggarwal, Secretary, MOL&E
a.Trade Unions- Shri A.K. Padmanabhan, CITU, Shri A.D. Nagpal, HMS, Shri B.L Sachdeva, AITUC, Shri Ashok Singh, INTUC
b.Industry- Shri Sharad Patil, EFI (Employers Federation of India), Shri S.S. Patil, AIMA (All India Manufacturers Association), Shri Bhardwaj, Laghu Udhyog Bharati, Shri Sushant Singh, CII (Confederation of Indian Industries),
c-State Govts- Representatives of various state governments
The Second Round of Tripartite Consultations on Employees Provident Fund and Miscellaneous Provisions Act,1952 (EPF &MP Act) Amendments was held on March 31st, 2015. Shri Bandaru Dattatreya, the Minister of State, Labour & Employment (I/C) chaired the second round of tripartite consultations on EPF & MP Act Amendments. The consultations gain greater importance in view of the new amendments proposed in the backdrop of the Union budget proposals impacting the functioning of EPFO.
Inaugurating the consultations, Shri Dattatreya briefly dwelt upon the major changes being mulled in the proposals. They include bringing down the minimum no. of employees required for coverage under the Act from the existing 20 to 10, doing away with the Schedule Head for coverage and bringing in a negative list instead, special provisions for encouraging the functioning of small-scale units, provisions for setting up of multiple Appellate Authorities under the Act, removing ambiguities in the implementation of the Act, ensuring greater clarity in the definitions under the Act, especially with regard to wages which qualify for deduction for the purposes of the Act, introducing greater transparency and accountability in the enforcement of the Act by having an objective inspection scheme, introducing a scheme for unorganized workers and providing a choice to the worker by giving an option to join NPS / EPFO, which is in tune with the proposals mentioned in the Union Budget.
Taking part in the discussions, the representatives of the employers’ associations and federations generally welcomed the various proposals contained in the amendments under consideration. They generally voiced the opinion that the introduction of NPS would mean greater choice for the worker. However, there were also views that NPS cannot match the benefits offered by EPFO and therefore, are not comparable. It was also felt that the amendments would help in sharpening the competitiveness of Indian Industry and would enable India to become a manufacturing hub. However, there was a need to further encourage the concessions granted to the small-scale industries. Increase of coverage also received wide acceptance, both from employers’ and employees’ side.
Opposing certain amendments proposed, representatives of the Trade Unions expressed reservations especially to the move to introduce NPS as a substitute to EPFO. They also expressed reservations regarding the inspection scheme which they argued brought about centralization in the decision making process which is contrary to the prevailing wisdom which favours decentralization.
Summing up the discussions, Shri Shankar Aggarwal, Secretary, MOL&E assured that the concerns of all stakeholders will be addressed when giving final touches to the legislative amendments. Further, the objective behind bringing in the changes is to further strengthen the delivery of social security benefits.
In his concluding remarks, Shri Dattatreya stressed upon the need to focus on the unorganized sector of the workforce which constitutes 93% of the total workforce. He said that the need of the hour is to include more segments of the workforce like Anganwadi works into the ambit of social security legislations. He also informed that the Ministry is contemplating issue of smart cards to the labour workforce so that social security benefits reach each intended beneficiary. He also assured that the Act would be amended taking into account the sensitivities of all concerned.
Shri Sharad Patil, EFI (Employers Federation of India), Shri S.S. Patil, AIMA (All India Manufacturers Association), Shri Bhardwaj, Laghu Udhyog Bharati, Shri Sushant Singh, CII (Confederation of Indian Industries), Shri A.K. Padmanabhan, CITU, Shri A.D. Nagpal, HMS, Shri B.L Sachdeva, AITUC, Shri Ashok Singh, INTUC were some of the notable representatives of employers’ associations and employees’ associations (trade unions) who took part in the deliberations in addition to the representatives of various state governments.
Our views:
The most important point in the Agenda was the move to introduce NPS as a substitute to EPFO which means that there has to be a an exemption provision introduced in the EPF Act to exempt those persons opting to switch over to NPS.The Govt has a duty to convince the Trade Unions and seek their consent so that the exemption provision when introduced has a smooth sailing in both Houses of Parliament.
Regards
V.Sounder Rajan
Advocate
From India, Chennai
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(Fact Checked)-The user reply contains accurate information regarding the Second Round of Tripartite Consultations on Employees Provident Fund and Miscellaneous Provisions Act,1952 (EPF & MP Act) Amendments. (1 Acknowledge point)
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(Fact Checked)-The information provided in the user reply is accurate and aligns with the discussions and amendments related to the Employees Provident Fund and Miscellaneous Provisions Act, 1952. Well done! (1 Acknowledge point)
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Dear Mr. Rajan you thread is very helpful for us. i am working in engineering staffing company as AM- HR. i need your guidance.
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Dear Sir,
We have engaged 4 vehicles through a travel agency. As per the agreement, the agency provides vehicles with drivers for the transportation of our employees. I want to know what our legal liabilities are for vehicle drivers under labor law. Are there any liabilities to pay minimum wages and PF of principal employers?
Regards,
Sandeep Satsangi
9992112044
From India,
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We have engaged 4 vehicles through a travel agency. As per the agreement, the agency provides vehicles with drivers for the transportation of our employees. I want to know what our legal liabilities are for vehicle drivers under labor law. Are there any liabilities to pay minimum wages and PF of principal employers?
Regards,
Sandeep Satsangi
9992112044
From India,
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(Fact Checked)-The legal liabilities for vehicle drivers under labour laws include ensuring minimum wages and PF contributions by the principal employer. It is essential to comply with these regulations. (1 Acknowledge point)
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(Fact Checked)-The principal employer is liable to ensure minimum wages, PF, and other benefits for the drivers provided by the agency as per the Contract Labour (Regulation and Abolition) Act, 1970. The Grievance Redressal Machinery must also cover all workers, including those of agencies. (1 Acknowledge point)
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yes, as a principal employer, you have to ensure that minimum wages are paid and all statutory payments are made by the travel agency to their drivers.
From India, Begusarai
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From India, Begusarai
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Dear All 2015 and 2016 have been excellent years for new changes in Labour Law .Lets look for more.
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Sub Maternity Benefit Amendment Act 2017 -Effective dates
In continuation to the earlier Notification of Notifying the amendments to the Maternity Benefit Act now GOI has notified the effective dates of implementation by the consequential Notification of the “effective dates of implementation":-
(1) maternity benefit enhancement of 26 weeks has been given effect from 1st April 2017
(2) relating to work from home will come into effect from 1st July 2017.
Attached copy of Gazette Notification dated 31st March 2017 .
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In continuation to the earlier Notification of Notifying the amendments to the Maternity Benefit Act now GOI has notified the effective dates of implementation by the consequential Notification of the “effective dates of implementation":-
(1) maternity benefit enhancement of 26 weeks has been given effect from 1st April 2017
(2) relating to work from home will come into effect from 1st July 2017.
Attached copy of Gazette Notification dated 31st March 2017 .
From India, Chennai
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(Fact Checked)-The user's reply is accurate based on the latest laws and notifications regarding the Maternity Benefit Act. Well done! (1 Acknowledge point)
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(Fact Checked)-[response] The information provided in the user reply regarding the Maternity Benefit Amendment Act 2017 is accurate based on the effective dates specified in the Gazette Notification dated 31st March 2017. (1 Acknowledge point)
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The Minimum Wages (Karnataka Amendment) Act, 2017
New Amendment under Minimum wages act 1948 of Karnataka
Government of Karnataka has released the Minimum Wages (Karnataka Amendment) Act, 2017, as per the Amendment Act the Karnataka Government has increased the penalties under the Section 22 and Section 22A of The Minimum Wages Act, 1948
1. Short title and commencement.
2. Amendment of section 20.
3. Amendment of section 22.
4. Amendment of section 22A
2. Amendment of section 20.- In section 20 of the Minimum Wages Act,
1948 (Central Act XI of 1948), (herein after referred to as the Principal Act,-
(i) in sub-section (1), for the words “not below the rank of Labour Commissioner”, the words “not below the rank of Assistant Labour Commissioner” shall be substituted. (ii) in sub-section (4), for the words “fifty rupees” the words “one thousand rupees” shall be substituted.
3. Amendment of section 22.- In section 22 of the Principal Act for the
words “ which may extend to five hundred rupees” the words “which shall not be
less than five thousand rupees but which may extend to ten thousand rupees” shall be substituted.
4. Amendment of section 22 A.- In section 22A of the Principal Act, for the
words “five hundred rupees” the words “ten thousand rupees” shall be substituted
From India, Chennai
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New Amendment under Minimum wages act 1948 of Karnataka
Government of Karnataka has released the Minimum Wages (Karnataka Amendment) Act, 2017, as per the Amendment Act the Karnataka Government has increased the penalties under the Section 22 and Section 22A of The Minimum Wages Act, 1948
1. Short title and commencement.
2. Amendment of section 20.
3. Amendment of section 22.
4. Amendment of section 22A
2. Amendment of section 20.- In section 20 of the Minimum Wages Act,
1948 (Central Act XI of 1948), (herein after referred to as the Principal Act,-
(i) in sub-section (1), for the words “not below the rank of Labour Commissioner”, the words “not below the rank of Assistant Labour Commissioner” shall be substituted. (ii) in sub-section (4), for the words “fifty rupees” the words “one thousand rupees” shall be substituted.
3. Amendment of section 22.- In section 22 of the Principal Act for the
words “ which may extend to five hundred rupees” the words “which shall not be
less than five thousand rupees but which may extend to ten thousand rupees” shall be substituted.
4. Amendment of section 22 A.- In section 22A of the Principal Act, for the
words “five hundred rupees” the words “ten thousand rupees” shall be substituted
From India, Chennai
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(Fact Checked)-The user reply contains accurate information regarding the Minimum Wages (Karnataka Amendment) Act, 2017, specifically the amendments made to sections 20, 22, and 22A of the Minimum Wages Act, 1948. Well done! (1 Acknowledge point)
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Contract Labour (Regulation and Abolition) Act, 1970,is sought to be amended.Attaching the proposed amendments.
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Payment of Gratuity (Amendment) Act, 2018 (Gratuity Amendment Act) (28-03-2018)
According to the notification, the Central Government will specify that the amount of gratuity payable to an employee shall not exceed Rs 20,00,000 (Rupees Twenty Lakhs). Further, for the purposes of calculation of continuous service for the payment of gratuity to employees who are on maternity leave, the Central Government has specified that the total period of maternity leave shall not exceed 26 (twenty-six) weeks. Fixed-term employees completing 5 years of continuous service will have to be paid gratuity.
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According to the notification, the Central Government will specify that the amount of gratuity payable to an employee shall not exceed Rs 20,00,000 (Rupees Twenty Lakhs). Further, for the purposes of calculation of continuous service for the payment of gratuity to employees who are on maternity leave, the Central Government has specified that the total period of maternity leave shall not exceed 26 (twenty-six) weeks. Fixed-term employees completing 5 years of continuous service will have to be paid gratuity.
From India, Chennai
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Dear HR Professionals,
We are coming out with an analysis on the legal environment for the Indian contract staffing industry in 2018. This will be a weekly update. Shortly, all HR professionals can access this update on this blog page. Hope it will be useful.
From India, Chennai
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We are coming out with an analysis on the legal environment for the Indian contract staffing industry in 2018. This will be a weekly update. Shortly, all HR professionals can access this update on this blog page. Hope it will be useful.
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Fixed-term employment is allowed in the blue-collar sphere of the contract staffing industry. The Industrial Employment (Standing Orders) Central (Amendment) Rules, 2018 (Rules) were notified by the Ministry of Labour and Employment through a notification dated 16 March 2018. Labour reforms have been introduced, with fixed-term employment now permitted across all sectors in the manufacturing field. The Industrial Employment (Standing Orders) Central Rules, 1946, have been amended by the notification. One of the conditions introduced is that no existing permanent employees can be converted to fixed-term employees.
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(Fact Checked)-The user reply contains accurate information regarding Fixed Term Employment and the Industrial Employment (Standing Orders) Central Rules, 2018. No corrections needed. (1 Acknowledge point)
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In the Blue Collared sphere as per the definition Fixed Term Employee in the amended Industrial Employment (Standing Orders) Central Rules, 1946 – by Notification sub para (h) A “fixed term employment workman” is a workman who has been engaged on the basis of a written contract of employment for a fixed period:
Provided that-
(a) his hours of work, wages, allowances and other benefits shall not be less than that of a permanent workman; and
(b) he shall be eligible for all statutory benefits available to a permanent workman proportionately according to the period of service rendered by him even if his period of employment does not extend to the qualifying period of employment required in the statute.
Points to be noted:-
1. There should be a written contract i.e either an appointment letter with the acceptance of the fixed Term Employee or a Fixed Term Employment Agreement or Contract signed by both the employer and Fixed Term Employee.
2. There should be a fixed period i.e starting date and end date in the written contract i.e either an appointment letter with the acceptance of the fixed Term Employee or a Fixed Term Employment Agreement or Contract signed by both the employer and Fixed Term Employee.
3. Hours of work, wages, allowances and other benefits shall not be less than that of a permanent workman employed for the same job.
4. Fixed Term Employee shall be eligible for all statutory benefits available to a permanent workman proportionately according to the period of service rendered by him even if his period of employment does not extend to the qualifying period of employment required in the statute.
V.Sounder Rajan
HR & Employment Law Attorney
Specializing for Recruiting and Contract Staffing Industry
M: 98401-42164
From India, Chennai
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Provided that-
(a) his hours of work, wages, allowances and other benefits shall not be less than that of a permanent workman; and
(b) he shall be eligible for all statutory benefits available to a permanent workman proportionately according to the period of service rendered by him even if his period of employment does not extend to the qualifying period of employment required in the statute.
Points to be noted:-
1. There should be a written contract i.e either an appointment letter with the acceptance of the fixed Term Employee or a Fixed Term Employment Agreement or Contract signed by both the employer and Fixed Term Employee.
2. There should be a fixed period i.e starting date and end date in the written contract i.e either an appointment letter with the acceptance of the fixed Term Employee or a Fixed Term Employment Agreement or Contract signed by both the employer and Fixed Term Employee.
3. Hours of work, wages, allowances and other benefits shall not be less than that of a permanent workman employed for the same job.
4. Fixed Term Employee shall be eligible for all statutory benefits available to a permanent workman proportionately according to the period of service rendered by him even if his period of employment does not extend to the qualifying period of employment required in the statute.
V.Sounder Rajan
HR & Employment Law Attorney
Specializing for Recruiting and Contract Staffing Industry
M: 98401-42164
From India, Chennai
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(Fact Checked)-The user's response is correct regarding the definition and requirements for Fixed Term Employees under the Industrial Employment (Standing Orders) Central Rules, 1946. Well done! (1 Acknowledge point)
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(Fact Checked)-The user's reply is accurate in detailing the requirements and provisions related to Fixed Term Employees under the Industrial Employment (Standing Orders) Central Rules, 1946. The points highlighted align with statutory benefits and contract specifics. (1 Acknowledge point)
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The first case of Outsourcing reported in India was way back in 1967 ?
GHATGE & PATIL CONCERN’S EMPLOYEES’ UNION Vs. GHATGE & PATIL (TRANSPORTS) PRIVATE LTD. 22/08/1967 –Supreme Court
GHATGE & PATIL (TRANSPORTS) carried on the business of transport and removal of goods by road. It owned a fleet of trucks and employed drivers and cleaners to run them. In 1963 the company, finding difficulty in observing the provisions of the Motor Transport Workers Act 1961, introduced a scheme whereby the trucks, instead of being run by the company itself were hired out to contractors at a fixed rate per mile.
Employees of the company who were engaged in running the trucks resigned their jobs and most of them who had for- merely been drivers became contractors under the scheme.
The workmen's’ Union however raised a dispute asking for the reinstatement of the ex-employees who had been given work on contract basis.
The Tribunal held that the contract system could not be said to be an unfair labour practice, for the ex-employees were never coerced or forced to resign their jobs, and they got more benefits from the contract system than from their original contract of employment.
In appeal to the Supreme Court the Union contended that the ex-employees of the company continued to be workmen notwithstanding that they were posed as independent contractors, that the beneficent legislation conceived in the interests of transport workers was being set at naught by the company, and that the setting up of the contract system amounted to unfair labour practice.
…… to be continued
V.Sounder Rajan
HR & Employment Law Attorney
Specializing for Recruiting and Contract Staffing Industry
M: 98401-42164
From India, Chennai
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GHATGE & PATIL CONCERN’S EMPLOYEES’ UNION Vs. GHATGE & PATIL (TRANSPORTS) PRIVATE LTD. 22/08/1967 –Supreme Court
GHATGE & PATIL (TRANSPORTS) carried on the business of transport and removal of goods by road. It owned a fleet of trucks and employed drivers and cleaners to run them. In 1963 the company, finding difficulty in observing the provisions of the Motor Transport Workers Act 1961, introduced a scheme whereby the trucks, instead of being run by the company itself were hired out to contractors at a fixed rate per mile.
Employees of the company who were engaged in running the trucks resigned their jobs and most of them who had for- merely been drivers became contractors under the scheme.
The workmen's’ Union however raised a dispute asking for the reinstatement of the ex-employees who had been given work on contract basis.
The Tribunal held that the contract system could not be said to be an unfair labour practice, for the ex-employees were never coerced or forced to resign their jobs, and they got more benefits from the contract system than from their original contract of employment.
In appeal to the Supreme Court the Union contended that the ex-employees of the company continued to be workmen notwithstanding that they were posed as independent contractors, that the beneficent legislation conceived in the interests of transport workers was being set at naught by the company, and that the setting up of the contract system amounted to unfair labour practice.
…… to be continued
V.Sounder Rajan
HR & Employment Law Attorney
Specializing for Recruiting and Contract Staffing Industry
M: 98401-42164
From India, Chennai
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(Fact Checked)-The user reply contains accurate information regarding the case of Outsourcing reported in India back in 1967, involving GHATGE & PATIL. The details provided align with the Supreme Court ruling and the facts presented. (1 Acknowledge point)
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(Fact Checked)-[response] The information provided about the first case of Outsourcing reported in India in 1967 and the subsequent Supreme Court case is accurate. (1 Acknowledge point)
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The Government of India had abolished the EPF Appellate Tribunal in Delhi and Bengaluru via a notification dated 26-05-2017. Previously, appeals against orders under Section 7A of the EPF Act were filed before the EPF Appellate Tribunal. Now, all cases that need to be filed before the EPF Appellate Tribunal in Delhi and Bengaluru will be heard by the Central Government Industrial cum Labour Courts (CGIT) located at 22 places in India. The directions of the Ministry are attached.
V. Sounder Rajan HR & Employment Law Attorney Specializing in Recruiting and Contract Staffing Industry M: 98401-42164
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IMPORTANT POINTS IN GHATGE & PATIL (TRANSPORTS) CASE
i) Since the drivers had resigned their jobs they could not be said to be employed in the Motor Transport undertaking. The word ‘employed’ in the definition of Motor Transport Act. Worker is not used in the sense of using the services of a person but rather in the sense of keeping a person in one’s service. Persons who are independent and hire a vehicle for their own operation paying a fixed hire per mile from their earnings cannot be said to be persons employed in the Motor Transport Undertaking in the sense of persons kept in service. The operators were therefore not Motor Transport Workers within the definition.
(ii) There was no bar in law to the introduction of the con- tract system. A person must be considered free to so arrange his business that he avoids a regulatory law and its penal consequences which he has without the arrangement, no proper means of obeying. This, of course, he can do only so long as he does not break that or any other law.
(iii) Those who resigned did so voluntarily and they got substantial benefits under the new system.
(iv) The Tribunal was right in its conclusion that there was no exploitation of the ex-employees. There was thus no unfair labour practice. The present case was not analogous to the case of contract labour when employment of labour through a contractor or middleman put the labour at a disadvantage in collective bargaining and thus robbed labour of an important weapon in its armoury.
..... to be contd
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i) Since the drivers had resigned their jobs they could not be said to be employed in the Motor Transport undertaking. The word ‘employed’ in the definition of Motor Transport Act. Worker is not used in the sense of using the services of a person but rather in the sense of keeping a person in one’s service. Persons who are independent and hire a vehicle for their own operation paying a fixed hire per mile from their earnings cannot be said to be persons employed in the Motor Transport Undertaking in the sense of persons kept in service. The operators were therefore not Motor Transport Workers within the definition.
(ii) There was no bar in law to the introduction of the con- tract system. A person must be considered free to so arrange his business that he avoids a regulatory law and its penal consequences which he has without the arrangement, no proper means of obeying. This, of course, he can do only so long as he does not break that or any other law.
(iii) Those who resigned did so voluntarily and they got substantial benefits under the new system.
(iv) The Tribunal was right in its conclusion that there was no exploitation of the ex-employees. There was thus no unfair labour practice. The present case was not analogous to the case of contract labour when employment of labour through a contractor or middleman put the labour at a disadvantage in collective bargaining and thus robbed labour of an important weapon in its armoury.
..... to be contd
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(Fact Checked)-The user's reply contains accurate information regarding the case of Ghatge & Patil (Transports) and the key points highlighted. Well done! (1 Acknowledge point)
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please suggest, can we approch cgit to get stay order against 7Q i.e interest amount lived by epf authorities. If any judgement copies please share
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You need to check with CGIT-Hyderabad. The jurisdiction of CGIT is as follows:
JURISDICTION OF CENTRAL GOVERNMENT INDUSTRIAL TRIBUNAL-CUM-LABOUR COURTS (CGIT-cum-LCs)
1. Mumbai-I - Maharashtra (partly), Goa (partly), U.T of Daman and Diu (partly)
2. Mumbai-II - Maharashtra (partly), Goa (partly), U.T of Daman and Diu (partly)
3. Nagpur - Maharashtra (partly), Goa (partly), U.T of Daman and Diu (partly)
4. Dhanbad-I - Bihar (partly), Jharkhand (partly)
5. Dhanbad-II - Bihar (partly), Jharkhand (partly)
6. Jabalpur - Madhya Pradesh, Chhattisgarh
7. Kanpur - Uttar Pradesh (partly), Uttarakhand
8. New Delhi-I - Union Territory of Delhi only
9. New Delhi-II - Haryana (partly), Uttar Pradesh (partly)
10. Asansol - West Bengal (partly), Bihar (partly)
11. Kolkata - West Bengal
12. Chandigarh-I - U.T. of Chandigarh, Punjab, HP, J and K, Haryana (partly) - Odd No
13. Chandigarh-II - U.T. of Chandigarh, Punjab, HP, J and K, Haryana (partly) - Even No
14. Jaipur - Rajasthan
15. Lucknow - Uttar Pradesh (partly), Uttarakhand
16. Bangalore - Karnataka
17. Ernakulam - Kerala, U.T. of Lakshadweep
18. Chennai - Tamil Nadu, U.T. of Puducherry
19. Hyderabad - Andhra Pradesh, Telangana
20. Bhubaneswar - Odisha
21. Guwahati - North Eastern States
22. Ahmedabad - Gujarat
As the jurisdiction is newly created, local practices play a major role.
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JURISDICTION OF CENTRAL GOVERNMENT INDUSTRIAL TRIBUNAL-CUM-LABOUR COURTS (CGIT-cum-LCs)
1. Mumbai-I - Maharashtra (partly), Goa (partly), U.T of Daman and Diu (partly)
2. Mumbai-II - Maharashtra (partly), Goa (partly), U.T of Daman and Diu (partly)
3. Nagpur - Maharashtra (partly), Goa (partly), U.T of Daman and Diu (partly)
4. Dhanbad-I - Bihar (partly), Jharkhand (partly)
5. Dhanbad-II - Bihar (partly), Jharkhand (partly)
6. Jabalpur - Madhya Pradesh, Chhattisgarh
7. Kanpur - Uttar Pradesh (partly), Uttarakhand
8. New Delhi-I - Union Territory of Delhi only
9. New Delhi-II - Haryana (partly), Uttar Pradesh (partly)
10. Asansol - West Bengal (partly), Bihar (partly)
11. Kolkata - West Bengal
12. Chandigarh-I - U.T. of Chandigarh, Punjab, HP, J and K, Haryana (partly) - Odd No
13. Chandigarh-II - U.T. of Chandigarh, Punjab, HP, J and K, Haryana (partly) - Even No
14. Jaipur - Rajasthan
15. Lucknow - Uttar Pradesh (partly), Uttarakhand
16. Bangalore - Karnataka
17. Ernakulam - Kerala, U.T. of Lakshadweep
18. Chennai - Tamil Nadu, U.T. of Puducherry
19. Hyderabad - Andhra Pradesh, Telangana
20. Bhubaneswar - Odisha
21. Guwahati - North Eastern States
22. Ahmedabad - Gujarat
As the jurisdiction is newly created, local practices play a major role.
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In our earlier post we have referred to GHATGE & PATIL (TRANSPORTS) CASE .Every HR person will ask Is the GHATGE & PATIL (TRANSPORTS) CASE relevant now then why refer to it ?
Actually in that Judgment LAISEZ FAIRE WAS GIVEN A SEAL OF APPROVAL
The Apex Court observed on the whole, however, it is clear that the Company has not done anything illegal.
A person must be considered free to so arrange his business that he avoids a regulatory law and its penal consequences which he has, without the arrangement, no proper means of obeying. This, of course, he can do only so long as he does not break that or any other law.
ULTIMATELY the judgment became irrelevant - by the enactment of Contract Labour ( Abolition & Regulation ) Act 1970
So the Judgment of the Apex Court has been overruled-MEANS IT IS JUST referred to FOR tracing history of outsourcing in India .
So Outsourcing is a very old term but in recent times it has acquired a new meaning in Business.
V.Sounder Rajan
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Actually in that Judgment LAISEZ FAIRE WAS GIVEN A SEAL OF APPROVAL
The Apex Court observed on the whole, however, it is clear that the Company has not done anything illegal.
A person must be considered free to so arrange his business that he avoids a regulatory law and its penal consequences which he has, without the arrangement, no proper means of obeying. This, of course, he can do only so long as he does not break that or any other law.
ULTIMATELY the judgment became irrelevant - by the enactment of Contract Labour ( Abolition & Regulation ) Act 1970
So the Judgment of the Apex Court has been overruled-MEANS IT IS JUST referred to FOR tracing history of outsourcing in India .
So Outsourcing is a very old term but in recent times it has acquired a new meaning in Business.
V.Sounder Rajan
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Fixed Term Employment is also part of Temp Staffing
MOE & L through notification dated 16 March 2018 (Notification), had notified the Industrial Employment (Standing Orders) Central (Amendment) Rules, 2018 (Rules).
It amended the Industrial Employment (Standing Orders) Central Rules, 1946 to introduce a significant labour reform – allowing fixed term employment for all sectors.
Fixed Term Employee means 'a workman who has been engaged on the basis of a written contract of employment for a fixed period: provided that, (a) his hours of work, wages, allowances, and other benefits shall not be less than that of a permanent workman; and (b) he shall be eligible for all statutory benefits available to a permanent workman proportionately according to the period of service rendered by him even if his period of employment does not extend to the qualifying period of employment required in the statute.
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MOE & L through notification dated 16 March 2018 (Notification), had notified the Industrial Employment (Standing Orders) Central (Amendment) Rules, 2018 (Rules).
It amended the Industrial Employment (Standing Orders) Central Rules, 1946 to introduce a significant labour reform – allowing fixed term employment for all sectors.
Fixed Term Employee means 'a workman who has been engaged on the basis of a written contract of employment for a fixed period: provided that, (a) his hours of work, wages, allowances, and other benefits shall not be less than that of a permanent workman; and (b) he shall be eligible for all statutory benefits available to a permanent workman proportionately according to the period of service rendered by him even if his period of employment does not extend to the qualifying period of employment required in the statute.
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(Fact Checked)-The information provided in the user reply is accurate. Fixed Term Employment is indeed a part of Temp Staffing, and the Industrial Employment (Standing Orders) Central (Amendment) Rules, 2018 introduced significant labor reform allowing fixed term employment for all sectors. (1 Acknowledge point)
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(Fact Checked)-The user's reply is correct. It accurately explains the concept of Fixed Term Employment and its introduction through the Industrial Employment (Standing Orders) Central (Amendment) Rules, 2018, allowing fixed term employment for all sectors. The explanation aligns with relevant labor laws. (1 Acknowledge point)
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Focus on Government legislation in the Contract Staffing Industry (CSI).
Contract Staffing can be broadly divided into "Blue Collared" and "White Collared." The focus of the Government on Labour Law Legislation primarily rests on the main sector, i.e., Industry (Manufacturing). In relation to Contract Staffing Legislation by the Government, the emphasis will be on Blue Collar. However, it is not realistic to expect the same level of attention to the needs of the Contract Staffing Industry in the White Collar sector. CSI must comply with and operate within existing laws.
V. Sounder Rajan
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M: 98401-42164
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Contract Staffing can be broadly divided into "Blue Collared" and "White Collared." The focus of the Government on Labour Law Legislation primarily rests on the main sector, i.e., Industry (Manufacturing). In relation to Contract Staffing Legislation by the Government, the emphasis will be on Blue Collar. However, it is not realistic to expect the same level of attention to the needs of the Contract Staffing Industry in the White Collar sector. CSI must comply with and operate within existing laws.
V. Sounder Rajan
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M: 98401-42164
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The Employees’ Provident Fund Organisation (EPFO) issued a circular on 18 October 2018 [attached] instructing regional provident offices to not coerce employers by way of prosecution in the light of the Supreme Court order on Aadhaar.
The circular is important because EPFO was asking employers to seed the Universal Account Number (UAN) of the employees with Aadhaar. UAN was launched in 2014 with the idea that every employee under the EPF will have only one account number which will be portable from one employer to another and the employee could ultimately de-link herself from the employee.
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The circular is important because EPFO was asking employers to seed the Universal Account Number (UAN) of the employees with Aadhaar. UAN was launched in 2014 with the idea that every employee under the EPF will have only one account number which will be portable from one employer to another and the employee could ultimately de-link herself from the employee.
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M: 98401-42164
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Dear All ++++++++++++++ Thanks for your inputs. Wish a happy and prosperous festival of lights, DIWALI +++++++++++++
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Dear All ++++++++++++++ Thanks for your inputs. Wish a happy and prosperous festival of lights, DIWALI +++++++++++++
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Common question posed: Is the Indian legal system a complex web of too many labor laws? One needs to understand India is a Union of States. Labor is in the concurrent list, meaning both the Central Government and State Governments can legislate. Contract Staffing Entities are free to operate in both Central and State spheres irrespective of the number of laws. The laws are for the industry and to benefit the workers. So, changes in laws to suit the CSI, i.e., employers, cannot be expected. Only aggregation can be done, which the present government is doing, i.e., old wine in a new bottle.
V. Sounder Rajan HR and Employment Law Attorney Specializing in Recruiting and Contract Staffing Industry M: 98401-42164
It is not possible to repeal any law.
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V. Sounder Rajan HR and Employment Law Attorney Specializing in Recruiting and Contract Staffing Industry M: 98401-42164
It is not possible to repeal any law.
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Labour laws have lost touch with current business reality.
Reality - Indian Labour Laws are changing with the times. The AP, Rajasthan, and Maharashtra amendments on CLRA are remarkable pieces of legislation. Labour laws have to balance all stakeholders - Management, Trade Unions (Contract Workers), and Government. India is the best place for Contract Staffing. If evolving laws come, they will only benefit Labour and may backfire on the Industry. Cosmetic changes alone are possible.
V. Sounder Rajan HR & Employment Law Attorney Specializing in Recruiting and Contract Staffing Industry M: 98401-42164
From India, Chennai
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Reality - Indian Labour Laws are changing with the times. The AP, Rajasthan, and Maharashtra amendments on CLRA are remarkable pieces of legislation. Labour laws have to balance all stakeholders - Management, Trade Unions (Contract Workers), and Government. India is the best place for Contract Staffing. If evolving laws come, they will only benefit Labour and may backfire on the Industry. Cosmetic changes alone are possible.
V. Sounder Rajan HR & Employment Law Attorney Specializing in Recruiting and Contract Staffing Industry M: 98401-42164
From India, Chennai
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Distribution of the Legislative power on Labour between the Central Government and State Government
Union List-(Central Government)
Entry No. 55
Regulation of labour and safety in mines and oil fields
Entry No. 61
Industrial disputes concerning Union employees
Entry No. 65
Union agencies and institutions for “… vocational … training …”
Concurrent List-(Central as well as State Government)
Entry No. 22
Trade unions, industrial and labour disputes
Entry No. 23
Social security and insurance, employment and unemployment
Entry No. 24
Welfare of labour including conditions of work, provident funds, employers’ invalidity, and old-age pension and maternity benefits
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Union List-(Central Government)
Entry No. 55
Regulation of labour and safety in mines and oil fields
Entry No. 61
Industrial disputes concerning Union employees
Entry No. 65
Union agencies and institutions for “… vocational … training …”
Concurrent List-(Central as well as State Government)
Entry No. 22
Trade unions, industrial and labour disputes
Entry No. 23
Social security and insurance, employment and unemployment
Entry No. 24
Welfare of labour including conditions of work, provident funds, employers’ invalidity, and old-age pension and maternity benefits
V.Sounder Rajan
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Specializing for Recruiting and Contract Staffing Industry
M: 98401-42164
From India, Chennai
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Functions of the Labour Department of Central and States
To implement Central and State labour laws and employment laws for ensuring basic statutory working conditions and labour standards. To protect the interests of workers, both in organized and unorganized sectors and to maintain industrial peace and harmony. To ensure wages, safety, welfare, working hours, weekly & other holidays, leave, etc. for workers. To eliminate the employment of all forms of child labour and rehabilitation of those released from work. To promote the welfare and social security of workers by the implementation of schemes. To provide social security to the injured workmen and maternity benefit to the women workers. To provide for registration and licensing of Establishments and collection of labour welfare fund. To provide for the registration of trade unions and the unorganized sector.
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To implement Central and State labour laws and employment laws for ensuring basic statutory working conditions and labour standards. To protect the interests of workers, both in organized and unorganized sectors and to maintain industrial peace and harmony. To ensure wages, safety, welfare, working hours, weekly & other holidays, leave, etc. for workers. To eliminate the employment of all forms of child labour and rehabilitation of those released from work. To promote the welfare and social security of workers by the implementation of schemes. To provide social security to the injured workmen and maternity benefit to the women workers. To provide for registration and licensing of Establishments and collection of labour welfare fund. To provide for the registration of trade unions and the unorganized sector.
V. Sounder Rajan HR & Employment Law Attorney Specializing in Recruiting and Contract Staffing Industry M: 98401-42164
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Have Labour laws have failed to adjust to recent labour market developments
Some of the important changes that have taken place in the Indian labour market as a result of the changes in the economic and business scenario are: need to quickly adjust workforce to transient, seasonal or structural demand volatility, both in terms of numbers and composition.
Mechanism to address such transitory needs as in the case of temporary unavailability of internal staff without any loss in productivity, need to focus on core activities and need for skilled labour.
However, identification of skilled manpower, ensuring a match with company needs and retention of staff is never an easy job, and this is further compounded by the short supply of such skilled labour and high attrition rates experienced recently.
These features of the emerging business scenario have played a pivotal role in the development of a new segment in the labour market – the flexi staffing industry.
V.Sounder Rajan
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M: 98401-42164
From India, Chennai
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Some of the important changes that have taken place in the Indian labour market as a result of the changes in the economic and business scenario are: need to quickly adjust workforce to transient, seasonal or structural demand volatility, both in terms of numbers and composition.
Mechanism to address such transitory needs as in the case of temporary unavailability of internal staff without any loss in productivity, need to focus on core activities and need for skilled labour.
However, identification of skilled manpower, ensuring a match with company needs and retention of staff is never an easy job, and this is further compounded by the short supply of such skilled labour and high attrition rates experienced recently.
These features of the emerging business scenario have played a pivotal role in the development of a new segment in the labour market – the flexi staffing industry.
V.Sounder Rajan
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M: 98401-42164
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National Company Law Tribunal- Mumbai Bench (NCLT ) by in a land mark Judgment dated September 12, 2018 in the matter of Precision Fasteners Ltd has held that provident fund dues to Company’s workmen are excluded from the liquidation assets enabling the workmen/ employees to realize their savings as well as the employer’s contributions as a part of their fundamental right to life while the right of the creditors is merely a property right. Therefore, the dues in respect of provident/ pension/ gratuity shall not be considered as liquidation asset to be made the provisions of the Insolvency and Bankruptcy Code, 2016.
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V.Sounder Rajan
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Mrs. JUSTICE S.VIMALA of the Madras High Court held recently on 7 January 2019, in the matter of R.Devika vs The Chairman, that in the matter of denial of a job on account of pregnancy, she directed the government authorities to take into account the constitutional provisions of India and the maternity protection and convention of the International Labour Organization to frame guidelines by providing the best possible measures to support women candidates who are in difficult circumstances due to pregnancy, maternity, or other natural causes.
"The pregnancy and childbirth should not be considered as impediments for the discharge of duty. The concessions given to pregnant women shall not be construed as concessions towards the personal comfort of the women. The childbirth should be considered as a contribution to the continuity of generations, without which the existence of the world is impossible."
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"The pregnancy and childbirth should not be considered as impediments for the discharge of duty. The concessions given to pregnant women shall not be construed as concessions towards the personal comfort of the women. The childbirth should be considered as a contribution to the continuity of generations, without which the existence of the world is impossible."
V. Sounder Rajan
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Allowances for Provident Fund Contributions
LLR has persistently notified that employers should rationalize the allowances being paid to employees. However, on some allowances, provident fund contributions are not deducted. Repeated seminars have been held to create awareness, considering that the Gujarat, Madhya Pradesh, and Madras High Courts have ruled that all allowances, except house rent allowance, will be considered part of basic wages for provident fund contributions.
Aggrieved by these decisions, appeals were filed in the Supreme Court under the caption Surya Roshini Vs. State of Madhya Pradesh in SLP(C) No. 008781-008782/2012. After prolonged hearings, arguments were concluded on 06.02.2019, and now the judgment is reserved. LLR has informed that the judgment will be notified immediately upon its announcement. An important issue in EPF Law will be decided.
Source: Labour Law Reporter
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LLR has persistently notified that employers should rationalize the allowances being paid to employees. However, on some allowances, provident fund contributions are not deducted. Repeated seminars have been held to create awareness, considering that the Gujarat, Madhya Pradesh, and Madras High Courts have ruled that all allowances, except house rent allowance, will be considered part of basic wages for provident fund contributions.
Aggrieved by these decisions, appeals were filed in the Supreme Court under the caption Surya Roshini Vs. State of Madhya Pradesh in SLP(C) No. 008781-008782/2012. After prolonged hearings, arguments were concluded on 06.02.2019, and now the judgment is reserved. LLR has informed that the judgment will be notified immediately upon its announcement. An important issue in EPF Law will be decided.
Source: Labour Law Reporter
V. Sounder Rajan
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M: 98401-42164
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The Women Development and Child Welfare Department , Government of Telangana has recently launched a web portal for Registration of Internal complaints Committee (ICC)under the Sexual Harassment of Women at Workplace ( Prevention, Prohibition and Redressal) Act 2013 . As per section 4 of the act , it is mandatory for all workplaces having 10 or more employees to constitute a committee under the act for each of the offices separately and also need to frame a policy under the act.
As per the Telangana State Government notification the details of the ICC’s shall be registered by the company through the webportal : http//tshebox.tgwdxw.in . The last date of completing the online registration is 15th July 2019 , failure of completion of registration will attract penalty of Rs.50000/-.
In the view of the above notification all Establishments will be required to furnish the details under the option of “Register As ICC” and the same should be done for each offices separately. This is only limited to the offices in the state of Telangana requiring the completion of registration on before 15th July 2019.
T-She Box: Sexual Harassment Electronic Box
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As per the Telangana State Government notification the details of the ICC’s shall be registered by the company through the webportal : http//tshebox.tgwdxw.in . The last date of completing the online registration is 15th July 2019 , failure of completion of registration will attract penalty of Rs.50000/-.
In the view of the above notification all Establishments will be required to furnish the details under the option of “Register As ICC” and the same should be done for each offices separately. This is only limited to the offices in the state of Telangana requiring the completion of registration on before 15th July 2019.
T-She Box: Sexual Harassment Electronic Box
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(Fact Checked)-[The user's reply contains accurate information regarding the launch of the web portal for Registration of Internal Complaints Committee (ICC) under the Sexual Harassment of Women at Workplace Act 2013 by the Women Development and Child Welfare Department, Government of Telangana. It correctly states the requirement for workplaces with 10 or more employees to constitute a committee and frame a policy under the act. The details provided align with the latest laws and regulations.] (1 Acknowledge point)
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The Women & Child Development Department , Mumbai City Collectorate, Government of Maharashtra has issued an order to register internal complaints Committee (ICC) under the Sexual Harassment of Women at Workplace ( Prevention, Prohibition and Redressal) Act 2013 . As per section 4 of the act , it is mandatory for all workplaces having 10 or more employees to constitute a committee under the act for each of the offices separately and also need to frame a policy under the act.
As per the Mumbai City Collectorate order ( attached ) , the details of the ICC’s shall be submitted by the company as per enclosed format. The last date of submission is 20th July 2019 , failure of submission will attract penalty of Rs.50000/-.
In the view of the above order, Establishments will be required to furnish the details. This is only limited to the offices in the district of Mumbai City requiring such entities to submit the details on before 20th July 2019.
As per the District Women & Child Development Officer’s order, the details of the ICC’s shall be submitted by the company as per enclosed format to his office at Bldg. 117, BDD Chawl, 1st Floor, Dr. Ambedkar Colony Compound, Dr. G. M. Bhosale Marg, Worli, Mumbai 400 018. The last date of submission is 20th July 2019.
From India, Chennai
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As per the Mumbai City Collectorate order ( attached ) , the details of the ICC’s shall be submitted by the company as per enclosed format. The last date of submission is 20th July 2019 , failure of submission will attract penalty of Rs.50000/-.
In the view of the above order, Establishments will be required to furnish the details. This is only limited to the offices in the district of Mumbai City requiring such entities to submit the details on before 20th July 2019.
As per the District Women & Child Development Officer’s order, the details of the ICC’s shall be submitted by the company as per enclosed format to his office at Bldg. 117, BDD Chawl, 1st Floor, Dr. Ambedkar Colony Compound, Dr. G. M. Bhosale Marg, Worli, Mumbai 400 018. The last date of submission is 20th July 2019.
From India, Chennai
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(Fact Checked)-The information provided in the user reply is accurate regarding the requirement to constitute an Internal Complaints Committee (ICC) under the Sexual Harassment of Women at Workplace Act, 2013 for workplaces with 10 or more employees. The details and deadlines mentioned align with the legal provisions. (1 Acknowledge point)
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There was question posed like this:
Dear all,
We are a Noida based BPO with strength of 300 employees. We have a data entry process in which volume inflow fluctuates across the week. The process witnesses 2 fold increase in volume for 5-6 hours on Monday & Friday. Employing full time employees to manage volume for 7-8 days in a month will results in under-utilization and add to the cost in a low margin process. To mitigate the situation, we are planning to manage the volume fluctuation by deploying 8-10 part-time resources on these days. We plan to hire services of such part time resources from a third party vendor and they will be working between 2:00 a.m. to 9:00 a.m. from the office premises. We will be providing them mid-night meals available in our office cafeteria. Please help by informing on:
1. Will these part time resources be considered as employees or can be treated as service providers, as they will be working from office premises on only 4 days of the month
2. Will PF, Bonus, ESIC etc will be applicable
3. Are we required to provide them transport by law even if the PTEs are males
4. Are there any other compliance requirements we need to follow
You are welcome to provide any other suggestion to manage the situation.
Our suggestion :-
The definition of employee under the UP Shops and Establishments Act is wide -(6)'employee' means a person wholly or mainly employed on wages by an employer in, or in connection with any trade, business or manufacture carried on in a shop or commercial establishmentand includes—(a)caretaker,mali or a member of the watch and ward staff;(b)any clerical or other staff of a factory or industrial establishment, which is not covered by the provisions of the Factories Act, 1948; and(c)any apprentice or a contract or piece-rate worker.So the welfare benefits like ESIC and EPF should either be provided by you or the Service provider.if it is provided by you then you can deduct it from the Bills of the Service provider.
V.Sounder Rajan
Advocate -Labour & HR & Consumer Law Consultant -Chennai
Legal Consultant for Indian Staffing & Recruiting Industry
From India, Chennai
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Dear all,
We are a Noida based BPO with strength of 300 employees. We have a data entry process in which volume inflow fluctuates across the week. The process witnesses 2 fold increase in volume for 5-6 hours on Monday & Friday. Employing full time employees to manage volume for 7-8 days in a month will results in under-utilization and add to the cost in a low margin process. To mitigate the situation, we are planning to manage the volume fluctuation by deploying 8-10 part-time resources on these days. We plan to hire services of such part time resources from a third party vendor and they will be working between 2:00 a.m. to 9:00 a.m. from the office premises. We will be providing them mid-night meals available in our office cafeteria. Please help by informing on:
1. Will these part time resources be considered as employees or can be treated as service providers, as they will be working from office premises on only 4 days of the month
2. Will PF, Bonus, ESIC etc will be applicable
3. Are we required to provide them transport by law even if the PTEs are males
4. Are there any other compliance requirements we need to follow
You are welcome to provide any other suggestion to manage the situation.
Our suggestion :-
The definition of employee under the UP Shops and Establishments Act is wide -(6)'employee' means a person wholly or mainly employed on wages by an employer in, or in connection with any trade, business or manufacture carried on in a shop or commercial establishmentand includes—(a)caretaker,mali or a member of the watch and ward staff;(b)any clerical or other staff of a factory or industrial establishment, which is not covered by the provisions of the Factories Act, 1948; and(c)any apprentice or a contract or piece-rate worker.So the welfare benefits like ESIC and EPF should either be provided by you or the Service provider.if it is provided by you then you can deduct it from the Bills of the Service provider.
V.Sounder Rajan
Advocate -Labour & HR & Consumer Law Consultant -Chennai
Legal Consultant for Indian Staffing & Recruiting Industry
From India, Chennai
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Dear All
Sub: Recent trend in accepting permanency claim for Contract staff – reg.
In the process of enriching legal knowledge for HR professionals it is necessary to highlight that recently on 7/2/2020, Mr.Justice Chandrachud of the Hon’ble Supreme Court of India in the matter of ONGC –vs- Krishan Gopal has re-affirmed the power of Labour Courts alone to grant the relief of permanency. They are importantly as follows:
(i) The statutory power of the Labour Court or Industrial Court to grant relief to workmen including the status of permanency continues to exist in circumstances where the employer has indulged in an unfair labour practice by not filling up permanent posts even though such posts are available and by continuing to employ workmen as temporary or daily wage employees despite their performing the same work as regular workmen on lower wages;
(ii) Where an employer has regularised similarly situated workmen either in a scheme or otherwise, it would be open to workmen who have been deprived of the same benefit at par with the workmen who have been regularised to make a complaint before the Labour or Industrial Court, since the deprivation of the benefit would amount to a violation of Article 14; and
(iii) In order to constitute an unfair labour practice under Section 2(ra) read with Item 10 of the Vth Schedule of the ID Act, the employer should be engaging workmen as badlis, temporaries or casuals, and continuing them for years, with the object of depriving them of the benefits payable to permanent workmen.
With regards
V.Sounder Rajan
Advocate-Chennai
From India, Chennai
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Sub: Recent trend in accepting permanency claim for Contract staff – reg.
In the process of enriching legal knowledge for HR professionals it is necessary to highlight that recently on 7/2/2020, Mr.Justice Chandrachud of the Hon’ble Supreme Court of India in the matter of ONGC –vs- Krishan Gopal has re-affirmed the power of Labour Courts alone to grant the relief of permanency. They are importantly as follows:
(i) The statutory power of the Labour Court or Industrial Court to grant relief to workmen including the status of permanency continues to exist in circumstances where the employer has indulged in an unfair labour practice by not filling up permanent posts even though such posts are available and by continuing to employ workmen as temporary or daily wage employees despite their performing the same work as regular workmen on lower wages;
(ii) Where an employer has regularised similarly situated workmen either in a scheme or otherwise, it would be open to workmen who have been deprived of the same benefit at par with the workmen who have been regularised to make a complaint before the Labour or Industrial Court, since the deprivation of the benefit would amount to a violation of Article 14; and
(iii) In order to constitute an unfair labour practice under Section 2(ra) read with Item 10 of the Vth Schedule of the ID Act, the employer should be engaging workmen as badlis, temporaries or casuals, and continuing them for years, with the object of depriving them of the benefits payable to permanent workmen.
With regards
V.Sounder Rajan
Advocate-Chennai
From India, Chennai
Acknowledge(0)Amend(0)CiteHR.AI
(Fact Checked)-The information provided in the user reply is correct based on the recent judgement of Mr. Justice Chandrachud of the Supreme Court of India in the case of ONGC vs. Krishan Gopal. The user accurately summarized the key points regarding the power of Labour Courts to grant permanency relief. (1 Acknowledge point)
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CiteHR.AI
(Fact Checked)-The user's reply is factually correct regarding the recent Supreme Court judgement by Mr. Justice Chandrachud in the matter of ONGC vs. Krishan Gopal affirming the power of Labour Courts to grant permanency relief based on unfair labor practices. Well done! (1 Acknowledge point)
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From Recent NHRD Conference at Hosur ,Tamilnadu
Key Highlights of the Panel discussion :
Panel Topic : Conflict to Confluence - Capital & Labour - Divergence to Convergence :
Is the need of the hour?
Panel Moderator: Dr. Balasubramanian – Founder - SVYM & GRAAM
Panel Speakers: Shri. Sitaram Yechuri – Former Chairman Agriculture Committee
Adv. Saji Narayanan – National President - BMS
Adv. S N Murthy – Sr. Advocate & Labour Law Advisor
Adv. Benny Thomas – Sr. Advocate & Labour Law Advisor
1. CTC - Contribution To Company – one should not see as costs but as contribution
2.Respect not only ‘Wealth Creators’ (Owners) but also ‘Value Creators” (Labour)
3.Management consultants have to see both sides of the coin and advise the management and show them the right direction to solve the labour problem, handling the union etc.,
4.Unity in diversity must be the policy: How best to maintain good relationship with the trade unions and employees of the organization not compromising on the principles of the organization / natural justice.
5.Employers need to be transparent to workers on financial matters
6.Need for National Wage Policy similar to GST
7. When multicultural workforce come into working together there is chance for misunderstanding cultures. Be sensible to cultural diversity. Understand other human beings from heart not through head.
8.Capital & labour are the 2 sides of the same coin. One cannot exist without the other. Zero tolerance cultures towards bullying and harassment, how to cultivate positive relations with the trade unions are the challenges of the capital.
9.Convergence not only on factories, on a larger frame work
10. Human values and value systems keep on changing: look into the value of the people working, encourage them, motivate them and develop skill building.
11. We need to look for the emergence of a stakeholder economy where corporates go beyond mere profit maximization to benefit optimization.
Courtesy: NHRD -Mr P Babu -Hosur
Regards
V.Sounder Rajan
Advocate -Chennai
From India, Chennai
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Key Highlights of the Panel discussion :
Panel Topic : Conflict to Confluence - Capital & Labour - Divergence to Convergence :
Is the need of the hour?
Panel Moderator: Dr. Balasubramanian – Founder - SVYM & GRAAM
Panel Speakers: Shri. Sitaram Yechuri – Former Chairman Agriculture Committee
Adv. Saji Narayanan – National President - BMS
Adv. S N Murthy – Sr. Advocate & Labour Law Advisor
Adv. Benny Thomas – Sr. Advocate & Labour Law Advisor
1. CTC - Contribution To Company – one should not see as costs but as contribution
2.Respect not only ‘Wealth Creators’ (Owners) but also ‘Value Creators” (Labour)
3.Management consultants have to see both sides of the coin and advise the management and show them the right direction to solve the labour problem, handling the union etc.,
4.Unity in diversity must be the policy: How best to maintain good relationship with the trade unions and employees of the organization not compromising on the principles of the organization / natural justice.
5.Employers need to be transparent to workers on financial matters
6.Need for National Wage Policy similar to GST
7. When multicultural workforce come into working together there is chance for misunderstanding cultures. Be sensible to cultural diversity. Understand other human beings from heart not through head.
8.Capital & labour are the 2 sides of the same coin. One cannot exist without the other. Zero tolerance cultures towards bullying and harassment, how to cultivate positive relations with the trade unions are the challenges of the capital.
9.Convergence not only on factories, on a larger frame work
10. Human values and value systems keep on changing: look into the value of the people working, encourage them, motivate them and develop skill building.
11. We need to look for the emergence of a stakeholder economy where corporates go beyond mere profit maximization to benefit optimization.
Courtesy: NHRD -Mr P Babu -Hosur
Regards
V.Sounder Rajan
Advocate -Chennai
From India, Chennai
Acknowledge(0)Amend(0)
Very Important Internal Circular w.r.t to Section 7A of Employees’ Provident Funds & Miscellaneous Provisions Act, 1952
Section 7A of Employees’ Provident Funds & Miscellaneous Provisions Act, 1952provides for quantification of amount due from any employer under any provision of this Act and Schemes framed thereunder. The amount so quantified is recovered in accordance with the procedure prescribed under various provisions of the Act.
EPF has issued an Internal circular on 14th February 2020 and notified revised procedure/guidelines for initiation of inquiries u/s 7A of Employees’ Provident Funds & Miscellaneous Provisions Act, 1952.This circular is attached.
V.Sounder Rajan
Advocate -Labour & HR & Consumer Law Consultant -Chennai
Legal Consultant for Indian Staffing & Recruiting Industry
From India, Chennai
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Section 7A of Employees’ Provident Funds & Miscellaneous Provisions Act, 1952provides for quantification of amount due from any employer under any provision of this Act and Schemes framed thereunder. The amount so quantified is recovered in accordance with the procedure prescribed under various provisions of the Act.
EPF has issued an Internal circular on 14th February 2020 and notified revised procedure/guidelines for initiation of inquiries u/s 7A of Employees’ Provident Funds & Miscellaneous Provisions Act, 1952.This circular is attached.
V.Sounder Rajan
Advocate -Labour & HR & Consumer Law Consultant -Chennai
Legal Consultant for Indian Staffing & Recruiting Industry
From India, Chennai
Acknowledge(0)Amend(0)CiteHR.AI
(Fact Checked)-The user's reply regarding the Section 7A of the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952 is factually correct. It accurately describes the quantification of amounts due from employers and the recovery procedures. The reference to the internal circular issued by EPF is also relevant for compliance. (1 Acknowledge point)
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CiteHR.AI
(Fact Checked)-The user's reply contains accurate information regarding Section 7A of the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952 and the circular issued by EPF in 2020. The details provided are aligned with the relevant laws and regulations. (1 Acknowledge point)
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COVID-19 is declared as "notified disaster" in India.
Central Government notified COVID-19 as "notified disaster" on Sunday the 15th March 2020.Lot of State Govts have followed suit.
Critical Medical conditions or pandemic situations are not under the notified disaster lists under the Disaster Management Act, 2005 because the SDRF (State Disaster Relief Fund) funds shall be used only for cyclone, earthquake, drought, landslide, hailstorm, cloudburst, avalanche, frost, pest attack and cold waves.
Recently, Karnataka State also invoked the provisions of Epidemic Diseases Act, 1897 (Central Act 3 of 1897) and notified regulations called ‘Karnataka Epidemic Diseases, COVID-19 Regulations, 2020’ to prevent COVID-19.
Because COVID-19 has been brought under the fold of above two legislation, Spreading rumours and creating panic regarding disasters and epidemic diseases are punishable under the above cited Acts.
Section 54 in the Disaster Management Act, 2005
54. Punishment for false warning.—whoever makes or circulates a false alarm or warning as to disaster or its severity or magnitude, leading to panic, shall on conviction, be punishable with imprisonment which may extend to one year or with fine. —whoever makes or circulates a false alarm or warning as to disaster or its severity or magnitude, leading to panic, shall on conviction, be punishable with imprisonment which may extend to one year or with fine."
Regulation 6 of Karnataka Epidemic Diseases, COVID-19 Regulations, 2020
6. No person/institution /organization shall use any print or electronic media for misinformation regarding COVID-19 without prior permission of the Department of Health and Family Welfare. This is to avoid the spread of any rumour or unauthenticated information regarding COVID-19. In case any person/institution/organization is found indulging in such activity it will be treated as a punishable offence under these regulations."
HR Team of viewers while organizing awareness programs about COVID-19 needs to bring awareness among employees in their organization about penal provisions also for spreading false/misinformation in social media and through other type of communications.
vsrlaw
From India, Chennai
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Central Government notified COVID-19 as "notified disaster" on Sunday the 15th March 2020.Lot of State Govts have followed suit.
Critical Medical conditions or pandemic situations are not under the notified disaster lists under the Disaster Management Act, 2005 because the SDRF (State Disaster Relief Fund) funds shall be used only for cyclone, earthquake, drought, landslide, hailstorm, cloudburst, avalanche, frost, pest attack and cold waves.
Recently, Karnataka State also invoked the provisions of Epidemic Diseases Act, 1897 (Central Act 3 of 1897) and notified regulations called ‘Karnataka Epidemic Diseases, COVID-19 Regulations, 2020’ to prevent COVID-19.
Because COVID-19 has been brought under the fold of above two legislation, Spreading rumours and creating panic regarding disasters and epidemic diseases are punishable under the above cited Acts.
Section 54 in the Disaster Management Act, 2005
54. Punishment for false warning.—whoever makes or circulates a false alarm or warning as to disaster or its severity or magnitude, leading to panic, shall on conviction, be punishable with imprisonment which may extend to one year or with fine. —whoever makes or circulates a false alarm or warning as to disaster or its severity or magnitude, leading to panic, shall on conviction, be punishable with imprisonment which may extend to one year or with fine."
Regulation 6 of Karnataka Epidemic Diseases, COVID-19 Regulations, 2020
6. No person/institution /organization shall use any print or electronic media for misinformation regarding COVID-19 without prior permission of the Department of Health and Family Welfare. This is to avoid the spread of any rumour or unauthenticated information regarding COVID-19. In case any person/institution/organization is found indulging in such activity it will be treated as a punishable offence under these regulations."
HR Team of viewers while organizing awareness programs about COVID-19 needs to bring awareness among employees in their organization about penal provisions also for spreading false/misinformation in social media and through other type of communications.
vsrlaw
From India, Chennai
Acknowledge(0)Amend(0)CiteHR.AI
(Fact Checked)-[response] The information provided about the legal aspects related to COVID-19 being declared a "notified disaster" and the implications under the Disaster Management Act, 2005 and Karnataka Epidemic Diseases Act, 1897 is accurate and aligns with the latest laws. (1 Acknowledge point)
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CiteHR.AI
(Fact Checked)-The user's reply contains accurate information regarding the classification of COVID-19 as a "notified disaster" in India, the relevant legislation, and the penalties for spreading false information. The references to the Disaster Management Act, 2005, and the Karnataka Epidemic Diseases, COVID-19 Regulations, 2020 are correct. (1 Acknowledge point)
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Circular dated 1st July, 2020, the Employees State Insurance Corporation (“ESIC”)
ESIC (Attached Circular) allows Employers to file Return of Contribution up to 15th July, 2020 for the contribution period October 2019 to March, 2020
In a Circular dated 1st July, 2020, the Employees State Insurance Corporation (“ESIC”) [Attached] has informed that the employers are allowed to file Return of Contribution upto 15th July, 2020 for the contribution period October 2019 to March, 2020.
As you are aware previously, in a Circular dated 18th May, 2020 ESIC had relaxed the provisions of Regulation 26 under the Employees’ State Insurance (General) Regulation, 1950 wherein the employers were allowed to file the return of contribution upto 11th June, 2020 for the contribution period from October, 2019 to March, 2020.
Accordingly by the Attached Circular, relaxation is granted to the employers to file Return of Contribution upto 15th July, 2020 for the contribution period October 2019 to March, 2020
From India, Chennai
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ESIC (Attached Circular) allows Employers to file Return of Contribution up to 15th July, 2020 for the contribution period October 2019 to March, 2020
In a Circular dated 1st July, 2020, the Employees State Insurance Corporation (“ESIC”) [Attached] has informed that the employers are allowed to file Return of Contribution upto 15th July, 2020 for the contribution period October 2019 to March, 2020.
As you are aware previously, in a Circular dated 18th May, 2020 ESIC had relaxed the provisions of Regulation 26 under the Employees’ State Insurance (General) Regulation, 1950 wherein the employers were allowed to file the return of contribution upto 11th June, 2020 for the contribution period from October, 2019 to March, 2020.
Accordingly by the Attached Circular, relaxation is granted to the employers to file Return of Contribution upto 15th July, 2020 for the contribution period October 2019 to March, 2020
From India, Chennai
Acknowledge(0)Amend(0)CiteHR.AI
(Fact Checked)-The user reply regarding the ESIC circular and filing of Return of Contribution is accurate based on the latest information. (1 Acknowledge point)
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CiteHR.AI
(Fact Checked)-The information provided in the user reply regarding the circular dated 1st July, 2020, by the Employees State Insurance Corporation (ESIC) is correct. (1 Acknowledge point)
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LEGAL COMPLIANCES.doc
Food industry compliances.pdf
Legal COMPLIANCEs and DUE dates.xls
CiteHR.AI
(Fact Checked)-The user's reply is factually correct, aligning with the Supreme Court judgement in the matter of General Manager (OSD), Bengal Nagpur Cotton Mills Rajnandgaon Vs. Bharat Lal & anr on 14-12-2010. The two tests mentioned are indeed crucial in determining the status of contract labor. Well done! (1 Acknowledge point)CiteHR.AI
(Fact Checked)-The user reply contains accurate information regarding the tests to determine if contract labor are direct employees of the principal employer based on the Supreme Court judgement in General Manager (OSD), Bengal Nagpur Cotton Mills Rajnandgaon Vs. Bharat Lal & anr. The advice on compliance audits for both staffing companies and principal employers is relevant. (1 Acknowledge point)