Dear Sunil Kumar Chauhan ji,
I appreciate your reply.
By law, the employer is liable to pay bonus. In this forum, we are here to enhance our knowledge by sharing and participating in discussions.
The employer is liable to pay not only a bonus. He is liable to pay as per minimum wage rates as declared by the government. He is liable to make other statutory compliances also. Failure to do so, he is liable for penal action.
An employer may be a contractor. The contractor or any employer cannot take a stand that he cannot make payment as per the minimum wage rate. He cannot make payment of a bonus. He cannot extend minimum facilities to his employees which are to be provided as per the law. He cannot make due compliance of applicable law. All these things are not viable for him. He is not getting a price for all these things from his principal employer, or he is not getting that much profit to do all these statutory things.
Any contract or agreement is not one-sided. It is both-sided. Both parties to it agree to it in totality. You cannot take a stand that your principal, i.e., the other party to the contract, is not paying you sufficiently by which you can discharge your legal liabilities. Such a contract is illegal ab initio. You are liable for this illegal contract.
I hope you are convinced that the principal employer is not liable to make payment of a bonus.
I will appreciate if you ask how many contract laborers are actually paid a bonus by their employer (contractors)?
Law does not change even if you get the truth.
Who is responsible for it? You and I, i.e., WE, or the Government who makes the law or the officers who come to collect money from you?
Now, the Govt. of Maharashtra, via its ordinance dated 17.09.2010, has mandated payment of bonus through a cheque/bank account only. But still, is there any guarantee that the poor employers who are indulged in the illegal contracts will adhere to this ordinance and if they will not find some way out to recover the amount from employees?
I think we should have more discussion in this regard.
Thanks with regards,
Keshav Korgaonkar
From India, Mumbai
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2636I appreciate your reply.
By law, the employer is liable to pay bonus. In this forum, we are here to enhance our knowledge by sharing and participating in discussions.
The employer is liable to pay not only a bonus. He is liable to pay as per minimum wage rates as declared by the government. He is liable to make other statutory compliances also. Failure to do so, he is liable for penal action.
An employer may be a contractor. The contractor or any employer cannot take a stand that he cannot make payment as per the minimum wage rate. He cannot make payment of a bonus. He cannot extend minimum facilities to his employees which are to be provided as per the law. He cannot make due compliance of applicable law. All these things are not viable for him. He is not getting a price for all these things from his principal employer, or he is not getting that much profit to do all these statutory things.
Any contract or agreement is not one-sided. It is both-sided. Both parties to it agree to it in totality. You cannot take a stand that your principal, i.e., the other party to the contract, is not paying you sufficiently by which you can discharge your legal liabilities. Such a contract is illegal ab initio. You are liable for this illegal contract.
I hope you are convinced that the principal employer is not liable to make payment of a bonus.
I will appreciate if you ask how many contract laborers are actually paid a bonus by their employer (contractors)?
Law does not change even if you get the truth.
Who is responsible for it? You and I, i.e., WE, or the Government who makes the law or the officers who come to collect money from you?
Now, the Govt. of Maharashtra, via its ordinance dated 17.09.2010, has mandated payment of bonus through a cheque/bank account only. But still, is there any guarantee that the poor employers who are indulged in the illegal contracts will adhere to this ordinance and if they will not find some way out to recover the amount from employees?
I think we should have more discussion in this regard.
Thanks with regards,
Keshav Korgaonkar
From India, Mumbai
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Dear All,
Please read the second last para of the above posting as follows:
Now, the Government of Maharashtra, vide its ordinance dated 17.09.2010, has mandated payment of bonuses through cheque/bank account only. However, is there any guarantee that the poor employers engaged in illegal contracts will adhere to this ordinance? And if they do, will they not find some way to recover the amount from employees?
The word "ALL" is missing in the original posting. I kindly request the administrators of CiteHr to edit my post accordingly to assist you all.
Thank you once again.
Keshav Korgaonkar
From India, Mumbai
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Please read the second last para of the above posting as follows:
Now, the Government of Maharashtra, vide its ordinance dated 17.09.2010, has mandated payment of bonuses through cheque/bank account only. However, is there any guarantee that the poor employers engaged in illegal contracts will adhere to this ordinance? And if they do, will they not find some way to recover the amount from employees?
The word "ALL" is missing in the original posting. I kindly request the administrators of CiteHr to edit my post accordingly to assist you all.
Thank you once again.
Keshav Korgaonkar
From India, Mumbai
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POBC act is applicable in your company for all employees drawing 10,000 or less, subject to a ceiling of 20% of Rs. 3500 = 8400/- and a minimum of 8.33% on 3500, depending on the last three years' balance sheet and provision of available surplus and allocable surplus after observing the process of set on and set off. However, please check whether the company is really operating for the last three years and the balance sheet for the last three years is published or not. Even if the company is showing a loss in the balance sheet for the last three years and there is no set on available, they still have to pay an 8.33% bonus. The Dy labour commissioner may intervene suo moto if any complaint/dispute is lodged with him, and the company may land in deep trouble.
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Dear All,
Apart from this bonus issue, I would like to share my query regarding compliance:
1. As per the Labour Abolition Act, it is mandatory for the principal employer to contribute to ESI/PF amounts as per the act. However, if some job contractors are working within the premises, is it necessary for the management to share this contribution?
2. Is this requirement also applicable to the canteen contractor? Do both agencies fall under the Labour Contract Act?
Please provide advice on the same.
Regards,
Devendra
From India, Pune
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Apart from this bonus issue, I would like to share my query regarding compliance:
1. As per the Labour Abolition Act, it is mandatory for the principal employer to contribute to ESI/PF amounts as per the act. However, if some job contractors are working within the premises, is it necessary for the management to share this contribution?
2. Is this requirement also applicable to the canteen contractor? Do both agencies fall under the Labour Contract Act?
Please provide advice on the same.
Regards,
Devendra
From India, Pune
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1. The Contract Labor Regulation and Abolition Act does not state that the principal employer is responsible for paying ESI and PF to contract laborers. In reality, the contractor, also known as the immediate employer, is responsible for complying with the provisions of ESI and PF. However, in case of violations of these acts, the principal employer is also liable to face penal action from the ESI and PF authorities separately.
2. In practice, there is no such thing as a job contract. If a contractor is paid based on measurements (e.g., X Rs for Y Kg/Cubic feet/pieces of work done), the provisions of minimum wages, ESI, and PF acts apply to the contract laborers employed by the contractor. For instance, if the minimum wages set by the state government are Rs 170/- per day per laborer, the contractor must deposit PF at 13.61% and ESI at 4.75% based on the minimum wages. The principal employer must ensure that such contributions are deposited with the PF and ESI departments by the contractors (immediate employer). The act mandates that labor payments must be made in the presence of an authorized representative of the principal employer.
3. ESI and PF are applicable to laborers engaged by canteen contractors as well.
4. Every contractor should have their own PF and ESI registration number, into which they should deposit the PF and ESI contributions of their laborers. However, if any contractor does not have their own PF and ESI code, the principal employer may obtain a subcode in their name and deposit the ESI/PF contributions of the contract laborers.
Mihir
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2. In practice, there is no such thing as a job contract. If a contractor is paid based on measurements (e.g., X Rs for Y Kg/Cubic feet/pieces of work done), the provisions of minimum wages, ESI, and PF acts apply to the contract laborers employed by the contractor. For instance, if the minimum wages set by the state government are Rs 170/- per day per laborer, the contractor must deposit PF at 13.61% and ESI at 4.75% based on the minimum wages. The principal employer must ensure that such contributions are deposited with the PF and ESI departments by the contractors (immediate employer). The act mandates that labor payments must be made in the presence of an authorized representative of the principal employer.
3. ESI and PF are applicable to laborers engaged by canteen contractors as well.
4. Every contractor should have their own PF and ESI registration number, into which they should deposit the PF and ESI contributions of their laborers. However, if any contractor does not have their own PF and ESI code, the principal employer may obtain a subcode in their name and deposit the ESI/PF contributions of the contract laborers.
Mihir
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Dear Mr. Mihir,
Thank you for your reply!
My question is regarding labor contractors. We provide ESI and PF contributions (4.75% and 13.61%) for labor contractors. However, in the case of job contractors, they are responsible for paying these amounts for their workforce. Are job contractors considered the principal employers for job contract workers?
On the contrary, for labor contractors, we are the principal employers. So, do we also need to pay the ESI/PF share to job contractors?
Thank you.
From India, Pune
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Thank you for your reply!
My question is regarding labor contractors. We provide ESI and PF contributions (4.75% and 13.61%) for labor contractors. However, in the case of job contractors, they are responsible for paying these amounts for their workforce. Are job contractors considered the principal employers for job contract workers?
On the contrary, for labor contractors, we are the principal employers. So, do we also need to pay the ESI/PF share to job contractors?
Thank you.
From India, Pune
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