In our organisation, we employ daily wagers , many of them are working since many years, with a break in service of almost 2 months and 1 month. Does payment of gratuity applies to them ?
From India, Pune
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1From India, Pune
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Dear Member,
Please consider the following links to discussions on the current topic of interest to you:
- https://www.citehr.com/174408-contin...-gratuity.html
- https://www.citehr.com/435270-gratui...-employee.html
- https://www.citehr.com/487796-gratui...ce-period.html
You could further search the website for information useful to you. I believe this will help you in finding answers soon.
Best regards,
Citelegal
From India , Delhi
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Please consider the following links to discussions on the current topic of interest to you:
- https://www.citehr.com/174408-contin...-gratuity.html
- https://www.citehr.com/435270-gratui...-employee.html
- https://www.citehr.com/487796-gratui...ce-period.html
You could further search the website for information useful to you. I believe this will help you in finding answers soon.
Best regards,
Citelegal
From India , Delhi
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Thank you for the reply. I could get a better picture from these links. However, I have one query. These employees are not on our payroll. We have permanent employees as per our authorization. In addition, we have employed these daily wagers who have been working with the institute for many years. Some of them work throughout the year without taking any breaks, while others are sent on compulsory breaks of two months or one month. Are these people eligible for gratuity?
From India, Pune
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From India, Pune
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Dear friend,
The mode or periodicity of payment of wages does not alter the employer-employee relationship as long as there is regularity of employment. What is important is that to be eligible to claim gratuity from the employer, the employee, irrespective of their employment status such as permanent, temporary, casual, etc., should have completed not less than five years of continuous service under the same employer. To be entitled to gratuity, the employee should have completed 240 days of continuous service in every year as defined under section 2-A of the Payment of Gratuity Act, 1972.
The breaks in service repeatedly mentioned in your posts might not be due to the fault of the employees but could have been intentionally given by the management to show discontinuity in their services. Moreover, as these breaks range from only one to two months in every year, they cannot reduce the 240 days of continuous service in such years. Therefore, if the Payment of Gratuity Act, 1972 is applicable to the establishment, daily wagers are eligible for gratuity upon the termination of their employment.
Thank you.
From India, Salem
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The mode or periodicity of payment of wages does not alter the employer-employee relationship as long as there is regularity of employment. What is important is that to be eligible to claim gratuity from the employer, the employee, irrespective of their employment status such as permanent, temporary, casual, etc., should have completed not less than five years of continuous service under the same employer. To be entitled to gratuity, the employee should have completed 240 days of continuous service in every year as defined under section 2-A of the Payment of Gratuity Act, 1972.
The breaks in service repeatedly mentioned in your posts might not be due to the fault of the employees but could have been intentionally given by the management to show discontinuity in their services. Moreover, as these breaks range from only one to two months in every year, they cannot reduce the 240 days of continuous service in such years. Therefore, if the Payment of Gratuity Act, 1972 is applicable to the establishment, daily wagers are eligible for gratuity upon the termination of their employment.
Thank you.
From India, Salem
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Umakanthan Sir has rightly said that 240 days of continuous services are required for five years in a row to be entitled to gratuity. If the employer has given breaks, but even then, if the days of service in a year are 240, for five continuous years, then gratuity will be applicable.
From India, Vadodara
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From India, Vadodara
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Dear friend, One should complete contineous service of 5 years. The contineous service nothing but 240 days working in a calender year. Any break in service can not be treated as contineous service.
From India, Mumbai
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From India, Mumbai
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Dear Umakanthan Sir and all,
I am working in a construction company where we have to hire many casual laborers to work at our different projects or townships. These workers do not work like permanent employees; instead, they demand wages per day or after two or four days. Hence, we have to make the payment accordingly, usually on a per-day basis.
For example, if we hire a worker to work at our site in the evening, we also have to make the payment to him. However, the next day, he may not come for duty. According to EPF and ESIC norms, if any employee or worker has worked, they should be enrolled in PF and ESIC from the very first day. It is challenging to comply with labor laws in such situations regarding casual labor. Can you please clarify the following:
1) Whether construction sites fall under the purview of the Shop and Commercial Establishment Act or the Factory Act.
2) Whether we have to complete the joining formalities for casual workers.
3) If we strictly adhere to the EPF and ESIC acts, are there any exceptions where casual workers are not required to be covered by ESIC and EPF?
Please resolve my above queries. Thank you.
Ankur
From India, Jaipur
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I am working in a construction company where we have to hire many casual laborers to work at our different projects or townships. These workers do not work like permanent employees; instead, they demand wages per day or after two or four days. Hence, we have to make the payment accordingly, usually on a per-day basis.
For example, if we hire a worker to work at our site in the evening, we also have to make the payment to him. However, the next day, he may not come for duty. According to EPF and ESIC norms, if any employee or worker has worked, they should be enrolled in PF and ESIC from the very first day. It is challenging to comply with labor laws in such situations regarding casual labor. Can you please clarify the following:
1) Whether construction sites fall under the purview of the Shop and Commercial Establishment Act or the Factory Act.
2) Whether we have to complete the joining formalities for casual workers.
3) If we strictly adhere to the EPF and ESIC acts, are there any exceptions where casual workers are not required to be covered by ESIC and EPF?
Please resolve my above queries. Thank you.
Ankur
From India, Jaipur
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Dear Ankur,
Before addressing the three questions you have raised, I would like to discuss certain aspects/ingredients of the concept of employment of labor in order to differentiate it from the engagement of labor. Engaging labor for a specific work implies a service contract between the person seeking the services and the individual performing the work, either personally or through a third party, for monetary compensation. Once the work is completed and payment made, the contract concludes. This relationship is temporary and entails no additional rights or obligations beyond what was agreed upon.
On the other hand, employment involves the employer, employee, and the employment contract. The employment contract, whether explicit or implicit, establishes a lasting relationship between the employer and employee through mutually agreed-upon terms and obligations. In a Welfare State, the laissez-faire policy is replaced by the government's regulation of employment through labor legislation. These laws can amend existing employment contracts or introduce new ones through their regulatory authority.
Now, in this context, I will address your questions as follows:
1) Your construction site falls under the purview of the Building and Other Construction Workers' (Regulation of Employment and Conditions of Service) Act, 1996.
2) One interpretation of the term "casual" is irregular or non-permanent. When used to describe "casual labor," it refers to workers employed on a temporary or irregular basis. The focus is on the manner of employment rather than the nature of the job. Since the appointment is temporary, formalities regarding joining or leaving employment are not significant.
3) Analyzing the definitions of employee, wages, and contributions in the ESI Act, 1948, and the EPF Act, 1952, reveals no distinction based on the regularity of employment. Contributions are calculated based on wages earned, requiring periodic remittance without exemptions for casual labor. Keeping track of attendance and calculating wages for the days worked minimizes compliance difficulties. Casual employees automatically qualify for the rights and benefits under applicable labor laws based on meeting stipulated conditions.
I hope this clarifies the distinctions and answers your questions effectively.
Best regards,
[Your Name]
From India, Salem
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Before addressing the three questions you have raised, I would like to discuss certain aspects/ingredients of the concept of employment of labor in order to differentiate it from the engagement of labor. Engaging labor for a specific work implies a service contract between the person seeking the services and the individual performing the work, either personally or through a third party, for monetary compensation. Once the work is completed and payment made, the contract concludes. This relationship is temporary and entails no additional rights or obligations beyond what was agreed upon.
On the other hand, employment involves the employer, employee, and the employment contract. The employment contract, whether explicit or implicit, establishes a lasting relationship between the employer and employee through mutually agreed-upon terms and obligations. In a Welfare State, the laissez-faire policy is replaced by the government's regulation of employment through labor legislation. These laws can amend existing employment contracts or introduce new ones through their regulatory authority.
Now, in this context, I will address your questions as follows:
1) Your construction site falls under the purview of the Building and Other Construction Workers' (Regulation of Employment and Conditions of Service) Act, 1996.
2) One interpretation of the term "casual" is irregular or non-permanent. When used to describe "casual labor," it refers to workers employed on a temporary or irregular basis. The focus is on the manner of employment rather than the nature of the job. Since the appointment is temporary, formalities regarding joining or leaving employment are not significant.
3) Analyzing the definitions of employee, wages, and contributions in the ESI Act, 1948, and the EPF Act, 1952, reveals no distinction based on the regularity of employment. Contributions are calculated based on wages earned, requiring periodic remittance without exemptions for casual labor. Keeping track of attendance and calculating wages for the days worked minimizes compliance difficulties. Casual employees automatically qualify for the rights and benefits under applicable labor laws based on meeting stipulated conditions.
I hope this clarifies the distinctions and answers your questions effectively.
Best regards,
[Your Name]
From India, Salem
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Dear Umakanthan Sir,
If no joining formalities need to be processed in the case of casual labor, is there any defined period of employment for casual laborers? For example, casual workers may be restricted from working more than a certain number of days or months, such as 10 days or 15 days. If any worker exceeds this defined period, would they be deemed as regular workers?
Is there any such stipulated period in place?
From India, Jaipur
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If no joining formalities need to be processed in the case of casual labor, is there any defined period of employment for casual laborers? For example, casual workers may be restricted from working more than a certain number of days or months, such as 10 days or 15 days. If any worker exceeds this defined period, would they be deemed as regular workers?
Is there any such stipulated period in place?
From India, Jaipur
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