Hi All
I would like to get one clarification from you
Whether the contract labour is eligible for Gratuity after completion of 5 years of service, in case eligible , and if the sub contractor not paying the gratuity to the contract employee
will the Principle employer can be held responsible , your views pls
REgards
R Sudahkar
From India, Bangalore
3I would like to get one clarification from you
Whether the contract labour is eligible for Gratuity after completion of 5 years of service, in case eligible , and if the sub contractor not paying the gratuity to the contract employee
will the Principle employer can be held responsible , your views pls
REgards
R Sudahkar
From India, Bangalore
All employees are eligible for gratuity. Principal employer is liable for all statutory liabilities, if the Contractor does not pay.
It is applicable for gratuity as well.
However, the Principal employer can recover from the concerned Contractor if any money is due to the contractor.
From India, Chennai
It is applicable for gratuity as well.
However, the Principal employer can recover from the concerned Contractor if any money is due to the contractor.
From India, Chennai
Dear Sudhakar
Generally, in practice, one doesn't come across such cases; as 5 years is a long time to keep one continuously on contract; and as per the CLA&R Act; such contract labourers would have sought regular employment with the PE.
Warm regards.
From India, Delhi
Generally, in practice, one doesn't come across such cases; as 5 years is a long time to keep one continuously on contract; and as per the CLA&R Act; such contract labourers would have sought regular employment with the PE.
Warm regards.
From India, Delhi
Neither contract labour act nor gratuity act provides any rules that say that Gratuity must be paid by or reimbursed by the principal employer. We have been seeing these issues in many places.
As per law, the contractor is liable to pay gratuity as the direct employer of the worker.
However, he is not interested in paying. The principal employer is not going to pay either. There are no rules saying theynhave to pay. And no employer is interested in providing them more than what is laid down in law
From India, Mumbai
As per law, the contractor is liable to pay gratuity as the direct employer of the worker.
However, he is not interested in paying. The principal employer is not going to pay either. There are no rules saying theynhave to pay. And no employer is interested in providing them more than what is laid down in law
From India, Mumbai
Dear Sudhakar,
An employee who has worked for 5 years for countinues year, will be eligible for gratuity, and in your case if contractor deny to pay , principal employer can't be held responsible.
Regds
From India, Delhi
An employee who has worked for 5 years for countinues year, will be eligible for gratuity, and in your case if contractor deny to pay , principal employer can't be held responsible.
Regds
From India, Delhi
Dear All
The question "Can Principal employer held responsible for non payment of Gratuity by his contractor?"
Principal employer simply can not escape from the liability, if the aggevied workman/employee makes him party to the dispute.
There is a judgement viz. 2003-I-LLJ-854(MADRAS FERTILIZERS LTD VS cONTROLLING AUTHORITY UNDER PG ACT & OTHERS) Justice V.S. SIRPURKAR where it was held that It is the responsibility of the Principal Employer to pay the gratuity of contract worker subject to recovery from the contractor later if the workman/employee becomes eligible for payment of gratuity as per the Act.
Shailsh Parikh
Vadodara, Gujarat
99 98 97 10 65
From India, Mumbai
The question "Can Principal employer held responsible for non payment of Gratuity by his contractor?"
Principal employer simply can not escape from the liability, if the aggevied workman/employee makes him party to the dispute.
There is a judgement viz. 2003-I-LLJ-854(MADRAS FERTILIZERS LTD VS cONTROLLING AUTHORITY UNDER PG ACT & OTHERS) Justice V.S. SIRPURKAR where it was held that It is the responsibility of the Principal Employer to pay the gratuity of contract worker subject to recovery from the contractor later if the workman/employee becomes eligible for payment of gratuity as per the Act.
Shailsh Parikh
Vadodara, Gujarat
99 98 97 10 65
From India, Mumbai
I have a different opinion from what Swanswantbanejee has said. Contract Labour Act is an Act to 'regulate and abolish' engagement of contract labour. As such the Act is intended to reduce the practice of engaging workmen through a contractor and thereby disallowing the benefits to be paid to workmen as per various labour laws in force. In the absence of a specific law all employers will engage workmen through an intermediary and will say that the workmen who actually work for them are not their employees and we have nothing to do with their statutory liabilities. This has been very categorically stated in a very recent judgement of our Apex Court in Bhilwara Dugdh Utpadak Sahakari S. Ltd. Vs. Vinod Kumar Sharma Dead by LRS & Ors and the following sentences of the judgement are noteworthy.
“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” The judgement also hints that “globalization/liberalization in the name of growth cannot be at the human cost of exploitation of workers”
The above judgement is expected to be a landmark judgement. Therefore, if the contractor is not paying the gratuity to his employee(s) the principal employer cannot escape from his liability. Please find the attached judgement also.
Regards,
Madhu.T.K
From India, Kannur
“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” The judgement also hints that “globalization/liberalization in the name of growth cannot be at the human cost of exploitation of workers”
The above judgement is expected to be a landmark judgement. Therefore, if the contractor is not paying the gratuity to his employee(s) the principal employer cannot escape from his liability. Please find the attached judgement also.
Regards,
Madhu.T.K
From India, Kannur
Dear Madhu
Thanks for quoting the judgement.
I read the 17 page attachement, my head is spinning with the large amount of legal-inputs ;)
One interesting thing i noted :
The judgement says that Contract Labour Act says that principal employer is liable for everything covered in payment of wages act
Payment of Wages act specifically excludes dues under gratuity (also quoted in the judgement specifically)
But they have still decided that the principal employer has to pay
I wonder if there is any other judgement contrary to this one.
From India, Mumbai
Thanks for quoting the judgement.
I read the 17 page attachement, my head is spinning with the large amount of legal-inputs ;)
One interesting thing i noted :
The judgement says that Contract Labour Act says that principal employer is liable for everything covered in payment of wages act
Payment of Wages act specifically excludes dues under gratuity (also quoted in the judgement specifically)
But they have still decided that the principal employer has to pay
I wonder if there is any other judgement contrary to this one.
From India, Mumbai
I have gone through the above discussion. I have a little bit different query or say required to discuss another point i.e. :
Say one contract, who is rendering services to different organisation / PE. The contracting business he is doing since more than 5 years. The contractual arrangements with PE's are less than 5 years. Under the circumstances if employees of contractor completed 5 years of services with Contractor and contractor does not ready to pay liabilities such as Gratuity etc. Whether PE is responsible for such dues ? Whereas PE might had arrangement with Contractor just before or say one or 2 years before ?
Regards,
Pramod Thakar
From India, Pune
Say one contract, who is rendering services to different organisation / PE. The contracting business he is doing since more than 5 years. The contractual arrangements with PE's are less than 5 years. Under the circumstances if employees of contractor completed 5 years of services with Contractor and contractor does not ready to pay liabilities such as Gratuity etc. Whether PE is responsible for such dues ? Whereas PE might had arrangement with Contractor just before or say one or 2 years before ?
Regards,
Pramod Thakar
From India, Pune
Banerjee's apprehension about the definition of wages as given in Payment of Wages Act is right and the court also had taken that into consideration. But the Contract labour Act which came into force later on, gives more scope for principal employer's liability. I don't think that there is another judgement which absolves PE's liability.
Pramod: In order to make the Principal employer liable to pay gratuity on behalf of the contractor the said employee should have worked for the principal employer. If he has worked only for two years, the question of gratuity will not arise with reference to employment in the Principal employer's plant or oraganisation and what ever dispute is there will be absolutely between him and his employer, ie, the contractor.
Normally when ever a contract is given for manpower arrangement or outsourcing there will be an understanding that no single person will not work continuously and that understanding is to avoid such kinds of litigation in future.
Regards,
Madhu.T.K
From India, Kannur
Pramod: In order to make the Principal employer liable to pay gratuity on behalf of the contractor the said employee should have worked for the principal employer. If he has worked only for two years, the question of gratuity will not arise with reference to employment in the Principal employer's plant or oraganisation and what ever dispute is there will be absolutely between him and his employer, ie, the contractor.
Normally when ever a contract is given for manpower arrangement or outsourcing there will be an understanding that no single person will not work continuously and that understanding is to avoid such kinds of litigation in future.
Regards,
Madhu.T.K
From India, Kannur
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SBT Vs Asst. Labour Commissioner- Gratuity dismissed employee-LTS.PD F
FORM I(Application for Gratuity by an employee).doc