1
I in service in a Pvt.Limited Co. of a well known group. I need your kind guidance in administration of contract labour in one of the ongoing project of the Company.
I require following clarifications:
1. The project is getting completed and the plant will be commissioned
shortly. The project work started end of 2006 and the work has
taken more than two years.
2. This new plant is erected in the same plot where an existing plant is in
operation.
3. The entire job construction work is given on contract to various
contractors.
4. All labour laws are applicable at this site.
5. Since the project is getting completed , thecontractors have started
retrenching the workers:
6. Due to business nonviability Co. is running in loss ans we have paid full wages to contract workmen for the last 6 months.
Please confirm following payments are payable to the workmen as per various labour laws:
*** Are the contract workmen are eligible to get retrenchment compensation?
A. Notice pay of 26 days if the worker has worked for 240 days or more in
a calender year. - The Relevent Provision & the Act?
B. Retrenchment Compensation at 15 days wages for each
completed year of service. - The Relevent Provision & the Act?
C. Leave wages at the rate of One day wages for every 20 days worked.
D. Bonus for the year till retrenchment at the rate of 8.33%
S.K.DINDA
From India, Calcutta
I require following clarifications:
1. The project is getting completed and the plant will be commissioned
shortly. The project work started end of 2006 and the work has
taken more than two years.
2. This new plant is erected in the same plot where an existing plant is in
operation.
3. The entire job construction work is given on contract to various
contractors.
4. All labour laws are applicable at this site.
5. Since the project is getting completed , thecontractors have started
retrenching the workers:
6. Due to business nonviability Co. is running in loss ans we have paid full wages to contract workmen for the last 6 months.
Please confirm following payments are payable to the workmen as per various labour laws:
*** Are the contract workmen are eligible to get retrenchment compensation?
A. Notice pay of 26 days if the worker has worked for 240 days or more in
a calender year. - The Relevent Provision & the Act?
B. Retrenchment Compensation at 15 days wages for each
completed year of service. - The Relevent Provision & the Act?
C. Leave wages at the rate of One day wages for every 20 days worked.
D. Bonus for the year till retrenchment at the rate of 8.33%
S.K.DINDA
From India, Calcutta
Dear Mr. Dinda,
It is indeed a very interesting situation. I am really surprised as to why nobody has offered comments as yet despite expiry of more than 3 years.
Having gone through the facts of the case given by you , it is clear that you had engaged contract labour through various contractors. Assuming that you had bonafide contracts, the employers of all such labour were the contractors and not you. The provision of retrenchment is contained in section 25F and 25N of Industrial Disputes Act which applies to employers and employees and not to Principal Employers and the contract labour.
Therefore, if the retrenchment compensation is to be paid to the contract labour at all, it will have to be paid by the contractors and not the Principal Employer. However, careful perusal of definition of Contract labour under the Contract Labour R&A Act would reveal that contract labour are not truley employees on rolls of Contractors as they are engaged against certain jobs of an establishment and their engagement is only for the period of contract.
Further in terms of provision contained in section 2(oo) of ID Act which defines retrenchment, clause (bb) excludes any seperation on account of non renewal of contract of employment.
Hence, the contractors as well are not responsible for payment of retrenchment compensation.
Any other view on the subject is solicited.
From India, Pune
It is indeed a very interesting situation. I am really surprised as to why nobody has offered comments as yet despite expiry of more than 3 years.
Having gone through the facts of the case given by you , it is clear that you had engaged contract labour through various contractors. Assuming that you had bonafide contracts, the employers of all such labour were the contractors and not you. The provision of retrenchment is contained in section 25F and 25N of Industrial Disputes Act which applies to employers and employees and not to Principal Employers and the contract labour.
Therefore, if the retrenchment compensation is to be paid to the contract labour at all, it will have to be paid by the contractors and not the Principal Employer. However, careful perusal of definition of Contract labour under the Contract Labour R&A Act would reveal that contract labour are not truley employees on rolls of Contractors as they are engaged against certain jobs of an establishment and their engagement is only for the period of contract.
Further in terms of provision contained in section 2(oo) of ID Act which defines retrenchment, clause (bb) excludes any seperation on account of non renewal of contract of employment.
Hence, the contractors as well are not responsible for payment of retrenchment compensation.
Any other view on the subject is solicited.
From India, Pune
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