Dear Sir,
We have in a peculiar situation regrding the PF remittences of contract workers. From the beginning the PF for contract workers have been remitted on the employer code. Recently the management has taken a decision and ased all the contractors to get their own PF & ESI code. Accordingly some contractors have got separate PF code Nos. After the contractors got the PF code the workers working under the contractors have objected and strongly defended the move and demanded to continue the same practice.
Then the management has came back to its decision and wants to continue the contract workers on the company code.
Since some of the contractors have got PF code, the PF authorities are aksing to remit the contributons on the contractor code.
In the light of the what we have do?
Kindly suggest
M S GIRI
From India, Hyderabad
4We have in a peculiar situation regrding the PF remittences of contract workers. From the beginning the PF for contract workers have been remitted on the employer code. Recently the management has taken a decision and ased all the contractors to get their own PF & ESI code. Accordingly some contractors have got separate PF code Nos. After the contractors got the PF code the workers working under the contractors have objected and strongly defended the move and demanded to continue the same practice.
Then the management has came back to its decision and wants to continue the contract workers on the company code.
Since some of the contractors have got PF code, the PF authorities are aksing to remit the contributons on the contractor code.
In the light of the what we have do?
Kindly suggest
M S GIRI
From India, Hyderabad
You mentioned 'workers working under the contractors have objected' with the new system — why? Were there any shortcomings in the changeover process? Rgds, TS
From India, Hyderabad
From India, Hyderabad
Dear Tajsateesh,
In the past without insisting the contractors to get their PF & ESI code their workers PF & ESI were covered under the Company code. They have followed the same practice upto now. Now they have taken a decision to gradually divert the contract workers from company code to contractor code and asked all the contractor to get their own codes.
During this process some unnecessary doubts spread in the contract workers. Eventhough we have tried a lot to clarify their doubts they have not heared and requested us to continue in the same. The contract workers feeling that their accumulations and other benefits will be safe if they are continuing in the company code.
My quary is that:
Since the PF authorities have allotted the code they are insisting to remit the contributions in the contractor code at least for one or two months. The contract workers are accepting to remit the contributions for one/two months in the contractor code, if the management accept to remit the contributions in the company code after one/two months.
What we have to do in the above situation.
Kindly suggest
Kind regards
GIRI
From India, Hyderabad
In the past without insisting the contractors to get their PF & ESI code their workers PF & ESI were covered under the Company code. They have followed the same practice upto now. Now they have taken a decision to gradually divert the contract workers from company code to contractor code and asked all the contractor to get their own codes.
During this process some unnecessary doubts spread in the contract workers. Eventhough we have tried a lot to clarify their doubts they have not heared and requested us to continue in the same. The contract workers feeling that their accumulations and other benefits will be safe if they are continuing in the company code.
My quary is that:
Since the PF authorities have allotted the code they are insisting to remit the contributions in the contractor code at least for one or two months. The contract workers are accepting to remit the contributions for one/two months in the contractor code, if the management accept to remit the contributions in the company code after one/two months.
What we have to do in the above situation.
Kindly suggest
Kind regards
GIRI
From India, Hyderabad
You are sitting on a time bomb.
It was stupid of your company to allow payment of PF on company code for contract workers. This is a ground that workers will have for claiming to be permanent / direct employees and show that the contracts are sham.
The workers know that.
Which is why they are not willing to allow a move to contractors PF code, they lose the leverage.
Now it is becoming an industrial dispute. You are in trouble for sure.
Since the move has been made, it's Important to ensure it gets through.
Start paying the PF on contractors code. Do not revert to the company code.
Promise the workers that you will ensure that the PF gets transferred to the new account and that no one will lose anything. Promise further to monitor and check of returns every month of every contractor to ensure they are getting full PF dues. Get a PF consultant in the picture and ensure all balances get transferred to the new account, give them prints of their statements, teach them to view and check their balances online
If possible, get PF officers to talk to the workers to alley their fear that money will be lost.
But take the help of your IR team to resolve the underlying problem that is probably the workers know moving them to contractor PF only help the company avoid making them permanent
From India, Mumbai
It was stupid of your company to allow payment of PF on company code for contract workers. This is a ground that workers will have for claiming to be permanent / direct employees and show that the contracts are sham.
The workers know that.
Which is why they are not willing to allow a move to contractors PF code, they lose the leverage.
Now it is becoming an industrial dispute. You are in trouble for sure.
Since the move has been made, it's Important to ensure it gets through.
Start paying the PF on contractors code. Do not revert to the company code.
Promise the workers that you will ensure that the PF gets transferred to the new account and that no one will lose anything. Promise further to monitor and check of returns every month of every contractor to ensure they are getting full PF dues. Get a PF consultant in the picture and ensure all balances get transferred to the new account, give them prints of their statements, teach them to view and check their balances online
If possible, get PF officers to talk to the workers to alley their fear that money will be lost.
But take the help of your IR team to resolve the underlying problem that is probably the workers know moving them to contractor PF only help the company avoid making them permanent
From India, Mumbai
Hello Giri,
Saswatabanerjee has the Plan-of-Action laid out for you.
What SEEMS to have started off as a goodwill/good-faith measure by your company has now become an albatross under your neck.
Suggest heed his advice: "Do not revert to the company code" at any cost.
Just because a mistake was done earlier doesn't mean you have to do it again.
Your IR team can take the stand that the earlier action was because the company didn't know the Rules completely--and now that things are more clear, it would be illegal to repeat it knowingly. The apprehension that the workers MAY be trying to build-up the case to be made permanent NEED NOT be discussed at all--though you need to absolutely keep that factor in-mind while moving from here.
All the Best.
Rgds,
TS
From India, Hyderabad
Saswatabanerjee has the Plan-of-Action laid out for you.
What SEEMS to have started off as a goodwill/good-faith measure by your company has now become an albatross under your neck.
Suggest heed his advice: "Do not revert to the company code" at any cost.
Just because a mistake was done earlier doesn't mean you have to do it again.
Your IR team can take the stand that the earlier action was because the company didn't know the Rules completely--and now that things are more clear, it would be illegal to repeat it knowingly. The apprehension that the workers MAY be trying to build-up the case to be made permanent NEED NOT be discussed at all--though you need to absolutely keep that factor in-mind while moving from here.
All the Best.
Rgds,
TS
From India, Hyderabad
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