Sub:Splitting of Minimum Wages for the purpose of PF contribution not permissible.
Dear All
Staffing Industry Professionals need to be aware that by Circular No.: Coord/4(6)2003/Clarification/Vol-II/ Dated: 23-05-2011of Mr K.C. Pandey Addl. Central P.F. Commissioner(Compliance) Employees Provident Fund Organization (Ministry of Labour & Employment, Govt. of India), Head Office, Bhavrshya Yidhr Bhawan, 14, Bhikaiji Cama Place. New Delhi - 110 066 splitting of Minimum Wages for the purpose of PF contribution is not permissible and all covered Establishments are to be directed to ensure that P.F. Contributions are not remitted on wages less than Minimum Wages since every employer is legally bound to pay at least minimum wages to his/her employees and minimum wages are not amenable to split up. It is one pay package.
Further it has been intimated and made abundantly clear by the Circular that basic wage in no case can be lesser than the minimum wage as the same is not only contrary to law of land but is also beyond logic and rationale that an establishment which can not pay even minimum wages to its employees, would be willing to pay allowances to them and if such instances exist, there is certainly a malafide motive which may be considered as knowingly making or causing to make false statement/representation punishable u/s 14(1) of EPF & MP Act,1952. It may also attract the provision of section 418 of IPC.
Staffing Companies need to address themselves to the compliance of the Circular to avoid prosecution under .u/s 14(1) of EPF & MP Act,1952. It may also attract the provision of section 418 of IPC
The Circular is reproduced below for easy reference .
With Regards
V.Sounder Rajan
Advocates & Notaries -Legal Consultants for the Indian Staffing and Recruiting Industry
E-mail : rajanassociates@eth,net,
EMPLOYEES’ PROVIDENT FUND ORGANISATION
EMPLOYEES’ PROVIDENT FUND ORGANISATION, (Ministry of Labour & Employment, Govt. of India), Head Office, Bhavrshya Yidhr Bhawan, 14, Bhikaiji Cama Place. New Delhi - 110 066.
No.: Coord/4(6)2003/Clarification/Vol-II/ Dated: 23-05-2011
Sub:Splitting of Minimum Wages for the purpose of PF contribution not permissible.
Sir,
Attention of all concerned is invited towards this office circular no. Coord./4(6)2003/Clarification/13633 dated 06.06.2008 vide which it was advised to ensure that P.F. Contributions on at least Minimum Wages are remitted by the establishments. It was also directed to review all such cases disposed of u/s 7A of the Act where determination of dues has taken place on wages lesser than Minimum Wages.
2. However, it has been observed that still uniform approach in this regard is not followed by all the field offices which is viewed seriously. It is also observed that the field offices are not duly defending the issue in spite of the fact that the Division Bench of Hon’ble High Court, Karnataka in the matter of Group 4 Securities Guarding Ltd Vs. RPFC has categorically upheld the view that RPFCs u/s 7A of the Act can examine and look into the nature of contract entered between the employer and its employees as well as the pay structure to decide whether the pay is being split up under several heads as a subterfuge to avoid PF Contribution.
3. The order of the Division Bench was challenged by the establishment before the Apex Court. While tentatively upholding the order of the Division Bench, the Hon’ble Supreme Court in its order dated 23.07.2004 again granted liberty to the authorities to decide the matter in accordance with law on its merits. As such the authorities have to consider the order of the Division Bench of Hon’ble High Court, Karnataka unless there is substantial evidence to lead otherwise.
4. Accordingly, the matter has been examined in view of the Apex Court’s direction and the following guidelines are issued which should be adhered to and followed by all strictly.
5. The EPF & MP Act, 1952 is a beneficial social security legislation. In construing the provisions of the Act, it has already been settled earlier* that where ever two views are reasonably possible, the view which helps the achievement of the object should be preferred and accordingly the assessing authority while determining dues under Section 7A should curb any attempt to curtail the legitimate social security benefits of the employees. It is needless to reiterate the impact of contribution on lesser wages by splitting the wages into different heads, which results in lesser accumulations in PF account and miniscule pension to the member/family.
[*The RPFC, Punjab Vs Shibu Metal Works — 1965 (1) LU.473].
6. As you are aware, section 2(b) of EPF & MP Act, 1952 defines the basic wage which excludes all kind of allowances from being considered as basic wage. As the term suggests, ‘basic wage’ or ‘basic salary’ is the base salary which is provided to a person in lieu of his services. It is without any allowances which may or may not be added to basic wages in terms of employment.
7. However, it appears that some confusion is prevailing among field offices as to whether basic wages can be lower than the minimum wages or whether an establishment paying minimum wages to its employees can be allowed to split up the wages into various allowances reducing the PF contribution by making it a part of ” terms of employment or Contract” .
8. It would be worth to see that the terms ‘basic’, ‘basic wage’and ‘minimum wage’ are defined in Oxford Dictionary as below:
(i). “basic. Adj.1. forming an essential foundation; fundamental. 2. consisting of the minimum required or offered”
(ii). “basic wage . n. 1 a minimum wage earned before additional payments such as overtime. 2. Austral/NZ/ the minimum living wage, as determined by industrial tribunal”
(iii). “minimum wage, n. the lowest wage permitted by law or by agreement.”
9. Thus, whereas the minimum wage is the lowest permitted wage ought to be paid to a worker as per law as upheld and revisited on various occasions by the Hon`ble Supreme Court *, basic wage is only relevant for allowing additional allowances by treating it (basic wage) as a basic/floor level.
(*Crown Aluminum Works Vs Workers Union, [1958 Vola LU,
Page I], Unichoyi Vs State of Kerala [1961 Voll LL.3 P. 631], Kaman’ Metals & Alloys Ltd. Vs. Their Work Men [1967 Vil.11- 55; (1967) 2 SCR Page 463]).
10. Another aspect of basic wage/salary i5 that it is provided to all classes of employees irrespective of quantum of their salary and its quantum varies with every class/post of an employee where as minimum wage is prescribed only for the lowest paid employee to whom any lesser payment of wages is not permitted by law.
11. From above, it is abundantly clear that basic wage in no case can be lesser than the minimum wage as the same is not only contrary to law of land but is also beyond logic and rationale that an establishment which can not pay even minimum wages to its employees, would be willing to pay allowances to them and if such instances exist, there is certainly a malafide motive which may be considered as knowingly making or causing to make false statement/representation punishable u/s 14(1) of EPF & MP Act, 1952. It may also attract the provision of section 418 of IPC.
12. Further, it also needs to be kept in mind that any agreement which negates any law of land is ab-initio-void and would have effect of non-existence. Therefore, any such terms of agreement for employment where minimum wages is splitted to reduce the liability under EPF & MP Act, 1952 would be governed by the same logic as it is against the provisions of Minimum Wages Act and hence illegal.
13. Also Minimum Wage being a state matter, clarifications were sought from various state Governments. The replies received reveal that minimum wage is a lump sum composite amount arrived at by following the permissible procedure of fixation as revised from time to time and it can not be segregated and reclassified. Thus the State governments have also observed that splitting of minimum wages is not permissible in the eye of law,
14. Accordingly, all concerned are directed to ensure that P.F. Contributions are not remitted on wages less than Minimum Wages since every employer is legally bound to pay at least minimum wages to his/her employees and minimum wages are not amenable to split up. It is one pay package.*
(*Civil Appeal 4259 of 1999 Air Freight Ltd. Vs State of Karnataka and Ors., 1999 Supp. (1) SCR 22]
15. It is needless to mention that wherever the matter regarding splitting of wages is challenged or pending in a court of law, the stand of department along with all rules and guidelines of Hon’ble Supreme Court should be effectively utilized to defend the case. It is also mentioned that nothing said above shall come in way of implementation/execution of any order of a court of law.
16. The assessing officers shall examine full facts about the wage structure, minimum wages prescribed by the appropriate govt. for the relevant class and provide reasonable opportunity to the establishment before deciding the subterfuge, if any.
All the concerned officials/officers are requested to strictly comply with above said guidelines in regard to subject matter.
Please acknowledge receipt.
(This issues with the approval of CPFC)
(K.C. Pandey)
Addl. Central P.F. Commissioner(Compliance)
----------------------------------------------------------------------------------------------------------------------------
Copy to:
• FA & CAO/ CVO
• All Add I. CPFC5, Head Office
• Director, NATRSS
• All RPFC-I ,Head Office
• All RPFC II, HO
• All DD (Vig.)/DD ( Audit)
• All RPFCs (ZTIs)
• Web Administrator for uploading the circular on the central website of EPFO.
• DD (OL.), Head Office – for release of Hindi Version
(Anita S. Dixit)
Regional P.F. Commissioner-I(Coordination)
From India, Bangalore
50Dear All
Staffing Industry Professionals need to be aware that by Circular No.: Coord/4(6)2003/Clarification/Vol-II/ Dated: 23-05-2011of Mr K.C. Pandey Addl. Central P.F. Commissioner(Compliance) Employees Provident Fund Organization (Ministry of Labour & Employment, Govt. of India), Head Office, Bhavrshya Yidhr Bhawan, 14, Bhikaiji Cama Place. New Delhi - 110 066 splitting of Minimum Wages for the purpose of PF contribution is not permissible and all covered Establishments are to be directed to ensure that P.F. Contributions are not remitted on wages less than Minimum Wages since every employer is legally bound to pay at least minimum wages to his/her employees and minimum wages are not amenable to split up. It is one pay package.
Further it has been intimated and made abundantly clear by the Circular that basic wage in no case can be lesser than the minimum wage as the same is not only contrary to law of land but is also beyond logic and rationale that an establishment which can not pay even minimum wages to its employees, would be willing to pay allowances to them and if such instances exist, there is certainly a malafide motive which may be considered as knowingly making or causing to make false statement/representation punishable u/s 14(1) of EPF & MP Act,1952. It may also attract the provision of section 418 of IPC.
Staffing Companies need to address themselves to the compliance of the Circular to avoid prosecution under .u/s 14(1) of EPF & MP Act,1952. It may also attract the provision of section 418 of IPC
The Circular is reproduced below for easy reference .
With Regards
V.Sounder Rajan
Advocates & Notaries -Legal Consultants for the Indian Staffing and Recruiting Industry
E-mail : rajanassociates@eth,net,
EMPLOYEES’ PROVIDENT FUND ORGANISATION
EMPLOYEES’ PROVIDENT FUND ORGANISATION, (Ministry of Labour & Employment, Govt. of India), Head Office, Bhavrshya Yidhr Bhawan, 14, Bhikaiji Cama Place. New Delhi - 110 066.
No.: Coord/4(6)2003/Clarification/Vol-II/ Dated: 23-05-2011
Sub:Splitting of Minimum Wages for the purpose of PF contribution not permissible.
Sir,
Attention of all concerned is invited towards this office circular no. Coord./4(6)2003/Clarification/13633 dated 06.06.2008 vide which it was advised to ensure that P.F. Contributions on at least Minimum Wages are remitted by the establishments. It was also directed to review all such cases disposed of u/s 7A of the Act where determination of dues has taken place on wages lesser than Minimum Wages.
2. However, it has been observed that still uniform approach in this regard is not followed by all the field offices which is viewed seriously. It is also observed that the field offices are not duly defending the issue in spite of the fact that the Division Bench of Hon’ble High Court, Karnataka in the matter of Group 4 Securities Guarding Ltd Vs. RPFC has categorically upheld the view that RPFCs u/s 7A of the Act can examine and look into the nature of contract entered between the employer and its employees as well as the pay structure to decide whether the pay is being split up under several heads as a subterfuge to avoid PF Contribution.
3. The order of the Division Bench was challenged by the establishment before the Apex Court. While tentatively upholding the order of the Division Bench, the Hon’ble Supreme Court in its order dated 23.07.2004 again granted liberty to the authorities to decide the matter in accordance with law on its merits. As such the authorities have to consider the order of the Division Bench of Hon’ble High Court, Karnataka unless there is substantial evidence to lead otherwise.
4. Accordingly, the matter has been examined in view of the Apex Court’s direction and the following guidelines are issued which should be adhered to and followed by all strictly.
5. The EPF & MP Act, 1952 is a beneficial social security legislation. In construing the provisions of the Act, it has already been settled earlier* that where ever two views are reasonably possible, the view which helps the achievement of the object should be preferred and accordingly the assessing authority while determining dues under Section 7A should curb any attempt to curtail the legitimate social security benefits of the employees. It is needless to reiterate the impact of contribution on lesser wages by splitting the wages into different heads, which results in lesser accumulations in PF account and miniscule pension to the member/family.
[*The RPFC, Punjab Vs Shibu Metal Works — 1965 (1) LU.473].
6. As you are aware, section 2(b) of EPF & MP Act, 1952 defines the basic wage which excludes all kind of allowances from being considered as basic wage. As the term suggests, ‘basic wage’ or ‘basic salary’ is the base salary which is provided to a person in lieu of his services. It is without any allowances which may or may not be added to basic wages in terms of employment.
7. However, it appears that some confusion is prevailing among field offices as to whether basic wages can be lower than the minimum wages or whether an establishment paying minimum wages to its employees can be allowed to split up the wages into various allowances reducing the PF contribution by making it a part of ” terms of employment or Contract” .
8. It would be worth to see that the terms ‘basic’, ‘basic wage’and ‘minimum wage’ are defined in Oxford Dictionary as below:
(i). “basic. Adj.1. forming an essential foundation; fundamental. 2. consisting of the minimum required or offered”
(ii). “basic wage . n. 1 a minimum wage earned before additional payments such as overtime. 2. Austral/NZ/ the minimum living wage, as determined by industrial tribunal”
(iii). “minimum wage, n. the lowest wage permitted by law or by agreement.”
9. Thus, whereas the minimum wage is the lowest permitted wage ought to be paid to a worker as per law as upheld and revisited on various occasions by the Hon`ble Supreme Court *, basic wage is only relevant for allowing additional allowances by treating it (basic wage) as a basic/floor level.
(*Crown Aluminum Works Vs Workers Union, [1958 Vola LU,
Page I], Unichoyi Vs State of Kerala [1961 Voll LL.3 P. 631], Kaman’ Metals & Alloys Ltd. Vs. Their Work Men [1967 Vil.11- 55; (1967) 2 SCR Page 463]).
10. Another aspect of basic wage/salary i5 that it is provided to all classes of employees irrespective of quantum of their salary and its quantum varies with every class/post of an employee where as minimum wage is prescribed only for the lowest paid employee to whom any lesser payment of wages is not permitted by law.
11. From above, it is abundantly clear that basic wage in no case can be lesser than the minimum wage as the same is not only contrary to law of land but is also beyond logic and rationale that an establishment which can not pay even minimum wages to its employees, would be willing to pay allowances to them and if such instances exist, there is certainly a malafide motive which may be considered as knowingly making or causing to make false statement/representation punishable u/s 14(1) of EPF & MP Act, 1952. It may also attract the provision of section 418 of IPC.
12. Further, it also needs to be kept in mind that any agreement which negates any law of land is ab-initio-void and would have effect of non-existence. Therefore, any such terms of agreement for employment where minimum wages is splitted to reduce the liability under EPF & MP Act, 1952 would be governed by the same logic as it is against the provisions of Minimum Wages Act and hence illegal.
13. Also Minimum Wage being a state matter, clarifications were sought from various state Governments. The replies received reveal that minimum wage is a lump sum composite amount arrived at by following the permissible procedure of fixation as revised from time to time and it can not be segregated and reclassified. Thus the State governments have also observed that splitting of minimum wages is not permissible in the eye of law,
14. Accordingly, all concerned are directed to ensure that P.F. Contributions are not remitted on wages less than Minimum Wages since every employer is legally bound to pay at least minimum wages to his/her employees and minimum wages are not amenable to split up. It is one pay package.*
(*Civil Appeal 4259 of 1999 Air Freight Ltd. Vs State of Karnataka and Ors., 1999 Supp. (1) SCR 22]
15. It is needless to mention that wherever the matter regarding splitting of wages is challenged or pending in a court of law, the stand of department along with all rules and guidelines of Hon’ble Supreme Court should be effectively utilized to defend the case. It is also mentioned that nothing said above shall come in way of implementation/execution of any order of a court of law.
16. The assessing officers shall examine full facts about the wage structure, minimum wages prescribed by the appropriate govt. for the relevant class and provide reasonable opportunity to the establishment before deciding the subterfuge, if any.
All the concerned officials/officers are requested to strictly comply with above said guidelines in regard to subject matter.
Please acknowledge receipt.
(This issues with the approval of CPFC)
(K.C. Pandey)
Addl. Central P.F. Commissioner(Compliance)
----------------------------------------------------------------------------------------------------------------------------
Copy to:
• FA & CAO/ CVO
• All Add I. CPFC5, Head Office
• Director, NATRSS
• All RPFC-I ,Head Office
• All RPFC II, HO
• All DD (Vig.)/DD ( Audit)
• All RPFCs (ZTIs)
• Web Administrator for uploading the circular on the central website of EPFO.
• DD (OL.), Head Office – for release of Hindi Version
(Anita S. Dixit)
Regional P.F. Commissioner-I(Coordination)
From India, Bangalore
Dear All
Mr Dinesh Shah by an E Mail sent to us has brought to our attention the extract of the following judgment decided on 01/02/2011 by the Punjab & Haryana High Court which is at variance to Circular No: Coord/4(6)2003/Clarification/Vol-II/ Dated: 23-05-2011 :
• Employees Provident Fund (Miscellaneous Provisions) Act, 1952 , Minimum Wages Act, 1948
Date: 2011.04.01:
ASST. PROVIDENT FUND COMMISSIONER vs. M/S G4S SECURITY SERVICES (INDIA) LTD & ANR [P &H] CWP NO. 15433 OF 2009 (O&M) MAHESH GROVER, J [DECIDED ON 01/02/2011]
Employees Provident Fund (Miscellaneous Provisions) Act, 1952 – basic wages excludes HRA etc – Minimum Wages Act, 1948- Basic wages includes HRA – company excluded HRA, and paid contribution accordingly – PF Commissioner contended that basic wages should be as defined under Minimum Wages Act – whether correct – held , no
Brief Facts: The respondent – company is an establishment which is amenable to the provisions of Employees Provident Fund & Misc. Provisions Act and for the purposes of determining its contribution was taking into consideration the basic wage as given to its employees. The petitioner’s grievance is that the respondents were splitting the wage structure of the employees as a subterfuge so as to dilute its liability and that this was contrary to the wage structure which is to be taken into consideration for the contributions to be made to the Fund under the Act. The precise grievance is that rates of minimum wages which ought to have been taken into consideration are not being done so by the respondents and by splitting up the wage structure there is an evasion of its liability. The Tribunal considered the matter and held that the respondents were right in taking into consideration the basic wage of the employee for determining the contribution to the Fund. The plea of the petitioner was negated which has prompted him to file the instant writ petition.
Decision: Petition dismissed
Reason: On due consideration it is to be noticed that Section 2(b) of the Employees Provident Fund and Miscellaneous Provisions Act, clearly provides that the basic wage means all emoluments which are earned by an employee while on duty or on leave or on holidays with wages in either case in accordance with the terms of the contract of employment and which may be paid or payable in cash to him but would not include the cash value of any food concession, any Dearness Allowance, House Rent Allowance, Over Time Allowance, Bonus, Commission or any other similar allowance payable to an employee in respect of his employment or work done in such an employment.
It is thus evident that under the provisions of the Employees Provident Fund Act, the definition of wage has an appended exclusion clause in which the various allowances which are quite broad in nature have been provided so as to enable the employee to determine its liability to make the contribution to the fund. The Minimum Wages Act on the other hand provides for a definition of wage which is distinct from that of the basic wage and that definition of wage includes within its ambit House Rent Allowance, but does not include certain other allowances which are being detailed therein. The object and reasons of both the statutes are manifestly distinct even thought they cover the beneficial aspect of the welfare of an employee. The laws of interpretation of statute also provides that nothing more is to be read into the language of a statute and words are to be read and interpreted as they exist to acknowledge the legislative intent. Having regard to the aforesaid, there is little hesitation to hold that the contention of the petitioner is misplaced and that the respondents have rightly excluded certain allowances such as House Rent Allowance, Washing Allowance and Conveyance Allowance while determining the basic wage, and it cannot be said to be unjustified unless they are totally at variance and in complete deviation of the concept of the allowances sought to be under the exclusion clause.
In the Circular there is no reference to the Judgment in ASST. PROVIDENT FUND COMMISSIONER vs. M/S G4S SECURITY SERVICES (INDIA) LTD & ANR [P &H] CWP NO. 15433 OF 2009 (O&M) MAHESH GROVER, J [DECIDED ON 01/02/2011]. It necessitates clarity on this issue.
With Regards
V.Sounder Rajan
Advocates & Notaries -Legal Consultants for the Indian Staffing and Recruiting Industry
E-mail : rajanassociates@eth,net,
.
From India, Bangalore
Mr Dinesh Shah by an E Mail sent to us has brought to our attention the extract of the following judgment decided on 01/02/2011 by the Punjab & Haryana High Court which is at variance to Circular No: Coord/4(6)2003/Clarification/Vol-II/ Dated: 23-05-2011 :
• Employees Provident Fund (Miscellaneous Provisions) Act, 1952 , Minimum Wages Act, 1948
Date: 2011.04.01:
ASST. PROVIDENT FUND COMMISSIONER vs. M/S G4S SECURITY SERVICES (INDIA) LTD & ANR [P &H] CWP NO. 15433 OF 2009 (O&M) MAHESH GROVER, J [DECIDED ON 01/02/2011]
Employees Provident Fund (Miscellaneous Provisions) Act, 1952 – basic wages excludes HRA etc – Minimum Wages Act, 1948- Basic wages includes HRA – company excluded HRA, and paid contribution accordingly – PF Commissioner contended that basic wages should be as defined under Minimum Wages Act – whether correct – held , no
Brief Facts: The respondent – company is an establishment which is amenable to the provisions of Employees Provident Fund & Misc. Provisions Act and for the purposes of determining its contribution was taking into consideration the basic wage as given to its employees. The petitioner’s grievance is that the respondents were splitting the wage structure of the employees as a subterfuge so as to dilute its liability and that this was contrary to the wage structure which is to be taken into consideration for the contributions to be made to the Fund under the Act. The precise grievance is that rates of minimum wages which ought to have been taken into consideration are not being done so by the respondents and by splitting up the wage structure there is an evasion of its liability. The Tribunal considered the matter and held that the respondents were right in taking into consideration the basic wage of the employee for determining the contribution to the Fund. The plea of the petitioner was negated which has prompted him to file the instant writ petition.
Decision: Petition dismissed
Reason: On due consideration it is to be noticed that Section 2(b) of the Employees Provident Fund and Miscellaneous Provisions Act, clearly provides that the basic wage means all emoluments which are earned by an employee while on duty or on leave or on holidays with wages in either case in accordance with the terms of the contract of employment and which may be paid or payable in cash to him but would not include the cash value of any food concession, any Dearness Allowance, House Rent Allowance, Over Time Allowance, Bonus, Commission or any other similar allowance payable to an employee in respect of his employment or work done in such an employment.
It is thus evident that under the provisions of the Employees Provident Fund Act, the definition of wage has an appended exclusion clause in which the various allowances which are quite broad in nature have been provided so as to enable the employee to determine its liability to make the contribution to the fund. The Minimum Wages Act on the other hand provides for a definition of wage which is distinct from that of the basic wage and that definition of wage includes within its ambit House Rent Allowance, but does not include certain other allowances which are being detailed therein. The object and reasons of both the statutes are manifestly distinct even thought they cover the beneficial aspect of the welfare of an employee. The laws of interpretation of statute also provides that nothing more is to be read into the language of a statute and words are to be read and interpreted as they exist to acknowledge the legislative intent. Having regard to the aforesaid, there is little hesitation to hold that the contention of the petitioner is misplaced and that the respondents have rightly excluded certain allowances such as House Rent Allowance, Washing Allowance and Conveyance Allowance while determining the basic wage, and it cannot be said to be unjustified unless they are totally at variance and in complete deviation of the concept of the allowances sought to be under the exclusion clause.
In the Circular there is no reference to the Judgment in ASST. PROVIDENT FUND COMMISSIONER vs. M/S G4S SECURITY SERVICES (INDIA) LTD & ANR [P &H] CWP NO. 15433 OF 2009 (O&M) MAHESH GROVER, J [DECIDED ON 01/02/2011]. It necessitates clarity on this issue.
With Regards
V.Sounder Rajan
Advocates & Notaries -Legal Consultants for the Indian Staffing and Recruiting Industry
E-mail : rajanassociates@eth,net,
.
From India, Bangalore
Dear All
IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES
Can the Temporary Employee of a Staffing Agency question his/her termination,/ retrenchment by an Appeal under the State Shops and Establishments Act ?
A:Yes.It can be questioned.Because the termination under the Shops and Establishments Act has to be for reasonable cause after conducting enquiry In such Shop Act Appeals the Staffing Agency has to take a pro-active action for settling such disputes out of Court.
With Regards
V.Sounder Rajan
Advocates & Notaries -Legal Consultants for the Indian Staffing and Recruiting Industry
E-mail : rajanassociates@eth,net,
.
From India, Bangalore
IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES
Can the Temporary Employee of a Staffing Agency question his/her termination,/ retrenchment by an Appeal under the State Shops and Establishments Act ?
A:Yes.It can be questioned.Because the termination under the Shops and Establishments Act has to be for reasonable cause after conducting enquiry In such Shop Act Appeals the Staffing Agency has to take a pro-active action for settling such disputes out of Court.
With Regards
V.Sounder Rajan
Advocates & Notaries -Legal Consultants for the Indian Staffing and Recruiting Industry
E-mail : rajanassociates@eth,net,
.
From India, Bangalore
Dear All
IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES
In our earlier post the following question came up:
Can the Temporary Employee of a Staffing Agency question his/her termination,/ retrenchment by an Appeal under the State Shops and Establishments Act ?
Now let us see the Appeal provisions to question his/her termination,/ retrenchment in each State enactment starting with-
ANDHRA PRADESH SHOPS AND ESTABLISHMENTS ACT, 1988
First the termination provision -
47. Conditions for terminating the services of an employee, payment of service compensation for termination, retirement, resignation, disablement, etc., and payment of subsistence allowance for the period of suspension :- (1) No employer shall, without a reasonable cause terminate the service of an employee who has been in his employment continuously for a period of not less than six months without giving such employee at least one month s notice in writing or wages in lieu thereof and in respect of an employee who has been in his employment continuously for a period of not less than one year, a service compensation amounting to fifteen days average wages for each year of continuous employment:
Provided that every termination shall be made by the employer in writing and a copy of such termination order shall be furnished to the Inspector having jurisdiction over the area within three days of such termination.
(2) The services of an employee shall not be terminated by the employer when such employee made a complaint to the Inspector regarding the denial of any benefit accruing to him under any labour welfare enactment applicable to the establishment and during the pendency of such complaint before the Inspector. The services of an employee shall not also be terminated for misconduct except for such acts or omission and in such manner as may be prescribed.
(3) Every employee who has put in a continuous service of not less than one year shall be eligible for service compensation amounting to fifteen days average wages for each year of continuous employment, (i) on voluntary cessation of his work after completion of 60 years of age, (ii) on his resignation, or (iii) on physical or mental infirmity duly certified by Registered Medical Practitioner, or (iv) on his death or disablement due to accident or disease:
Provided that the completion of continuous service of one year shall not be necessary where the termination of the employment of an employee is due to death or disablement:
Provided further that in a case of death of an employee service compensation payable to him shall be paid to his nominee or if no nomination has been made to his legal heir.
(4) Where a service compensation is payable under this section to an employee, he shall be entitled to receive his wages from the date of termination or cessation of his services until the date on which the service compensation so payable is actually paid.
(5) The payment of service compensation under this section shall not apply in cases where the employee is entitled to gratuity under the Payment of Gratuity Act, 1972 (Central Act 39 of 1972) and gratuity has been paid accordingly consequent on the termination or cessation of service.
(6) Where an employee is placed under suspension pending enquiry into grave misconduct the employer shall pay a subsistance allowance equivalent to fifty per cent of the last drawn wage for the first six months and at seventy five per cent of the last drawn wage beyond six months during the period of suspension. The total period of suspension shall not however exceed one year in any case. If the misconduct is not established or the total period of suspension exceeds one year, the employee shall be entitled to full wages during suspension period and the period of suspension shall be treated as on duty.
Explanation :- (1) For the purpose of this section :
(a) the term employee shall include part time employee also;
(b) the expression average wages means the daily average of wages for the days an employee actually worked during the thirty days immediately preceding the date of termination or cessation of service;
(c) the expression wages does not include over time wages;
(d) an employee in an establishment shall be deemed to have been in continuous employment for a period of not less than six months if he has worked for not less than one hundred and twenty days in that establishment within a period of six months immediately preceding the date of termination or cessation of the service of that employee.
(e) where the total continuous employment is for a fraction of a year or extends over a fraction of a year in addition to one or more completed years of continuous employment, such fraction, if it is not less than a half year shall be counted as a year of continuous employment in calculating the total number of years for which the service compensation is to be given;
(f) the service compensation of an employee whose services have been terminated for any act, wilful omission or negligence causing any damage or loss to, or destruction of property belonging to the employer, shall be forfeited to the extent of the damage or loss caused;
(g) disablement means such disablement which incapacitates an employee for the work which he was capable of performing before the accident or disease resulting in such disablement.
(2) An employee who has completed the age of sixty years or who is physically or mentally unfit having been so declared by a Registered Medical Practitioner or who wants to retire on medical grounds or to resign his service may give up his employment after giving to his employer notice of atleast fifteen days and where no such notice is given, the service compensation payable to him shall be forfeited to the extent of fifteen days in lieu of the notice.
Now the Appeal section-
48. Appointment of authority to hear and decide appeals arising out of termination of services :- (1)(a) The Chief Inspector may, by notification, appoint for any area as may be specified therein, any authority to hear and decide appeals arising out of the termination of service of employees under Section 47:
Provided that the Chief Inspector may on administrative grounds transfer any appeal arising in the territorial jurisdiction of any authority to the file of another authority for disposal, and such authority to whom the appeal is transferred by the Chief Inspector shall dispose of the appeal so transferred.
(b) Any employee whose services have been terminated may, appeal to the authority concerned within such time and in such manner as may be prescribed.
(2) The appellate authority may, after inquiry in the prescribed manner, dismiss the appeal or direct the reinstatement of the employee with or without wages for period he was kept out of employment or direct payment of compensation without reinstatement or grant such other relief as it deems fit in the circumstances of the case:
Provided that the authority concerned shall, without delay, hear such appeal and pass such orders within a period of three months from the date of receipt of such appeal:
Provided further that where any such authority considers it necessary or expedient so to do, it may, for reasons to be recorded in writing, extend such period by such further period as it may think fit:
Provided also that no proceedings before such authority shall lapse merely on the grounds that any period specified in this sub section had expired without such proceedings being completed.
(3) Against any decision of the authority under sub section (2), a second appeal shall lie to such authority as may be notified by the Government within thirty days from the date of communication of the decision and the decision of such authority on such appeal shall be final and binding on both the employer and the employee and shall be given effect to within such time as may be specified in the order of that authority:
Provided that the second appeal shall not be entertained unless the employer deposits the entire amount of back wages as ordered by the appellate authority under sub section (2) or the amount of compensation ordered as the case may be:
Provided further that if the second appeal is against the order of reinstatement given by the appellate authority under sub section (2), the employee shall be entitled to wages last drawn by him during the pendency of the proceedings before appellate authority.
(4) Where in any case, an appellate authority by its award directs reinstatement of any employee and the employer challenges such award in any Court of Law, the employer shall be liable to pay such employee during the pendency of such proceedings, full wages last drawn by him, if the employee had not been employed in any establishment during such period and an affidavit by such employee had been filed to that effect in such Court:
Provided that where it is proved to the satisfaction of the Court that such employee has been employed and has been receiving remuneration during any such period or part thereof the Court shall order that no wage shall be payable under this section for such period or part, as the case may be.
(5) Any amount directed to be paid under this section may be recovered :
(a) if the authority appointed under sub section (1) is a Magistrate, by the authority, as if it were a fine imposed by him as Magistrate; and
(b) If the authority is not a Magistrate, by any Magistrate to whom the authority makes application in this behalf as if it were a fine imposed by such Magistrate.
Therefore the power under Section 48 is wide .Staffing Companies operating /employing Temporary Employees in the State of Andhra Pradesh need to take absolute precautions while firing their Temporary Employees.
With Regards
V.Sounder Rajan
Advocates & Notaries -Legal Consultants
E-mail : rajanassociates@eth,net,
.
From India, Bangalore
IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES
In our earlier post the following question came up:
Can the Temporary Employee of a Staffing Agency question his/her termination,/ retrenchment by an Appeal under the State Shops and Establishments Act ?
Now let us see the Appeal provisions to question his/her termination,/ retrenchment in each State enactment starting with-
ANDHRA PRADESH SHOPS AND ESTABLISHMENTS ACT, 1988
First the termination provision -
47. Conditions for terminating the services of an employee, payment of service compensation for termination, retirement, resignation, disablement, etc., and payment of subsistence allowance for the period of suspension :- (1) No employer shall, without a reasonable cause terminate the service of an employee who has been in his employment continuously for a period of not less than six months without giving such employee at least one month s notice in writing or wages in lieu thereof and in respect of an employee who has been in his employment continuously for a period of not less than one year, a service compensation amounting to fifteen days average wages for each year of continuous employment:
Provided that every termination shall be made by the employer in writing and a copy of such termination order shall be furnished to the Inspector having jurisdiction over the area within three days of such termination.
(2) The services of an employee shall not be terminated by the employer when such employee made a complaint to the Inspector regarding the denial of any benefit accruing to him under any labour welfare enactment applicable to the establishment and during the pendency of such complaint before the Inspector. The services of an employee shall not also be terminated for misconduct except for such acts or omission and in such manner as may be prescribed.
(3) Every employee who has put in a continuous service of not less than one year shall be eligible for service compensation amounting to fifteen days average wages for each year of continuous employment, (i) on voluntary cessation of his work after completion of 60 years of age, (ii) on his resignation, or (iii) on physical or mental infirmity duly certified by Registered Medical Practitioner, or (iv) on his death or disablement due to accident or disease:
Provided that the completion of continuous service of one year shall not be necessary where the termination of the employment of an employee is due to death or disablement:
Provided further that in a case of death of an employee service compensation payable to him shall be paid to his nominee or if no nomination has been made to his legal heir.
(4) Where a service compensation is payable under this section to an employee, he shall be entitled to receive his wages from the date of termination or cessation of his services until the date on which the service compensation so payable is actually paid.
(5) The payment of service compensation under this section shall not apply in cases where the employee is entitled to gratuity under the Payment of Gratuity Act, 1972 (Central Act 39 of 1972) and gratuity has been paid accordingly consequent on the termination or cessation of service.
(6) Where an employee is placed under suspension pending enquiry into grave misconduct the employer shall pay a subsistance allowance equivalent to fifty per cent of the last drawn wage for the first six months and at seventy five per cent of the last drawn wage beyond six months during the period of suspension. The total period of suspension shall not however exceed one year in any case. If the misconduct is not established or the total period of suspension exceeds one year, the employee shall be entitled to full wages during suspension period and the period of suspension shall be treated as on duty.
Explanation :- (1) For the purpose of this section :
(a) the term employee shall include part time employee also;
(b) the expression average wages means the daily average of wages for the days an employee actually worked during the thirty days immediately preceding the date of termination or cessation of service;
(c) the expression wages does not include over time wages;
(d) an employee in an establishment shall be deemed to have been in continuous employment for a period of not less than six months if he has worked for not less than one hundred and twenty days in that establishment within a period of six months immediately preceding the date of termination or cessation of the service of that employee.
(e) where the total continuous employment is for a fraction of a year or extends over a fraction of a year in addition to one or more completed years of continuous employment, such fraction, if it is not less than a half year shall be counted as a year of continuous employment in calculating the total number of years for which the service compensation is to be given;
(f) the service compensation of an employee whose services have been terminated for any act, wilful omission or negligence causing any damage or loss to, or destruction of property belonging to the employer, shall be forfeited to the extent of the damage or loss caused;
(g) disablement means such disablement which incapacitates an employee for the work which he was capable of performing before the accident or disease resulting in such disablement.
(2) An employee who has completed the age of sixty years or who is physically or mentally unfit having been so declared by a Registered Medical Practitioner or who wants to retire on medical grounds or to resign his service may give up his employment after giving to his employer notice of atleast fifteen days and where no such notice is given, the service compensation payable to him shall be forfeited to the extent of fifteen days in lieu of the notice.
Now the Appeal section-
48. Appointment of authority to hear and decide appeals arising out of termination of services :- (1)(a) The Chief Inspector may, by notification, appoint for any area as may be specified therein, any authority to hear and decide appeals arising out of the termination of service of employees under Section 47:
Provided that the Chief Inspector may on administrative grounds transfer any appeal arising in the territorial jurisdiction of any authority to the file of another authority for disposal, and such authority to whom the appeal is transferred by the Chief Inspector shall dispose of the appeal so transferred.
(b) Any employee whose services have been terminated may, appeal to the authority concerned within such time and in such manner as may be prescribed.
(2) The appellate authority may, after inquiry in the prescribed manner, dismiss the appeal or direct the reinstatement of the employee with or without wages for period he was kept out of employment or direct payment of compensation without reinstatement or grant such other relief as it deems fit in the circumstances of the case:
Provided that the authority concerned shall, without delay, hear such appeal and pass such orders within a period of three months from the date of receipt of such appeal:
Provided further that where any such authority considers it necessary or expedient so to do, it may, for reasons to be recorded in writing, extend such period by such further period as it may think fit:
Provided also that no proceedings before such authority shall lapse merely on the grounds that any period specified in this sub section had expired without such proceedings being completed.
(3) Against any decision of the authority under sub section (2), a second appeal shall lie to such authority as may be notified by the Government within thirty days from the date of communication of the decision and the decision of such authority on such appeal shall be final and binding on both the employer and the employee and shall be given effect to within such time as may be specified in the order of that authority:
Provided that the second appeal shall not be entertained unless the employer deposits the entire amount of back wages as ordered by the appellate authority under sub section (2) or the amount of compensation ordered as the case may be:
Provided further that if the second appeal is against the order of reinstatement given by the appellate authority under sub section (2), the employee shall be entitled to wages last drawn by him during the pendency of the proceedings before appellate authority.
(4) Where in any case, an appellate authority by its award directs reinstatement of any employee and the employer challenges such award in any Court of Law, the employer shall be liable to pay such employee during the pendency of such proceedings, full wages last drawn by him, if the employee had not been employed in any establishment during such period and an affidavit by such employee had been filed to that effect in such Court:
Provided that where it is proved to the satisfaction of the Court that such employee has been employed and has been receiving remuneration during any such period or part thereof the Court shall order that no wage shall be payable under this section for such period or part, as the case may be.
(5) Any amount directed to be paid under this section may be recovered :
(a) if the authority appointed under sub section (1) is a Magistrate, by the authority, as if it were a fine imposed by him as Magistrate; and
(b) If the authority is not a Magistrate, by any Magistrate to whom the authority makes application in this behalf as if it were a fine imposed by such Magistrate.
Therefore the power under Section 48 is wide .Staffing Companies operating /employing Temporary Employees in the State of Andhra Pradesh need to take absolute precautions while firing their Temporary Employees.
With Regards
V.Sounder Rajan
Advocates & Notaries -Legal Consultants
E-mail : rajanassociates@eth,net,
.
From India, Bangalore
Dear All
IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES
In our earlier post the following question came up:
Can the Temporary Employee of a Staffing Agency question his/her termination,/ retrenchment by an Appeal under the State Shops and Establishments Act ?
Now let us see the Appeal provisions to question his/her termination,/ retrenchment in each State enactment starting with-
TAMILNADU SHOPS AND ESTABLISHMENTS ACT
First the termination provision -
Section 41 of the Act reads as follows:
"41. Notice of dismissal: (1) No employer shall dispense with the
services of a person employed continuously for a period of not less
than six months, except for a reasonable cause and without giving
such person at least one month's notice or wages in lieu of such
notice, provided however, that such notice shall not be necessary
where the services of such person are dispensed with on a charge of
misconduct supported by satisfactory evidence recorded at an enquiry
held for the purpose.
(2) The person employed shall have a right to appeal to such
authority and within such time as may be prescribed either on the
ground that there was no reasonable cause for dispensing with his
services or on the ground that he had not been guilty of misconduct
as held by the employer.
(3) The decision of the Appellate Authority shall, be final and
binding on both the employer and the person employed".
The termination of a Temporary Employees in the State of Tamilnadu if it is on the ground of misconduct it is to supported by satisfactory evidence recorded at an enquiry held for the purpose.
Staffing Companies need to be careful when their clients make the request for termination.
With Regards
V.Sounder Rajan
Advocates & Notaries -Legal Consultants
E-mail : rajanassociates@eth,net,
.
From India, Bangalore
IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES
In our earlier post the following question came up:
Can the Temporary Employee of a Staffing Agency question his/her termination,/ retrenchment by an Appeal under the State Shops and Establishments Act ?
Now let us see the Appeal provisions to question his/her termination,/ retrenchment in each State enactment starting with-
TAMILNADU SHOPS AND ESTABLISHMENTS ACT
First the termination provision -
Section 41 of the Act reads as follows:
"41. Notice of dismissal: (1) No employer shall dispense with the
services of a person employed continuously for a period of not less
than six months, except for a reasonable cause and without giving
such person at least one month's notice or wages in lieu of such
notice, provided however, that such notice shall not be necessary
where the services of such person are dispensed with on a charge of
misconduct supported by satisfactory evidence recorded at an enquiry
held for the purpose.
(2) The person employed shall have a right to appeal to such
authority and within such time as may be prescribed either on the
ground that there was no reasonable cause for dispensing with his
services or on the ground that he had not been guilty of misconduct
as held by the employer.
(3) The decision of the Appellate Authority shall, be final and
binding on both the employer and the person employed".
The termination of a Temporary Employees in the State of Tamilnadu if it is on the ground of misconduct it is to supported by satisfactory evidence recorded at an enquiry held for the purpose.
Staffing Companies need to be careful when their clients make the request for termination.
With Regards
V.Sounder Rajan
Advocates & Notaries -Legal Consultants
E-mail : rajanassociates@eth,net,
.
From India, Bangalore
Dear All
IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES
In our earlier post the following question came up:
Can the Temporary Employee of a Staffing Agency question his/her termination,/ retrenchment by an Appeal under the State Shops and Establishments Act ?
Now let us see the Appeal provisions to question his/her termination,/ retrenchment in Kerala State
KERALA SHOPS AND ESTABLISHMENTS ACT 1960
First the termination provision -
18. Notice of Dismissal.—(1) No employer shall dispense with the services of an employee employed continuously for a period of not less than six months, except for a reasonable cause and without giving such employee at least one month’s notice or wages in lieu of such notice; provided however that such notice shall not be necessary where the services of such employee are dispensed with on a charge of misconduct supported by satisfactory evidence recorded at an inquiry held for the purpose.
(2)Any employee whose services are dispensed with may appeal to such authority and within such time as may be prescribed either on the ground that there was no reasonable cause for dispensing which his services or on the ground that he has not been guilty of misconduct as held by the employer.
(3)The appellate authority may, after giving notice in the prescribed manner to the employer and the employee, dismiss the appeal or direct the reinstatement of the employee with or without wages for the period he was kept out of employment or direct payment of compensation without reinstatement or grant such other relief as it deems fit in the circumstances of the case.
(4)In directing the reinstatement of an employee the appellate authority shall also direct the payment of such amount of compensation as may be specified by him in case the employer fails to reinstate the employee in accordance with the directions.
(4A) In directing the payment of compensation under sub-section (3) or sub-section (4), the appellate authority may include as part of the compensation the wages of the employee for the period he was kept out of employment.
(5)The decision of the appellate authority shall be final and binding on both the parties, not be liable to be questioned in any Court of Law and be given effect to within such time as may be specified in the order of the appellate authority.
(6)Any compensation required to be paid by the employer under sub-sections (3) and (4) but not paid by him shall be recoverable as arrears of land revenue under the provisions of the Revenue Recovery Act for the time being in force.
The termination of a Temporary Employees in the State of Kerala if it is to be on the ground of misconduct it is to supported by satisfactory evidence recorded at an enquiry held for the purpose.
Staffing Companies need to be careful when their clients make the request for termination.
With Regards
V.Sounder Rajan
Advocates & Notaries -Legal Consultants
E-mail : rajanassociates@eth,net,
.
From India, Bangalore
IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES
In our earlier post the following question came up:
Can the Temporary Employee of a Staffing Agency question his/her termination,/ retrenchment by an Appeal under the State Shops and Establishments Act ?
Now let us see the Appeal provisions to question his/her termination,/ retrenchment in Kerala State
KERALA SHOPS AND ESTABLISHMENTS ACT 1960
First the termination provision -
18. Notice of Dismissal.—(1) No employer shall dispense with the services of an employee employed continuously for a period of not less than six months, except for a reasonable cause and without giving such employee at least one month’s notice or wages in lieu of such notice; provided however that such notice shall not be necessary where the services of such employee are dispensed with on a charge of misconduct supported by satisfactory evidence recorded at an inquiry held for the purpose.
(2)Any employee whose services are dispensed with may appeal to such authority and within such time as may be prescribed either on the ground that there was no reasonable cause for dispensing which his services or on the ground that he has not been guilty of misconduct as held by the employer.
(3)The appellate authority may, after giving notice in the prescribed manner to the employer and the employee, dismiss the appeal or direct the reinstatement of the employee with or without wages for the period he was kept out of employment or direct payment of compensation without reinstatement or grant such other relief as it deems fit in the circumstances of the case.
(4)In directing the reinstatement of an employee the appellate authority shall also direct the payment of such amount of compensation as may be specified by him in case the employer fails to reinstate the employee in accordance with the directions.
(4A) In directing the payment of compensation under sub-section (3) or sub-section (4), the appellate authority may include as part of the compensation the wages of the employee for the period he was kept out of employment.
(5)The decision of the appellate authority shall be final and binding on both the parties, not be liable to be questioned in any Court of Law and be given effect to within such time as may be specified in the order of the appellate authority.
(6)Any compensation required to be paid by the employer under sub-sections (3) and (4) but not paid by him shall be recoverable as arrears of land revenue under the provisions of the Revenue Recovery Act for the time being in force.
The termination of a Temporary Employees in the State of Kerala if it is to be on the ground of misconduct it is to supported by satisfactory evidence recorded at an enquiry held for the purpose.
Staffing Companies need to be careful when their clients make the request for termination.
With Regards
V.Sounder Rajan
Advocates & Notaries -Legal Consultants
E-mail : rajanassociates@eth,net,
.
From India, Bangalore
Dear All
IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES
In our earlier post the following question came up:
Can the Temporary Employee of a Staffing Agency question his/her termination,/ retrenchment by an Appeal under the State Shops and Establishments Act ?
Now let us see the Appeal provisions to question his/her termination,/ retrenchment in each State enactment :
Goa, Daman, Diu Shops-Establishment Act1973
39. Conditions for terminating the service of an employee and payment of gratuity.— (7) No employer
shall without a reasonable cause and except for misconduct, terminate the service of an employee who has been in his employment continuously for a period of not less than six months without giving such employee, at least one month's notice in writing or wages in lieu thereof and a gratuity amounting to fifteen day's average wages for each year of continous
employment.
Explanation.— For the purpose of this sub-section:
(a) the expression "wages" does not include over time wages;
(b) the expression "wages" means the daily average of wages for the days an employee actually worked during the thirty days immediately preceding the date of termination of service;
(c) an employee in an establishment shall be deemed to have been in continuous employment for a period of not less than six months, if he has worked for not less than one hundred and twenty days in that establishment within a period of six months immediately preceding the date of termination of the service of that employee;
(d) where the total continuous employment is for a fraction of a year or extends over a fraction of a year in addition to one or more completed years of continuous employment, such fraction, if it is not less than half a year shall be counted as a year of continuous employment in calculating the total number of year for which the gratuity is to be given. (2) Where a gratuity is payable under sub-section (1) to an employee, he shall be entitled to receive his wages from the date of termination of his service until the date on which the gratuity so payable is actually paid subject to a maximum of wages for two months.
(3) An employee, who has completed the age of sixty years or who is physically or mentally unfit having been
so declared by a medical certificate or who wants to retire on medical grounds or to resign his service, may give up his employment after giving to his employer notice of at least one month and every such employee and the dependent of an employee who dies while in service, shall be entitled to receive a gratuity amounting to fifteen days' average wages for each year of continuous employment calculated in the manner provided in the Explanation to sub-section (1). He shall be entitled to receive the wages from the date giving up the employment until the date on which the gratuity so payable is actually paid, subject to a maximum of wages for two months.
(4) The services of an employee shall not be terminated for misconduct except, for such acts or omissions and in such manner, as may be prescribed.
Explanation.— For the purpose of this section, the term "employee" shall include part-time employee also.
Now the Appeal provision
40. Appointment of authority to hear and decide appeals arising out of termination of service.—
(a) The Government may, by notification, appoint an authority to hear and decide appeals arising out of the termination of service of employee under section 39.
(b) Any employee whose service has been terminated may appeal to the authority concerned within such time and in such manner as may be prescribed.
(2) The authority may, after inquiring in the prescribed manner, dismiss the appeal or direct the reinstatement of the employee with or without wages for the period he was kept out of employment or direct payment of compensation without
reinstatement or grant such other relief as it deems fit in the circumstances of the case.
(3) Against any decision of the authority under sub--section (2), a second appeal shall lie to Labour Court constituted under section 7 of the Industrial disputes Act, 1947 (Central Act 14 of 1947) within thirty days from the date of
communication of the decision and the decision of the Labour Court on such appeal shall be final and binding on both the employer and the employee and shall be given effect to within such time as may be specified in the order of that Court.
(4) Any amount directed to be paid under this section may be recovered—
(a) if the authority is a Magistrate, by the authority, as if it were a fine imposed by him as magistrate; and
(b) if the authority is not a Magistrate, by any Magistrate to whom the authority makes application in
this behalf, as if it were a fine imposed by such Magistrate.
Staffing Companies operating in Goa, Daman, Diu need to be careful when their clients make the request for termination.
With Regards
V.Sounder Rajan
VS Rajan Associates,
Advocates & Notaries -Legal Consultants
No.27, Ist Floor, Singapore Plaza,
No.164, Linghi Chetty Street,
Chennai - 600 001.
E-mail : rajanassociates@eth,net,
Off : 044-42620864, 044-65874684, .
From India, Madras
IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES
In our earlier post the following question came up:
Can the Temporary Employee of a Staffing Agency question his/her termination,/ retrenchment by an Appeal under the State Shops and Establishments Act ?
Now let us see the Appeal provisions to question his/her termination,/ retrenchment in each State enactment :
Goa, Daman, Diu Shops-Establishment Act1973
39. Conditions for terminating the service of an employee and payment of gratuity.— (7) No employer
shall without a reasonable cause and except for misconduct, terminate the service of an employee who has been in his employment continuously for a period of not less than six months without giving such employee, at least one month's notice in writing or wages in lieu thereof and a gratuity amounting to fifteen day's average wages for each year of continous
employment.
Explanation.— For the purpose of this sub-section:
(a) the expression "wages" does not include over time wages;
(b) the expression "wages" means the daily average of wages for the days an employee actually worked during the thirty days immediately preceding the date of termination of service;
(c) an employee in an establishment shall be deemed to have been in continuous employment for a period of not less than six months, if he has worked for not less than one hundred and twenty days in that establishment within a period of six months immediately preceding the date of termination of the service of that employee;
(d) where the total continuous employment is for a fraction of a year or extends over a fraction of a year in addition to one or more completed years of continuous employment, such fraction, if it is not less than half a year shall be counted as a year of continuous employment in calculating the total number of year for which the gratuity is to be given. (2) Where a gratuity is payable under sub-section (1) to an employee, he shall be entitled to receive his wages from the date of termination of his service until the date on which the gratuity so payable is actually paid subject to a maximum of wages for two months.
(3) An employee, who has completed the age of sixty years or who is physically or mentally unfit having been
so declared by a medical certificate or who wants to retire on medical grounds or to resign his service, may give up his employment after giving to his employer notice of at least one month and every such employee and the dependent of an employee who dies while in service, shall be entitled to receive a gratuity amounting to fifteen days' average wages for each year of continuous employment calculated in the manner provided in the Explanation to sub-section (1). He shall be entitled to receive the wages from the date giving up the employment until the date on which the gratuity so payable is actually paid, subject to a maximum of wages for two months.
(4) The services of an employee shall not be terminated for misconduct except, for such acts or omissions and in such manner, as may be prescribed.
Explanation.— For the purpose of this section, the term "employee" shall include part-time employee also.
Now the Appeal provision
40. Appointment of authority to hear and decide appeals arising out of termination of service.—
(a) The Government may, by notification, appoint an authority to hear and decide appeals arising out of the termination of service of employee under section 39.
(b) Any employee whose service has been terminated may appeal to the authority concerned within such time and in such manner as may be prescribed.
(2) The authority may, after inquiring in the prescribed manner, dismiss the appeal or direct the reinstatement of the employee with or without wages for the period he was kept out of employment or direct payment of compensation without
reinstatement or grant such other relief as it deems fit in the circumstances of the case.
(3) Against any decision of the authority under sub--section (2), a second appeal shall lie to Labour Court constituted under section 7 of the Industrial disputes Act, 1947 (Central Act 14 of 1947) within thirty days from the date of
communication of the decision and the decision of the Labour Court on such appeal shall be final and binding on both the employer and the employee and shall be given effect to within such time as may be specified in the order of that Court.
(4) Any amount directed to be paid under this section may be recovered—
(a) if the authority is a Magistrate, by the authority, as if it were a fine imposed by him as magistrate; and
(b) if the authority is not a Magistrate, by any Magistrate to whom the authority makes application in
this behalf, as if it were a fine imposed by such Magistrate.
Staffing Companies operating in Goa, Daman, Diu need to be careful when their clients make the request for termination.
With Regards
V.Sounder Rajan
VS Rajan Associates,
Advocates & Notaries -Legal Consultants
No.27, Ist Floor, Singapore Plaza,
No.164, Linghi Chetty Street,
Chennai - 600 001.
E-mail : rajanassociates@eth,net,
Off : 044-42620864, 044-65874684, .
From India, Madras
Dear All
IMMEDIATE LEGAL QUESTIONS FOR PRINCIPAL EMPLOYERS / CLIENTS
The key risks in Staffing/Temping that need to be looked into by the Client are: -
(a) Strategic Risk – The Staffing/Temping organization may conduct business on its own behalf, which is inconsistent with the overall strategic goals of the Client
(b) Reputation Risk – Poor service from the service provider, its customer interaction not being consistent with the overall standards of the Client
(c) Compliance Risk – Privacy, consumer ,Statutory and Labour laws not adequately complied with.
(d) Operational Risk – Arising due to technology failure, fraud, error, inadequate financial capacity to fulfill obligations and/or provide remedies
(e) Exit Strategy Risk – This could arise from over–reliance on one firm, the loss of relevant skills in the Client itself preventing it from bringing the activity back in-house and contracts entered into wherein speedy exits would be prohibitively expensive
(f) Country Risk – Due to the political, social or legal climate creating added risk
(h) Contractual risk – arising from whether or not the Client has the ability to enforce the contract
I) Concentration and Systemic Risk – Due to lack of control of individual Client over a Staffing/Temping organization , more so when overall Client has considerable exposure to one Staffing/Temping organization .
With Regards
V.Sounder Rajan
Advocates & Notaries -Legal Consultants
E-mail : rajanassociates@eth,net,
.
From India, Bangalore
IMMEDIATE LEGAL QUESTIONS FOR PRINCIPAL EMPLOYERS / CLIENTS
The key risks in Staffing/Temping that need to be looked into by the Client are: -
(a) Strategic Risk – The Staffing/Temping organization may conduct business on its own behalf, which is inconsistent with the overall strategic goals of the Client
(b) Reputation Risk – Poor service from the service provider, its customer interaction not being consistent with the overall standards of the Client
(c) Compliance Risk – Privacy, consumer ,Statutory and Labour laws not adequately complied with.
(d) Operational Risk – Arising due to technology failure, fraud, error, inadequate financial capacity to fulfill obligations and/or provide remedies
(e) Exit Strategy Risk – This could arise from over–reliance on one firm, the loss of relevant skills in the Client itself preventing it from bringing the activity back in-house and contracts entered into wherein speedy exits would be prohibitively expensive
(f) Country Risk – Due to the political, social or legal climate creating added risk
(h) Contractual risk – arising from whether or not the Client has the ability to enforce the contract
I) Concentration and Systemic Risk – Due to lack of control of individual Client over a Staffing/Temping organization , more so when overall Client has considerable exposure to one Staffing/Temping organization .
With Regards
V.Sounder Rajan
Advocates & Notaries -Legal Consultants
E-mail : rajanassociates@eth,net,
.
From India, Bangalore
hi all members
If an employee is appoint in an organisation and on the appointment letter it is mentioned that "you are appointed for post..... . And you will be on probation period for one year and after 1 year you wil be on regular bases." and with this they signed two year service bond. Now question is if person want to leave before one year then what wil the procedure, can he leave with 1 week notice(as he is on probation period for 1 year) or two year bond restrict hgm to do so.
From India, Kanpur
If an employee is appoint in an organisation and on the appointment letter it is mentioned that "you are appointed for post..... . And you will be on probation period for one year and after 1 year you wil be on regular bases." and with this they signed two year service bond. Now question is if person want to leave before one year then what wil the procedure, can he leave with 1 week notice(as he is on probation period for 1 year) or two year bond restrict hgm to do so.
From India, Kanpur
Dear All
IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES
In our earlier post the following question came up:
Can the Temporary Employee of a Staffing Agency question his/her termination,/ retrenchment by an Appeal under the State Shops and Establishments Act ?
Now let us see the LEGAL REMEDY provisions to question his/her termination,/ retrenchment under The Punjab Shops and Commercial Establishments Act, 1958
22. Notice of removal. -- (1) No employee shall be removed from service unless and until
one month’s previous notice or pay in lieu thereof has been given to him:
Provided that –
(a) no employee shall be entitled to the notice or pay in lieu thereof if he is removed
on account of misconduct established on record;
(b) no employee shall be entitled to one month’s notice or notice pay unless and until
he has been in the service of the employee continuously for a period of three months.
(2) In any case instituted for a contravention of the provisions of sub-section (1), if a
Judicial Magistrate is satisfied that an employee has been removed without reasonable
cause, the Judicial Magistrate shall, for reason to be recorded in writing, award compensation to the employee equivalent to two month’s salary;
Provided that no such claim shall be entertained unless it is preferred by the employee
within six months from the date of his removal.
(3) The amount payable as compensation under this section shall be in addition to, and
recoverable and fine payable under section 26.
(4) No person who has been awarded compensation under this section shall be entitled to bring a civil suit in respect of the same claim.
23. Notice by employee. -- (1) No employee, who has been in the service of the employer continuously for a period of three months shall terminate his employment unless he has given to his employer seven days previous notice or pay in lieu thereof.
(2) Where an employee contravenes the provisions of sub-section (1) his employer may
forfeit his unpaid wages for a period not exceeding seven days.
The Punjab Act is balanced and provides notice period both for the Employer and Employee.
With Regards
V.Sounder Rajan
Advocates & Notaries -Legal Consultants
E-mail : rajanassociates@eth,net,
.
From India, Bangalore
IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES
In our earlier post the following question came up:
Can the Temporary Employee of a Staffing Agency question his/her termination,/ retrenchment by an Appeal under the State Shops and Establishments Act ?
Now let us see the LEGAL REMEDY provisions to question his/her termination,/ retrenchment under The Punjab Shops and Commercial Establishments Act, 1958
22. Notice of removal. -- (1) No employee shall be removed from service unless and until
one month’s previous notice or pay in lieu thereof has been given to him:
Provided that –
(a) no employee shall be entitled to the notice or pay in lieu thereof if he is removed
on account of misconduct established on record;
(b) no employee shall be entitled to one month’s notice or notice pay unless and until
he has been in the service of the employee continuously for a period of three months.
(2) In any case instituted for a contravention of the provisions of sub-section (1), if a
Judicial Magistrate is satisfied that an employee has been removed without reasonable
cause, the Judicial Magistrate shall, for reason to be recorded in writing, award compensation to the employee equivalent to two month’s salary;
Provided that no such claim shall be entertained unless it is preferred by the employee
within six months from the date of his removal.
(3) The amount payable as compensation under this section shall be in addition to, and
recoverable and fine payable under section 26.
(4) No person who has been awarded compensation under this section shall be entitled to bring a civil suit in respect of the same claim.
23. Notice by employee. -- (1) No employee, who has been in the service of the employer continuously for a period of three months shall terminate his employment unless he has given to his employer seven days previous notice or pay in lieu thereof.
(2) Where an employee contravenes the provisions of sub-section (1) his employer may
forfeit his unpaid wages for a period not exceeding seven days.
The Punjab Act is balanced and provides notice period both for the Employer and Employee.
With Regards
V.Sounder Rajan
Advocates & Notaries -Legal Consultants
E-mail : rajanassociates@eth,net,
.
From India, Bangalore
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Legal COMPLIANCEs and DUE dates.xls
Service Jurisprudence & Legal Compliances.pdf