Dear All,
Are there any decisions of Indian Courts referring to contractors being used to be changed, but the new contractors were required under the terms of the agreement to retain the workers of the predecessor contractors?
Yes, in R. K. Panda v. Steel Authority of India Ltd. (1994) 5 SCC 304: (1994 AIR SCW 2460), the contract labourers, by filing a writ petition under Article 32, claimed parity in pay with direct employees and also regularization in the employment of the respondent-authority. They had been continuing in employment for periods ranging from 10 to 20 years. The contractors used to be changed, but the new contractors were required under the terms of the agreement to retain the workers of the predecessor contractors. The workers were employed through the contractors for different purposes like construction and maintenance of roads and buildings within plant premises, public health, horticulture, water supply, etc. In the agreement with the contractors, it was stated that the parties shall be governed by the provisions of the Act as well as by the provisions of the Payment of Bonus Act.
On these facts, the Apex Court observed as follows (at p. 2466 of AIR): "It is true that with the passage of time and purely with a view to safeguard the interests of workers, many principal employers, while renewing the contracts, have been insisting that the contractor or the new contractor retains the old employees. In fact, such a condition is incorporated in the contract itself. However, such a clause in the contract, which is benevolently inserted in the contract to protect the continuance of the source of livelihood of the contract labour, cannot by itself give rise to a right to regularization in the employment of the principal employer. Whether the contract labourers have become the employees of the principal employer in the course of time and whether the engagement and employment of labourers through a contractor is a mere camouflage and a smokescreen, as has been urged in this case, is a question of fact and has to be established by the contract labourers on the basis of the requisite material. It is not possible for the High Court or this Court, while exercising writ jurisdiction or jurisdiction under Article 136 to decide such questions, only on the basis of the affidavits. It need not be pointed out that in all such cases, the labourers are initially employed and engaged by the contractors. As such, at what point of time a direct link is established between the contract labourers and the principal employer, eliminating the contractor from the scene, is a matter which has to be established on material produced before the Court. Normally, the Labour Court and the Industrial Tribunal, under the Industrial Disputes Act, are competent to adjudicate such disputes on the basis of the oral and documentary evidence produced before them.
It is now imperative for the Indian Contract Staffing Industry to evolve a Code of Inherent risks so that Principal Employers are forewarned in deploying Contract Staff.
With Regards,
Advocates and Notaries & Legal Consultants for Recruiting & Staffing Industry
E-mail: rajanassociates@eth.net
Phone: 9025792684, 9025792634
From India, Bangalore
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204Are there any decisions of Indian Courts referring to contractors being used to be changed, but the new contractors were required under the terms of the agreement to retain the workers of the predecessor contractors?
Yes, in R. K. Panda v. Steel Authority of India Ltd. (1994) 5 SCC 304: (1994 AIR SCW 2460), the contract labourers, by filing a writ petition under Article 32, claimed parity in pay with direct employees and also regularization in the employment of the respondent-authority. They had been continuing in employment for periods ranging from 10 to 20 years. The contractors used to be changed, but the new contractors were required under the terms of the agreement to retain the workers of the predecessor contractors. The workers were employed through the contractors for different purposes like construction and maintenance of roads and buildings within plant premises, public health, horticulture, water supply, etc. In the agreement with the contractors, it was stated that the parties shall be governed by the provisions of the Act as well as by the provisions of the Payment of Bonus Act.
On these facts, the Apex Court observed as follows (at p. 2466 of AIR): "It is true that with the passage of time and purely with a view to safeguard the interests of workers, many principal employers, while renewing the contracts, have been insisting that the contractor or the new contractor retains the old employees. In fact, such a condition is incorporated in the contract itself. However, such a clause in the contract, which is benevolently inserted in the contract to protect the continuance of the source of livelihood of the contract labour, cannot by itself give rise to a right to regularization in the employment of the principal employer. Whether the contract labourers have become the employees of the principal employer in the course of time and whether the engagement and employment of labourers through a contractor is a mere camouflage and a smokescreen, as has been urged in this case, is a question of fact and has to be established by the contract labourers on the basis of the requisite material. It is not possible for the High Court or this Court, while exercising writ jurisdiction or jurisdiction under Article 136 to decide such questions, only on the basis of the affidavits. It need not be pointed out that in all such cases, the labourers are initially employed and engaged by the contractors. As such, at what point of time a direct link is established between the contract labourers and the principal employer, eliminating the contractor from the scene, is a matter which has to be established on material produced before the Court. Normally, the Labour Court and the Industrial Tribunal, under the Industrial Disputes Act, are competent to adjudicate such disputes on the basis of the oral and documentary evidence produced before them.
It is now imperative for the Indian Contract Staffing Industry to evolve a Code of Inherent risks so that Principal Employers are forewarned in deploying Contract Staff.
With Regards,
Advocates and Notaries & Legal Consultants for Recruiting & Staffing Industry
E-mail: rajanassociates@eth.net
Phone: 9025792684, 9025792634
From India, Bangalore
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Dear Friends,
For more details, please see the link: (https://www.citehr.com/366609-p-f-contributions-minimum-wages-stay-ap-high-court.html).
Rajan Law Firm
Please also visit: (https://www.citehr.com/285737-legal-compliances-required-staffing-industry.html).
From India, Madras
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For more details, please see the link: (https://www.citehr.com/366609-p-f-contributions-minimum-wages-stay-ap-high-court.html).
Rajan Law Firm
Please also visit: (https://www.citehr.com/285737-legal-compliances-required-staffing-industry.html).
From India, Madras
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Dear All
Extracting the copy of the EPF Circular that has been stayed in the interim by the Hon'ble Delhi & AP High Court:
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)
rajanlawfirm
From India, Madras
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Extracting the copy of the EPF Circular that has been stayed in the interim by the Hon'ble Delhi & AP High Court:
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)
rajanlawfirm
From India, Madras
Acknowledge(0)Amend(0)CiteHR.AI
(Fact Checked)-The information provided in the user reply is accurate based on the latest laws and regulations regarding EPF contributions and minimum wages. (1 Acknowledge point)
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ORIGIN OF 240 DAYS CLAUSE
The 240 days clause has its birth from Sec.25-B of the Industrial Disputes Act which is extracted below:
25-B. Definition of continuous service: -- For the purpose of this Chapter,-
(1) a workman shall be said to be in continuous service for a period if he is, for that period, in uninterrupted service, including service which may be interrupted on account of sickness or authorized leave or an accident or a strike which is not illegal, or a lock-out or a cessation of work which is not due to any fault on the part of the workman;
(2) Where a workman is not in continuous service within the meaning of clause (1) for a period of one year or six months, he shall be deemed to be in continuous service under an employer—
(a) for a period of one year, if the workman, during a period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than—
(i) one hundred and ninety days in the case of a workman employed below ground in a mine; and
(ii) two hundred and forty days, in any other case;
(b) for a period of six months, if the workman, during a period of six calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than—
(i) ninety five days, in the case of a workman employed below ground in a mine; and
(ii) one hundred and twenty days, in any other case;
Explanation: -- For the purpose of clause (2), the number of days on which a workman has actually worked under an employer shall include the days on which—
(i) he has been laid-off under an agreement or as permitted by standing orders made under the Industrial Employment [Standing Orders] Act, 1946 (20 of 1946), or under this Act or under any other law applicable to the Industrial establishment;
(ii) he has been on leave with full wages, earned in the previous years;
(iii) he has been absent due to temporary disablement caused by accident arising out of and in the course of his employment; and
(iv) in the case of a female, she has been on maternity leave; so, however, that the total period of such maternity leave does not exceed twelve weeks.
Continuous Service is applied in Section 25 F
25-F. Continuous precedent to retrenchment of workmen.—No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until—
(a) the workman has been given one month’s notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice:
(b) the workman has been paid, at the time, of retrenchment, compensation which shall be equivalent to fifteen days’ average pay [for every completed year of continuous service] or any part thereof in excess of six months; and
(c) notice in the prescribed manner is served on the appropriate Government [or such authority as may be specified by the appropriate Government by notification in the Official Gazette.]
Both the definition and the application has been extracted.Viewers would need to understand the Statutory provision in its original form and reach their own understanding.
rajanlawfirm
From India, Madras
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The 240 days clause has its birth from Sec.25-B of the Industrial Disputes Act which is extracted below:
25-B. Definition of continuous service: -- For the purpose of this Chapter,-
(1) a workman shall be said to be in continuous service for a period if he is, for that period, in uninterrupted service, including service which may be interrupted on account of sickness or authorized leave or an accident or a strike which is not illegal, or a lock-out or a cessation of work which is not due to any fault on the part of the workman;
(2) Where a workman is not in continuous service within the meaning of clause (1) for a period of one year or six months, he shall be deemed to be in continuous service under an employer—
(a) for a period of one year, if the workman, during a period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than—
(i) one hundred and ninety days in the case of a workman employed below ground in a mine; and
(ii) two hundred and forty days, in any other case;
(b) for a period of six months, if the workman, during a period of six calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than—
(i) ninety five days, in the case of a workman employed below ground in a mine; and
(ii) one hundred and twenty days, in any other case;
Explanation: -- For the purpose of clause (2), the number of days on which a workman has actually worked under an employer shall include the days on which—
(i) he has been laid-off under an agreement or as permitted by standing orders made under the Industrial Employment [Standing Orders] Act, 1946 (20 of 1946), or under this Act or under any other law applicable to the Industrial establishment;
(ii) he has been on leave with full wages, earned in the previous years;
(iii) he has been absent due to temporary disablement caused by accident arising out of and in the course of his employment; and
(iv) in the case of a female, she has been on maternity leave; so, however, that the total period of such maternity leave does not exceed twelve weeks.
Continuous Service is applied in Section 25 F
25-F. Continuous precedent to retrenchment of workmen.—No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until—
(a) the workman has been given one month’s notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice:
(b) the workman has been paid, at the time, of retrenchment, compensation which shall be equivalent to fifteen days’ average pay [for every completed year of continuous service] or any part thereof in excess of six months; and
(c) notice in the prescribed manner is served on the appropriate Government [or such authority as may be specified by the appropriate Government by notification in the Official Gazette.]
Both the definition and the application has been extracted.Viewers would need to understand the Statutory provision in its original form and reach their own understanding.
rajanlawfirm
From India, Madras
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(Fact Checked)-The user's reply provides accurate information regarding the 240 days clause and its origin from Sec. 25-B of the Industrial Disputes Act. The explanation is clear and aligns with the relevant legal provisions. (1 Acknowledge point)
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CiteHR.AI
(Fact Checked)-[response] The information provided in the user reply about the origin of the 240 days clause under Sec. 25-B of the Industrial Disputes Act is accurate and detailed. (1 Acknowledge point)
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Extracting the relevant portion of the Andhra Pradesh Govt State Policy:
Review of Labour Laws
The strength of the small-scale units lies in their flexibility in production. However, the existing labour laws restrict such flexibility. There is a multiplicity of labour laws enacted by the Central and State Governments that need to be reviewed and combined into one single piece of legislation. The One Man Commission has examined this issue. The recommendations will be examined, and action will be taken to simplify the laws and, wherever necessary, communicated to the Government of India.
The AP Govt has appointed a One Man Commission, and the Govt will examine the recommendations. Action is expected to be taken to simplify the laws.
Rajan Law Firm
From India, Madras
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Review of Labour Laws
The strength of the small-scale units lies in their flexibility in production. However, the existing labour laws restrict such flexibility. There is a multiplicity of labour laws enacted by the Central and State Governments that need to be reviewed and combined into one single piece of legislation. The One Man Commission has examined this issue. The recommendations will be examined, and action will be taken to simplify the laws and, wherever necessary, communicated to the Government of India.
The AP Govt has appointed a One Man Commission, and the Govt will examine the recommendations. Action is expected to be taken to simplify the laws.
Rajan Law Firm
From India, Madras
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Hi, I am working with an IT company and being in HR, I am asked to find out statutory compliances related to an IT (US Staffing) company and certifications that can be acquired by such companies like ISO, etc. I would really appreciate it if somebody could provide an expert opinion on this.
Thanks and Regards, Deepali HR Executive
From United States, Fremont
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Thanks and Regards, Deepali HR Executive
From United States, Fremont
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IMPORTANT ISSUES IN CONTRACT STAFFING INDUSTRY -F & F SETTLEMENT
Dear All
The essence of compliance of Section 25 F of the Industrial Disputes Act has been made clear by the Supreme Court of India in the reported case of Pramod Jha & others Vs State of Bihar reported in 2003(3) SBR 617. To quote the very words of the Supreme Court it has been held that
“the underlying object of Section 25 F[ the retrenchment provision in the Industrial Disputes Act] is two fold. Firstly, retrenched employee and must have one month's time available at his disposal to search for alternative employment, and so, either he should be given one months notice of the proposed termination or he should be paid wages for the notice period. Secondly the worker must be paid retrenchment compensation at the time of retrenchment, or before, so that once having been retrenched there should be no need for him to go to his employer demanding retrenchment compensation and the compensation so paid is not only a reward earned for his previous services rendered to the employer but is also a sustenance to the worker for the period which may be spent in searching for another employment."
Retrenchment can be simply termed as termination .Two points therefore emerge ;
Firstly, terminated Contract Staffing employee must have one month's time available at his disposal to search for alternative employment, and so, either he should be given one months notice of the proposed termination or he should be paid salary for the notice period.
Secondly the Contract Staffing Employee must be paid retrenchment compensation at the time of retrenchment, or before, so that once having been retrenched there should be no need for him to go to the Contract Staffing Company demanding retrenchment compensation and the compensation so paid is not only a reward earned for his/her previous services rendered to the Contract Staffing Company but is also a sustenance to the Contract Staffing Employee for the period which may be spent in searching for another employment.
With Regards
V.Sounder Rajan ,
Advocates and Notaries & Legal Consultants
E-mail : rajanassociates@eth,net,
-9025792684-9025792634
From India, Bangalore
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Dear All
The essence of compliance of Section 25 F of the Industrial Disputes Act has been made clear by the Supreme Court of India in the reported case of Pramod Jha & others Vs State of Bihar reported in 2003(3) SBR 617. To quote the very words of the Supreme Court it has been held that
“the underlying object of Section 25 F[ the retrenchment provision in the Industrial Disputes Act] is two fold. Firstly, retrenched employee and must have one month's time available at his disposal to search for alternative employment, and so, either he should be given one months notice of the proposed termination or he should be paid wages for the notice period. Secondly the worker must be paid retrenchment compensation at the time of retrenchment, or before, so that once having been retrenched there should be no need for him to go to his employer demanding retrenchment compensation and the compensation so paid is not only a reward earned for his previous services rendered to the employer but is also a sustenance to the worker for the period which may be spent in searching for another employment."
Retrenchment can be simply termed as termination .Two points therefore emerge ;
Firstly, terminated Contract Staffing employee must have one month's time available at his disposal to search for alternative employment, and so, either he should be given one months notice of the proposed termination or he should be paid salary for the notice period.
Secondly the Contract Staffing Employee must be paid retrenchment compensation at the time of retrenchment, or before, so that once having been retrenched there should be no need for him to go to the Contract Staffing Company demanding retrenchment compensation and the compensation so paid is not only a reward earned for his/her previous services rendered to the Contract Staffing Company but is also a sustenance to the Contract Staffing Employee for the period which may be spent in searching for another employment.
With Regards
V.Sounder Rajan ,
Advocates and Notaries & Legal Consultants
E-mail : rajanassociates@eth,net,
-9025792684-9025792634
From India, Bangalore
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(Fact Checked)-[response] The user's reply provides an accurate explanation of the essence of compliance with Section 25F of the Industrial Disputes Act regarding retrenchment provisions. The user correctly outlines the two-fold purpose of Section 25F as interpreted by the Supreme Court in the case of Pramod Jha & others vs. State of Bihar. The user's explanation of the requirements for terminated contract staffing employees aligns with the legal provisions. (1 Acknowledge point)
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CiteHR.AI
(Fact Checked)-The user's reply is accurate based on the Supreme Court judgement in Pramod Jha & others Vs State of Bihar regarding Section 25F of the Industrial Disputes Act. (1 Acknowledge point)
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Subject: Central Minimum Wages
In view of the fact that minimum wages have a bearing on the contract staffing industry, please visit https://www.citehr.com/369020-latest-central-wages.html for the latest revision. You can find the downloads in the post by Major (Retired) D. Bhushan Rao.
Thanks to Major.
Rajan Associates
From India, Bangalore
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In view of the fact that minimum wages have a bearing on the contract staffing industry, please visit https://www.citehr.com/369020-latest-central-wages.html for the latest revision. You can find the downloads in the post by Major (Retired) D. Bhushan Rao.
Thanks to Major.
Rajan Associates
From India, Bangalore
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IMMEDIATE ISSUES FOR CONTRACT STAFFING ENTITIES
What are the circumstances in which the Central Government can prohibit the employment of Contract Labour under CLRA?
Prohibition
Apart from the regulatory action under the Contract Labour (Abolition Regulation) Act, CLRA provides the Authority, the "appropriate Government" under Sec 10(1) after consultation with the Central or State Board employing agency to prohibit any establishment in a Process operation or other work. Such restrictions are often adopted based on the following criteria:
- if the work is in the nature of perennial;
- if the work is incidental or necessary for the work of an Operation;
- if the work is sufficient to employ a significant number of full-time workers;
- if the work is usually done through periodic Workers at this factory, or a similar setting.
The Central Government, on the recommendations of the Central Advisory Board, has prohibited the employment of contract labor in various operations and categories of jobs in different establishments. These details are available by checking the Notifications.
With Regards,
V. Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail: rajanassociates@eth.net
9025792684 - 9025792634
From India, Bangalore
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What are the circumstances in which the Central Government can prohibit the employment of Contract Labour under CLRA?
Prohibition
Apart from the regulatory action under the Contract Labour (Abolition Regulation) Act, CLRA provides the Authority, the "appropriate Government" under Sec 10(1) after consultation with the Central or State Board employing agency to prohibit any establishment in a Process operation or other work. Such restrictions are often adopted based on the following criteria:
- if the work is in the nature of perennial;
- if the work is incidental or necessary for the work of an Operation;
- if the work is sufficient to employ a significant number of full-time workers;
- if the work is usually done through periodic Workers at this factory, or a similar setting.
The Central Government, on the recommendations of the Central Advisory Board, has prohibited the employment of contract labor in various operations and categories of jobs in different establishments. These details are available by checking the Notifications.
With Regards,
V. Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail: rajanassociates@eth.net
9025792684 - 9025792634
From India, Bangalore
Acknowledge(0)Amend(0)CiteHR.AI
(Fact Checked)-The information provided in the user reply is accurate and aligns with the Contract Labour (Regulation and Abolition) Act. Well done! (1 Acknowledge point)
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CiteHR.AI
(Fact Checked)-The user's reply contains accurate information regarding the circumstances in which the Central Government can prohibit the employment of Contract Labour under CLRA. The reply cites the relevant sections and criteria correctly. (1 Acknowledge point)
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Certain important provisions that Payroll of a Staffing Company may overlook under the ESI Act include:
Legal Provisions:
Section 72:
Section 72 of the Act places a bar on the powers of an employer regarding the reduction of wages of an employee for reasons of his liability to pay contributions.
Section 73:
Under Section 73, an employer cannot dismiss or punish an employee during the period of his certified sickness, etc. Contravention of these provisions attracts penalties provided under Section 85 of the Act.
Many times, clients report sick cases as absconding, leading to legal complications.
Regulation 97:
Regulation 97 permits an employer to discontinue or reduce benefits payable to his employees under conditions of their service which are similar to the benefits conferred by the Act, to the extent specified below, namely:
a) From the date of the commencement of the first benefit period following the Appointed Day for his factory or establishment:
- Sick leave on half pay to the full extent;
- Such proportion of any combined general purposes and sick leave on half pay as may be assigned as sick leave but in any case not exceeding 50 percent of such combined leave.
b) Any maternity benefits granted to a woman employee to the extent to which such a woman employee may become entitled to the Maternity Benefit under the ESI Act.
When an employee avails himself/herself of any leave from the employer for sickness, maternity, or temporary disablement, the employer shall be entitled to deduct from the leave salary of the employee the amount of benefit to which he/she may be entitled under the Act for the corresponding period.
It is only when a workman actually obtains or receives cash benefits under the ESI Scheme that the employer can exercise his right to make a suitable deduction from the wages due to him by way of leave salary.
Rajan Law Firm
From India, Madras
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Legal Provisions:
Section 72:
Section 72 of the Act places a bar on the powers of an employer regarding the reduction of wages of an employee for reasons of his liability to pay contributions.
Section 73:
Under Section 73, an employer cannot dismiss or punish an employee during the period of his certified sickness, etc. Contravention of these provisions attracts penalties provided under Section 85 of the Act.
Many times, clients report sick cases as absconding, leading to legal complications.
Regulation 97:
Regulation 97 permits an employer to discontinue or reduce benefits payable to his employees under conditions of their service which are similar to the benefits conferred by the Act, to the extent specified below, namely:
a) From the date of the commencement of the first benefit period following the Appointed Day for his factory or establishment:
- Sick leave on half pay to the full extent;
- Such proportion of any combined general purposes and sick leave on half pay as may be assigned as sick leave but in any case not exceeding 50 percent of such combined leave.
b) Any maternity benefits granted to a woman employee to the extent to which such a woman employee may become entitled to the Maternity Benefit under the ESI Act.
When an employee avails himself/herself of any leave from the employer for sickness, maternity, or temporary disablement, the employer shall be entitled to deduct from the leave salary of the employee the amount of benefit to which he/she may be entitled under the Act for the corresponding period.
It is only when a workman actually obtains or receives cash benefits under the ESI Scheme that the employer can exercise his right to make a suitable deduction from the wages due to him by way of leave salary.
Rajan Law Firm
From India, Madras
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(Fact Checked)-The user's reply contains accurate legal provisions under the ESI Act. No amendments needed. (1 Acknowledge point)
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CiteHR.AI
(Fact Checked)-The information provided in the user reply is accurate and aligns with the legal provisions under the ESI Act. Well done! (1 Acknowledge point)
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CiteHR.AI
(Fact Checked)-The information provided in the user reply is factually correct based on the Supreme Court decision in R. K. Panda v. Steel Authority of India Ltd. (1994) 5 SCC 304. The reply accurately reflects the situation of contractors retaining workers under the terms of the agreement. Well done! (1 Acknowledge point)CiteHR.AI
(Fact Checked)-The user reply accurately cites the case of R. K. Panda v. Steel Authority of India Ltd. (1994) 5 SCC 304 regarding the retention of workers by new contractors as per terms of the agreement. The reply also correctly emphasizes the need for the Contract Staffing Industry to establish a Code of Inherent risks. (1 Acknowledge point)