IMMEDIATE LEGAL QUESTIONS HAUNTING INDIAN STAFFING COMPANIES
In continuation of our earlier post on the subject:
What is Sec 25 F of the Industrial Disputes Act 1947?
It reads like this:
25F. CONDITIONS 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.
Since the word "retrenchment" is used in Section 25 F, the definition of retrenchment has to be seen in Section 2 (OO):
(oo) "retrenchment" means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include – (a) voluntary retirement of the workman; or (b) retirement of the workman on reaching the age of superannuating if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or (bb) termination of the service of the workman as a result of the non-removal of the contract of employment between the employer and the workman concerned on its expiry or of such contract being terminated under a stipulation in that behalf contained therein; or (c) termination of the service of a workman on the ground of continued ill-health;
For Compliance of Sec 25 F of the ID Act, the following is to be done:
i. The employee of the Staffing Entity sent for work to the Client must be given a one month's notice in writing, indicating the reasons for retrenchment. The retrenchment can take effect only after the notice period has expired, or if the employee of the Staffing Entity sent for work to the Client has been paid wages in lieu of such notice.
ii. The employee of the Staffing Entity sent for work to the Client must be paid, at the time of retrenchment, compensation, which is equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months.
iii. A notice must be served in the prescribed manner, on the appropriate Government. (Section 25F of the ID Act)
With Regards,
V.Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail: rajanassociates@eth.net
9025792684.
From India, Bangalore
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204In continuation of our earlier post on the subject:
What is Sec 25 F of the Industrial Disputes Act 1947?
It reads like this:
25F. CONDITIONS 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.
Since the word "retrenchment" is used in Section 25 F, the definition of retrenchment has to be seen in Section 2 (OO):
(oo) "retrenchment" means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include – (a) voluntary retirement of the workman; or (b) retirement of the workman on reaching the age of superannuating if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or (bb) termination of the service of the workman as a result of the non-removal of the contract of employment between the employer and the workman concerned on its expiry or of such contract being terminated under a stipulation in that behalf contained therein; or (c) termination of the service of a workman on the ground of continued ill-health;
For Compliance of Sec 25 F of the ID Act, the following is to be done:
i. The employee of the Staffing Entity sent for work to the Client must be given a one month's notice in writing, indicating the reasons for retrenchment. The retrenchment can take effect only after the notice period has expired, or if the employee of the Staffing Entity sent for work to the Client has been paid wages in lieu of such notice.
ii. The employee of the Staffing Entity sent for work to the Client must be paid, at the time of retrenchment, compensation, which is equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months.
iii. A notice must be served in the prescribed manner, on the appropriate Government. (Section 25F of the ID Act)
With Regards,
V.Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail: rajanassociates@eth.net
9025792684.
From India, Bangalore
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IMMEDIATE LEGAL QUESTIONS HAUNTING INDIAN STAFFING COMPANIES
In continuation of our earlier post on the subject:
A common question that arises in the Staffing Industry is whether compliance with Sec 25(F) of the Industrial Disputes Act is the correct process for the termination of the Deputed candidate?
Absolutely, it is a watertight process and a safeguard to avoid wrongful termination litigation. In the field, you will find that clients will hesitate to provide the minimum 15 days' notice for terminating the candidate.
For compliance with Sec 25 F of the ID Act, the following is to be done:
i. The employee of the Staffing Entity sent for work to the Client must be given one month's notice in writing, indicating the reasons for retrenchment. The retrenchment can take effect only after the notice period has expired, or if the employee of the Staffing Entity sent for work to the Client has been paid wages in lieu of such notice.
ii. The employee of the Staffing Entity sent for work to the Client must be paid, at the time of retrenchment, compensation equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months.
iii. A notice must be served in the prescribed manner on the appropriate Government (Section 25F of the ID Act). It has become a practice in the industry to dispense with this notice. The Government can take steps to delete this provision.
With Regards,
V. Sounder Rajan
Advocates & Notaries & Legal Consultants
Email: rajanassociates@eth.net
-9025792684.
From India, Bangalore
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In continuation of our earlier post on the subject:
A common question that arises in the Staffing Industry is whether compliance with Sec 25(F) of the Industrial Disputes Act is the correct process for the termination of the Deputed candidate?
Absolutely, it is a watertight process and a safeguard to avoid wrongful termination litigation. In the field, you will find that clients will hesitate to provide the minimum 15 days' notice for terminating the candidate.
For compliance with Sec 25 F of the ID Act, the following is to be done:
i. The employee of the Staffing Entity sent for work to the Client must be given one month's notice in writing, indicating the reasons for retrenchment. The retrenchment can take effect only after the notice period has expired, or if the employee of the Staffing Entity sent for work to the Client has been paid wages in lieu of such notice.
ii. The employee of the Staffing Entity sent for work to the Client must be paid, at the time of retrenchment, compensation equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months.
iii. A notice must be served in the prescribed manner on the appropriate Government (Section 25F of the ID Act). It has become a practice in the industry to dispense with this notice. The Government can take steps to delete this provision.
With Regards,
V. Sounder Rajan
Advocates & Notaries & Legal Consultants
Email: rajanassociates@eth.net
-9025792684.
From India, Bangalore
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(Fact Checked)-The information provided in the user reply is [B]correct[/B] based on the Industrial Disputes Act, specifically Section 25F. The user accurately outlined the process and requirements for termination of deputed candidates in compliance with the Act. (1 Acknowledge point)
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Dear All,
Sub: Statistics of Enforcement of CLRA by the Central Govt
The enforcement of the provisions of various labour laws has been prescribed under provisions of the relevant Acts and is secured through the officers of the Central Industrial Relations Machinery (CIRM) in the Central Sphere, and through the State enforcement machinery in the State Sphere.
In the Central sphere, the officers of the Chief Labour Commissioner (Central)'s organization conduct inspections regularly under the Contract Labour (Regulation & Abolition) Act, 1970, and take action by filing prosecution cases against the defaulting employers and contractors.
Details of inspections conducted and prosecutions launched during the last three years and the current year under the Contract Labour Act, 1970, are found in the attachment. Shri Harish Rawat, Minister of Labour and Employment, gave this information in reply to a question in the Lok Sabha.
The attached data will give a picture of the realistic enforcement scenario in respect of these two enactments.
Presently, the level playing field available for the Indian Staffing Industry to operate in the present liberalised regime of the Central Government is commendable and will be an invitation to International Staffing & Recruiting Companies to open shop in India.
With Regards,
V. Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail: rajanassociates@eth.net
9025792684 | 9025792634
From India, Bangalore
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Sub: Statistics of Enforcement of CLRA by the Central Govt
The enforcement of the provisions of various labour laws has been prescribed under provisions of the relevant Acts and is secured through the officers of the Central Industrial Relations Machinery (CIRM) in the Central Sphere, and through the State enforcement machinery in the State Sphere.
In the Central sphere, the officers of the Chief Labour Commissioner (Central)'s organization conduct inspections regularly under the Contract Labour (Regulation & Abolition) Act, 1970, and take action by filing prosecution cases against the defaulting employers and contractors.
Details of inspections conducted and prosecutions launched during the last three years and the current year under the Contract Labour Act, 1970, are found in the attachment. Shri Harish Rawat, Minister of Labour and Employment, gave this information in reply to a question in the Lok Sabha.
The attached data will give a picture of the realistic enforcement scenario in respect of these two enactments.
Presently, the level playing field available for the Indian Staffing Industry to operate in the present liberalised regime of the Central Government is commendable and will be an invitation to International Staffing & Recruiting Companies to open shop in India.
With Regards,
V. Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail: rajanassociates@eth.net
9025792684 | 9025792634
From India, Bangalore
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Subject: Immediate Legal Questions for Indian Staffing Companies
Re: Recovery for Damage or Loss to the Client's Property
A common question arises in Contractual Employment when Contract Employees sent for work with the Client cause damage or loss to the Client's property. The Client then makes a claim on the Temping or Staffing Company and wants the loss to be adjusted in the Contract Employee's salary. Can such a request be entertained?
The Temping or Staffing Contractor cannot adjust it without affording an opportunity to the Contract Employee. Apparently, it is for the period the Contract Employee had worked. Recovery from salary has to be under Section 10 of the Payment of Wages Act, 1936, for a loss provided under clause (c) of sub-section (2) of section 7, as extracted below:
Clause (c) of sub-section (2) of section 7:
(c) deductions for damage to or loss of goods expressly entrusted to the employed person for custody, or for the loss of money for which he is required to account, where such damage or loss is directly attributable to his neglect or default;
Section 10: Deductions for Damage or Loss:
(1) A deduction under clause (c) or clause (o) of sub-section (2) of section 7 shall not exceed the amount of the damage or loss caused to the employer by the neglect or default of the employed person.
(1-A) A deduction shall not be made under clause (c) or clause (m) or clause (n) or clause (o) of subsection (2) of section 7 until the employed person has been given an opportunity to show cause against the deduction, or otherwise than in accordance with such procedure as may be prescribed for the making of such deductions.
(2) All such deductions and all realizations thereof shall be recorded in a register to be kept by the person responsible for the payment of wages under section 3 in such form as may be prescribed.
Recovery from the salary can be done only after following the above procedure, which is the due process of law as provided above:
First by issuing a show cause notice for salary adjustment and after receiving any objections; and
Second pass an order of Adjustment; and
Third record the proof of delivery of the Salary adjustment letter; and
Lastly, the adjustment request from the Client's claim can be entertained.
This procedure can be made a part of the Code of Conduct issued by the Staffing or Temping Company to their Contract Employees.
With Regards,
V. Sounder Rajan
Advocates & Notaries & Legal Consultants
Email: rajanassociates@eth.net
Phone: 9025792684 / 9025792634
From India, Bangalore
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Re: Recovery for Damage or Loss to the Client's Property
A common question arises in Contractual Employment when Contract Employees sent for work with the Client cause damage or loss to the Client's property. The Client then makes a claim on the Temping or Staffing Company and wants the loss to be adjusted in the Contract Employee's salary. Can such a request be entertained?
The Temping or Staffing Contractor cannot adjust it without affording an opportunity to the Contract Employee. Apparently, it is for the period the Contract Employee had worked. Recovery from salary has to be under Section 10 of the Payment of Wages Act, 1936, for a loss provided under clause (c) of sub-section (2) of section 7, as extracted below:
Clause (c) of sub-section (2) of section 7:
(c) deductions for damage to or loss of goods expressly entrusted to the employed person for custody, or for the loss of money for which he is required to account, where such damage or loss is directly attributable to his neglect or default;
Section 10: Deductions for Damage or Loss:
(1) A deduction under clause (c) or clause (o) of sub-section (2) of section 7 shall not exceed the amount of the damage or loss caused to the employer by the neglect or default of the employed person.
(1-A) A deduction shall not be made under clause (c) or clause (m) or clause (n) or clause (o) of subsection (2) of section 7 until the employed person has been given an opportunity to show cause against the deduction, or otherwise than in accordance with such procedure as may be prescribed for the making of such deductions.
(2) All such deductions and all realizations thereof shall be recorded in a register to be kept by the person responsible for the payment of wages under section 3 in such form as may be prescribed.
Recovery from the salary can be done only after following the above procedure, which is the due process of law as provided above:
First by issuing a show cause notice for salary adjustment and after receiving any objections; and
Second pass an order of Adjustment; and
Third record the proof of delivery of the Salary adjustment letter; and
Lastly, the adjustment request from the Client's claim can be entertained.
This procedure can be made a part of the Code of Conduct issued by the Staffing or Temping Company to their Contract Employees.
With Regards,
V. Sounder Rajan
Advocates & Notaries & Legal Consultants
Email: rajanassociates@eth.net
Phone: 9025792684 / 9025792634
From India, Bangalore
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(Fact Checked)-The information provided in the user reply is factually accurate based on the Payment of Wages Act, 1936 regarding deductions for damage or loss. No corrections needed. (1 Acknowledge point)
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(Fact Checked)-The user's reply is correct based on the Payment of Wages Act, 1936, which outlines the procedure for deductions from an employee's salary due to damage or loss caused to the employer. The steps mentioned align with the legal requirements. (1 Acknowledge point)
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Dear All,
We send our Pongal & Maha Sankranti Greetings.
Significance of Pongal
Pongal is a harvest festival - the Tamil equivalent of Thanksgiving. It is held to honor the Sun for a bountiful harvest. Families gather to rejoice and share their joy and their harvests with others. The Sun is offered a "Pongal" of rice and milk.
Literally meaning "Boiling over," Pongal signifies the advent of prosperity. Pongal is normally celebrated over a period of four days, starting on the 13th of January. Since the calculation to determine the day is based on the solar calendar, the date doesn't change. It is considered a very auspicious occasion when the Sun transits the Capricorn sign. A rich and abundant harvest of paddy and other crops depends on the availability of good rain, as most of the rivers in Tamil Nadu are not perennial. Hence, there is the invocation of the Sun God and the God of Rain at the time of Pongal.
The period is referred to as Uttarayan Punyakalam and is considered auspicious. Legend has it that the Devas wake up after a six-month long slumber during this period. And so it is believed that those who pass away during Uttarayana attain salvation. In fact, Bheeshma is believed to have waited for the dawn of Uttarayana before he gave up his life.
As is customary, the cleaning of every house a few days prior to the Pongal festival is an indispensable ritual. Not only is every house cleaned, but it is also dusted and whitewashed. Wearing new clothes on Pongal is also customary. Attired in a new "Lehanga" and half sari for young girls and lungi and angavastram, the men, women, and children prepare themselves for celebrating the first day called Bhogi Pandigai. This day is dedicated to Indra, who is also called Bhogi. It is believed that on this day Lord Krishna had urged the people to neglect Indra and not worship him. People take an oil bath on this day. Using rice paste, "Kolam" is drawn and this represents the Sun. The items that are generally used to celebrate Pongal include Sandalwood paste, vermilion, mango saplings, coconut fronds, sugarcanes, banana leaves, ginger pieces, white flour, new vessels for cooking, tu.
Pongal is a four-day affair. The first day, Bhogi, is celebrated on the last day of the month of Margazhi. Scholars have often compared Bhogi to the Indra Vizha celebrated by the Chola kings at Kaveripattinam, also known as Poompuhar. Indra Vizha was celebrated in honor of Lord Indra, also called Bhogi, the God of thunder and rain.
The second day is Surya Pongal, also called Perum Pongal. It is the most important day, and people worship Surya, the Sun God, and his consorts, Chaya and Samgnya. There are several legends associated with Surya Pongal. A sage named Hema prayed to Lord Vishnu on the banks of the Pottramarai tank in Kumbakonam. On Surya Pongal day, the lord is believed to have taken the form of Sarangapani and blessed the sage. Yet another legend has it that Lord Shiva performed a miracle where a stone image of an elephant ate a piece of sugarcane.
The third day is Mattu Pongal, celebrated to glorify cattle that help farmers in myriad ways. On this day, the cows are bathed and decorated with vermilion and garlands and fed. The last day is Kaanum Pongal. It is that part of the festival when families used to gather on the riverbanks and have a sumptuous meal (kootanchoru). It is also time for some traditional dances such as kummi and kolattam. In recent years, that day is celebrated as Uzhavar Tirunal in honor of farmers.
The dishes prepared during these days are "Sarkarai Pongal," "Ven Pongal," Dosai and Sambhar, Vadai, and Payasam (a sweet rice pudding).
The sun itself stands for all the ideals of the Pongal festival. Its message is that of light, unity, equality, and true selflessness. These are the ideals of Karma Yoga. Hence, the sun is the greatest Karma Yogi.
When we celebrate Pongal, our sense of value changes. We begin to understand that our real wealth is the goodwill and friendship of your relatives, friends, neighbors, and other human beings, and ESPECIALLY OUR VIEWERS IN CITEHR.
Our wealth is the land on which our food grows, the cattle which help us in agriculture, and the cow which gives us milk. We begin to have greater love and respect for them and for all living beings - the crows, the fish, and all other creatures.
To the agriculturalist, Pongal is a day of triumph. He would have by then brought home the fruits of his patient toil. Symbolically, the first harvest is offered to the Almighty - and that is Pongal. To toil was his task, his duty, but the fruit is now offered to the Lord. This is the spirit of Karma Yoga.
Thanks & Regards
V. Sounder Rajan - Advocates & Notaries - Legal Consultants
E-mail: rajanassociates@eth.net
-9025792684-9025792634
From India, Bangalore
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We send our Pongal & Maha Sankranti Greetings.
Significance of Pongal
Pongal is a harvest festival - the Tamil equivalent of Thanksgiving. It is held to honor the Sun for a bountiful harvest. Families gather to rejoice and share their joy and their harvests with others. The Sun is offered a "Pongal" of rice and milk.
Literally meaning "Boiling over," Pongal signifies the advent of prosperity. Pongal is normally celebrated over a period of four days, starting on the 13th of January. Since the calculation to determine the day is based on the solar calendar, the date doesn't change. It is considered a very auspicious occasion when the Sun transits the Capricorn sign. A rich and abundant harvest of paddy and other crops depends on the availability of good rain, as most of the rivers in Tamil Nadu are not perennial. Hence, there is the invocation of the Sun God and the God of Rain at the time of Pongal.
The period is referred to as Uttarayan Punyakalam and is considered auspicious. Legend has it that the Devas wake up after a six-month long slumber during this period. And so it is believed that those who pass away during Uttarayana attain salvation. In fact, Bheeshma is believed to have waited for the dawn of Uttarayana before he gave up his life.
As is customary, the cleaning of every house a few days prior to the Pongal festival is an indispensable ritual. Not only is every house cleaned, but it is also dusted and whitewashed. Wearing new clothes on Pongal is also customary. Attired in a new "Lehanga" and half sari for young girls and lungi and angavastram, the men, women, and children prepare themselves for celebrating the first day called Bhogi Pandigai. This day is dedicated to Indra, who is also called Bhogi. It is believed that on this day Lord Krishna had urged the people to neglect Indra and not worship him. People take an oil bath on this day. Using rice paste, "Kolam" is drawn and this represents the Sun. The items that are generally used to celebrate Pongal include Sandalwood paste, vermilion, mango saplings, coconut fronds, sugarcanes, banana leaves, ginger pieces, white flour, new vessels for cooking, tu.
Pongal is a four-day affair. The first day, Bhogi, is celebrated on the last day of the month of Margazhi. Scholars have often compared Bhogi to the Indra Vizha celebrated by the Chola kings at Kaveripattinam, also known as Poompuhar. Indra Vizha was celebrated in honor of Lord Indra, also called Bhogi, the God of thunder and rain.
The second day is Surya Pongal, also called Perum Pongal. It is the most important day, and people worship Surya, the Sun God, and his consorts, Chaya and Samgnya. There are several legends associated with Surya Pongal. A sage named Hema prayed to Lord Vishnu on the banks of the Pottramarai tank in Kumbakonam. On Surya Pongal day, the lord is believed to have taken the form of Sarangapani and blessed the sage. Yet another legend has it that Lord Shiva performed a miracle where a stone image of an elephant ate a piece of sugarcane.
The third day is Mattu Pongal, celebrated to glorify cattle that help farmers in myriad ways. On this day, the cows are bathed and decorated with vermilion and garlands and fed. The last day is Kaanum Pongal. It is that part of the festival when families used to gather on the riverbanks and have a sumptuous meal (kootanchoru). It is also time for some traditional dances such as kummi and kolattam. In recent years, that day is celebrated as Uzhavar Tirunal in honor of farmers.
The dishes prepared during these days are "Sarkarai Pongal," "Ven Pongal," Dosai and Sambhar, Vadai, and Payasam (a sweet rice pudding).
The sun itself stands for all the ideals of the Pongal festival. Its message is that of light, unity, equality, and true selflessness. These are the ideals of Karma Yoga. Hence, the sun is the greatest Karma Yogi.
When we celebrate Pongal, our sense of value changes. We begin to understand that our real wealth is the goodwill and friendship of your relatives, friends, neighbors, and other human beings, and ESPECIALLY OUR VIEWERS IN CITEHR.
Our wealth is the land on which our food grows, the cattle which help us in agriculture, and the cow which gives us milk. We begin to have greater love and respect for them and for all living beings - the crows, the fish, and all other creatures.
To the agriculturalist, Pongal is a day of triumph. He would have by then brought home the fruits of his patient toil. Symbolically, the first harvest is offered to the Almighty - and that is Pongal. To toil was his task, his duty, but the fruit is now offered to the Lord. This is the spirit of Karma Yoga.
Thanks & Regards
V. Sounder Rajan - Advocates & Notaries - Legal Consultants
E-mail: rajanassociates@eth.net
-9025792684-9025792634
From India, Bangalore
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Dear All,
We are back after the Pongal Break.
NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES
A common question arises in Contractual Employment: whether the doctrine of equal pay for equal work incorporated in the CLRA. Is there a need for Contractors and Principal Employers to adhere to this?
Yes. It is incorporated in Rule 25 of the CLRA Rules, which is extracted below:
25. Form and terms and condition of licence—(1) Every license granted under sub-section (1) of Sec. 12 shall be in Form VI.
(2) Every license granted under sub-rule (11) or renewed under 29 shall be subject to the following conditions, namely:
***
(v) (a) In cases where the workmen employed by the contractor perform the same or similar kind of work as the workmen directly employed by the principal employer of the establishment, the wage rates, holidays, hours of work, and other conditions of service of the workmen of the contractor shall be the same as applicable to the workman directly employed by the principal employer of the establishment on the same or similar kind of work.
Provided that in the case of any disagreement with regard to the type of work, the same shall be decided by the Labor Commissioner.
The effect of the rule is that wherever Contract Labor or Temporary Employees are appointed, i.e., where the workmen employed by the contractor perform the same or similar kind of work as the workmen directly employed by the principal employer of the establishment, the wage rates, holidays, hours of work, and other conditions of service of the workmen of the contractor shall be the same as applicable to the workman directly employed by the principal employer of the establishment on the same or similar kind of work.
In a recent Judgment of the Madras High Court, Madurai Bench decided by Mr. Justice K. Chandru in the matter of A. Victor vs. Executive Director BHEL, it has been held that in case a contract workman is paid less than the wages payable to a similarly placed workman by the principal employer, the TN Contract Labor Rules, 1975, has a remedy under Rule 25(v)(a). Justice K. Chandru, quoting the rules, held that in such circumstances, it was for the registering authority to go into the question as to whether the workman employed by the contractor performed the same or similar kind of work as the workman directly employed by the principal employer. But it was held that the High Court would not entertain the Writ Petition to implement the circular dated July 28, 2005, issued by R-1 (BHEL, Corporate Office, New Delhi 110 049) and to revise the wages to employees who were working as contract labor through the labor contract society.
Both the Principal Employer, as well as the Staffing Agency, have to ensure the above compliance. If there is a violation, the Contract Employee has the remedy under Rule 25(v)(a) of CLRA Rules.
Thanks & Regards
V. Sounder Rajan
Advocates & Notaries - Legal Consultants
E-mail: rajanassociates@eth.net
-9025792684-9025792634
From India, Bangalore
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We are back after the Pongal Break.
NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES
A common question arises in Contractual Employment: whether the doctrine of equal pay for equal work incorporated in the CLRA. Is there a need for Contractors and Principal Employers to adhere to this?
Yes. It is incorporated in Rule 25 of the CLRA Rules, which is extracted below:
25. Form and terms and condition of licence—(1) Every license granted under sub-section (1) of Sec. 12 shall be in Form VI.
(2) Every license granted under sub-rule (11) or renewed under 29 shall be subject to the following conditions, namely:
***
(v) (a) In cases where the workmen employed by the contractor perform the same or similar kind of work as the workmen directly employed by the principal employer of the establishment, the wage rates, holidays, hours of work, and other conditions of service of the workmen of the contractor shall be the same as applicable to the workman directly employed by the principal employer of the establishment on the same or similar kind of work.
Provided that in the case of any disagreement with regard to the type of work, the same shall be decided by the Labor Commissioner.
The effect of the rule is that wherever Contract Labor or Temporary Employees are appointed, i.e., where the workmen employed by the contractor perform the same or similar kind of work as the workmen directly employed by the principal employer of the establishment, the wage rates, holidays, hours of work, and other conditions of service of the workmen of the contractor shall be the same as applicable to the workman directly employed by the principal employer of the establishment on the same or similar kind of work.
In a recent Judgment of the Madras High Court, Madurai Bench decided by Mr. Justice K. Chandru in the matter of A. Victor vs. Executive Director BHEL, it has been held that in case a contract workman is paid less than the wages payable to a similarly placed workman by the principal employer, the TN Contract Labor Rules, 1975, has a remedy under Rule 25(v)(a). Justice K. Chandru, quoting the rules, held that in such circumstances, it was for the registering authority to go into the question as to whether the workman employed by the contractor performed the same or similar kind of work as the workman directly employed by the principal employer. But it was held that the High Court would not entertain the Writ Petition to implement the circular dated July 28, 2005, issued by R-1 (BHEL, Corporate Office, New Delhi 110 049) and to revise the wages to employees who were working as contract labor through the labor contract society.
Both the Principal Employer, as well as the Staffing Agency, have to ensure the above compliance. If there is a violation, the Contract Employee has the remedy under Rule 25(v)(a) of CLRA Rules.
Thanks & Regards
V. Sounder Rajan
Advocates & Notaries - Legal Consultants
E-mail: rajanassociates@eth.net
-9025792684-9025792634
From India, Bangalore
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(Fact Checked)-The user's reply is accurate, citing Rule 25 of the Contract Labour (Regulation and Abolition) Rules, which mandates equal pay for equal work between direct employees and contract workers. The reference to the Madras High Court judgment further supports the response. (1 Acknowledge point)
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(Fact Checked)-The user reply is mostly accurate, providing details on equal pay for equal work under the Contract Labour (Regulation and Abolition) Act, 1970. The reference to the recent judgment of the Madras High Court regarding Rule 25 of the CLRA Rules is relevant. (1 Acknowledge point)
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Dear All,
NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES
A common question arises in Contractual Employment: whether the Staffing or Temping Agency Employees sent for work to the Clients' place are to be paid under the Minimum Wages Act?
Yes, it is incorporated in Rule 25 of the CLRA Rules, which is extracted below:
25. Form and terms and condition of licence— (1) Every license granted under subsection (1) of Sec. 12 shall be in Form VI.
(2) Every license granted under sub-rule (11) or renewed under the rules shall be subject to the following conditions, namely:
(IV) the rates of wages payable to the workmen by the contractor shall not be less than the rates prescribed under the Minimum Wages Act, 1948 for such employment where applicable, and where the rates have been fixed by agreement, settlement, or award, not less than the rates so fixed.
Consequently, compliance with Minimum Wages is mandatory and not optional.
In fact, the Inspecting Agencies under the Payment of Wages Act, both at the Center and States, prioritize this compliance for inspection, and strict action is taken.
The next time any Staffing or Temping Agency receives a Notice after inspection, the issue is to be taken very seriously, and a proper reply is to be sent by the Staffing or Temping Agency.
Thanks & Regards,
V. Sounder Rajan - Advocates & Notaries - Legal Consultants
E-mail: rajanassociates@eth.net
-9025792684 - 9025792634
From India, Bangalore
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NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES
A common question arises in Contractual Employment: whether the Staffing or Temping Agency Employees sent for work to the Clients' place are to be paid under the Minimum Wages Act?
Yes, it is incorporated in Rule 25 of the CLRA Rules, which is extracted below:
25. Form and terms and condition of licence— (1) Every license granted under subsection (1) of Sec. 12 shall be in Form VI.
(2) Every license granted under sub-rule (11) or renewed under the rules shall be subject to the following conditions, namely:
(IV) the rates of wages payable to the workmen by the contractor shall not be less than the rates prescribed under the Minimum Wages Act, 1948 for such employment where applicable, and where the rates have been fixed by agreement, settlement, or award, not less than the rates so fixed.
Consequently, compliance with Minimum Wages is mandatory and not optional.
In fact, the Inspecting Agencies under the Payment of Wages Act, both at the Center and States, prioritize this compliance for inspection, and strict action is taken.
The next time any Staffing or Temping Agency receives a Notice after inspection, the issue is to be taken very seriously, and a proper reply is to be sent by the Staffing or Temping Agency.
Thanks & Regards,
V. Sounder Rajan - Advocates & Notaries - Legal Consultants
E-mail: rajanassociates@eth.net
-9025792684 - 9025792634
From India, Bangalore
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(Fact Checked)-The information provided in the user reply is correct as per the Contract Labour (Regulation and Abolition) Act, 1970 and the Minimum Wages Act, 1948. Compliance with minimum wages for contract workers is mandatory, as stated in Rule 25 of the CLRA Rules. (1 Acknowledge point)
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(Fact Checked)-The information provided in the user reply is accurate regarding the compliance of Minimum Wages Act for Contractual Employment in India. The reference to Rule 25 of the CLRA Rules aligns with the requirement to pay minimum wages to workers. No amendments are needed. (1 Acknowledge point)
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Dear All,
PUNISHMENT FOR NON-COMPLIANCE OF MINIMUM WAGES ACT
NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES
In continuation of our previous post on compliance with the Minimum Wages Act, the next question is the nature and type of penal action that can be taken by the authorities against the Staffing Entity or Contractor for non-compliance with the Minimum Wages Act?
For non-compliance, Section 20(3)(i) of the Minimum Wages Act provides that in the case of a claim arising out of payment of less than the minimum rates of wages, the payment to the employee of the amount by which the minimum wages payable to him exceed the amount actually paid together with the payment of such compensation as the authority may think fit not exceeding ten times the amount of such excess.
In short, the violator may have to shell out up to 10 times the compensation amount together with compliance with the Minimum Wages Act.
Apart from the above, Section 22 provides for a penalty to any employer who pays to any employee less than the minimum rates of wages fixed for that employee's class of work or less than the amount due to him under the provisions of the Minimum Wages Act shall be punishable with imprisonment for a term which may extend to six months or with a fine which may extend to five hundred rupees or with both. While imposing the punishment of a fine for an offense under Sec 22, the Court shall take into consideration the amount of any compensation already awarded against the violator in any proceedings taken under Section 20.
Thanks & Regards,
V. Sounder Rajan - Advocates & Notaries - Legal Consultants
E-mail: rajanassociates@eth.net,
-9025792684-9025792634
From India, Bangalore
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PUNISHMENT FOR NON-COMPLIANCE OF MINIMUM WAGES ACT
NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES
In continuation of our previous post on compliance with the Minimum Wages Act, the next question is the nature and type of penal action that can be taken by the authorities against the Staffing Entity or Contractor for non-compliance with the Minimum Wages Act?
For non-compliance, Section 20(3)(i) of the Minimum Wages Act provides that in the case of a claim arising out of payment of less than the minimum rates of wages, the payment to the employee of the amount by which the minimum wages payable to him exceed the amount actually paid together with the payment of such compensation as the authority may think fit not exceeding ten times the amount of such excess.
In short, the violator may have to shell out up to 10 times the compensation amount together with compliance with the Minimum Wages Act.
Apart from the above, Section 22 provides for a penalty to any employer who pays to any employee less than the minimum rates of wages fixed for that employee's class of work or less than the amount due to him under the provisions of the Minimum Wages Act shall be punishable with imprisonment for a term which may extend to six months or with a fine which may extend to five hundred rupees or with both. While imposing the punishment of a fine for an offense under Sec 22, the Court shall take into consideration the amount of any compensation already awarded against the violator in any proceedings taken under Section 20.
Thanks & Regards,
V. Sounder Rajan - Advocates & Notaries - Legal Consultants
E-mail: rajanassociates@eth.net,
-9025792684-9025792634
From India, Bangalore
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(Fact Checked)-The user reply contains accurate information regarding the punishment for non-compliance with the Minimum Wages Act. No amendments are needed. (1 Acknowledge point)
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(Fact Checked)-The user's reply contains accurate information regarding the punishment for non-compliance of the Minimum Wages Act. The details provided align with the provisions of Section 20 and Section 22 of the Act. Well done! (1 Acknowledge point)
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Dear All,
Sub: Enhancement of wage ceiling by the ID Amendment Act
(s) "workman" means any person, but does not include any such person –
(iii) who is employed mainly in a managerial or administrative capacity; or
(iv) who, being employed in a supervisory capacity, draws wages exceeding ten thousand rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.
Can someone shed a bit more light on the exclusion clauses above from the definition of workmen? What is "managerial capacity" for the ID Act? We are living in a world of mammoth enterprises that are bigger than many governments and have more than 10 levels of reporting hierarchy. It is silly to think that the ID Act doesn't cover everyone except the board of directors and those directly appointed by the board of directors of a company. This has no relevance to the salary or the nature of the job since technically everyone else will not be in a managerial capacity in true sense. If we take the view that everyone except the board of directors and their direct appointee to be acting in a non-managerial capacity, then everyone else would be included as workman for the purposes of the ID Act, is it not?
From India, Hyderabad
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Sub: Enhancement of wage ceiling by the ID Amendment Act
(s) "workman" means any person, but does not include any such person –
(iii) who is employed mainly in a managerial or administrative capacity; or
(iv) who, being employed in a supervisory capacity, draws wages exceeding ten thousand rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.
Can someone shed a bit more light on the exclusion clauses above from the definition of workmen? What is "managerial capacity" for the ID Act? We are living in a world of mammoth enterprises that are bigger than many governments and have more than 10 levels of reporting hierarchy. It is silly to think that the ID Act doesn't cover everyone except the board of directors and those directly appointed by the board of directors of a company. This has no relevance to the salary or the nature of the job since technically everyone else will not be in a managerial capacity in true sense. If we take the view that everyone except the board of directors and their direct appointee to be acting in a non-managerial capacity, then everyone else would be included as workman for the purposes of the ID Act, is it not?
From India, Hyderabad
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Dear PvtProfessional,
Can someone shed a bit more light on the exclusion clauses above from the definition of workmen?
What is the "managerial capacity" for the ID Act? We are living in a world of mammoth enterprises that are bigger than many governments and have more than 10 levels of reporting hierarchy. It is silly to think that the ID Act doesn't cover everyone except the board of directors and those directly appointed by the board of directors of a company. This has no relevance to the salary or the nature of the job since technically everyone else will not be in a managerial capacity in the true sense.
If we take the view that everyone except the board of directors and their direct appointee to be acting in non-managerial capacity, then everyone else would be included as a workman for the purposes of the ID Act, is it not?
Please find below the amended definition of workman under the ID Act:
The recent ID Act amendments for the Staffing Industry have enhanced the wage ceiling.
Prior to the amendment, the wage ceiling of workman in the definition clause Sec 2(s) was Rs. 1600/-. Now it is enhanced to Rs. 10,000/- per month.
Consequently, any person working in any industry doing any manual, unskilled, skilled, technical, operational, clerical, or supervisory work drawing wages up to Rs. 10,000/- will be considered a workman. The workman definition now reads as follows:
(s) "workman" means any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical, or supervisory work for hire or reward, whether the terms of employment be express or implied. For the purposes of any proceeding under this Act in relation to an industrial dispute, it includes any such person who has been dismissed, discharged, or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge, or retrenchment has led to that dispute, but does not include any such person: (i) who is subject to the Air Force Act, 1950 (45 of 1950), or the Army Act, 1950 (46 of 1950), or the Navy Act, 1957 (62 of 1957); (ii) who is employed in the police service or as an officer or other employee of a prison; (iii) who is employed mainly in a managerial or administrative capacity; or (iv) who, being employed in a supervisory capacity, draws wages exceeding ten thousand rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.
The exclusion is where the workmen employed in a supervisory capacity draw wages exceeding ten thousand rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.
The Judgment of the Bombay High Court [attached]. Specifically, para 18 settles the issue. We are not having the information whether any SLP has been filed in the Supreme Court on the Bombay High Court decision.
You can refer to it and apply it to your facts.
Rajan Associates
From India, Bangalore
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Can someone shed a bit more light on the exclusion clauses above from the definition of workmen?
What is the "managerial capacity" for the ID Act? We are living in a world of mammoth enterprises that are bigger than many governments and have more than 10 levels of reporting hierarchy. It is silly to think that the ID Act doesn't cover everyone except the board of directors and those directly appointed by the board of directors of a company. This has no relevance to the salary or the nature of the job since technically everyone else will not be in a managerial capacity in the true sense.
If we take the view that everyone except the board of directors and their direct appointee to be acting in non-managerial capacity, then everyone else would be included as a workman for the purposes of the ID Act, is it not?
Please find below the amended definition of workman under the ID Act:
The recent ID Act amendments for the Staffing Industry have enhanced the wage ceiling.
Prior to the amendment, the wage ceiling of workman in the definition clause Sec 2(s) was Rs. 1600/-. Now it is enhanced to Rs. 10,000/- per month.
Consequently, any person working in any industry doing any manual, unskilled, skilled, technical, operational, clerical, or supervisory work drawing wages up to Rs. 10,000/- will be considered a workman. The workman definition now reads as follows:
(s) "workman" means any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical, or supervisory work for hire or reward, whether the terms of employment be express or implied. For the purposes of any proceeding under this Act in relation to an industrial dispute, it includes any such person who has been dismissed, discharged, or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge, or retrenchment has led to that dispute, but does not include any such person: (i) who is subject to the Air Force Act, 1950 (45 of 1950), or the Army Act, 1950 (46 of 1950), or the Navy Act, 1957 (62 of 1957); (ii) who is employed in the police service or as an officer or other employee of a prison; (iii) who is employed mainly in a managerial or administrative capacity; or (iv) who, being employed in a supervisory capacity, draws wages exceeding ten thousand rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.
The exclusion is where the workmen employed in a supervisory capacity draw wages exceeding ten thousand rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.
The Judgment of the Bombay High Court [attached]. Specifically, para 18 settles the issue. We are not having the information whether any SLP has been filed in the Supreme Court on the Bombay High Court decision.
You can refer to it and apply it to your facts.
Rajan Associates
From India, Bangalore
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(Fact Checked)-The user reply is incorrect in stating that everyone except the board of directors and their direct appointees are considered workmen under the Industrial Disputes Act. The Act specifically excludes individuals employed in a managerial or administrative capacity. Additionally, the wage ceiling for workmen has been increased to Rs. 10,000 per month. The information provided is accurate based on the latest laws and definitions. (1 Acknowledge point)
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(Fact Checked)-[The user reply provides accurate information regarding the definition of a workman under the Industrial Disputes Act, including the recent amendments and the exclusion criteria for managerial capacity. The reference to the Bombay High Court judgment adds credibility to the response. Well done!] (1 Acknowledge point)
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(Fact Checked)-The explanation provided is accurate and in line with the Industrial Disputes Act, specifically Section 25F regarding retrenchment conditions for workmen. Well done! (1 Acknowledge point)CiteHR.AI
(Fact Checked)-The user's reply accurately explains the conditions precedent to retrenchment of workmen under Sec 25F of the Industrial Disputes Act, 1947. The explanation provided aligns with the legal requirements stated in the Act. (1 Acknowledge point)