Dear colleague, Please advise on the matter of termination of the car driver.
1. Driver was engaged for work on off roll/ voucher payment basis from April 2004 to Oct. 2011.
2. From 1st November 2011, covered under P.F. without any appointment letter with a component of Basic and Personal Allowance.
3. He is continued on a roll from 1st November 2011 to till now.
As his reporting officer retired on 31st October, hence services not needed of the driver from 1st November.
Present in charge of the establishment is asking for termination of the driver, also he agrees to pay gratuity and retrenchment compensation for ten years on his present basic salary.
But the driver is denied to accept this compensation and asking for retrenchment and gratuity on full salary i.e. basic plus personal allowance, also he is not ready to relocate/transfer for another place for doing the job and asking for a written retrenchment notice or transfer order.
As not been issued any appointment letter hence we are not in a position to issue him any written documents.
In this situation what will be a better option to terminate his services and pay him his genuine f&f.
From India, Raipur
11. Driver was engaged for work on off roll/ voucher payment basis from April 2004 to Oct. 2011.
2. From 1st November 2011, covered under P.F. without any appointment letter with a component of Basic and Personal Allowance.
3. He is continued on a roll from 1st November 2011 to till now.
As his reporting officer retired on 31st October, hence services not needed of the driver from 1st November.
Present in charge of the establishment is asking for termination of the driver, also he agrees to pay gratuity and retrenchment compensation for ten years on his present basic salary.
But the driver is denied to accept this compensation and asking for retrenchment and gratuity on full salary i.e. basic plus personal allowance, also he is not ready to relocate/transfer for another place for doing the job and asking for a written retrenchment notice or transfer order.
As not been issued any appointment letter hence we are not in a position to issue him any written documents.
In this situation what will be a better option to terminate his services and pay him his genuine f&f.
From India, Raipur
Dear Colleague,
The Said driver was engaged continuously from the year 2004 it seems from your write up. From 2011 he was covered under PF and then he continues till date without any appointment order. This is basically a system to be relooked for review and refine the system if any more Personnel are working like this. The organization may take the drivers off-role through contractors which is an effective way to manage the Role instead of having On-Roll Drivers. This is widely practiced and through the contractor you may do all compliances which is hassle free.
Coming to the present Driver it is presumed that the organization had a practice of paying salary directly to him by voucher or other modes. From the given details it is better to pay and close the matter with all magnanimity as some one should not work without any order of appointment or clarity on what is his status in the organization for a long time.
Under such circumstances:
1. Gratuity to be paid for the total service based on the BASIC +DA if any at the rate of 15 days of wages for every completed year of service
2. Kindly examine whether you paid the " personal allowance" in lieu of DA or it is totally independent and the purpose is different. In such case take call carefully to exclude.
3. Gratuity is payable only on BASIC+ Dearness Allowance if any as of now under the present Law.
Sec 2 (s) “wages” means all emoluments which are earned by an employee while on duty or on leave in accordance with the terms and conditions of his employments and which are paid or are payable to him in cash and includes dearness allowance but does not include any bonus, commission, house rent allowance, overtime wages and any other allowance.
You need to take call after examination on the component " Personal Allowance"
4. With regard to the Retrenchment Compensation it is payable under the Industrial Disputes Act 1947. Here there are notices to be served and compensation is payable based on the balance service remaining for the subjected driver. Here better you consult a Labour Law Consultant and then decide the course of action as there are provision to send notices to the authority, notice to Trade Union if any and compensation worked out for the remaining service ( balance service of the driver) considering the 2 important definitions- Wages & Workmen as given below :
2(gg) (rr) 4 " wages" means all remuneration capable of being expressed in terms of money, which would, if the terms of employment, expressed or implied, were fulfilled, be payable to a workman in respect of his employment or of work done in such employment, and includes--
(i) such allowances (including dearness allowance) as the workman is for the time being entitled to;
(ii) the value of any house accommodation, or of supply of light, water, medical attendance or other amenity or of any service or of any concessional supply of food- grains or other articles;
(iii) any travelling concession;
(iv) any commission payable on the promotion of sales or business or both;]
but does not include--
(a) any bonus;
(b) any contribution paid or payable by the employer to any pension fund or provident fund or for the benefit of the workman under any law for the time being in force;
(c) any gratuity payable on the termination of his service;]
2(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, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, dischasrge 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 ); or
(ii) who is employed in the police service or as an officer or other employee of a prison; or
(iii) who is employed mainly in a managerial or administrative capacity; or
(iv) who, being employed in a supervisory capacity, draws wages exceeding 10,000/- 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 analysis shows that he is deemed to be a Workmen under ID act and all his components to be taken into account for Retrenchment Compensation working.
Caution: Retrenchment is a trick subject and depending on the number of workers employed in your organization Chapter VA or VB will apply and there are pre-conditions applicable like Notice/ Approval/ Payment of Retrenchment compensation all in single go etc. Hence suggest if you really want to take this route then consult a Labour Law Practitioner then do.
Other best alternate is that you may try to convince the driver briefing the justification and try to put on VRS like proposal so that he will also go happily and there will be no Dispute later on.
Suggest that give the driver a good payment reasonably worked out and take it like resignation on his own accord.
The final option is that no workmen can deny accepting " transfer" if it is on genuine ground and it is the prerogative of the employer. If you have vacancy elsewhere under same employer, then no harm in transferring him to that place. However kindly regularize his service properly with an order officially at least now. Otherwise every chance that he wins in an ID later on if arises.
Overall kindly take a calculated risk and close the case and look and review such systems and streamline
All the Best, God Bless,
Dr.P.SIVAKUMAR
Doctor Siva Global HR
Tamil Nadu
From India, Chennai
The Said driver was engaged continuously from the year 2004 it seems from your write up. From 2011 he was covered under PF and then he continues till date without any appointment order. This is basically a system to be relooked for review and refine the system if any more Personnel are working like this. The organization may take the drivers off-role through contractors which is an effective way to manage the Role instead of having On-Roll Drivers. This is widely practiced and through the contractor you may do all compliances which is hassle free.
Coming to the present Driver it is presumed that the organization had a practice of paying salary directly to him by voucher or other modes. From the given details it is better to pay and close the matter with all magnanimity as some one should not work without any order of appointment or clarity on what is his status in the organization for a long time.
Under such circumstances:
1. Gratuity to be paid for the total service based on the BASIC +DA if any at the rate of 15 days of wages for every completed year of service
2. Kindly examine whether you paid the " personal allowance" in lieu of DA or it is totally independent and the purpose is different. In such case take call carefully to exclude.
3. Gratuity is payable only on BASIC+ Dearness Allowance if any as of now under the present Law.
Sec 2 (s) “wages” means all emoluments which are earned by an employee while on duty or on leave in accordance with the terms and conditions of his employments and which are paid or are payable to him in cash and includes dearness allowance but does not include any bonus, commission, house rent allowance, overtime wages and any other allowance.
You need to take call after examination on the component " Personal Allowance"
4. With regard to the Retrenchment Compensation it is payable under the Industrial Disputes Act 1947. Here there are notices to be served and compensation is payable based on the balance service remaining for the subjected driver. Here better you consult a Labour Law Consultant and then decide the course of action as there are provision to send notices to the authority, notice to Trade Union if any and compensation worked out for the remaining service ( balance service of the driver) considering the 2 important definitions- Wages & Workmen as given below :
2(gg) (rr) 4 " wages" means all remuneration capable of being expressed in terms of money, which would, if the terms of employment, expressed or implied, were fulfilled, be payable to a workman in respect of his employment or of work done in such employment, and includes--
(i) such allowances (including dearness allowance) as the workman is for the time being entitled to;
(ii) the value of any house accommodation, or of supply of light, water, medical attendance or other amenity or of any service or of any concessional supply of food- grains or other articles;
(iii) any travelling concession;
(iv) any commission payable on the promotion of sales or business or both;]
but does not include--
(a) any bonus;
(b) any contribution paid or payable by the employer to any pension fund or provident fund or for the benefit of the workman under any law for the time being in force;
(c) any gratuity payable on the termination of his service;]
2(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, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, dischasrge 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 ); or
(ii) who is employed in the police service or as an officer or other employee of a prison; or
(iii) who is employed mainly in a managerial or administrative capacity; or
(iv) who, being employed in a supervisory capacity, draws wages exceeding 10,000/- 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 analysis shows that he is deemed to be a Workmen under ID act and all his components to be taken into account for Retrenchment Compensation working.
Caution: Retrenchment is a trick subject and depending on the number of workers employed in your organization Chapter VA or VB will apply and there are pre-conditions applicable like Notice/ Approval/ Payment of Retrenchment compensation all in single go etc. Hence suggest if you really want to take this route then consult a Labour Law Practitioner then do.
Other best alternate is that you may try to convince the driver briefing the justification and try to put on VRS like proposal so that he will also go happily and there will be no Dispute later on.
Suggest that give the driver a good payment reasonably worked out and take it like resignation on his own accord.
The final option is that no workmen can deny accepting " transfer" if it is on genuine ground and it is the prerogative of the employer. If you have vacancy elsewhere under same employer, then no harm in transferring him to that place. However kindly regularize his service properly with an order officially at least now. Otherwise every chance that he wins in an ID later on if arises.
Overall kindly take a calculated risk and close the case and look and review such systems and streamline
All the Best, God Bless,
Dr.P.SIVAKUMAR
Doctor Siva Global HR
Tamil Nadu
From India, Chennai
Dear Rakesh,
Whether an employee is kept off-roll or on-roll, what is important is whether he has been employed directly by the employer/industrial establishment is the basic criterion to determine the fact of employment. Suppose, had he been employed by the retired officer as per his choice to drive his own car and paid him out of the conveyance allowance he received from the employer, the position would be different. Hence the inescapable conclusion is that he has been in the continuous service of the establishment since 2004 as admitted in the thread despite his off-roll tenure followed by his belated enrolment into the EPF Scheme in 2011. Therefore, he cannot be simply terminated by way of retrenchment or otherwise as the present in-charge desires.
If the establishment is one falling under the definition of the term " industrial establishment " u/s 25-L of Chapter V-B of the Industrial Disputes Act,1947, you have to obtain prior permission from the appropriate Government by following the provisions of sec.25-N of the Act. In any other case, you have to follow the provisions of sec.25-F of the Act before actually retrenching him.
Of course, gratuity can be calculated on the basis of the last drawn basic in the absence of dearness allowance. But in my opinion the personal allowance being paid may be an allowance to defray the special expenses related to the performance of car driving and as such it cannot be treated as a component of wages for the purpose of minimum wages under the Minimum Wages Act,1948 and therefore the basic wages shall not be less than the statutory minimum wages for the purpose of calculation of terminal benefits.
Again retrenchment compensation should be calculated on the basis of 15 days average pay received for every completed year of service rendered.
His total length of service shall be calculated effective from his actual date of appointment in 2004 and which may be around 17 years as of now.
In view of the legal bottle-necks, my suggestion would be settle the matter amicably by paying him retrenchment compensation and gratuity for the entire no of years of service rendered so far based on his last drawn salary as he desires and ensure that the separation is peaceful or transfer him if it is possible.
From India, Salem
Whether an employee is kept off-roll or on-roll, what is important is whether he has been employed directly by the employer/industrial establishment is the basic criterion to determine the fact of employment. Suppose, had he been employed by the retired officer as per his choice to drive his own car and paid him out of the conveyance allowance he received from the employer, the position would be different. Hence the inescapable conclusion is that he has been in the continuous service of the establishment since 2004 as admitted in the thread despite his off-roll tenure followed by his belated enrolment into the EPF Scheme in 2011. Therefore, he cannot be simply terminated by way of retrenchment or otherwise as the present in-charge desires.
If the establishment is one falling under the definition of the term " industrial establishment " u/s 25-L of Chapter V-B of the Industrial Disputes Act,1947, you have to obtain prior permission from the appropriate Government by following the provisions of sec.25-N of the Act. In any other case, you have to follow the provisions of sec.25-F of the Act before actually retrenching him.
Of course, gratuity can be calculated on the basis of the last drawn basic in the absence of dearness allowance. But in my opinion the personal allowance being paid may be an allowance to defray the special expenses related to the performance of car driving and as such it cannot be treated as a component of wages for the purpose of minimum wages under the Minimum Wages Act,1948 and therefore the basic wages shall not be less than the statutory minimum wages for the purpose of calculation of terminal benefits.
Again retrenchment compensation should be calculated on the basis of 15 days average pay received for every completed year of service rendered.
His total length of service shall be calculated effective from his actual date of appointment in 2004 and which may be around 17 years as of now.
In view of the legal bottle-necks, my suggestion would be settle the matter amicably by paying him retrenchment compensation and gratuity for the entire no of years of service rendered so far based on his last drawn salary as he desires and ensure that the separation is peaceful or transfer him if it is possible.
From India, Salem
Dear Sir We had not issued appointment letter to him, in such condition can we issue him transfer letter, as we need driver in other location. With Regards Rakesh Dubey
From India, Raipur
From India, Raipur
Dear Rakesh,
As of now, if I remember correct, no law other than the Sales Promotion Employees Act,1976, makes the issuance of appointment orders to an employee mandatory.. Therefore, non-issuance of appointment orders cannot be a bar to transfer the services of the employee due to want of vacancy to another branch of the same establishment provided it is not prohibited in the Standing Orders or service regulations.
From India, Salem
As of now, if I remember correct, no law other than the Sales Promotion Employees Act,1976, makes the issuance of appointment orders to an employee mandatory.. Therefore, non-issuance of appointment orders cannot be a bar to transfer the services of the employee due to want of vacancy to another branch of the same establishment provided it is not prohibited in the Standing Orders or service regulations.
From India, Salem
Dear Rakesh Dubey,
The Driver was on casual roll and was receiving payment in voucher from April 2004 to Oct'2011.
But subsequently your establishment brought him to roll by deducting EPF, the said action gives him a regular employee of your establishment from 1st Nov 2011 to the last day of his working. Therefore, it does not require an appointment letter to prove him as an employee. The title of Employee has offered by your establishment by enrolling the employee under EPF. The claim of driver for terminal benefit and gratuity is right and to which your establishment cant deny and the theory of appointment letter is immaterial. The Payment of gratuity and retrenchment compensation by your establishment inversely admitting the employment of the person, even though not being issued an appointment letter.
The driver can be issued with letter that his services ends as his requirement is not existing due to consequal effect at present location, thus establishment sanctions the compensation of X amount(pay him the termination compensation with gratuity calculated on basic on which his EPF deduction made). An employee can be retrenched owing to non-existence of post, if the person still feels is not as per rule let him contest in court.
From India, Mumbai
The Driver was on casual roll and was receiving payment in voucher from April 2004 to Oct'2011.
But subsequently your establishment brought him to roll by deducting EPF, the said action gives him a regular employee of your establishment from 1st Nov 2011 to the last day of his working. Therefore, it does not require an appointment letter to prove him as an employee. The title of Employee has offered by your establishment by enrolling the employee under EPF. The claim of driver for terminal benefit and gratuity is right and to which your establishment cant deny and the theory of appointment letter is immaterial. The Payment of gratuity and retrenchment compensation by your establishment inversely admitting the employment of the person, even though not being issued an appointment letter.
The driver can be issued with letter that his services ends as his requirement is not existing due to consequal effect at present location, thus establishment sanctions the compensation of X amount(pay him the termination compensation with gratuity calculated on basic on which his EPF deduction made). An employee can be retrenched owing to non-existence of post, if the person still feels is not as per rule let him contest in court.
From India, Mumbai
Very good options were given by seniors. I only suggest if you want to settle amicably, calcultate retrenchment compensation etc., and finally arrive at a figure to pay. Then you can have discussion with driver and settle for it.
We need to understand that we can not fire an employee simply because some one retired. If he is not ready for the settlement offered by you, the course of action can be followed by transfer as suggested if your rules permit.
At any point of time you have to take care that the whole episode should not reflect on other employees of the organization but if the other side is adamant, then legal course become inevitable.
From India, Hyderabad
We need to understand that we can not fire an employee simply because some one retired. If he is not ready for the settlement offered by you, the course of action can be followed by transfer as suggested if your rules permit.
At any point of time you have to take care that the whole episode should not reflect on other employees of the organization but if the other side is adamant, then legal course become inevitable.
From India, Hyderabad
Whether you terminate /retrench him or transfer him or enter into settlement, the same should be done after proper consultation from competent person. -S.K.Mittal 9319956443
From India, Faridabad
From India, Faridabad
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