Hi,
Does employment under retainership (Contract between individual or agency with organisation for purpose of specialised services) attract CLRA - 1970?
If yes, HOW?
If no, what are the liabilities of employer in case of such employment.
Any inputs will highly be appreciated.
Regards
Mahesh
From India, Mangaluru
1Does employment under retainership (Contract between individual or agency with organisation for purpose of specialised services) attract CLRA - 1970?
If yes, HOW?
If no, what are the liabilities of employer in case of such employment.
Any inputs will highly be appreciated.
Regards
Mahesh
From India, Mangaluru
No.It does not apply to retainership since it is a contarct between the company and the retainer for allowing his pecial services to the company for a fee. The liabilities of the company depends up on the terms of the contract.
B.saikumar
Hr &Labour Law advisor
Mumbai
From India, Mumbai
B.saikumar
Hr &Labour Law advisor
Mumbai
From India, Mumbai
Who is a retainer-?
Retainer is a professional adviser, such as an attorney, counselor, or consultant, who works independently provides service to more than one organization at one point of time. For example, a person with the degree in law can be retained as a legal consultant/advisor or a CA can be retained as a financial consultant or a person with a degree like MBBS/MD can be a retainer medical practitioner in an establishment/factory
While engaging any Retainer it has to be kept in mind that as the Retainers are hired for some specific consultancy services which requires specific profession knowledge & experience, it is also to be seen that whether the same retainer possess the requisite professional qualification. Who is not the full time employee of any organization? In case of retainers service tax will be applicable and no employment/labour laws will be applicable on retainers who provide need based services and falling out of coverage of ESIC & PF. Retainers are being paid for their service rendered to the organization.
What the implication giving designations of retains to full time employees?
But if in case of giving designation of retainer to persons who are working on the payroll of organizations even for a short term and proper appointment letter is being issue, instead of retainership Agreement. And who follow the instructions from employer , the work done by such employees being supervised and controlled by the employer, attendance record, salary record etc maintained, in such kind of cases Employer – Employee relationship exist between the organization and the persons working for that organization as retainers. Then legally we cannot say that they will be treated as retainer and only service tax is payable against the services rendered by them. Otherwise payments made to retainers would qualify for deduction of ESI/PF and other statutory levies as they would be deemed as employee and not Retainer. But they shall be treated as full time employee of the organization for the purpose of Labour & employment laws. It’s kind of designation given to the employees, just to avoid the compliance under labour laws and to give social benefit to employees. The organization will be bound to comply with labour laws related to an employee's PF, Gratuity and other terminal benefits on retirement or resignation.
What are the risks involved in such designation?
The Company is getting their services not as a retainer as the definition of retainer is self explanatory. And pay services tax to Tax department. But such employees will be treated as full time employees of the company under applicable Labour/Employment legislations as most of Employment Legislation defined any person who employed in any industry to do any manual, unskilled, technical, operational, clerical or supervisory work for hire reward, whether the terms of employment be expressed or implied. Further EPF & MP Act & ESI Act provide the vide definition of employee which covered all the employee working or getting remuneration directly or indirectly from the employer.
In case of inspection from ESI/PF Authorities, labour department. It will cause heavy loss to organization in terms damage and interest on the contribution which need to be filed under social benefit legislations like ESI, PF, LWF etc.
Apparently the organization has to pay double amount one towards the services tax and for the compliance of social benefit legislations.
Retainer is a professional adviser, such as an attorney, counselor, or consultant, who works independently provides service to more than one organization at one point of time. For example, a person with the degree in law can be retained as a legal consultant/advisor or a CA can be retained as a financial consultant or a person with a degree like MBBS/MD can be a retainer medical practitioner in an establishment/factory
While engaging any Retainer it has to be kept in mind that as the Retainers are hired for some specific consultancy services which requires specific profession knowledge & experience, it is also to be seen that whether the same retainer possess the requisite professional qualification. Who is not the full time employee of any organization? In case of retainers service tax will be applicable and no employment/labour laws will be applicable on retainers who provide need based services and falling out of coverage of ESIC & PF. Retainers are being paid for their service rendered to the organization.
What the implication giving designations of retains to full time employees?
But if in case of giving designation of retainer to persons who are working on the payroll of organizations even for a short term and proper appointment letter is being issue, instead of retainership Agreement. And who follow the instructions from employer , the work done by such employees being supervised and controlled by the employer, attendance record, salary record etc maintained, in such kind of cases Employer – Employee relationship exist between the organization and the persons working for that organization as retainers. Then legally we cannot say that they will be treated as retainer and only service tax is payable against the services rendered by them. Otherwise payments made to retainers would qualify for deduction of ESI/PF and other statutory levies as they would be deemed as employee and not Retainer. But they shall be treated as full time employee of the organization for the purpose of Labour & employment laws. It’s kind of designation given to the employees, just to avoid the compliance under labour laws and to give social benefit to employees. The organization will be bound to comply with labour laws related to an employee's PF, Gratuity and other terminal benefits on retirement or resignation.
What are the risks involved in such designation?
The Company is getting their services not as a retainer as the definition of retainer is self explanatory. And pay services tax to Tax department. But such employees will be treated as full time employees of the company under applicable Labour/Employment legislations as most of Employment Legislation defined any person who employed in any industry to do any manual, unskilled, technical, operational, clerical or supervisory work for hire reward, whether the terms of employment be expressed or implied. Further EPF & MP Act & ESI Act provide the vide definition of employee which covered all the employee working or getting remuneration directly or indirectly from the employer.
In case of inspection from ESI/PF Authorities, labour department. It will cause heavy loss to organization in terms damage and interest on the contribution which need to be filed under social benefit legislations like ESI, PF, LWF etc.
Apparently the organization has to pay double amount one towards the services tax and for the compliance of social benefit legislations.
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