Hi,
My organisation wants to convert or issue letter to some employees as a contract/retainer/consultant to avoid an labour compliances like ESIC,PF,Gratuity.
Pls advise if we take this step and issue, we are still under labour compliances umbrella.
Thanks
Raj
From India, Mumbai
1My organisation wants to convert or issue letter to some employees as a contract/retainer/consultant to avoid an labour compliances like ESIC,PF,Gratuity.
Pls advise if we take this step and issue, we are still under labour compliances umbrella.
Thanks
Raj
From India, Mumbai
Hi,
If u maintain any group of employees as contract employees, they will definitely comes under the labour compliance if u r the principle employer.
For trainee esi is must bt u can exempt them from PF. that too if only their per day salary is minimum wage. moreover u can maintain them as trainee or apprentice oly for certain period which will not extend 2 years. for extending their training period u shld maintain proper records.
these all needs proper records so get advice from your auditor and proceed carefully.
From India, Coimbatore
If u maintain any group of employees as contract employees, they will definitely comes under the labour compliance if u r the principle employer.
For trainee esi is must bt u can exempt them from PF. that too if only their per day salary is minimum wage. moreover u can maintain them as trainee or apprentice oly for certain period which will not extend 2 years. for extending their training period u shld maintain proper records.
these all needs proper records so get advice from your auditor and proceed carefully.
From India, Coimbatore
So far as the employee is contarctual or through a contractor, it does not make any difference to the employer's liability For P.F,ESI and in relevant cases, gratuity. Secondly, so far as the consultant/ retainer is concerned, mere designation as such will not free the employer from liability and a lot depends up on the manner in which they perform their work.
So as ithe case with trainees.
B.Saikumar
HR & Labour law Advsior
mumbai
From India, Mumbai
So as ithe case with trainees.
B.Saikumar
HR & Labour law Advsior
mumbai
From India, Mumbai
Dear Raj,
Emphasizing on your point of "convert" which suggest a transition of exsisitng practices,herein refereed to HR compliance matters,you shall get stuck on the following points:
I. PF- Once extended to an employee of an organization can not be withdrawn till he/she is serving the organization.
II. ESIC- Can not be withdrawn midway between a contribution term even you revise the salary to Rs.15001/month onwards.
Likewise,the basic statutory points do not differentiate between an employee engaged directly by an establishment or by other ways.
One more point is that, you ca not just designate som one as "Trainee" to skip the basic statutory points as the statutory is exempted only for trainees who satisfies the provision of "Apprentice Act,1961".
To conclude,i shall advise to consider the idea of engaging "contractor" to reduce this hassles pertaining to statutory.
But,do ensure that in case you engage a contractor,the party should be totally conversant with the applicable enactments and statutory norms.
From India, Chandigarh
Emphasizing on your point of "convert" which suggest a transition of exsisitng practices,herein refereed to HR compliance matters,you shall get stuck on the following points:
I. PF- Once extended to an employee of an organization can not be withdrawn till he/she is serving the organization.
II. ESIC- Can not be withdrawn midway between a contribution term even you revise the salary to Rs.15001/month onwards.
Likewise,the basic statutory points do not differentiate between an employee engaged directly by an establishment or by other ways.
One more point is that, you ca not just designate som one as "Trainee" to skip the basic statutory points as the statutory is exempted only for trainees who satisfies the provision of "Apprentice Act,1961".
To conclude,i shall advise to consider the idea of engaging "contractor" to reduce this hassles pertaining to statutory.
But,do ensure that in case you engage a contractor,the party should be totally conversant with the applicable enactments and statutory norms.
From India, Chandigarh
Dear Raj,
You wish to convert some of your employees in to contract, retainership and Consultancy so that you can deprive them from the benefits of social securities such as EPF, ESI, Gratuity etc.
If it is permitted then many employers like you will do it since they want to make profit at the cost of Social Security of their human assests.
Please bear in mind, whether you employ any person on contractual or on contract or through contractor agency all labour laws are applicable to him.
Now question of retainer and consultant, you can not have every class of people as retainer and consultant. Even you have retainer and consultant and the employee and employer relationship is established there, your very purpose of doing this exercise is defeated.
So, be careful while suggesting any thing to the employer or be careful if your employer wish to take such steps and you are there as HR professional.
More discussions on such kind of issues by members are expected in such kind of forum.
Thanks and regards.
Keshav Korgaonkar
Shantadurgaent.com,Insurance Advisors,Corporate Advisors,Legal Advise,Wage and salary,Shantadurgaent.com,Labour Compliance Audit,SSI registration,NOC from
From India, Mumbai
You wish to convert some of your employees in to contract, retainership and Consultancy so that you can deprive them from the benefits of social securities such as EPF, ESI, Gratuity etc.
If it is permitted then many employers like you will do it since they want to make profit at the cost of Social Security of their human assests.
Please bear in mind, whether you employ any person on contractual or on contract or through contractor agency all labour laws are applicable to him.
Now question of retainer and consultant, you can not have every class of people as retainer and consultant. Even you have retainer and consultant and the employee and employer relationship is established there, your very purpose of doing this exercise is defeated.
So, be careful while suggesting any thing to the employer or be careful if your employer wish to take such steps and you are there as HR professional.
More discussions on such kind of issues by members are expected in such kind of forum.
Thanks and regards.
Keshav Korgaonkar
Shantadurgaent.com,Insurance Advisors,Corporate Advisors,Legal Advise,Wage and salary,Shantadurgaent.com,Labour Compliance Audit,SSI registration,NOC from
From India, Mumbai
Dear Keshav,
I have my own reservations and doubts to express on the matter, request you to please see my observations and clarifications on the below matter.
You wish to convert some of your employees in to contract, retainership and Consultancy so that you can deprive them from the benefits of social securities such as EPF, ESI, Gratuity etc.
If it is permitted then many employers like you will do it since they want to make profit at the cost of Social Security of their human assests.:- (There is no issue if some employee wants to save some money, I have the strong reasoning/logic and moreover legality.)
Please bear in mind, whether you employ any person on contractual or on contract or through contractor agency all labour laws are applicable to him.:- (Do not agree with this point as it is very much possible in case of direct contract with individual, only need to have those contracts as professionals and for a certain time period and thereafter it can be renewed.)
Now question of retainer and consultant, you can not have every class of people as retainer and consultant. Even you have retainer and consultant and the employee and employer relationship is established there, your very purpose of doing this exercise is defeated.;- (No I do not agreed with this, if we do the contract with the consultant/professionals stating a specific task with the stipulated time frame and some certain amount for those period are fixed, nevertheless the amount we are realising on monthly basis then the relationship can not be established as master & servant, only see to that the individual are raising the invoice with ST and company are realising the payment by deducting TDS.)
So, be careful while suggesting any thing to the employer or be careful if your employer wish to take such steps and you are there as HR professional.
More discussions on such kind of issues by members are expected in such kind of forum.:- (Hereby it is advised to you to please do some more R&D, then we can have some fruitful discussion on this, can be reached any crux)
From India, Mumbai
I have my own reservations and doubts to express on the matter, request you to please see my observations and clarifications on the below matter.
You wish to convert some of your employees in to contract, retainership and Consultancy so that you can deprive them from the benefits of social securities such as EPF, ESI, Gratuity etc.
If it is permitted then many employers like you will do it since they want to make profit at the cost of Social Security of their human assests.:- (There is no issue if some employee wants to save some money, I have the strong reasoning/logic and moreover legality.)
Please bear in mind, whether you employ any person on contractual or on contract or through contractor agency all labour laws are applicable to him.:- (Do not agree with this point as it is very much possible in case of direct contract with individual, only need to have those contracts as professionals and for a certain time period and thereafter it can be renewed.)
Now question of retainer and consultant, you can not have every class of people as retainer and consultant. Even you have retainer and consultant and the employee and employer relationship is established there, your very purpose of doing this exercise is defeated.;- (No I do not agreed with this, if we do the contract with the consultant/professionals stating a specific task with the stipulated time frame and some certain amount for those period are fixed, nevertheless the amount we are realising on monthly basis then the relationship can not be established as master & servant, only see to that the individual are raising the invoice with ST and company are realising the payment by deducting TDS.)
So, be careful while suggesting any thing to the employer or be careful if your employer wish to take such steps and you are there as HR professional.
More discussions on such kind of issues by members are expected in such kind of forum.:- (Hereby it is advised to you to please do some more R&D, then we can have some fruitful discussion on this, can be reached any crux)
From India, Mumbai
Dear Manoj ji,
Greetings of the day!
I appreciate your contribution in the discussion and request other members also to contribute in it so that this discussion will be more interesting and enriching.
Thanks and regards.
Keshav Korgaonkar
Shantadurgaent.com,Insurance Advisors,Corporate Advisors,Legal Advise,Wage and salary,Shantadurgaent.com,Labour Compliance Audit,SSI registration,NOC from
From India, Mumbai
Greetings of the day!
I appreciate your contribution in the discussion and request other members also to contribute in it so that this discussion will be more interesting and enriching.
Thanks and regards.
Keshav Korgaonkar
Shantadurgaent.com,Insurance Advisors,Corporate Advisors,Legal Advise,Wage and salary,Shantadurgaent.com,Labour Compliance Audit,SSI registration,NOC from
From India, Mumbai
Dear Mr. Manoj
This is to inform you that Mr.Fikat has already told in the first line itself that his organisation wants to get relieved from the liability of Statutory requirements i.e., Employee Welfare (PF & ESI).
Your arguments can be accepted only for debate but it cannot be implemented. If we implement then it will be as like depriving the benefits of the employees. Even if the employee works one day and his PF is deducted and he died means surely his family can claim the PF Pension from the EPFO, and with such advise you are misguiding Mr. Fikat.
As per your contention you are having strong reasoning/logic and legality but in your action there is no humanity. You can consider for some humanity towards your employees before depriving their rights.
I have some doubt in the Act, "Contract Labour (Regulation & Abolition) Act. What is the meaning of Regulation and which part the act describes about Abolition. What is "need to have those contracts as professionals and for a certain time period and thereafter it can be renewed", by which you want to convey.
As a principal employer one must confirm the remittance of PF, ESI for the employees engaged by the contractor and if the contractor fails to deduct or fails to submit the Challan for PF and ESI, then the Principal Employer is having every right to deduct and remit the same on their PF and ESI Account. If the contractor does not have such PF and ESI account on their name, then it is the duty of the Principal employer to deduct on the PE's establishment code itself and remit the same.
From India, Kumbakonam
This is to inform you that Mr.Fikat has already told in the first line itself that his organisation wants to get relieved from the liability of Statutory requirements i.e., Employee Welfare (PF & ESI).
Your arguments can be accepted only for debate but it cannot be implemented. If we implement then it will be as like depriving the benefits of the employees. Even if the employee works one day and his PF is deducted and he died means surely his family can claim the PF Pension from the EPFO, and with such advise you are misguiding Mr. Fikat.
As per your contention you are having strong reasoning/logic and legality but in your action there is no humanity. You can consider for some humanity towards your employees before depriving their rights.
I have some doubt in the Act, "Contract Labour (Regulation & Abolition) Act. What is the meaning of Regulation and which part the act describes about Abolition. What is "need to have those contracts as professionals and for a certain time period and thereafter it can be renewed", by which you want to convey.
As a principal employer one must confirm the remittance of PF, ESI for the employees engaged by the contractor and if the contractor fails to deduct or fails to submit the Challan for PF and ESI, then the Principal Employer is having every right to deduct and remit the same on their PF and ESI Account. If the contractor does not have such PF and ESI account on their name, then it is the duty of the Principal employer to deduct on the PE's establishment code itself and remit the same.
From India, Kumbakonam
Dear Raj
If your contractor is not having the PF/ESI Registration, then obviously you must deduct from the Contractor for the workmen engaged by him and remit with the PF and ESI Authorities on your own Establishment Code.
If you are engaging more than 20 contract workmen in your establishment then you must register yourself as Establishment as per Contract Labour Act and further you will issue Form V to your contractor. With that Form V the Contractor will have to apply for Contract Labour Licence.
Hence you will be covered by further one more act, i.e., Contract Labour Act and if your state is insisting you for Inter State Migrant workmen Act, then you will be covered for 2 more acts.
Better you can advise your employer/management not to escape from such Statutory Obligations and you insist for the same as it is favourable to your employees.
From India, Kumbakonam
If your contractor is not having the PF/ESI Registration, then obviously you must deduct from the Contractor for the workmen engaged by him and remit with the PF and ESI Authorities on your own Establishment Code.
If you are engaging more than 20 contract workmen in your establishment then you must register yourself as Establishment as per Contract Labour Act and further you will issue Form V to your contractor. With that Form V the Contractor will have to apply for Contract Labour Licence.
Hence you will be covered by further one more act, i.e., Contract Labour Act and if your state is insisting you for Inter State Migrant workmen Act, then you will be covered for 2 more acts.
Better you can advise your employer/management not to escape from such Statutory Obligations and you insist for the same as it is favourable to your employees.
From India, Kumbakonam
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
Letter-Petition dated 9th January 2016 against the Plight of Contractual White Collar Worker & .pdf
Death while in service letter for pf death claim.docx