Hi Seniors,
Can Someone show light on this?
Paying Bonus is employer / contractor responsibility and ensuring is principle employer responsibility - This part is clear.
while calculating bonus, whose profit % is to be considered? If principal employer profit is more, does they liable to pay more % to contract employees?
Since contractor is the immediate employer, Does his profit decides their employees %?
Regards,
From India, Mysore
Can Someone show light on this?
Paying Bonus is employer / contractor responsibility and ensuring is principle employer responsibility - This part is clear.
while calculating bonus, whose profit % is to be considered? If principal employer profit is more, does they liable to pay more % to contract employees?
Since contractor is the immediate employer, Does his profit decides their employees %?
Regards,
From India, Mysore
4262
This is an interesting question. I do not know why I never asked this!
The Payment of Bonus Act is silent on contract labour, so legally I suppose that you can pay it based on contractor's profit.
However, legislative intent seem to be that PE does not avoid its dues by pushing workers to contractor, so it is possible that the courts will consider PE's profit. This will be a highly contentious issue and likely to go to courts for 25 years!
In all the cases I have seen, we see that contract workers are paid bonus at 8.33% only and that is accepted by the workers as well as the labour inspectors. So you are not likely to have a problem on this matter. Just ensure you have evidence that the contractor is genuine, independent business.
From India, Mumbai
The Payment of Bonus Act is silent on contract labour, so legally I suppose that you can pay it based on contractor's profit.
However, legislative intent seem to be that PE does not avoid its dues by pushing workers to contractor, so it is possible that the courts will consider PE's profit. This will be a highly contentious issue and likely to go to courts for 25 years!
In all the cases I have seen, we see that contract workers are paid bonus at 8.33% only and that is accepted by the workers as well as the labour inspectors. So you are not likely to have a problem on this matter. Just ensure you have evidence that the contractor is genuine, independent business.
From India, Mumbai
The contractor is the immediate employer is responsible to pay the bonus. The bonus payment percentage depends on contractor’s profit and loss.
From India, Mumbai
From India, Mumbai
Observations of learned members throw an interesting question of "genuinety" of contract. What are the tests could be to ascertain ?
From India, Bangalore
From India, Bangalore
Hi Kumar
There is no hard and fast rule on what is genuine.
But courts will see if the contractor is an independent contractor who is providing a service or is a front for the employer and is just there to prevent the workers from getting fair wages and rights.
Generally we try and follow Sec 10 of Contract Labour Act,
also :
- No direct interference in selection of the workers
- No involvement in disciplinary action, leave approvals, etc.
- No direct control on the workers by PE (except for quality verification and safety matters)
- Skill trainings, etc provided by Contractor not by PE
- Attendance, Salary Sheet, payment etc is done by the contractor alone and not directly or indirectly done by the PE (eg using the PE's software to make salary registers, etc)
We also try and ensure that the contractor has a proper office and shop & Establishment license to show that it is really an independent business.
From India, Mumbai
There is no hard and fast rule on what is genuine.
But courts will see if the contractor is an independent contractor who is providing a service or is a front for the employer and is just there to prevent the workers from getting fair wages and rights.
Generally we try and follow Sec 10 of Contract Labour Act,
also :
- No direct interference in selection of the workers
- No involvement in disciplinary action, leave approvals, etc.
- No direct control on the workers by PE (except for quality verification and safety matters)
- Skill trainings, etc provided by Contractor not by PE
- Attendance, Salary Sheet, payment etc is done by the contractor alone and not directly or indirectly done by the PE (eg using the PE's software to make salary registers, etc)
We also try and ensure that the contractor has a proper office and shop & Establishment license to show that it is really an independent business.
From India, Mumbai
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January'14 to June'14- Contract Labours.pdf
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