Legal Compliances required for the Staffing Industry Page 14
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Legal Compliances required for the Staffing Industry - Page 14

rajanassociates - Member Since: Nov 2007
IMPORTANT ISSUES IN CONTRACT STAFFING INDUSTRY -F & F SETTLEMENT


Dear All


The essence of compliance of Section 25 F of the Industrial Disputes Act has been made clear by the Supreme Court of India in the reported case of Pramod Jha & others Vs State of Bihar reported in 2003(3) SBR 617. To quote the very words of the Supreme Court it has been held that

“the underlying object of Section 25 F[ the retrenchment provision in the Industrial Disputes Act] is two fold. Firstly, retrenched employee and must have one month's time available at his disposal to search for alternative employment, and so, either he should be given one months notice of the proposed termination or he should be paid wages for the notice period. Secondly the worker must be paid retrenchment compensation at the time of retrenchment, or before, so that once having been retrenched there should be no need for him to go to his employer demanding retrenchment compensation and the compensation so paid is not only a reward earned for his previous services rendered to the employer but is also a sustenance to the worker for the period which may be spent in searching for another employment."

Retrenchment can be simply termed as termination .Two points therefore emerge ;

Firstly, terminated Contract Staffing employee must have one month's time available at his disposal to search for alternative employment, and so, either he should be given one months notice of the proposed termination or he should be paid salary for the notice period.

Secondly the Contract Staffing Employee must be paid retrenchment compensation at the time of retrenchment, or before, so that once having been retrenched there should be no need for him to go to the Contract Staffing Company demanding retrenchment compensation and the compensation so paid is not only a reward earned for his/her previous services rendered to the Contract Staffing Company but is also a sustenance to the Contract Staffing Employee for the period which may be spent in searching for another employment.


With Regards
V.Sounder Rajan ,
VS Rajan Associates, Advocates and Notaries & Legal Consultants
No.27, Ist Floor, Singapore Plaza,
No.164, Linghi Chetty Street,
Chennai - 600 001.
E-mail : rajanassociates@eth,net,
Off : 044-42620864, 044-65874684,
Mobile : 9840142164-9025792684-9025792634

rajanassociates - Member Since: Nov 2007
Sub: Central Minimum Wages

In view of the fact that Minimum Wages have a bearing on the Contract Staffing Industry please see Latest central wages for the latest revision .You get the downloads in the post of Major (Retired) D Bhushan Rao.
Thanks to Major.
rajanassociates

rajanassociates - Member Since: Nov 2007
IMMEDIATE ISSUES FOR CONTRACT STAFFING ENTITIES


What are the circumstances in which the Central Government can prohibit the employment of Contract Labour under CLRA ?

Prohibition
Apart from the regulatory action under the Contract Labour (Abolition Regulation )Act CLRA provides the Authority , the "appropriate Government" under Sec 10 (1) after consultation with the Central or State Board employing agency to prohibit any establishment in an Process operation or other work. Such restrictions are often adopted on following these criteria .

if the work is in the nature of perennial;
if the work incidental or necessary for the work of a Operation;
if the work sufficient to employ a significant number the whole time workers;
if the work is usually done through periodic Workers at this factory, or a similar setting.

The Central Government on the recommendations of Central Advisory Board has prohibited employment of contract labor in various operations and categories of jobs in different establishments. These details are available by checking up the Notifications.

With Regards

V.Sounder Rajan
VS Rajan Associates,
Advocates & Notaries & Legal Consultants
No.27, Ist Floor, Singapore Plaza,
No.164, Linghi Chetty Street,
Chennai - 600 001.
E-mail : rajanassociates@eth,net,
Off : 044-42620864, 044-65874684,
Mobile : 9840142164-9025792684-9025792634

rajanassociates - Member Since: Nov 2007
ESI Coverage for Disabled Employees. Pls see the post http://www.citehr.com/108074-esi-coverage-disabled-employees.htm rajanassociates

rajanlawfirm - Member Since: Nov 2007
Certain important provisions which Payroll of a Staffing Company may over look under ESI Act

Legal provisions

Section 72

Section 72 of the Act, places a bar upon the powers of an employer with regard to reduction of wages of an employee for reasons of his liability to pay contribution.

Section 73

Under Section 73, an employer cannot dismiss or punish an employee during the period of his certified sickness etc. Contravention of these provisions attracts penalties provided under Section 85 of the Act.

Many a times the Clients report Sick cases as absconding leading to legal complication .

Regulation 97

Regulation 97 permits an employer to discontinue or reduce benefits payable to his employees under conditions of their service which .are similar to the benefits conferred by the Act, to the extent specified below, namely

a) From the date of the commencement of the first benefit period following the Appointed Day for his factory or establishment -

*Sick leave on half pay to the full extent;
*Such proportion of any combined general purposes and sick leave on half pay as may be assigned as a sick leave but in any case not exceeding 50 per cent of such combined leave.

b) Any maternity benefits granted to a woman employee to the extent to which such a woman employee may become entitled to the Maternity Benefit under the ESI Act.

Where an employee avails himself/herself of any leave from the employer for sickness, maternity or temporary disablement, the employers shall be entitled to deduct from the leave salary of the employee the amount of benefit to which he/she may be entitled under the Act for the corresponding period.

It is only when a workman actually obtains or receives cash benefit under the ESI Scheme that the employer can exercise his right to make a suitable deduction from the wages due to him by way of leave salary.

rajanlawfirm

rajanassociates - Member Since: Nov 2007
Gratuity Entitlement for Contract Staff.

Dear Friends

Recently Mr Justice K.Chandru of the Madras High Court -Madurai Bench in the matter of Special Officer-Srirangam Co-operative Urban Bank Ltd has held that every Employee who has worked in an organization for five or more years is entitled for Gratuity irrespective of the following:

superannuation;

retirement;

resignation;

death;

disablement ; or

any other terminology used by the Employer to send the Employee out of service.


The only exception is under Section 4 (6) of the Payment of Gratuity Act which enabled the Employer to forfeit the Gratuity under certain circumstances and by following a specified procedure if the Employee had not been allowed to retire or reached the age of superannuation.


Our understanding of the verdict on its application in the Contract Staffing Industry invocation of Sec 4 (6)of the Payment of Gratuity Act may be totally difficult is because of the Contract Staff being deployed with a Client


Consequently the entitlement for Gratuity of the Contract Staff cannot be denied on any account.


With Regards

V.Sounder Rajan
VS Rajan Associates,
Advocates & Notaries & Legal Consultants
No.27, Ist Floor, Singapore Plaza,
No.164, Linghi Chetty Street,
Chennai - 600 001.
E-mail : rajanassociates@eth,net,
Off : 044-42620864, 044-65874684,
Mobile : 9840142164-9025792684-9025792634

rajanlawfirm - Member Since: Nov 2007
Section 4(6)(b) in The Payment Of Gratuity Act, 1972 is extracted below:

(b) the gratuity payable to an employee may be wholly or partially forfeited
(i) if the services of such employee have been terminated for his riotous or disorderly conduct or any other act violence on his part, or
(ii) if the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment.

The termination has to be done after conduct of a Domestic Enquiry by appointing an Enquiry Officer.In the Contract Staffing Industry conduct of a Domestic Enquiry is next to impossible.Therefore Section 4(6)(b) in The Payment Of Gratuity Act, 1972 literally becomes inapplicable.

rajanlawfirm

rajanlawfirm - Member Since: Nov 2007
Sub: Non Payment of Salary-Illegal Deduction from Salary of Contract Staff

Dear Friends

The Contract Staffing Industry may note that under the Payment of Wages Act, 1936 in case of delay in payment of wages or unlawful deductions in Salary of the Contract workers there is a remedy under Section 15 of the Payment of Wages Act, 1936 which is extracted below:

15. Claims arising out of deductions from wages or delay in payment of wages and penalty for malicious or vexatious claims -

(1) The State Government may by notification in the Official Gazette appoint a presiding officer of any Labour Court or Industrial Tribunal constituted under the Industrial Disputes Act 1947 (14 of 1947) or under any corresponding law relating to the investigation and settlement of industrial disputes in force in the State or any Commissioner for Workmen's Compensation or other officer with experience as a Judge of a Civil Court or as a Stipendiary Magistrate to be the authority to hear and decide for any specified area all claims arising out of deductions from the wages or delay in payment of the wages of persons employed or paid in that area including all matters incidental to such claims :

Provided that where the State Government considers it necessary so to do it may appoint more than one authority for any specified area and may by general or special order provide for the distribution or allocation of work to be performed by them under this Act.

(2) Where contrary to the provisions of this Act any deduction has been made from the wages of an employed person or any payment of wages has been delayed such person himself or any legal practitioner or any official of a registered trade union authorised in writing to act on his behalf or any Inspector under this Act or any other person acting with the permission of the authority appointed under sub-section (1) may apply to such authority for a direction under sub-section (3) :

Provided that every such application shall be presented within twelve months from the date on which the deduction from the wages was made or from the date on which the payment of the wages was due to be made as the case may be :

Provided Further that any application may be admitted after the said period of twelve months when the applicant satisfies the authority that he had sufficient cause for not making the application within such period.

(3) When any application under sub-section (2) is entertained the authority shall hear the applicant and the employer or other person responsible for the payment of wages under section 3 or give them an opportunity of being heard and after such further inquiry (if any) as may be necessary may without prejudice to any other penalty to which such employer or other person is liable under this Act direct the refund to the employed person of the amount deducted or the payment of the delayed wages together with the payment of such compensation as the authority may think fit not exceeding ten times the amount deducted in the former case and not exceeding twenty-five rupees in the latter and even if the amount deducted or the delayed wages are paid before the disposal of the application direct the payment of such compensation as the authority may think fit not exceeding twenty-five rupees :

Provided that no direction for the payment of compensation shall be made in the case of delayed wages if the authority is satisfied that the delay was due to -

(a) a bonafide error or bonafide dispute as to the amount payable to the employed person or

(b) the occurrence of an emergency or the existence of exceptional circumstances such that the person responsible for the payment of the wages was unable though exercising reasonable diligence to make prompt payment or

(c) the failure of the employed person to apply for or accept payment.

(4) If the authority hearing an application under this section is satisfied -

(a) that the application was either malicious or vexatious the authority may direct that a penalty not exceeding fifty rupees be paid to the employer or other person responsible for the payment of wages by the person presenting the application; or

(b) that in any case in which compensation is directed to be paid under sub-section (3) the applicant ought not to have been compelled to seek redress under this section the authority may direct that a penalty not exceeding fifty rupees be paid to the State Government by the employer or other person responsible for the payment of wages.

(4A) Where there is any dispute as to the person or persons being the legal representative or representatives of the employer or of the employed person the decision of the authority on such dispute shall be final.

(4B) Any inquiry under this section shall be deemed to be a judicial proceeding within the meaning of sections 193 219 and 228 of the Indian Penal Code (45 of 1860).

(5) Any amount directed to be paid under this section may be recovered -

(a) if the authority is a Magistrate by the authority as if it were a fine imposed by him as Magistrate and

(b) if the authority is not a Magistrate by any Magistrate to whom the authority makes application in this behalf as if it were a fine imposed by such Magistrate.

There is also a provision for class action under Section 16 of the Payment of Wages Act, 1936 which is also extracted below:

16. Single application in respect of claims from unpaid group -

(1) Employed persons are said to belong to the same unpaid group if they are borne on the same establishment and if deductions have been made from their wages in contravention of this Act for the same cause and during the same wage-period or periods or if their wages for the same wage-period or periods have remained unpaid after the day fixed by section 5.

(2) A single application may be presented under section 15 on behalf or in respect of any number of employed persons belonging to the same unpaid group and in such case every person on whose behalf such application is presented may be awarded maximum compensation to the extent specified in sub-section (3) of section 15.

(3) The authority may deal with any number of separate pending applications presented under section 15 in respect of persons belonging to the same unpaid group as a single application presented under sub-section (2) of this section and the provisions of that sub-section shall apply accordingly.

In case the Employer delays the payment of Salary or F & F the aggrieved Employee will normally send a demand or a Legal Notice and the Contract Staffing Company would need to comply with the demand to avoid the Legal proceedings .On failure it would be followed up with an application to the Local Appropriate Authority under the Payment of Wages Act as extracted below:

Form of Individual Application
[See sub-section (2) of section 15 of the Payment of Wages Act]

In the Court of the Authority appointed under the Payment of Wages Act, 1936 (4 of 1936) for ……………….. area.
Application No. ……….. of …….


Between A.B.C. ………………………………….. Applicant (through a legal practitioner/an official of …………………………….. which is a registered Trade Union.)
And X.Y.Z………………………………………………………opposite party:
The applicant states as follows:
1. A.B.C. is a person employed in the/on the factory/railway/industrial establishment entitled and resides at ……………………………………..
The address of the applicant for the service of all notices and processes is:
…………………………………………………………………………………
2. X.Y.Z., the opposite party, is the person responsible for the payment of his wages under section 3 of the Act, and his address for the service of all notices and processes is:…………………………………………………………………………………..
3. (1) The applicant’s wages have not been paid for the following wage-period(s)………………………………….(give dates)
Or A sum of Rs…………….. has been unlawfully deducted from his wages of amount for the wage-period(s) which ended on ……………… (give dates)
(2) [Here give any further claim or explanation].

4. The applicant estimates the value of the relief sought by him at the sum of Rs………………
5. The applicant prays that a direction may be issued under sub-section (3) of section 15 for –
(a) Payment of delayed wages as estimated or such greater or lesser amount as the Authority may find to be due.
Or Refund of the amount illegally deducted.
(b) Compensation amounting to ………………………
The Applicant certifies that the statement of facts contained in this application is to the best of his knowledge and belief accurate.

Signature or thumb impression of the
employed person, or legal practitioner or official
of a registered trade union duly authorized.


There is also a provision for Group action as per the following format :


Form of Group Application
[See sub-section (2) of sections 15 and 16 of Payment of Wages Act]

In the Court of the Authority appointed under the Payment of Wages, Act, 1936 (4 of 1936) for ………………….. area

application No………………… of …………

Between A.B.C…………………………………………………
Applicants
A legal practitioner
(through a legal practitioner/an official of …………………………….. which is a registered union).

And X.Y.Z………………………………………………. Opposite Party.

The applicants state as follows:
1. [The applicants whose names and permanent addresses] appear in the attached schedule are persons employed in the /on the /factory/railway/insustrial establishment entitled and resides at …………………………….
The address of the applicants for service of all notice and processes is:
………………………………………………………………………….
2. X.Y.Z. the opposite party, is the person responsible for the payment of wages under section 3 of the Act, and his address for the service of all notices and processes is:
…………………………………………………………………………….
3. The applicants’ wages have not been paid for the following wage-period(s):
……………………………………………………………………………..
4. The applicants estimate the value of the relief sought by them at the sum of Rs…

5. The applicants pray that a direction may be issued under sub-section (3) of section 15 for:
(a) Payment of the applicants’ delayed wages as estimated……………. or such greater or lesser amount as the Authority may find to be due.
(b) Compensation amounting to…………….
The Applicants certify that the statement of facts contained in this application is, to the best of their knowledge and belief, accurate.

Signature of thumb impression of two of the
Applicants, or legal practitioner, or an official of
A registered trade union duly authorized.

SCHEDULE
__________________________________________________ ______________________
S.No. Name of Applicant Permanent Address
__________________________________________________ ______________________
1 2 3

rajanlawfirm

rajanassociates - Member Since: Nov 2007
Penal provisions the punishment for non compliance of the ESI Act ?


Dear All


The ESI Act contains adequate provisions to Employers for violating its provisions. The relevant penal sections, so far as violations in the matter of coverage, are sections 84, 85, 85-A, 86 and 86-A. The prosecutions under these sections can be filled in the criminal courts and adjudication of the same matter by Employee’s Insurance Court is not a condition precedent.

Contract Staffing Companies who qualify for coverage need to strictly adhere to this.When they are concentrating on securing more Business they tend to over-look the coverage under ESI Act.

The important provisions are these:-

Section 84: This section inter alia states that whoever, for the purpose of avoiding any payment to be made by himself under the said Act or enabling any other person to avoid any such payment, knowingly makes or causes to be made any false statement or false representations, shall be punishable with imprisonment for a term which may extend to six months or with fine not exceeding two thousand rupees, or with both.

Thus, if any employer, whose factory or establishment is coverable, knowingly makes a false representation / statement about the coverage, he is liable to be punished under this section.

Section-85: Under this section, inter alia, any person who is guilty of any contravention of or non-compliance with any of the requirements of the Act/rules/regulations, shall be punishable with imprisonment for a term which may extend to one year or with fine which may extend to four thousand rupees, or with both.


Section-85-A: This section lay down that if any person, already convicted for any offence punishable under the Act, commits the same offence, he shall be punished with imprisonment for a term which may extend to two years and with a fine of five thousand rupees.

Section-86: According to this section, the prosecution against employer or any other person shall be instituted with the previous sanction of the Insurance Commissioner or any other authorized officer of the Corporation. Under this provision, the power to sanction prosecution has been delegated to the Regional Directors and in charges of sub-regions.

A complaint for any offence under the Act has to be filed in writing in any court having jurisdiction but not inferior to that of Metropolitan Magistrate or First Class Judicial Magistrate.

This apart the Penal provisions of the Indian Penal Code which is stringent are there .It is found in Explanation 2 :

Section 405. Criminal breach of trust

Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or willfully suffers any other person so to do, commits "criminal breach of trust".

xxxx

Explanation 2

A person, being an employer, who deducts the employees' contribution from the wages payable to the employee for credit to the Employees' State Insurance Fund held and administered by the Employees' State Insurance Corporation established under the Employees' State Insurance Act, 1948 (34 of 1948), shall be deemed to have been entrusted with the amount of the contribution so deducted by him and if he makes default in the payment of such contribution to the said Fund in violation of the said Act, shall be deemed to have dishonestly used the amount of the said contribution in violation of a direction of law as aforesaid.


With Regards


VS Rajan Associates,
Advocates & Notaries & Legal Consultants
No.27, Ist Floor, Singapore Plaza,
No.164, Linghi Chetty Street,
Chennai - 600 001.
E-mail : rajanassociates@eth,net,
Off : 044-42620864, 044-65874684,
Mobile : 9840142164-9025792684-9025792634

sambasivakamasani - Member Since: Aug 2010
Dear I have a doubt regarding the following.

(6) any activity of the Government relatable to the sovereign functions of the Government including all the activities carried on by the departments of the Central Government dealing with defence research, atomic energy and space; or

Though it is incorporated, it is not gazetted and hence not operative. 1) Hon. Supreme Court is also kept this portion in abeyance. 2) Group of Ministers and Group of Secretaries differed and 3) In the Parliament it was presented that this portion is in operative. It is hanging in the fire because alternative remedy is not shown. Hence, please check and guide us.

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