rajanassociates
50

Dear All

Sub: Changes in Section 1(6) of the Payment of Wages Act-

Recently, the Government of India issued a Notification S.O. No.2260(E) dated 20th September, 2012 by which Section 1(6) of the Payment of Wages Act has been amended. The monthly ceiling on the wages is now Rs.18,000/- per month.

What is the effect of the amendment?

By this change, the payment of Wages Act provisions does not apply to those drawing Rs.18,000/- per month and above. Those below the ceiling alone will have the benefit of the provisions of the Payment of Wages Act.

Similar to what is done now by the Central Govt when the ceiling was increased the Andhra High Court in the matter of The Singareni Collieries ... vs The Singareni Collieries Company decided on 7 th July, 2011, the HON'BLE SRI JUSTICE K.C.BHANU has held as follows:

“Therefore, when the Central Government issued a Gazette notification extending all the provisions of the Act to all classes of persons, it can be made applicable to all the persons working in the first respondent company irrespective of their wages. While substituting the present provision under Section 1(6) of the Act, the statement of objects and reasons of the Amendment Act 1947 of 2003 is very clear that, the then existing ceiling of Rs.1,000/- per month was last revised to Rs.1,600/0 per month in 1982 and since then a large number of persons have gone out of the purview of the Act due to successive rise in wage levels resulting from rise in the cost of living, and with a view to cover more employed persons, it is proposed to enhance the wage ceiling from Rs.1,600/- per month to Rs.6,500/- per month. So, the legislature thought it fit to regulate the payment of wages to certain classes of persons as indicated in this Act so as to benefit certain classes of employed persons.”

Further His Lordship Mr Justice K.Chandru of the Madras High Court in a recent judgment of 28.02.2011 in the matter of P.Palani vs The District Manager on 28 February, 2011 has observed that:

“Under Section 1(6) of the Payment of Wages Act, the Act has been made applicable to persons who are drawing wages not exceeding Rs.10000/- per month which limit can be increased periodically at the interval of every five years. The said notification has been issued on 8.8.2007 by the Central Government's notification in S.O.1380 (E).”

With Regards

V.Sounder Rajan

Advocate -Labour & HR & Consumer Law Consultant -Chennai

Legal Consultant for Indian Staffing & Recruiting Industry

By appreciation, we make excellence in others our own property.

Voltaire

From India, Bangalore
rajanassociates
50

Subject: Need for Indian Labour Contract Law

Dear All

The topic ‘Does India require faster Labour Law Reforms ” is a much debated topic at every Global and Indian Contract Staffing Forum.

Recently in the October 2012 in the Annual conference of the Indian staffing Federation in their Indian Staffing Industry Research Paper 2012 the items where specific reforms are required has been outlined .In fact the need for adopting the The Private Employment Agency Convention of International Labour Organisation (Convention No. 181 of 1997) was raised in the same document. By adopting the The Private Employment Agency Convention of International Labour Organisation (Convention No. 181 of 1997) it will be a step forward in giving Statutory recognition to the Contract Staffing Industry .

Adapting and adopting Indian Laws to International Conventions has been an ongoing process .It is a simple legislative process .But adopting The Private Employment Agency Convention of International Labour Organisation (Convention No. 181 of 1997) will have serious resistance from the Trade Unions.

Everyone echoes that India should follow the China example in Economic reforms and the path of globalization .Then without waiting for the adoption of The Private Employment Agency Convention of International Labour Organisation (Convention No. 181 of 1997) we can just replicate the Labor Contract Law (LCL) which was enacted by the Chinese Parliament during 2008.The Chinese Political system modeled on the socialist pattern has enacted a Labor Contract Law (LCL) and adopting a similar one in India may not be difficult for the Government to convince the Trade Unions . The Trade Unions will support the move as it contains many pro-labour provisions and provides better bargaining strength for the Unions .

The further reason for the delay for India to implement the reforms in the Labour Law sphere is due to the fact that changes in Laws are to be brought about by the Centre for the Central acts and the respective State Governments for the State laws.This is a time consuming process. Before making any change the stake holders have to be consulted. It is a long drawn process .It would be better to start the process by enacting a similar law as done in China .For enacting this law the Contract Labour (Regulation & Abolition ) Act has to be either amended suitably or a New law enacted on the Chinese model .

Who can be the movers for enacting the Indian Labor Contract Law (ILCL).Definitely it will be the Business Associations and each of the Indian Staffing companies in India need to move the Government to enact a special law. The Association and Federations of Employers can take up this cause as they are the ultimate Principal Employers who will employ the Contract Labour.

To narrate the history when the Chinese Law was enacted the Chinese legislature during March 2006 launched the public consultation process for its draft Labor Contract Law. By April the legislators received 191,849 responses, a majority of them from workers. Meanwhile, foreign investors and commercial groups also studied the draft law and submitted their comments. The process included recommendations from the following bodies:

European Union Chamber of Commerce in China (EUCCC)

American Chamber of Commerce in Shanghai (ACCS)

U.S China Business Council

The first two largest foreign investors’ organizations in China and both of them submitted recommendations and opinion papers on the Draft Labour Contract Law to the Legal Affairs Committee of the Standing Committee of the National People's Congress.ACCS is said to represent over 1,300 corporations, including 150 Fortune 500 companies and the big names include Dell, Ford, General Electric, Microsoft and Nike. EUCCC in China represents more than 860 members. The U.S.-China Business Council represents 250 U.S. companies doing business across all sectors in China.

In India the Trade Unions have more stakes in Labour Law legislative process more than the Industry or its Association and Forum. Therefore the whole legislative process hinges on Trade Union acceptance /consent. The Association Federation would need invite the Top Trade Union Leaders of the Country for a dialogue on a Draft Labour Contract Law to be drafted by the Federation .This needs to be done on an emergent basis

Until the reforms are implemented Staffing business in India have to operate within the existing parameters of labour laws. The Business and legal team of every Staffing Company would need to tune operations to the existing provisions and help the business team to operate in an optimum manner within the prevalent labour law frame work without incurring additional cost till the reforms are implemented. This is where the success of any Staffing entity is.

With Regards

V.Sounder Rajan

Advocate -Labour & HR & Consumer Law Consultant -Chennai

Legal Consultant for Indian Staffing & Recruiting Industry

From India, Bangalore
rajanassociates
50

Dear All

Recently there was a fur ore on the Employees' Provident Fund Organisation(Ministry of Labour & Employment, Govt. of India)Head Office Dated 30 Th November 2012 internal instructions were given for Assessment under Section 7 A of the EPF Act .

That part of the Circular which has serious impact on the Payrolling in the Contract Staffing Industry is the following:

SPLITTING OF WAGES - Basic wages by its own definition encompasses all the payments except the specified exclusions. All such allowances which are ordinarily, necessarily and uniformly paid to the employees are to be treated as part of the basic wages. The confusion in definition of wages (and hence the issue of splitting of wages) primarily arises from the expression "commission or any other similar allowance payable to the employee" in Section 2(b) (ii) of the Act as "commission" and "any other similar allowance" are read as two separate expressions and hence "any other allowance" is read as an omnibus exclusion, thereby encouraging the subterfuge of splitting of wages to exclude the PF liabilities.

The expression "commission or any other similar allowance payable to the employee" is one continuous term meaning commission or any other "commission" like allowance by whatever nomenclature referred. Thus "basic wages" is subject to exclusions expressly referred to in the above definition and no other.

These instructions were drastic thereby giving a free hand to the Department to calculate contributions on the gross salary instead of basic plus DA including all or any allowance by whatever name it is called.

Fortunately on 14-12-2012 news report in the Hindu reports that the Hon'ble Minister for Labour has assured that the Circular is kept in abeyance. This is good new news for the Principal Employers and Contract Staffing players. As of now there is nothing to worry.

rajanassociates

From India, Bangalore
sambasivakamasani
24

(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 [U][B]defence research, atomic energy and space; I request the respectable VS Rajan Associates, to check this particular para that it is not gazetted and hence not in operation. Against one of the RTI queries Labour department clarified that it is not gazetted. And in the First para itself, it is said that it will come into operation from the date of gazettification. Pl. check and confirm. Regards.
From India, Nellore
rajanassociates
50

Dear HR Friends It was informed earlier that the EPF Circular of 30 th November 2012 has been kept in abeyance.The Abeyance Circular is attached for reference. rajanassociates
From India, Bangalore
Attached Files (Download Requires Membership)
File Type: pdf 2012_Circular_7a Proceedings_kept in abeyance_18Dec2012.pdf (36.0 KB, 34 views)

milindmali
1

Dear Seniors, I am working in Pvt Sector having external union, since last few months repeately demana for Overtime to be started for workers are being raised officially by the union leaders. We have optimum work force and need not require overtime by a workman. Hence please guide me how to handle the issue. And can stay worker for Overtime every day at least 3-4 hrs?
From India, Pune
rajanassociates
50

Extracting the News report in CLR Posted in Labour Law :News on May 28, 2013 which is also reported in the Times of India of even date:-
The Employees Provident Fund Organization(EPFO) readying to re-notify a new definition of “compensation” that will include all allowances. Currently, employers contribute only 12% of the basic salary and dearness allowance, which in fact is not paid by most companies currently, towards their share of “matching” provident fund and the Employees Pension Scheme contribution. Hence, for several thousands of employees, the basic salary actually remains constant, while increments are passed by way of enhanced or new allowances. In most cases, the tax liability for the employee goes up due to the salary hike — and companies earn tax credits on salary-related expenses over the same — however the statutory provident fund contribution remains unchanged in most cases.
As a result of the above stated logic, EPFO had notified similar changes last year. They

From India, Bangalore
RedStarGroup
8

Dear Friend,
Kindly contact us for any Disciplinary matters, Compliance, Industrial Dispute or HR Process related query, we assure you for best solution on same.
Regards,
For Red Star Group
9910503928

From India, New Delhi
Attached Files (Download Requires Membership)
File Type: ppt Red Star Group -Profile (Final).ppt (1.52 MB, 89 views)

varadan sounder rajan
1

Dear Friends

We are starting this multi - part over view of Contract Staffing law in the light of judicial precedents and the Contract Labour (Abolition and Regulation Act 1970) sure it will be informative for the Indian Contract Staffing Industry players .

Many Staffing Industry players are not aware of the earliest Case Law in Outsourcing as decided by the Indian Supreme Court.

Earliest Apex Court decision on Out-sourcing-

Way back in 1968 the case law was laid down by the Hon’ble Supreme Court in the matter of GHATGE & PATIL CONCERN\'S EMPLOYEES\' UNION Vs. GHATGE & PATIL (TRANSPORTS) PRIVATE LTD. & ANR.It is a very interesting case .

The facts are like this:-

GHATGE & PATIL (TRANSPORTS) PRIVATE LTD the Company carried on the business of transport and removal of goods by road. It owned a fleet of trucks and employed drivers and cleaners to run them. In 1963, finding difficulty in observing the provisions of the Motor Transport Workers Act 1961 GHATGE & PATIL (TRANSPORTS) introduced a scheme whereby the trucks, instead of being run by the them were hired out to contractors at a fixed rate per mile. It is the first reported case of organized Out-sourcing in India.To aid the process of out-sourcing employees of the company who were engaged in running the trucks resigned their jobs and most of them who had been erst-while drivers became contractors under the scheme. This Out-sourcing move was resisted by the Union GHATGE & PATIL CONCERN\'S EMPLOYEES\' UNION.The Union raised a dispute asking for the reinstatement of the ex-employees who had been given work on contract basis. The matter was agitated in the Tribunal .Th e Tribunal held that the contract system could not be said to be an unfair labour practice, for the ex-employees were never coerced or forced to resign their jobs, and they got more benefits from the contract system than from their original contract of employment.

In appeal to the Apex Court the GHATGE & PATIL CONCERN\'S EMPLOYEES\' UNION contended that the ex-employees of the company continued to be workmen notwithstanding that they were posed as independent contractors and the beneficent legislation conceived in the interests of transport workers was being set at naught by the Management and that the setting up of the contract system amounted to unfair labour practice.

In our next part we will deal with the manner in which the Hon\'ble Bench of the Apex Court steered the matter for a landmark resolution when the very word \"out-sourcing\" was unknown.


From India, Pune
Raj Kumar Hansdah
1426

Dear V.S. Rajan
I have no words to express my sincere appreciation on your contribution !!!
Its a gem !!!
"Way back in 1968 the case law was laid down by the Hon’ble Supreme Court in the matter of GHATGE & PATIL CONCERN\'S EMPLOYEES\' UNION Vs. GHATGE & PATIL (TRANSPORTS) PRIVATE LTD. & ANR.It is a very interesting case ."
attribution https://www.citehr.com/285737-legal-...#ixzz2k46LotSD
I am waiting for the next installment of your post.
The Hon'ble Supreme Court has been so futuristic and amazing in its judgement on an issue which was unknown at that time but would become so ubiquitous fifty years later !!!
Warm regards.

From India, Delhi
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