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

Advocates & Notaries & Legal Consultants

E-mail : rajanassociates@eth,net,

-9025792684-9025792634
27th October 2011 From India, Bangalore

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
27th October 2011 From India, Madras
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
29th October 2011 From India, Madras
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

Advocates & Notaries & Legal Consultants

E-mail : rajanassociates@eth,net,

-9025792684-9025792634
3rd November 2011 From India, Bangalore
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.
5th November 2011 From India, Nellore
The Supreme Court in the matter of State Of U.P vs Jai Bir Singh on 5 May, 2005 comprising of the Bench of Hon'ble Justices N S Hegde, K.G Balakrishnan, D Dharmadhikari, A Kumar had to say on the definition of `industry' by including within its meaning some activities of the government and excluding some other specified governmental activities and `public utility services' involving sovereign functions like this :

"In response to the Bangalore Water Supply and Sewerage Board case, the Parliament intervened and substituted the definition of `industry' by including within its meaning some activities of the government and excluding some other specified governmental activities and `public utility services' involving sovereign functions. For the past 23 years, the amended definition has remained unenforced on the statute book. The government has been experiencing difficulty in bringing into effect the new definition. Issuance of notification as required by sub-section 2 of sub-section 1 of Amendment Act, 1982 has been withheld so far. It is, therefore, high time for the court to reexamine the judicial interpretation given by it to the definition of `industry'. The Legislature should be allowed greater freedom to come forward with a more comprehensive legislation to meet the demands of employers and employees in the public and private sectors. The inhibition and the difficulties which are being exercised by the legislature and the executive in bringing into force the amended Industrial Law, more due to judicial interpretation of the definition of `industry' in the Bangalore Water Supply and Sewerage Board case, need to be removed. The experience of the working of the provisions of the Act would serve as a guide for a better and more comprehensive law on the subject to be brought into force without inhibition.

The word industry seems to have been redefined under the Amendment Act keeping in view the judicial interpretation of the word industry in the case of Bangalore water . Had there been no such expansive definition of industry given in Bangalore Water case, it would have been open to the parliament to bring in either a more expansive or a more restructive definition of industry by confining it or not confining it to industrial activities other than sovereign functions and public welfare activities of the State and its departments. Similarly, employment generated in carrying on of liberal professions could be clearly included or excluded depending on social conditions and demands of social justice. Comprehensive change in law and/or enactment of new law had not been possible because of the interpretation given to the definition of industry in Bangalore Water case. The judicial interpretation seems to have been the one of the inhabiting factors in the enforcement of the amended definition of the Act for the last 23 years.

In the Bangalore Water case not all the judges in interpreting the definition clause invoked the doctrine of noscitur-a-sociis. We are inclined to accept the view expressed by the six judges' Bench in the case of the Management of Safdarjung Hospital, (supra) that keeping in view the other provisions of the Act and words used in the definition clause, although profit motive is irrelevant, in other to encompass the activity within the word industry the activity must be `analogous to trade or business in a commercial sense'. We also agree that the mere enumeration of `public utility services' in section 2(n) read with the First Schedule should not be held decisive. Unless the public utility service answers the test of it being an `industry' as defined in clause (j) of section 2, the enumeration of such public utility service in the First Schedule to the Act would not make it an `industry'. The six judges also considered the inclusion of services such as hospitals and dispensaries as public utility services in the definition under section 2(n) of the Act and rightly observed thus:-

``When Parliament added the sixth clause under which other services could be brought within the protection afforded by the Act to public utility services, it did not intend that the entire concept of industry in the Act, could be ignored and anything brought in. Therefore, it said that on industry could be declared to be a public utility service. But what could be so declared had to be an industry in the first place.''

The decision in the case of Management of Safdarjung Hospital (supra) was a unanimous decision of all the six judges and we are inclined to agree with the following observations in the interpretation of the definition clause:-

``But in the collocation of the terms and their definitions these terms have a definite economic content of a particular type and on the authorities of this Court have been uniformly accepted as excluding professions and are only concerned with the production, distribution and consumption of wealth and the production and availability of material services. Industry has thus been accepted to mean only trade and business, manufacture, or undertaking analogous to trade or business for the production of material goods or wealth and material services.''

The six judges unanimously upheld the observations in Gymkhana Club case (supra):-

``... before the work engaged in can be described as an industry, it must bear the definite character of `trade' or `business' or `manufacture' or `calling' or must be capable of being described as an undertaking resulting in material goods or material services''.

In construing the definition clause and determining its ambit, one has not to lose sight of the fact that in activities like hospitals like hospitals and education, concepts like right of the workers to go on `strike' or the employer's right to `close down' and `lay off' are not contemplated because they are services in which the motto is `service to the community'. If the patients or students are to be left to the mercy of the employer and employees exercising their rights at will, the very purpose of the service activity would be frustrated.

We are respectfully inclined to agree with the observation of Shri Justice P.B. Gajendragadkar [AIR 1964 SC 903 at pg. 906] in the case of Harinagar Cane Farm (supra):-

``As we have repeatedly emphasized, in dealing with industrial matters, industrial adjudication should refrain from enunciating any general principles or adopting any doctrinaire considerations. It is desirable that industrial adjudication should deal with problems as and when they arise and confine its decisions to the points which strictly arise on the pleadings between the parties. .....''

We conclude agreeing with the conclusion of the hon'ble judges in the case of Hospital Mazdoor Sabha and Ors. (supra):-

``Though section 2(j) used words of very wide denotation, a line would have to be drawn in a fair and just manner so as to exclude some calling service or undertakings. ...''

[Emphasis supplied]

This Court must, therefore, reconsider where the line should be drawn and what limitations can and should be reasonably implied in interpreting the wide words used in section 2(j). That no doubt is rather a difficult problem to resolve more so when both the legislature and executive are silent and have kept an important amended provision of law dormant on the statute book.

We do not consider it necessary to say anything more and leave it to the larger Bench to give such meaning and effect to the definition clause in the present context with the experience of all these years and keeping in view the amended definition of `industry' kept dormant for long 23 years. Pressing demands of the competing sectors of employers and employees and the helplessness of legislature and executive in bringing into force the Amendment Act compel us to make this reference.

Let the cases be now placed before Hon'ble Chief Justice of India for constituting a suitable larger Bench for reconsideration of the judgment of this Court in the case of Bangalore Water, (supra)."



rajanlawfirm
5th November 2011 From India, Madras
Dear All,
Sub Splitting up of Minimum Wages -EPF Contribution.
Mr B .Murugavel Manager HR Hyundai Hysco India has sent this E Mail to us on 31-10-2011 which we would like to share.
"All of you aware that, EPF Appellate tribunal is the right forum to decide on EPF contribution and grievances related thereof. The Appellate given clear verdict that, minimum wages can be split as allowances and the authority has no power to question or equate the definition basic wages as per EPF and Minimum/Payment of Wages Act. Hence, there is no need to worry about interim stay and review thereof."
Attached is the News item with the case reference.
rajanlawfirm
6th November 2011 From India, Madras
Attached Files
File Type: pdf EPF-Tribunal.pdf (144.2 KB, 83 views)
For the purpose of EPF, it is debated whether we can split the minimum wage and DA or ADA or living Allowance, and others, but from Labour Authority,s point of view, minimum wage is the bearest minimum and not possible to split. Splitting, I mean, other allowances such as HRA, CA etc, but not minimum wage and living allowance. If you get into ingredients of minimum wage and splitting, it will be opening the pandora,s box. If minimum wage is allowed, each company works out its own minimum wage, which puts the worker in disadvantage in case of PF, bonus and other benefits. Regards.
6th November 2011 From India, Nellore
this is to inform that mr.prithviraj has received the salary for 15days rupees 7,500 and absconded without receiving the pay slip /with out writing his resignation letter.
the company is not liable to any misuse of company name if he does in the future as he already mis used his x company name during his work time.
. if you are coming to know that he is misusing the name plz do inform to
mr.prabhu advocate high court
legaldesk(at)sparkinfotech(dot).in
11th September 2012 From India, Bangalore
Dear All

Section 9 C was introduced in the Industrial Disputes Act Industrial Disputes (Amendment) Act, 2010 (No. 24 of 2010) a Grievance Redressal Machinery has been introduced by insertion of Section 9 C. We are being inquired whether the Section 9 C comes into effect after issue of a Notification the Section 9 C comes into effect .

We find that the wordings used in Section 9 C is self operative as is seen below and a further Notification may become superfluous as the very provision is clear :

Setting up of Grievance Redressal Machinery

9C. (1) Every industrial establishment employing twenty or more workmen shall have one or more Grievance Redressal Committee for the resolution of disputes arising out of individual grievances.

(2) The Grievance Redressal Committee shall consist of equal number of members from the employer and the workmen.

(3) The chairperson of the Grievance Redressal Committee shall be selected from the employer and from among the workmen alternatively on rotation basis every year.

(4) The total number of members of the Grievance Redressal Committee shall not exceed more than six:

Provided that there shall be, as far as practicable one woman member if the Grievance Redressal Committee has two members and in case the number of members are more than two, the number of women members may be increased proportionately.

(5) Notwithstanding anything contained in this section, the setting up of Grievance Redressal Committee shall not affect the right of the workman to raise industrial dispute on the same matter under the provisions of this Act.

(6) The Grievance Redressal Committee may complete its proceedings within thirty days on receipt of a written application by or on behalf of the aggrieved party.

(7) The workman who is aggrieved of the decision of the Grievance Redressal Committee may prefer an appeal to the employer against the decision of Grievance Redressal Committee and the employer shall, within one month from the date of receipt of such appeal, dispose off the same and send a copy of his decision to the workman concerned.

Further Section 9 C has already been Notified.

rajanassociates
13th September 2012 From India, Bangalore


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