manasilko Started The Discussion:
Hi,

Please provide your opinion on the below 2 cases:

Case 1:
If a company has an agreement with a vendor to provide contract labours for a 6 months contract, then is CLRA applicable on the IT firm. Does it need to take registration to have those contract labours.

Case 2:
If a company has an agreement with a vendor to provide contract labours for a 6 months contract, but these contract Labours are Full time Employees for the vendor. Then, is CLRA applicable on the IT firm. Does it need to take registration to have those contract labours.


Thanks in advance,
Mansi
Posted 16th May 2011 From India, Delhi
Dear Mr.Manasiko From the information provided by you, in both the cases, the CLRA Act is applicable
Posted 17th May 2011 From India, Madras
Thanks so much for the information. I needed to have more information on this. Thanks, Mansi
Posted 17th May 2011 From India, Delhi
Please note that there is NO relation of Employer and Employee between Principal Employer and contract labours. So resignation doesn’t require. Simply issue FORM 6 to Contractor.
Posted 18th May 2011 From India, Ahmadabad
dmc123 
As others have already stated, you need to have 20 or more workmen on contract for the applicability of CLRA Act including all other contractors. In that case you need to take registration under the Act and the contractors have to take a licence and comply with all applicable laws.
Posted 18th May 2011 From India, Pune
Hi Mansi,
In this case, the IT company is the 'Principal Employer' and the vendor is the 'Contractor'.
The CLRA is applicable to all institutions where more than 20 contract labour are hired. Some sections of the Act are relevant to the principal employer and some, in-fact most are applicable to the contractor.
The principal employer will have to register with the labour department of the state and obtain a registration certificate.
Based on the principal employer's registration certificate a Form V is issued to the contractor who in turn will apply to the labour department after paying certain fees per individual. The Form V of the contractor is to be submitted alongwith a copy of the principal employers registration certificate and proof of payment of fees/DD as required by the state labour department.
The contractor is then issued his license in about one months time. I'm sorry to state that the labour department is incorrigibly corrupt and will expect some compensation, if you are in a hurry. If you are not in a hurry, your UPC receipt will suffice till they issue the license, in due course.
The license is generally for one year and can be renewed. There is a small renewal fee and of course the departments gratification!!
I hope I have been able to help. If not you can either contact me on my mobile or email me :
Regards.
Colonel Gahlot
Proprietor 'TRURECRUIT' Placement Consultancy
9810081197 begin_of_the_skype_highlighting 9810081197 end_of_the_skype_highlighting
Posted 18th May 2011 From India, Delhi
Thanks everyone! How long is the contract labour hired for? Till the work is done or for a fixed time frame (e.g i year) What is the termination policy of these contract labours?
Posted 19th May 2011 From India, Delhi
Dear Manasilko
The period for which a contract labour is to be hired is need based and is the look out of the contractor and not that of the principal employer.
The contract labourers are to be terminated by the contractor and not by the principal employer. However, if the contract labourers are terminated by their employer(contractor), he has to comply with the provisions relating to payment of retrenchment compensation and notice pay in case the labourers had put in one year of continuous service. In case either chapter V-A or V-B of the Industrial Disputes Act 1947 is applicable to the contractor, then the procedure prescribed therein has to be followed
Posted 19th May 2011 From India, Madras
Thanks!

one more question-

If am employee is present on a fixed term contract then:
Q1) What should be the duration of the contract so that the employee cannot claim permanency
Q2) How many times should the contract be renewed so that the employee cannot claim permanency
Posted 20th May 2011 From India, Delhi
Dear Manasilko
I do not know in which State in India you are employed. Please tell me whether your State had passed any law relating to conferment of permanent status to workmen, if they work for a particular period of time or number of days.But there is no law passed by Parliament conferring permanent status to workmen if they work for a particular periof of time or number of days. In Tamilnadu there is a law passed by the State legislature which confers permanent status to workmen who have worked for 480 days in a period of 2 years with an employer. You would appreciate that that word "permanency" does not occur in the Industrial Disputes Act. If you give the information I requested, may be, I will be able to form an opinion on this issue
With regards
Posted 21st May 2011 From India, Madras
drmasq 
Dear Sir/Madam,
1. my opinion differs regarding case 2. These employees won't come under purview of the CLRA'70. In case of CLRA workmen engaged only for the job contract by appointment through Form-XIII of the CLRA are workmen under CLRA'70 or rules framed thereunder. For the employees of the contractors permanent roll, no re-appointment through Form-III is required.

2. Rgarding the CLRA applicability figure, 20 is for organisation coming under purview of CLRA central rules but i.r.o orgs under purview of CLRA State Rules, the figure is in most cases 10. It needs to be seen.

3. For dos' and donts' to minimise ir issues emanating from CLRA'70 workmen, please find an attachment for brush up.

Thanks & Regards

M.A.S.QADRI
Posted 21st May 2011 From India, Calcutta
Attached Files
Shared By Cite.Community Member "drmasq" For Public Download
File Type: pdf Dos' n Donts' for PE under CLR Act.pdf (266.4 KB, 196 views)
Dear Mr.M.A.S.Qadri
The second issue posed by Manasilko is "How many times should the contract be renewed so that the employee cannot claim permanency". Therefore can you please enlighten me as to whether employees who are on "fixed term contract" can claim permanency and if so what are the conditions to be fulfilled by them to claim permanency? Also, I would be much obliged if you could furnish information as to wheter there is any law which is applicable throught India or only in a particular State, which confers permanent status to workmen and if so under what circumstances
Posted 21st May 2011 From India, Madras
drmasq 
Dear Mr. V.Harikrishnan,
As per my opinion, permanency can not be legal if the job in which contract labour is engaged is not already abolished. Absorption can be claimed legally only if SECTION 10 has been envoked. the guideline is :

As per SECTION 10(1) THE APPROPRIATE GOVT. MAY…PROHIBIT EMPLOYMENT OF CONTRACT LABOUR IN ANY PROCESS, OPERATION OR OTHER WORK IN ANY ESTABLISHMETN..

SECTION 10(2)

RELEVANT FACTORS considered for prohibiting engagement of contract labour by concerned contract labour advisory boards are:

WHAT CONDITIONS OF WORK AND BENEFITS PROVIDED.
WHETHER THE PROCESS, OPERATION OR OTHER WORK IS INCIDENTAL TO, OR NECESSARY FOR THE INDUSTRY, TRADE, BUSINESS, MANUFACTURE OR OPERATION CARRIED ON IN THE ESTABLISHMENT.
WHETHER IT IS OF PERENNIAL NATURE.
WHETHER ORDINARILY DONE THROUGH REGULAR WORKMEN IN THAT OR SIMILAR ESTABLISHMENT.
WHETHER CONSIDERABLE NUMBER OF WHOLETIME WORKMEN REQUIRED.

Even after imposition of Section 10 there is no implicit requirement of automatic absorption of contract labour by the principal employer in the concerned establishment on issuance of notification by the appropriate Government under Section 10(1) prohibiting employment of contract labour in a given establishment. It needs to be seen that CL is not engaged after prohibition.

So, w.r.t. Manasilko's query "How many times should the contract be renewed so that the employee cannot claim permanency", i have to say that number of time of renewing a contract is not a factor. What we should see is whether the job may be abolished any time due to its nature? If the job is carried out for 240 days in preceding 12 months, it becomes of perennial nature. hence in such jobs, most precaution should be taken in engaging contract worker.

Even after abolition of a job from engaging cl, PE is not bound to absorb all workmen of the Contractor of that job if discontinued on abolition date.
Posted 22nd May 2011 From India, Calcutta
Dear Mr.M.A.S.Qadri
Manasilko's question was about employees on "fixed term contract" and not about "contract workers". I would request you to go through her post again. There is a lot of difference from an employee engaged on "fixed term contract" and a "contract worker". If you suggest that employees on "fixed term contract" are the same as "contract workers" please enlighten me on this issue based on legal provisions and Judgements of Honourable High Courts and/or Honourable Supreme Court.
Posted 22nd May 2011 From India, Madras
Thanks for the help!

if the employees cannot claim regularization then what is the clause of 240 days in the ID act?

Also, for the employees not falling in workman category of ID act, can they claim permanency in any case?

PS: The above discussion is for the fixed term contact employees
Posted 22nd May 2011 From India, Delhi
Dear Manasilko
Sections 25C, 25F, 25FF,25FFF,25N, of the Industrial Disputes Act 1947 uses the term "continuous service". The term "continuous service" is defined in section 25 B of the Industrial Disputes Act 1947. The word/term "permanency" is not at all used in the Industrial Disputes Act. The sections of the Industrial Disputes Act 1947 referred to by me imposes certain conditions for the employer to comply with before he either lays off his workmen or retrenches his workmen or closes his establishment. One of the condition is that a worker who has put in at least one year of "continuous service" is entitled to compensation at the rates specified. The liability to pay these compensation on the part of the employer and correspondingly the entitlement to get the compensation by the worker, specified in the Act is dependent not on the "permanency" of the worker, but on the worker having completed "one year of continuous service". How to reckon this "one year of continuous service" is indicated in section 25B of the Industrial Disputes Act. According to section 25C if a worker had worked for 240 in a period of twelve calendar months, he is deemed to have put in one year of continuous service. This some sort of a legal fiction in which a person who has not worked for one year is deemed to be in continuous service once he had worked for 240 days. Once the worker completes"one year of continuous service", he is entitled to the protection of Chapter V A or Chapter V B as the case may be. "Regularisation" or "permanency" are different issues not covered by the provisions of the Industrial Disputes Act 1947, though "regularisation" and "permanency" could be the subject matters of industrial dispute. The Industrial Disputes Act does not confer directly the rights of "regularisation" or "permanency". I would request you to go through the Judgment of Justice V.R.Krishna Iyer in Sundaramoney vs State Bank of India. This judgement elaborately deals with the consequences to the employer in case he does not pay retrenchement compensation to a worker who has put in more than one year of continuous service.
With regards
Posted 23rd May 2011 From India, Madras
Thanks for the useful information

For the employees who are on fixed term contract and do not come under workman definition in ID act. can they claim some bonus when their contract is terminated before the stated date in contract

Also, what checklist should be followed for the fixed term employees as per the indian contract act before giving them the contract
Posted 23rd May 2011 From India, Delhi
Dear Manasilko
An employee who is on fixed term contract and does not come within the definition of workman as defined under the I.D.Act 1947, may come within the definition of "employee" as defined under the Payment of Bonus Act 1965 section 2(13) as the definition of the term under the I.D.Act is different from the definition of the term employee under the P.B.Act. So apply this definition to the facts and you will get the answer. However, if the P.B.Act is not applicable to the employee the entitlement to get bonus has to be seen in the fixed term contract. I cannot enumerate all the issues that needs to be incorporated in a fixed term contract. The most important point is that it should specify the date on which the contract will come to an end. Further the usual clauses about the salary rates, the allowances, the place of employment, the liability for transfer if any, clauses relating to ESI and EPF as also the notice period for termination of the contract on either side has to be spefically stated in the contract. You may also add a clause that all other benefits that the regular employees get will not be automatically extended to him.
Posted 23rd May 2011 From India, Madras
Dear Mr Harikrishnan

Thank you for giving a clear exlplantion on the above two cases. I have a question for you. May I seek your advise on the same.

If an organisation has hired through a thirdparty service and the person is working as a deputy from that organisation for One or more number of years as contract employee, how the termination of services be considered by the employee as well as the employer?.

Thanking you in advance for your suggestions/advises.

Sumathi
Posted 23rd May 2011 From ,
Dear Ms.Sumathi
The employer is the contractor and in your case it is the third party services. As the organisation had not hired the person, it cannot also dismiss him. The organisation has to simply ask the third party to withdraw the services of the third person and to send a substitute if need be. It is the look out of the third party to provide the person, job with some other organisations. If the employee has any grievances he has to seek remedy from the third party.
Posted 23rd May 2011 From India, Madras
Dear Manasilko
It is a distinct possibility that the employee can claim permanency. I have not come across such instances. But as the period of engagement is fixed, the employer/employee relationship comes to an end on the appointed day and the employee may not succeed. For, it is an open term of the contract of employment that the worker cannot be continued beyond a particular day/date.
Posted 23rd May 2011 From India, Madras
Thanks so much!

Can you please inform what Labour law related checklist should a company follow before taking the following to minimise its business risk:

1. Contract Labour (other than the CLRA act adherence)
2. Taking fixed term employment contract employees
Posted 23rd May 2011 From India, Delhi
Dear Manasilko
In the case of contract labour (other than the CLRAadherence) ensure that the contractor discharges his liability under the EPF and ESI laws. Some of the employers ignore this aspect and get into trouble later. More over please go through the provisions of the CLR Act regarding the liability of the principal employer to pay the wages of the contract workers and recover it from the contractor later. The term "wages" is usually construed to refer to only the ordinary wages payable to the contract workers. But different High Court have interpreted the term "wages" occurring in the CLR Act in different ways. In one case a division bench the Honourable High Court of Madras had taken the view that the term "wages" as specified in the CLR Act includes gratuity payable under the Payment of Gratuity Act and had directed the principal employer to pay the gratuity to the contract workers and then recover the amount from the contractor. This is one of the risks to be taken care of while engaging contract labour. Another risk is the liability under the Employees Compensation Act, formerly known as the Workmens Compensation Act. The judicial authorities who decide claims for compensation under this Act usually fasten the liability to pay compensation on the principal employer, giving him the right to recover it from the contractor. If more than a couple of workmen are involved in the claim(s) then the liability of the employer would be very large. This is a contingency which has to be provided for.
In the case of fixed term employment contract employees also, the same issue could crop up, though as of now I have not come across any decided case laws, because fixed term employees are a new concept and phenomenon. If the Industrial Employment(Standing Orders) Act is applicable to your establishment, it is always advisable to incorporate "fixed term contract employees" also under the clause "classification of workmen", otherwise there is a distinct possibility that as this kind of engagement is not provided for in the certified standing orders, the management could not have employed workmen on fixed term contract and the alternative plea could be that such fixed term employees should be regarded as regular employees.
Posted 24th May 2011 From India, Madras
Thanks so much for the information!!

What does the following judgement mean

Reinstatement of person engaged on contractual basis would be illegal as it would not be retrenchment.The Harayana State Agriculture Marketing Board vs Subhash Chand & Anr. 2006 LLR 393.
Posted 25th May 2011 From India, Delhi
Dear manasilko
Before offering my views on the query raised I have to go through the entire judgment.Please inform me whether the judgment was delivered by the Honourable Supreme Court or the Honourable High Courts in which case please specify the High Court. A better option would be to upload the judgment if possible.
Posted 25th May 2011 From India, Madras
Hi,

The judgement is at the following link. Please lick it to open:

The Haryana State Agricultural Marketing Board Vs. Subhash Chand & Anr | Supreme Court Judgments: January, 2010 | Law Library | AdvocateKhoj


Thanks!
Posted 25th May 2011 From India, Delhi
Dear Manasilko

I read the entire judgment. This judgment had decided the applicability of Chapter V A and Chapter V B of the Industrial Disputes Act 1947 to workmen employed through a fixed term contract. The facts in summary was that Mr.Subhash Chand was appointed by the Haryana State Agriculture Marketing Board on contractual basis. The terms of appointment are contained in the judgment. One of the clauses of the terms of appointment is that “2.The period of engagement will be 89 days. “. Mr.Subash Chandra was terminated from service after a particular length of time. He raised an industrial dispute under the Industrial Disputes Act and challenged the termination on the ground that it amounted to “retrenchment” as defined under the Industrial Disputes Act 1947, and that he had worked for 356 days and that the management had not complied with the procedure laid down in Chapter V-A and/or Chapter V-B of the Industrial Disputes Act. On the issue of number of days worked, the contention of the management/employer is that Mr.Subash Chand had worked for only 208 days. The Labour Court held that the termination of Mr.Subash Chand was in violation of the provision of Section 25-G of the Act and also that the management took recourse to unfair labour policy. This view of the Labour Court was upheld by a Division Bench of the Punjab and Haryana High Court. Therefore the management had come before the Honourable Supreme Court.
The following two points were raised by the management before the Honourable Supreme Court.
(i) That the termination of Mr.Subash Chand was not “retrenchment” as defined under the Industrial Disputes Act, as he was engaged for a fixed period and therefore, according to section 2(oo)(bb) of the Industrial Disputes Act, his termination does not amount to retrenchment.
(ii) The management cannot be said to have taken recourse to unfair labour policy.
The Honourable Supreme Court agreed with the management and held that “A bare perusal of the offer of appointment clearly goes to show that the appointments were made on contract basis” and therefore the termination of Mr.Subash Chand is covered by section 2(oo)(bb) and is not retrenchment as defined under the ID Act." The Supreme Court had also held that the management had not committed any unfair labour practice.
The law laid down by the Honourable Supreme Court in this case is that if a worker is engaged on contract basis(i.e, an employment contract which specifies a period for which the employment will continue or the contract of employment if being not renewed after the period specified in the contract) and is subsequently terminated for the reasons specified in section 2(oo)(bb), it would not amount to retrenchment and chapter V-A or Chapter V-B of the ID Act will not apply.
The statement “Reinstatement of person engaged on contractual basis would be illegal as it would not be retrenchment” does not find a place in the entire judgment and may probably be given by the Editor of the Law Journal which published this judgement.
Posted 25th May 2011 From India, Madras
Dear Manasilko

I read the entire judgment. This judgment had decided the applicability of Chapter V A and Chapter V B of the Industrial Disputes Act 1947 to workmen employed through a fixed term contract. The facts in summary was that Mr.Subhash Chand was appointed by the Haryana State Agriculture Marketing Board on contractual basis. The terms of appointment are contained in the judgment. One of the clauses of the terms of appointment is that “2.The period of engagement will be 89 days. “. Mr.Subash Chandra was terminated from service after a particular length of time. He raised an industrial dispute under the Industrial Disputes Act and challenged the termination on the ground that it amounted to “retrenchment” as defined under the Industrial Disputes Act 1947, and that he had worked for 356 days and that the management had not complied with the procedure laid down in Chapter V-A and/or Chapter V-B of the Industrial Disputes Act. On the issue of number of days worked, the contention of the management/employer is that Mr.Subash Chand had worked for only 208 days. The Labour Court held that the termination of Mr.Subash Chand was in violation of the provision of Section 25-G of the Act and also that the management took recourse to unfair labour policy. This view of the Labour Court was upheld by a Division Bench of the Punjab and Haryana High Court. Therefore the management had come before the Honourable Supreme Court.
The following two points were raised by the management before the Honourable Supreme Court.
(i) That the termination of Mr.Subash Chand was not “retrenchment” as defined under the Industrial Disputes Act, as he was engaged for a fixed period and therefore, according to section 2(oo)(bb) of the Industrial Disputes Act, his termination does not amount to retrenchment.
(ii) The management cannot be said to have taken recourse to unfair labour policy.
The Honourable Supreme Court agreed with the management and held that “A bare perusal of the offer of appointment clearly goes to show that the appointments were made on contract basis” and therefore the termination of Mr.Subash Chand is covered by section 2(oo)(bb) and is not retrenchment as defined under the ID Act." The Supreme Court had also held that the management had not committed any unfair labour practice.
The law laid down by the Honourable Supreme Court in this case is that if a worker is engaged on contract basis(i.e, an employment contract which specifies a period for which the employment will continue or the contract of employment if being not renewed after the period specified in the contract) and is subsequently terminated for the reasons specified in section 2(oo)(bb), it would not amount to retrenchment and chapter V-A or Chapter V-B of the ID Act will not apply.
The statement “Reinstatement of person engaged on contractual basis would be illegal as it would not be retrenchment” does not find a place in the entire judgment and may probably be given by the Editor of the Law Journal which published this judgement.
Posted 25th May 2011 From India, Madras
Thanks for your efforts in explaining it to me!!

Some quick questions:

1. Do the "fixed term employees" who are under the direct payroll of the organization (as stated in the case above) come under the CLRA act?

2. Also, i got to hear that CLRA is applicable for "Contract For Service" and not "Contract Of service". Is this true?

3. If the above is true for Contract For service then how to make out that they the contract if "for service" or "of service"

4. If the employees come to the premise to work, but it is a contract of service ( i.e. outsorcing), then is CLRA applicable?


Thanks!!
Posted 25th May 2011 From India, Delhi
Hi,

When can a contract be proved to be a sham contract between contractor and the organization.

Uptil what level can the principle employer monitor the work of the contract labour.

Also, is there is checklist for things not be done to not make the contract as a sham contract
Posted 27th May 2011 From India, Delhi






 
 
 
 







Found This Useful? +Vote Up This Via Google.  

Why Vote? User validation is extremely important for good content to prosper.
Disclaimer: This network and the advice provided in good faith by our members only facilitates as a direction towards the actions necessary. The advice should be validated by proper consultation with a certified professional. The network or the members providing advice cannot be held liable for any consequences, under any circumstances.

About Us - Advertise - Contact Us - RSS   On Google+  
Copyright © 2016 Cite.Communities (CiteHR.Com) User contributions are owned by the contributor.
Privacy Policy | Disclaimer | Terms Of Service
Facebook Page | Follow Us On Twitter | Linkedin Network