Issue of Appointment letters by Pvt.Ltd. company
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Issue of Appointment letters by Pvt.Ltd. company

tmrao79 Started The Discussion:

Respected Sirs,

I need advices on the following :

A Private limited company started two years back with some 30 employees. Now wants to regularise their services by issuing appointment letters retrospectively. Is it necessary to deposit the arrears of PF and ESI Contributions of both employer and employee retrospectively from the date of appointment letter or can it be started from 01.06.2012.

Would you please advice the legal problems which may arise later with regard to implementation of PF and ESI if the deduction towards PF and ESI starts from 01.06.2012.

Regards

T.M. Rao

kishorpp - Member Since: Mar 2010
Dear Sir, Your company having PF & EISc or not, if having then from which date and tell me what is your companies Date of incorporation

tmrao79 - Member Since: Dec 2011
Dear Sirs,

I fully agree with the view of Mr. D Gurumuty on the issue of backdated appointment letters.
1. The date of issue of the letter should be current date
2. The clause of the appointment letter must include :

" The Management is pleased to regularise your services in the capacity of .......(Designation) on the following terms and conditions:

"1. That your date of joining is reckoned from ............(actual date of joining) for all purposes of seniority".

Since the services are being regularised now, I feel that the implementation of the statutory deductions towards PF, ESI etc. can also be implemented from now onwards i.e. from the date of regularisation of the services i.e. the date of issue of the letter.

Please advice whether I am in the right path ?
Regards to all
T M Rao

sekharita - Member Since: Feb 2009
Dear Mr. Rao,

Hope abvoe mentioned two paragrahs is necessiarily incorporate in the appointment letter, so that you can deposit PF and ESI a fresh from the date of fresh appointment letter is issed.

Regards,
C Sekhar

tmrao79 - Member Since: Dec 2011
Thank you very much Mr. Sekhar. I need opinion on the following based on such issues:

1) Whether there is any legal complication at a later stage on issuing back dated appointment letter, If yes, then what should be followed in such circmustances.
2) Clauses to be included in the appointment letter.

Regards and thanks once again for responding.

T.M. Rao

Gurushree - Member Since: Dec 2011
Dear Sir, You can contact us at ak@gurushree.com We provide consultancy services in payroll management & statutory compliances. Regards, Archit Kulkarni. Gurushree Services.

tmrao79 - Member Since: Dec 2011
Respected Seniors I want to draw the kind attention of Shri T. Sivasankaran on this issue. If my above querry draws his kind attention, I shall be lucky to have his opinion also on the above. Regards

Gurushree - Member Since: Dec 2011
Dear TMRao,

If you wish to issue appointment letters with retrospective effect, you will need to deposit PF & ESIC contributions (both employees & employers share) from the date on which your company has employed 20 persons.

Regards,

Archit Kulkarni.

tsivasankaran - Member Since: Dec 2007
Quote:
Originally Posted by tmrao79 View Post
Respected Seniors

I want to draw the kind attention of Shri T. Sivasankaran on this issue. If my above querry draws his kind attention, I shall be lucky to have his opinion also on the above.

Regards
Dear Mr. Rao

Issuance of appointment letter and coverage under PF/ESI are two different issues. As pointed out by Mr. Kulkarni, your organisation will get covered on the stipulated date. Appointment letter has no relevance to this. I suggest that you follow these steps.

1. Submit form for registration under PF wherein you need to give documents to prove when the organisation has started employing 20 workmen. Discuss with PF Inspector and they are normally considerate as you do not have a huge number of employees. When you fill the Form indicate June 2012 When a code number is issued it finalises a date of implementation of PF as well I suggest that you start recovery from this month on wards after displaying a Notice that employees deduction will be made from their salaries/wages.
Once you get a letter from the PF authorities, you need to allot PF numbers. After allotting, issue individual letters stating that" you are covered under PF with effect from 1st June or the date indicated by the Authorities. This will complete PF coverage.

2. Follow similar process for ESI as well.

3. This will leave from completing following 1. Gratuity date 2. Seniority list 3. Retirement clause 4. Notice Period 5. Other terms

4. I suggest that after completing PF and ESI. issue a simple letter to employees stating that ' as per our records, your date of Joining is ............. and if you have any dispute on this, kindly intimate to the Management within 7 days from the date of receipt of this letter failing which it will be deemed that the date mentioned in the letter is final" Get the duplicate copy signed by the employee. This will take care of gratuity and Seniority. I suggest that you mention Date of Birth also in this letter.

5. Do not issue letters for seniority and other issues at this stage. Just set right your records.

6. Regarding retirement age and other conditions do not precipitate at this stage. Workmen will suspect and will not appreciate good intentions of the Management. In any case, in the absence of Certified Standing Orders, Model Standing Orders are applicable. At an appropriate time, you can issue letter covering the following 1. Notice Period 2 retirement age 3. Part Time employment

Issuance of Appointment letter with retrospective effect will cause more confusion and you may not be able to resolve all issues. Your liabilities will also increase. Hence I do not suggest issuance of comprehensive appointment letter at this stage. I reiterate non issuance of appointment letter is not a great offence. Many organisation of small size do not issue letters. By issuing a letter, we only try to set the terms and conditions clear. it has no relevance to coverage under various statutory Provisions

I hope, I have explained covering all aspects.

Thanks

T SIVASANKARAN

tmrao79 - Member Since: Dec 2011
Dear Shri Sivasankaran,

Thank you very much. I shall proceed as suggested.

This Organisation after taking factory licence in the year 2007, registered under PF and ESI Acts and the applicability of the PF, ESI Acts were w.e.f. 01.08.2007. Then onwards, the contributions are deducting keeping the strength at the minimum i.e. 20 persons. Thereafter, people joining and leaving. Formal appointment letter, identity card etc. were not issued. Now, I have been assigned the responsibility of regularising their appointment, grades and scales, issuing identity cards and implementation of statutory provisions, drafting standing orders etc.

I have drafted grades and scales based on Jharkhand Minimum wages as applicable in the State. This was also posted in the Cite Hr by name : Drafting of Grades and Scales. You may also kindly go through the same and advice. Your advice would be great help to me in formulating the Grades and Scales.

Thanks and regards

T.M. Rao



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