We have an associate in our organization who is employed on the rolls of a very reputed third party for last two years. As his performance has been excellent, my organization has decided to take him as a permanent employee on the rolls of the organization.
When i consulted my senior manager, he advised me to ask the associate to submit a resignation letter to the third party. My manager also adviced me to vaive off his notice period (which is 15-30 days for contractual employees) and instead ask him not to report to work for 15 days after the date of resignation. We will issue an offer letter to him 15 days after his date of resignation. My manager said this is being done so that the associate cannot claim for "continuous association" with organization.
Kindly advice whether the stance taken in this case is ok. I personally feel that as he is an employee of the third party he cannot claim continous employment. The associates salary payments, travel expenses, and reimbursements of the last two years have been routed through the third party itself.
Kindly help.
From India, Mumbai
3When i consulted my senior manager, he advised me to ask the associate to submit a resignation letter to the third party. My manager also adviced me to vaive off his notice period (which is 15-30 days for contractual employees) and instead ask him not to report to work for 15 days after the date of resignation. We will issue an offer letter to him 15 days after his date of resignation. My manager said this is being done so that the associate cannot claim for "continuous association" with organization.
Kindly advice whether the stance taken in this case is ok. I personally feel that as he is an employee of the third party he cannot claim continous employment. The associates salary payments, travel expenses, and reimbursements of the last two years have been routed through the third party itself.
Kindly help.
From India, Mumbai
Hi Lijo,
As per my knowledge ,you should have taken NOC from the third praty ,NOC will be helpful for your company and also for employee.In NOC third party will mention about his last working day and also final settle ment copy.Which helps to you to do the smooth hiring of third party employee in to your company rolls.
Thank you...
Regards,
Dayakar
From India
As per my knowledge ,you should have taken NOC from the third praty ,NOC will be helpful for your company and also for employee.In NOC third party will mention about his last working day and also final settle ment copy.Which helps to you to do the smooth hiring of third party employee in to your company rolls.
Thank you...
Regards,
Dayakar
From India
First of all the so called associate has not been on your rolls earlier. On the other hand, he has been getting salary and other benefits only through the other person, ie, third party.
If you feel that he would claim for continuous service (to take in to account his two years of service as service with you) then giving him a break for 15 days or one month will not benefit you. Moreover, it is not just giving a break of 15 or 30 days but proving the relationship that existed between you and the employee that will decide whether he will be eligible for continuity of employment. That is, if relationship or contract you had with the third party for engaging the so called associate is proved to be sham because of your direct involvement in fixation of salary and other terms of service of that employee or your direct supervision over him, there is every chance of employee claiming continuity of service with you. As such you can not work on it.
You can also ensure that the employee had a PF account number with his contractor and he gets the same transferred to the new account allotted by your company.
Regards,
Madhu.T.K
From India, Kannur
If you feel that he would claim for continuous service (to take in to account his two years of service as service with you) then giving him a break for 15 days or one month will not benefit you. Moreover, it is not just giving a break of 15 or 30 days but proving the relationship that existed between you and the employee that will decide whether he will be eligible for continuity of employment. That is, if relationship or contract you had with the third party for engaging the so called associate is proved to be sham because of your direct involvement in fixation of salary and other terms of service of that employee or your direct supervision over him, there is every chance of employee claiming continuity of service with you. As such you can not work on it.
You can also ensure that the employee had a PF account number with his contractor and he gets the same transferred to the new account allotted by your company.
Regards,
Madhu.T.K
From India, Kannur
Dear Madhu & Dayakar,
Thanks for your inputs.
Once the associate submits his resignation, I will begin the NOC process from the principal employer's end. My senior manager has also confirmed that the third party completes NOC from their end also, after receiving our NOC.
The associate has a PF account with the third party. he is not eligible for ESi has his gross payment is above Rs.10,000. He also gets medical benefits and accident insurance from the third party. As for fixing his remuneration etc., we advice the third party as to what should be the % increase because we will be charged for it after all. There around 10 such associates employed through third party working in my dept. Their job is more of clerical/ data entry. They are supervised by permanent officers of my organization.
So, if I have understood correctly, the associates can still claim continous service on the strength of being directly supervised by permanent officers of the organization.
Also, I forgot to mention previously, these associates are taken on a contract period of one year only. After one year, their contracts are renewed for another year. So, this particular associate in question, has had his contract renewed twice till date. They have ID cards provided by the third party.
In short, my organization's name doesnt figure any where except in their appointment letter which is issued by the third party which says - "You will be deputed for one year with our client XYZ for a period of one year. During the course of your employment you will abide by the rules & regulations of our client".
Can they still claim continous employment?
From India, Mumbai
Thanks for your inputs.
Once the associate submits his resignation, I will begin the NOC process from the principal employer's end. My senior manager has also confirmed that the third party completes NOC from their end also, after receiving our NOC.
The associate has a PF account with the third party. he is not eligible for ESi has his gross payment is above Rs.10,000. He also gets medical benefits and accident insurance from the third party. As for fixing his remuneration etc., we advice the third party as to what should be the % increase because we will be charged for it after all. There around 10 such associates employed through third party working in my dept. Their job is more of clerical/ data entry. They are supervised by permanent officers of my organization.
So, if I have understood correctly, the associates can still claim continous service on the strength of being directly supervised by permanent officers of the organization.
Also, I forgot to mention previously, these associates are taken on a contract period of one year only. After one year, their contracts are renewed for another year. So, this particular associate in question, has had his contract renewed twice till date. They have ID cards provided by the third party.
In short, my organization's name doesnt figure any where except in their appointment letter which is issued by the third party which says - "You will be deputed for one year with our client XYZ for a period of one year. During the course of your employment you will abide by the rules & regulations of our client".
Can they still claim continous employment?
From India, Mumbai
By insisting on lot of formalities of relieving with NOC of your own departmental heads and confirming that the third party also relieve him with NOC, you are again putting yourselves in trouble.
As I said you have nothing to do with an employee engaged by a contractor expect to see whether the works assigned are done in time or not. When you go for getting 'no objection' from the departments (where he has been working) you will be proving that he has been employed by you or the contract is sham.
I do not think that when a consultant is leaving the establishment after fulfilling the duties assigned to him you will take NOC. Do you collect NOC when the audit parties leave after their audit works? Similar is the relationship you have with an outsourced employee. Certainly, if an outsourced employee leaves without completing the work assigned to him you can hold remuneration payable to the contractor but you can not say that the employee should not be relieved. After all, for that employee your relieving letter has nothing to do but it is from the contractor that he should get it.
On the other hand, if you collect an application from the employee and on the basis of such application process his appointment letter you are not going to lose anything. There should not be any reference to his past service with you in the appointment order. When he joins, you can collect his certificates including the relieving order issued to him by his employer, ie, your contractor.
Regards,
Madhu.T.K
From India, Kannur
As I said you have nothing to do with an employee engaged by a contractor expect to see whether the works assigned are done in time or not. When you go for getting 'no objection' from the departments (where he has been working) you will be proving that he has been employed by you or the contract is sham.
I do not think that when a consultant is leaving the establishment after fulfilling the duties assigned to him you will take NOC. Do you collect NOC when the audit parties leave after their audit works? Similar is the relationship you have with an outsourced employee. Certainly, if an outsourced employee leaves without completing the work assigned to him you can hold remuneration payable to the contractor but you can not say that the employee should not be relieved. After all, for that employee your relieving letter has nothing to do but it is from the contractor that he should get it.
On the other hand, if you collect an application from the employee and on the basis of such application process his appointment letter you are not going to lose anything. There should not be any reference to his past service with you in the appointment order. When he joins, you can collect his certificates including the relieving order issued to him by his employer, ie, your contractor.
Regards,
Madhu.T.K
From India, Kannur
Dear Madhu,
Thanks for the feedback.
I totally agree about what you have said. Though these associates are on third party rolls for all practical purpose they are like permanent employees. They are supervised by us, we decide their remuneration, we have given them appreciation letters etc.
I have asked the associate to resign. We will then take a formal interview as we do when we are recruiting for a permanent employee. He will have to under go a medical test. We have decided to keep a gap of 3-4 days between his last working date as an associate and his joining as a permanent employee.
Once again, thanks for the inputs and the conceptual clarity.
From India, Mumbai
Thanks for the feedback.
I totally agree about what you have said. Though these associates are on third party rolls for all practical purpose they are like permanent employees. They are supervised by us, we decide their remuneration, we have given them appreciation letters etc.
I have asked the associate to resign. We will then take a formal interview as we do when we are recruiting for a permanent employee. He will have to under go a medical test. We have decided to keep a gap of 3-4 days between his last working date as an associate and his joining as a permanent employee.
Once again, thanks for the inputs and the conceptual clarity.
From India, Mumbai
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Enforcement of negative covenants in employment terms.pdf