Thanks Mr. Rajan. I did get some more judgments on this topic and I still feel that the notion of "managerial capacity" has not be been defined clearly yet... I think we ought to see the objects and reasons of the ID Act to see if these judgments are good...
Any chance you happen to have the objects and reasons for the ID Act (the original and the amendments)?
Also, thanks for posting this thread...
Cheers!!
Raj
28th January 2011 From India, Hyderabad
Hi Rajan, This informations have been very useful. but does it also imply in the BPOs and KPOs and other out sourcing industry also.!! thenks, Pritam
28th January 2011 From India, Delhi
Dear

Sec 2 (j) of the Industrial Disputes Act defines "industry" means any systematic activity carried on by co-operation between an employer and his workmen (whether such workmen are employed by such employer directly or by or through any agency, including a contractor) for the production, supply or distribution of goods or services with a view to satisfy human wants or wishes (not being wants or wishes which are merely spiritual or religious in nature), whether or not, - (i) any capital has been invested for the purpose of carrying on such activity; or
(ii) such activity is carried on with a motive to make any gain or profit, and includes - (a) any activity of the Dock Labour Board established under section 5A of the Dock Workers (Regulation of Employment) Act, 1948 (9 of 1949);
(b) any activity relating to the promotion of sales or business or both carried on by an establishment, but does not include - (1) any agricultural operation except where such agricultural operation is carried on in an integrated manner with any other activity (being any such activity as is referred to in the foregoing provisions of this clause) and such other activity is the predominant one.
Explanation : For the purposes of this sub-clause, "agricultural operation" does not include any activity carried on in a plantation as defined in clause (f) of section 2 of the Plantations Labour Act, 1951 (69 of 1951); or
(2) hospitals or dispensaries; or
(3) educational, scientific, research or training institutions; or
(4) institutions owned or managed by organizations wholly or substantially engaged in any charitable, social or philanthropic service; or
(5) khadi or village industries; or
(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
(7) any domestic service; or
(8) any activity, being a profession practised by an individual or body of individuals, if the number of persons employed by the individuals or body of individuals in relation to such profession is less than ten; or
(9) any activity, being an activity carried on by a co-operative society or a club or any other like body of individuals, if the number of persons employed by the co-operative society, club or other like body of individuals in relation to such activity is less than ten;

The definition is broad enough to be inclusive and the exclusions are clearly provided.

rajanassociates
29th January 2011 From India, Bangalore
Dear All

NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES

A common question arises in Contractual Employment

What are the Statutory Registers to be maintained by the Staffing Agency in relation to Muster roll, wages registers, deduction register and overtime ?

As per Rule 78 of CLRA Rules it provides for maintenance of the following :
Muster roll, wages registers, deduction register and overtime register.-(1) (a)

Every contractor shall in respect of each work on which he engages contract labour -

(1) maintain a muster roll and a register of wages in Form XVI and Form XVII, respectively:
Provided that combined Register of Wage-cum Muster Roll in Form XVIII
shall be maintained by the contractor where the wage period is a fortnight or less;

(II) maintain a Register of Deductions for damage or loss, Register of Fines and Register of Advances in Form XX, Form XXI and Form XXII, respectively;

(III) maintain a Register of Overtime in Form XXIII recording therein the number of hours of, and wages, paid for, overtime work, if any.

(b) Every contractor shall, where the wage period is one week or more issue wage slips in Form XIX, to the workmen at least a day prior to the disbursement of wages.

(c) Every contractor shall obtain the signature or thumb-impression of the worker concerned against the entries relating to him on the Register of Wages or Muster Roll-cum-Wages Register, as the case may be, and the entries shall be authenticated by the initials of the contractor or his authorized representative and shall also be duly certified by the authorized representative of the principal employer in the manner provided in rule 73.
(d) In respect of establishments which are governed by the Payment of Wages Act, 1936 (4 of 1936), and the rules made there under, or Minimum Wages Act, 1948 or the rules made there under, the following registers and records required to be maintained by a contractor as employer under those Acts and the rules
made there under shall be deemed to be register and records to be maintained by the contractor under these rules, namely:
(a) Muster roll;
(b) register of wages;
(c) register of deductions;
(d) register of overtime;
(e) register of fines;
(f) register of advances;
(9) wage slip.

(3) Notwithstanding anything contained in these rules, where a combined or alternative form is sought to be used by the contractor to avoid duplication of work for compliance with the provisions of any other Act or the rules framed there under or any other laws or regulation where mechanized pay rolls are introduced for better administration, alternative suitable form or forms in lieu of any of the forms prescribed under these rules, may be used with the previous approval of the Chief Labour Commissioner (Central).

Technically when using mechanized Payroll previous approval of the Chief Labour Commissioner needs to be obtained.

Thanks & Regards

V.Sounder Rajan -
Advocates & Notaries -Legal Consultants

E-mail : rajanassociates@eth,net,

-9025792684-9025792634
31st January 2011 From India, Bangalore
Dear All
NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES
A common question arises in Contractual Employment
In case the Principal Employer is employing different Staffing Agency for different Services is there any duty for the Principal Employer to maintain any Statutory Record?
In accordance with Rule 74 of CLRA Rules every principal employer shall maintain in respect of each registered establishment a register of contractors in Form XII.This Register would disclose that fact. Otherwise there may be a confusion on the Numbers working for each Agency.
The Staffing Entity must request compliance on this score.
Thanks & Regards
V.Sounder Rajan -
Advocates & Notaries -Legal Consultants
E-mail : rajanassociates@eth,net,
-9025792684-9025792634
3rd February 2011 From India, Bangalore
In case the employee works for just a day and does not turn back to work....how could we make his personal data, coz you might understand here that in case of contract staff, to make their personal data we take atleast a week's time. if he quits within a day, how can we handle payment of ESI/ PF; as we do not have their details for registration. And according to CLA we need to pay and register the employee for all compliance.
Please suggest...
5th February 2011 From India, Bangalore
Dear All

NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES

Viewer Lakshmi has posed the following crucial question which arises in Contractual Employment

In case the employee works for just a day and does not turn back to work....how could we make his personal data, coz you might understand here that in case of contract staff, to make their personal data we take atleast a week's time. if he quits within a day, how can we handle payment of ESI/ PF; as we do not have their details for registration. And according to CLA we need to pay and register the employee for all compliance.

The ESI Act provides that an employee is required to file a declaration form upon employment in factory or establishment to show that he is covered under the Act.
On registration every insured person is provided with a ‘temporary identification certificate’ which is valid ordinarily for a period of three months but may be extended, if necessary, for a further period of 3 months. Within this period, the insured person is given a permanent ‘family photo identity card’ in exchange for the certificate.

The above is a compliance requirement from the Employee which may give insight into compliance requirement from the Employee.

But the EPF Act charging Section 6 reads as follows:

6. Contributions and matters which may be provided for in Schemes. – The contribution which shall be paid by the employer to the Fund shall be ten percent. Of the basic wages, dearness allowance and retaining allowance, if any, for the time being payable to each of the employees whether employed by him directly or by or through a contractor, and the employee’s contribution shall be equal to the contribution payable by the employer in respect of him and may, if any employee so desires, be an amount exceeding ten percent of his basic wages, dearness allowance and retaining allowance if any, subject to the condition that the employer shall not be under an obligation to pay any contribution over and above his contribution payable under this section:

Provided that in its application to any establishment or class of establishments which the Central Government, after making such inquiry as it deems fit, may, by notification in the Official Gazette specify, this section shall be subject to the modification that for the words “ten percent”, at both the places where they occur, the words “12 percent” shall be substituted:

Provided further that where the amount of any contribution payable under this Act involves a fraction of a rupee, the Scheme may provide for rounding off of such fraction to the nearest rupee, half of a rupee, or quarter of a rupee.
Explanation I – For the purposes of this section dearness allowance shall be deemed to include also the cash value of any food concession allowed to the employee.
Explanation II. – For the purposes of this section, “retaining allowance” means allowance payable for the time being to an employee of any factory or other establishment during any period in which the establishment is not working, for retaining his services.

Contribution is defined as follows:

(c) “Contribution” means a contribution payable in respect of a member under a scheme or the contribution payable in respect of an employee to whom the Insurance Scheme applies;

Employee Definition:
"Employee" as defined in Section 2(f) of the Act means any person who is employee for wages in any kind of work manual or otherwise, in or in connection with the work of an establishment and who gets wages directly or indirectly from the employer and includes any person employed by or through a contractor in or in connection with the work of the establishment.

Strictly speaking as the absconding Employee has been employed for a day there is no provision for exclusion.

But in practice each Organizations pay rolling procedure will definitely influence the Compliance on single day absconding cases.On a case to case basis you can check up with your EPF/ESI Inspector and go by their advice as they are the Enforcing Agency. It is high time that the EPF/ESI Law is amended to take care of such a situation especially arising in the Flexi-Staffing/Temping Industry.

The EPF website says if your Organization is a covered establishment under PF Act .Note: w.e.f 1-11-90 , an employee is eligible for membership from the very first date of joining a covered establishment.

Thanks & Regards

V.Sounder Rajan -
Advocates & Notaries -Legal Consultants

E-mail : rajanassociates@eth,net,

-9025792684-9025792634
6th February 2011 From India, Bangalore
First, Thanks for the reply.
But the statutory payments made to the government are of no use to the employee because some of them come to collect their salary and when we tell them about statutory deduction he is not happy about it and also that it will not help him for example : ESI - he will not be benefited with it as he will not be using and employee working for a day would not have given photos and others details as required. Same holds good for EPF. Why not EPF has crores of money unclaimed. there should be some feasibility which could benefit the employee and the employer.
8th February 2011 From India, Bangalore
Please note all labour welfare laws do not provide for automatic exemption.This is because Industry may be inclined to use the exemption to neutralise the Law.Therefore no leeway or discretion is to be given . Compliance is the requirement which Govt expects from the Industry.Then it becomes an issue between the Employee and the Department. As an Employer after proper compliance their duty is discharged.
rajanassociates
8th February 2011 From India, Bangalore
Dear All

NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES

Whether Trainees employed by the Staffing Agency and sent for work to Establishments covered under Shops & Establishments Act are exempted for Statutory Benefits ?

Sec 2 (f) of EPF Act does not provide for an exclusion or exemption of an Apprentice/Trainee under the Shops & Establishments Act .

The Apex Court Judgment in the case reported in the matter of The Regional Provident Fund Commissioner, Mangalore Versus M/s. Central Aercanut & Coca Marketing and Processing Co-op. Ltd. the Hon’ble Bench comprising of THE HONOURABLE MR. JUSTICE ARIJIT PASAYAT & THE HONOURABLE MR. JUSTICE R.V. RAVEENDRAN touched on exemption of an apprentice engaged under the Apprentices Act or under the Standing Orders is excluded from the definition of an 'employee' as per Section 2(f) of the Act .

In the ESI Act also there is exemption of an apprentice engaged under the Apprentices Act or under the Standing Orders.

Shops & Establishments Act is not included either in Sec 2 (f) of the EPF Act or Sec 2 (9) of the ESI Act.Both these Statutes need to be amended to include this.



Hence coverage is not exempted unless he /she are taken into employment under Apprentices Act or under the Standing Orders. For availing this benefit the Certification of the Standing Orders is to be done or the Model Standing Orders adopted by the Staffing Company.

Thanks & Regards

V.Sounder Rajan -

Advocates & Notaries -Legal Consultants

E-mail : rajanassociates@eth,net,

-9025792684-9025792634
9th February 2011 From India, Bangalore
Dear All

NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES

Under what circumstances exemption can be given to an establishment from the operation of EPF Scheme :

Section 17 provides for it :

17. Power of exempt

(1) The appropriate government may by notification in the Official Gazette and subject to such conditions as may be specified in the notification exempt whether prospectively or retrospectively from the operation of all or any of the provisions of any Scheme :

(a) any establishment to which this Act applies if in the opinion of the appropriate government the rules of its provident fund with respect to the rates of contribution are not less favourable than those specified in section 6 and the employees are also in enjoyment of other provident fund benefits which on the whole are not less favourable to the employees than the benefits provided under this Act or any Scheme in relation to the employees in any other establishment of similar character or

(b) any establishment are in enjoyment of benefits in the nature of provident fund pension or gratuity and the appropriate government is of opinion that such benefits separately or jointly are on the whole not less favourable to such employees that the benefits provided under this Act or any Scheme in relation to the employees in any other establishment of a similar character :

Provided that no such exemption shall be made except after consultation with the Central Board which on such consultation shall forward its views on exemption to the appropriate government within such time limit as may be specified in the Scheme.

Sec 17 1 (a ) is with reference to exemption from PF Contribution and Sec 17 1 (b) is with reference to Pension and Gratuity.

The condition for exemption is that the Establishment claiming exemption is providing benefits to its employees the benefit provident fund ,pension or gratuity and the appropriate government is of opinion that such benefits are on the whole not less favourable to such employees that the benefits provided under the EPF Act or any Scheme in relation to the employees in any other establishment of a similar character .

Supposing a Scheme for PF ,Pension or Gratuity is framed by an Entity to be more beneficial than those provided in the EPF Act then the organization can file an Exemption Application with the Appropriate Govt and the Exemption can be granted after consultation with the Central Board .

Thanks & Regards

V.Sounder Rajan -
Advocates & Notaries -Legal Consultants

E-mail : rajanassociates@eth,net,

-9025792684-9025792634
11th February 2011 From India, Bangalore
Dear All

NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES

Is there any recent development in Law giving a recognition to the Contract Staffing or Temp Staffing Industry?

Recently the Government of India introduced THE PROHIBITION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE BILL, 2010.

In the Bill the following definitions are noteworthy:
2 (f) “employee" means a person employed at a workplace for any work on regular, temporary, adhoc or daily wage basis, either directly or by or through an agent, including a contractor, with or without the knowledge of the principal employer, whether for remuneration or not, or working on a voluntary basis or otherwise, whether the terms of employment are express or implied and includes a domestic worker, a co-worker, a contract worker, probationer, trainee, apprentice or by any other name called;
Contract Staff deputation is taken care by including a person employed at a workplace for any work on regular, temporary, adhoc or daily wage basis, either directly or by or through an agent, including a contractor, with or without the knowledge of the principal employer.

g) “employer” means:- (i) in relation to any department, organisation, undertaking, establishment, enterprise, institution, office, branch or unit of the appropriate Government or a local authority, the head of that department, organisation,undertaking, establishment, enterprise,institution, office, branch or unit or such other officer as the appropriate Government or the local authority, as the case may be, may by an order specify in this behalf; (ii) in any workplace not covered under clause (i), any person responsible for the management, supervision and control of the of the workplace;

l) “Workplace” includes:- (i) any department, organisation, undertaking, establishment, enterprise, institution, office, branch or unit which is established, owned, controlled or wholly or substantially financed by funds provided directly or indirectly by the appropriate Government or the local authority or a Government company or a corporation or a cooperative society(ii) any private sector organisation or a private venture, undertaking, enterprise, institution, establishment, society, trust, nongovernmental organisation, unit or service provider carrying on commercial, professional, vocational, educational, entertainmental, industrial or financial activities including production, supply, sale, distribution or service; (iii) a house or dwelling place; (iv) any place, vehicle either by air, land, rail or sea visited by the employee arising out of, or during and in the course of, employment;

Similarly in the Workplace definition the concept of service provider carrying on commercial, professional, vocational, educational, entertainmental, industrial or financial activities including production, supply, sale, distribution or service has been included.

Viewers may also note that THE PROHIBITION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE BILL, 2010 is in the Bill stage and it has to be passed by both houses of Parliament ,then assent given by the President and then Notified in the Gazette to make it effective.

Thanks & Regards

V.Sounder Rajan -
Advocates & Notaries -Legal Consultants

E-mail : rajanassociates@eth,net,

-9025792684-9025792634
14th February 2011 From India, Bangalore
Dear All

NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES

What are the penal provisions in the EPF Act for non compliance of the provisions of Contribution both Employer and Employee by Staffing and Recruiting Companies?

The rate of penal damages for belated payment of EPF dues is as follows:

If the period of default less than 2 months -5 %
If the period of default is 2 months above but less than 4 months – 10 %
If the period of default is 4 months above but less than 6 months – 15 %
If the period of default is 6 months above–25 %

The above is in addition to 12 % simple interest .

Apart from the above the further consequences for default are:

Attachment of Bank Accounts

Realization of dues from Debtors[ Garnishee Order]

Attachment of moveable and immovable properties.

Arrest and detention in Prison..

Action under section 406/409 of the Indian Penal Code[ Criminal Law] and Section 110 of Cr .P.C

Prosecution.Prosecution for Non payment of contributions normally end in favour of the Department.Mandatory punishment of detention in Prison is provided .

Thanks & Regards

V.Sounder Rajan -
Advocates & Notaries -Legal Consultants

E-mail : rajanassociates@eth,net,

Mobile :9025792684-9025792634
18th February 2011 From India, Bangalore
Dear All

NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES

Are there any statutory provision to be followed by the Staffing or Temping Agency in respect of the Salary Payments of Contract employees sent by the Staffing or Temping Agency for work to the Client as per the CLRA Rules?

In the CLRA Rules reference can be found from Rule 63 to 73 of Chapter VI .The same is extracted below.

63. The contractor shall fix wage periods in respect of which wages shall be payable.

64. No wage period shall exceed one month.

65 The wages of every person employed as contract labour is an or- by a contractor where less than one thousand such persons are paid before the expiry of the seventh day; in other case before the expiry of the tenth after the last day of the wage period in respect of which the wages are payable.

66. Where the employment of any worker is terminated by or contractor the wages earned by him shall be paid before the expiry of the second working day from the day on which ‘he employment Is terminated.

67 All payments of wages shall be made on a working day at the work premises and during the working time and on a date notified in advance and in case the work is completed before the expiry of the wage period, final payment shall be made within forty eight hours of the last working days.

68.Wages due to every Worker shall be paid to him direct or to other person authorized by him in this behalf.

69.All wages shall be paid in current coin or currency or in both.

70. Wages shall be paid without any deductions of any kind except those specified by the Central Government by general or special order in this behalf or permissible under the Payment of Wages Act, 1936 (IV of 1936).

71. A notice showing the wage period and the place and time of disbursement of wage shall be displayed, at the place of work and copy sent by contractor to the principal employer under acknowledgment.

72. The principal employer shall ensure the presence of his authorized representative at the place and time of disbursement of wages by the contractor to workman and it shall be the duty of the contractor to ensure the disbursement wages in the presence of such authorized representative.

73. The authorized representative of the principal employer shall record under his signature a certificate at the end of the entries in the register of wages or the [Register of Wages-cum-Muster Roll as the case may be in following form:
“Certified that the amount shown in column No---------- has been paid to the workmen concerned in my presence on -------- at ---------“

In our earlier posts reference to Rule 66,72and 73 has been done.The remaining Rules are referred to in this Post.

Please note that the whole idea of Contract Labour Regulation on this aspect is to ensure timely payment of Salaries and the Law has provided for such stringent provisions as there will be a tendency to avoid/delay the Salaries by Contractors to the Contract Employees.

Thanks & Regards

V.Sounder Rajan -
Advocates & Notaries -Legal Consultants

E-mail : rajanassociates@eth,net,

Mobile :9025792684-9025792634
21st February 2011 From India, Bangalore
Dear All

NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES

In case the Staffing or Temping Company engages women Employees and they are sent for work at the Clients place what are the special provision in the CLRA Rules on welfare measures for them?

Rule25. Of the CLRA Rules provides that Every licence granted under sub-section (1) of Sec. 12 shall be in Form VI.and (2) Every licence granted under sub-rule (11) or renewed under 29 shall be subject to the following conditions, namely:

(a) In every establishment where twenty or more women are ordinarily employed as contract labour, there shall be provided two rooms of reasonable dimensions for the use of their children under the age of six year

(b) one of such rooms shall be used as a play-room for the children and the other as bed-room for the children;

(c) the contractor shall supply adequate number of toys and games in the play¬room and sufficient number of -cots and bedding in the sleeping room;

(d) the standard of construction and maintenance of the creches shall be such as may be specified in this behalf by the Chief Labour Commissioner-(Central);

By the above provision in case the Staffing Agency employs 20 or more women the necessity of compliance of the above provision may be necessitated.

It is understood that implementation of the above provision is presently limited to Factories and the time when it is extended to all Establishments is not far off.

Thanks & Regards

V.Sounder Rajan -
Advocates & Notaries -Legal Consultants

E-mail : rajanassociates@eth,net,

Mobile :9025792684-9025792634
23rd February 2011 From India, Bangalore
Dear All

NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES

Is there any provision for issue of Temporary Certificate of Registration in the CLRA?

Yes where conditions arise in an establishment requiring the employment of contract labour immediately and such employment is estimated to last for not more than fifteen days, the principal employer of the establishment or the contractor, as the case may be, may apply for a temporary certificate of registration or license to the Registering officer or the licensing Officer.

Rule 32 of the CLRA Rules provide for handling this situation.

32. Grant of temporary certificate of registration and licence

(1) Where conditions arise in an establishment requiring the employment of contract labour immediately and such employment is estimated to last for not more than fifteen days, the principal employer of the establishment or the contractor, as the case may be, may apply for a temporary certificate of registration or licence to the Registering officer or the licencing Officer, as the case may be, having jurisdiction over the area in which the establishment is situated.

(2) The application such temporary registration or licence shall be made in triplicate in Forms VIII and X, respectively and shall be accompanied by a Demand draft drawn in favour of the Pay and Accounts Officer, Office of the Chief Labour Commissioner (Central), New Delhi showing the payment of appropriate fees and in this case of the licence appropriate amount of security also. -

(3) On receipt of the application, complete in all respects, and on being satisfied either on affidavit by the applicant or otherwise that the work in respect of which the application has been made would be finished in a period of a nature which could not be carried out immediately the registering Officer or the Licensing Officer as the case may be, sha1l forthwith grant a certificate of registration of Form, or a licence in Form XL as the case may be, for a period of not more than fifteen days.

(4) Where a certificate of registration or licence is not granted the reasons therefor shall be recorded by the registering Officer or the LicensIng 0fficer as the case maybe.

(5) On the expiry of the validity of the registration certificate the establishment shall cease to employ in the establishment contract labour in respect of which the certificate was given.

It is better for Staffing Companies and Principal Employers to apply for Temporary Registration when such need arises.

Thanks & Regards

V.Sounder Rajan -
Advocates & Notaries -Legal Consultants

E-mail : rajanassociates@eth,net,

Mobile :9025792684-9025792634
28th February 2011 From India, Bangalore
Dear All
NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES
In case a CLRA Licence is obtained for deploying Contract Labour and it specifies the number of persons to be employed can the Contractor deploy in excess of the number ?
Rule 25 II of CLRA Rules specifies the number of workman employee as contract labour in the establishment shall not, on any day, exceed the maximum number specified in the licence and when the licence is issued and specifies the numbers it cannot be exceeded .
With Regards
V.Sounder Rajan
Advocates & Notaries & Legal Consultants
E-mail : rajanassociates@eth,net,
Mobile : 9025792684-9025792634
3rd March 2011 From India, Bangalore
Dear All

NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES

Is there any responsibility for the Contractor to maintain canteen for the welfare of Contract Employees ?

Yes Rule 42 of the CLRA Rules prescribes on the provision of Canteens and reads like this.

42.—(1) In every establishment to which the Act applies and wherein work regarding the employment of contract labour is likely to continue for six months and labour numbering one hundred or more are ordinarily employed an adequate canteen shall be provided by the contractor for the use of such contract labour within sixty days of the date of coming into force of the rules in the case of the existing establishments and within sixty days of the commencement of contract labour In the case of the establishments of the employment

(2) If the contractor fails to provide the canteen within the time laid down the same shall be provided by the principle employer within sixty days of the expiry of the time allowed to the contractor.

(3)The canteen shall be maintained by the contractor or principal employer; as the case may be, in an efficient manner

43. (1) The canteen shall consist of at least a dining hall; kitchen, store room, pantry and washing places separately for workers and for utensils.
(2)(i) The canteen shall be sufficiently lighted at all times when any person has, access to it.
(ii) The floor’ shall be made of smooth and impervious material and inside walls shall be lime-washed or colour-washed at least once in each year
Provided that the inside walls of the kitchen shall be lime-washed every four months.
(3)(i) The precincts of the canteen shall be maintained in, a. clean and sanitary condition.
(ii) Suitable arrangements shall be made for the collection and disposal of garbage.

44.(1) The dining-hall shall accommodate at a time at least 30 percent of the contract labour working at a time.

(2)The floor area of the dining-hall, excluding the area occupied by the service in the counter and any furniture except tables and chairs shall be not less than one square metre per diner to be accommodated as prescribed In sub-rule (1). -

(3) (i) A portion of the dining-hall and service counter shall be partitioned off and reserved for women workers, in proportion to their number,,.
(ii) Washing places for women shall be separate and screened to secure private.

(4)Sufficient tables, stools, chairs or benches shall be available for the number of diners to be accommodated as prescribed in sub-rule (1).

45 (1) (i) There shall be provided and maintained sufficient utensils, crockery, cutlery, furniture and any other equipment necessary for the sufficient running of the canteen,
(ii)The furniture, utensils and other equipment. shall be and Hygienic condition.

(2) (1) Suitable clean clothes for the employees’ service in the canteen shall also be provided and maintained
(ii)A service -counter, if provided, shall have top of smooth and impervious material.
(iii) Suitable facilities including an adequate supply of hot water shall be provided for the cleaning of utensils and equipment.

46.The foodstuffs and other items to be served in the canteen shall be in conformity with the normal habits of the contract labour.

47 The charges for foodstuffs, beverages and any other items served in the canteen shall be based on “no-profit, no loss” and shall be conspicuously displayed in the canteen

48. In arriving at the prices of foodstuffs and other articles served in the canteen the following items shall not be taken into consideration as expenditure, namely’
(a) the rent for the land and buildings;

(b) the depreciation and maintenance charges for the building and ‘equipment provided for in the canteen;
(c) the cost of purchase, repairs and replacement of equipment including furniture, crockery, cutlery and utensils;
(d) the water charges and other charges incurred for lighting and ventilation;
(e) the interest on the maintenance of amounts spent on the provision and maintenance of furniture and equipment provided for canteen.

49. The books of accounts and registers and other documents used in connection with the running of the canteen shall be produced on demand to an inspector.

50.The account pertaining to the canteen shall be audited once every twelve months by registered accountants and auditors

Provided that the Chief Labour Commissioner (general) may approve of any other person to audit the accounts, if he is satisfied that it is not feasible to appoint a registered accountant and auditor i view of the site or the location of the canteen.

The Staffing Entity taking a CLRA Licence and employing contract or Temporary labour which is likely to continue for six months and contract labour numbering one hundred or more are ordinarily employed would require the above compliance.
With Regards

V.Sounder Rajan

Advocates & Notaries & Legal Consultants

E-mail : rajanassociates@eth,net,

Mobile : 9025792684-9025792634
7th March 2011 From India, Bangalore
Dear All

NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES

Whether there is any classification of workmen in the Model Standing Orders in respect of Industrial Establishment?

Yes ,SCHEDULE I of [MODEL STANDING ORDERS IN RESPECT OF INDUSTRIAL ESTABLISHMENTS provides the following :

2. Classification of workmen.--(a) Workmen shall be classified as --
(1) permanent,
(2) Probationers,
(3) badlis,
(4) temporary,
(5) casual,
(6) apprentices.

(b) A “permanent workman” is a workman who has been engaged on a permanent basis and includes any person who has satisfactorily completed a probationary period of three months in the same or another occupation in the industrial establishment, including breaks due to sickness, accident, leave, lock-out, strike (not being an illegal strike) or involuntary closure of the establishment.

(c) A “probationer” is a workman who is provisionally employed to fill a permanent vacancy in a post and has not completed three months’ service therein. If a permanent employee is employed as a probationer in a new post he may, at any time during the probationary period of three months, be reverted to his old permanent post.

(d) A “badli” is a workman who is appointed in the post of a permanent workman or probationer who is temporarily absent.

(e) A “temporary workman” is a workman who has been engaged for work which is of an essentially temporary nature likely to be finished within a limited period.

(f) A “casual workman” is a workman whose employment is of a casual nature.

(g) An “apprentice” is a learner who is paid an allowance during the period of his training.

The import of the definition of “temporary workman” can be understood to be one who has been engaged for work which is of an essentially temporary nature likely to be finished within a limited period.

With Regards

V.Sounder Rajan

Advocates & Notaries & Legal Consultants

E-mail : rajanassociates@eth,net,

Mobile : 9025792684-9025792634
9th March 2011 From India, Bangalore
Dear All

NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES

Is there any liability on the part of the Principal Employer to provide amenities like supply of Wholesome drinking water, a sufficient number of latrines and urinals, washing facilities and first-aid facilities, to the Contract workers on failure by Contractor ?

Yes Rule 40.(1) of the CLRA Rules provide that the facilities required to be provided under Sec., 18 and 19 of the CLRA, namely provision of sufficient supply of Wholesome drinking water, a sufficient number of latrines and urinals, washing facilities and first-aid facilities, shall be provided by the contractor in the case of existing establishment within seven days of the commencement of these rules and in the case of new establishments within seven days of the commencement of the employment of contract labour therein and sub rule (2) if any of the facility mentioned in sub-rule(1) is not provided by the contractor within the period prescribed the same shall be provided by the principal employer within seven days of the expiry of period in the said sub-rule.

Therefore on failure by the Contractor the principal employer becomes liable to provide amenities like supply of Wholesome drinking water, a sufficient number of latrines and urinals, washing facilities and first-aid facilities, to the Contract workers.

With Regards

V.Sounder Rajan

Advocates & Notaries & Legal Consultants

E-mail : rajanassociates@eth,net,

Mobile : 9025792684-9025792634
13th March 2011 From India, Bangalore
Dear All

NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES

In the next few posts we will be dealing with issues concerning staffing Company Management and the Temporary Employee.to begin with Statutory compliance of Section 9 C of the Industrial Disputes Act will be required consequent to the Historic September 2010 amendments to the Industrial Disputes Act.

GRM -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.

The GRM is meant for resolving disputes arising out of individual grievances of the Temporary Employees .

An Appeal will lie to the Management of the Staffing or Temping Company in case the Temporary Employee is aggrieved by the decision of the GRM.

Time frame of 30 days for resolution is given both to the GRM and the Appellate authority i.e Management.

With Regards

V.Sounder Rajan

Advocates & Notaries & Legal Consultants

E-mail : rajanassociates@eth,net,

Mobile : 9025792684-9025792634
17th March 2011 From India, Bangalore
Subject: ERA 2011- Eighth Annual Convention

Dear All

We were invited to the ERA 2011-8 th Annual Convention -The convention theme being "Engaging the Unemployable Talent-Vision 2040 -Young India a double edged Sword held at Le Meridian Hotel Chennai between 18 th and 19 th March-2011.It was a great show organized by Mr Veerendra Mathur -President -ERA ,Mr Pramod Thilakan-,Dr K.Thirugnanam -Convenor ERA -Chennai Chapter and his Team .

The Topics deliberated on 18 th March were:

Harnessing Talent -Our march towards the future .

Compensation -A 3D Approach

New Age Leaders

Current Trends in Freshers Recruitment .

Encouraging Entrepreneurs in Recruitment and HR Industry.

On 19 th ;

Business Ethics

Branding Yourself -Employer of Choice .

Using Technology for effective Recruitment

Search Strategy

Account Management in Recruitment Industry

Strategies of Head Hunting -Then /Now /Future

Focus on the Risk -legal Aspects

Succession Planning

Attracting and Retaining Talent .

We had the chance to address the top notch HR professionals of the Recruiting and Staffing Industry on 19th March 2011 was -"Focus on the Risk- Legal Aspects".A major issue being Service Tax – Point of Taxation Rules, 2011to take effect from 1-4-2011 was raised for ERA to take it up with the Government .Of course ERA needs the support of all the players in the Recruiting and Staffing Industry.

The Convention gave an opportunity to the participants to understand the changing trends in the Industry and it ended on a promising note positioning the Recruiting and Staffing Industry for a sustained growth. If you were not there you really missed the emerging trends in the Industry.

Well done ERA and their Team and also thanks to ERA for taking us on board as their Honorary Legal Adviser .

A Memorable Convention of ERA held on the Historic day of the Full moon being closest to the Earth .

With Regards

V.Sounder Rajan
Advocates & Notaries
Legal Consultants

E-mail : rajanassociates@eth,net,

Mobile : 9025792684-9025792634
21st March 2011 From India, Bangalore
Dear All

NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES

Sub :Temporary Employee Welfare

Placing Temporary Employee Welfare/ Satisfaction on the priority list will be the need for the hour. .The Staffing Industry deploying Temporary Employees in thousands to their Clients have to build a strong internal mechanism .

An internal mechanism/Nodal Agency needs to be established for the following :

(a)to establish contacts and hold consultations with a view to maintaining harmonious relations between the Staffing Entity management and Temporary Employees ;

(b)to bring to the notice of the Staffing Entity management the grievances of Temporary Employees , individual as well as collective, with a view to securing their expeditious redress and to act as a liaison officer between the management and labour ;

( c) to study and understand the point of view of Temporary Employees in order to help the Staffing Entity management to shape and formulate labour policies and to interpret these policies and to interpret these policies to the Temporary Employees in a language they can understand;

(d)to watch industrial relations with a view to using influence in the event of a dispute between the Staffing Entity management and Temporary Employees and to help to bring about a settlement by persuasive effort;

(e)to advise on fulfillment by time management and the concerned departments of the Staffing Entity of obligations, statutory or otherwise, concerning regulation of working hours, maternity benefit, medical care, compensation for injuries and sickness and other welfare and social benefit measures;

(f)to advise and assist the management in the fulfillment of its obligations, statutory or otherwise, concerning prevention of personal injuries and maintaining a safe work environment,

(g)to promote relations between the concerned departments of the Staffing Entity and Temporary Employees which will bring about productive efficiency as well as amelioration in the working conditions and to help Temporary Employees to adjust and adapt themselves to their working environments;

(h)to encourage provision of amenities at the Clients place ,sickness gratuity payments, and legal advice to Temporary Employees ;

(i)to help the Staffing Entity management in regulating the grant of leave with wages and explain to the Temporary Employees the provisions relating to leave with wages and other leave privileges and to guide the Temporary Employees in the matter of submission of application for grant of leave for regulating authorized absence;

(j) to advise on provision of welfare facilities, , social and recreational facilities, sanitation, advice on individual personnel problems and education of children;

(k)to suggest measures which will serve to raise the standard of living of Temporary Employees and in general promote their well-being.

Our future post will be indicative of the way forward and the legal sanction if any available for it.

With Regards

V.Sounder Rajan

Advocates & Notaries & Legal Consultants

E-mail : rajanassociates@eth,net,

23rd March 2011 From India, Bangalore
Dear All

We had highlighted the Staffing Company need for evolving a process for Temporary Employee Welfare .

The roots of this aspect of monitoring and placing Employees Welfare at a prime place is found in the Statute book viz Factories Act Section 49 provides for the following :

49. Welfare officers.

(1) In every factory wherein five hundred or more workers are ordinarily employed the occupier shall employ in the factory such number of welfare officers as may be prescribed.

(2) The State Government may prescribe the duties, qualifications and conditions of service of officers employed under sub- section (1)

Taking the cue and beneficial provision in the Factories Act a similar analogy can be adopted in the Staffing Industry and inducting it for the Staffing Industry .

Duties of Temporary Employee Welfare Officers .- The duties of a Welfare Officer shall be -

(a)to establish contacts and hold consultations with a view to maintaining harmonious relations between the Staffing Entity management and Temporary Employees ;

(b)to bring to the notice of the Staffing Entity management the grievances of Temporary Employees , individual as well as collective, with a view to securing their expeditious redress and to act as a liaison officer between the management and labour ;

( c) to study and understand the point of view of labour in order to help the Staffing Entity management to shape and formulate labour policies and to interpret these policies and to interpret these policies to the Temporary Employees in a language they can understand;

(d)to watch industrial relations with a view to using his influence in the event of a dispute between the Staffing Entity management and Temporary Employees and to help to bring about a settlement by persuasive effort;

(e)to advise on fulfillment by time management and the concerned departments of the Staffing Entity of obligations, statutory or otherwise, concerning regulation of working hours, maternity benefit, medical care, compensation for injuries and sickness and other welfare and social benefit measures;

(f)to advise and assist the management in the fulfillment of its obligations, statutory or otherwise, concerning prevention of personal injuries and maintaining a safe work environment,

(g)to promote relations between the concerned departments of the Staffing Entity and Temporary Employees which will bring about productive efficiency as well as amelioration in the working conditions and to help Temporary Employees to adjust and adapt themselves to their working environments;

(h)to encourage provision of amenities at the Clients place ,sickness and benevolent scheme payments, pension and superannuation funds, gratuity payments, and legal advice to Temporary Employees ;

(i)to help the Staffing Entity management in regulating the grant of leave with wages and explain to the Temporary Employees the provisions relating to leave with wages and other leave privileges and to guide the Temporary Employees in the matter of submission of application for grant of leave for regulating authorized absence;

(j) to advise on provision of welfare facilities, , social and recreational facilities, sanitation, advice on individual personnel problems and education of children;

(k)to suggest measures which will serve to raise the standard of living of Temporary Employees and in general promote their well-being.

It is a normal practice that the Welfare officers so appointed should not deal with disciplinary cases or appear on behalf of the management against Temporary Employees and No Welfare Officer should deal with any disciplinary cases against Temporary Employees or appear before a conciliation officer in a court or tribunal on behalf of the Staffing Entity management against a worker or Temporary Employees . If the person employed as a Temporary Employee in the Staffing Industry voluntarily approaches the welfare officer in respect of a grievance arising out of any case of disciplinary action against him the prohibition can be waived.

Qualification of Temp Welfare Officers

Qualifications.- No person shall be eligible for appointment as welfare officer, unless he possesses the following qualifications, namely:-

1) (a) a Master’s Degree in Labour Management (or) a Bachelors Degree in Labour Management awarded by the Institute of Labour Studies, ; or

(b) a Post Graduate Degree or Diploma in Social Work, Social Science, Personnel Management, Labour Relations or Social Welfare with Labour Laws or Industrial Relations and Labour Welfare or Industrial Relations as a main subject, of any University or Institution recognized by the University Grants Commission for the purpose of its grant ; or

(c) a Post Graduate Diploma in Labour Administration awarded by the Institute of Labour Studies,; or

(d) a Post Graduate Diploma in Personnel Management, Industrial Relations and Labour Welfare awarded by Productivity Councils in States or any other Institutions recognized by the State Government for this purpose; or

(e) a Post Graduate Diploma in Labour Laws and Administrative Laws conducted by Law University ; or

(f) a Degree of any University or Institution recognized by the University Grants Commission for the purpose of its grant and a Diploma in Labour Laws awarded by the Indian Law Institute, New Delhi.

(2) adequate knowledge of the language spoken by the majority of the Temporary Employees in the Area of operation of the Staffing Business to which he is to be attached:

The CLRA Law may require changes to replicate the relevant provisions of the Factory Act to see the deployment of Temporary Employee Welfare Officers becoming a reality.

Great Staffing Industry Entity –Temporary Employee relationships are vital for the success of any Staffing Business. If the Temporary employees are not happy, there is no way that they will make the Staffing Company's Clients happy. The Staffing Company will be throwing their profits and business away to strive for a good working environment for the Temporary Employees.

If one perceives from the point of the Principal Employer a Staffing company retaining TWO will actually reduce the burden of the Principal Employer in resolving issues of Temps and TWO can be designated to monitor and solve them.Literally they will have a single contact . This may also be a plus point for that Staffing Company having TWO ”s.

With Regards

V.Sounder Rajan

Advocates & Notaries & Legal Consultants

E-mail : rajanassociates@eth,net,

28th March 2011 From India, Bangalore
Dear All

Sub : Effect of the Recent Amendment- Sec 2 A of the Industrial Disputes Act - Sub Section (2) & (3) Direct reference of Dispute.

In one of our earlier Posts we had touched upon the second aspect of the recent historic amendments to the ID Act .

The following one which is in the nature of our view would touch upon another important aspect and whether the Staffing Entity Legal Department is well equipped to deal with its impact.

Earlier the Temporary Employee or Contract worker could not approach a Labour Court for disputes in relation to discharge, dismissal, termination or retrenchment without the assistance of a Labour Union. Now by the amendment he/she can approach the Labour court directly . This a drastic provision and will have a crippling effect on the Staffing Industry.

The remedy is:

1. First he/she has to make an application to the Labour Department Conciliation Officer.

2. If no action is taken by the Conciliation Officer then he/she can file an application to the Labour Court for adjudication of the Dispute.

3. Time limit for questioning all such disputes in relation to discharge, dismissal, termination or retrenchment is 3 years.

Issue for Staffing Industry:

1. Individual Employee grievance /disputes in relation to discharge, dismissal, termination or retrenchment is subject to Conciliation by Labour Officer and thereafter by Labour Court.

2. Will open the floodgates of Temporary /Contract Employee Litigation.

Tips for avoidance:

1. Need to have a strong Internal redressal mechanism thereby closing all issues internally.GRM-Grievance Redressal Machinery can resolve such issues.

2. Take Notices from individual Temporary employees and their Lawyers seriously and solve them immediately.Take expert Legal advice on each issue.

3. A pro-Temporary employee approach even without even consulting the Principal employer [Client] needs to be taken.

4. Because of the insertion of this provision a separate provision needs to be made out by way of contingent liability to cover such risks in the Staffing Company's Budget.

5. CEO /HOD should be vigilant on this and take direct action in resolving disputes.They must get weekly reports from their Compliance Head /Team on resolution.They must appoint an official directly reporting to them to monitor and secure compliance.In special cases they must take Independent unbiased opinion from an Ombudsman appointed for such purpose as there will be a tendency by the handling team to justify their action which could possibly end up in Claims.

6.Resolution of Disputes will confer a satisfaction on the disgruntled Temporary Employee /Contract Worker . Ultimately Human Capital is the one which gives returns for the Business. Temps are the ultimate bread winners .But they are also the unsung heroes.

In one of our future posts we will deal with the issue of Ombudsman and also the effect of the Amendments on Industry as such.

With Regards

V.Sounder Rajan

Advocates & Notaries & Legal Consultants

E-mail : rajanassociates@eth,net,

-9025792684-9025792634
1st April 2011 From India, Bangalore
The recent ID Act amendments for the Staffing Industry we refer to the aspect Enhancement of wage ceiling by the ID Amendment Act.
Dear All,
Prior to the amendment Wage ceiling of workman in the definition clause Sec 2 (s) was Rs. 1600/- .Now it is enhanced to Rs. 10,000/- per month,.
Consequently any person working in any industry doing any manual, unskilled, skilled, technical, operational, clerical or supervisory work drawing wages up to Rs. 10000/- will be considered as a workman.
Present scenario a workmen is drawing more than 10k, as such whether these workmen attracts the aforesaid definition ? Kindly clarify
Regards
Rns
1st April 2011 From India, Mumbai
Dear All

In our earlier post we highlighted the impact of the recent amendments to Section 2 A of the ID Act, we had suggested reference of the decision by the Management to an Ombudsman for reviewing its correctness.

On going through the material on Ombudsman in our vies expressed herein we cannot call that Independent person as an Ombudsman .The definition of Ombudsman Committee of the International Bar Association defines the term “Ombudsman” as follows:

An Office provided for by the constitution or by action of the Legislature or Parliament and headed by an independent high-level public official, who is responsible to the Legislature or Parliament, who receives complaints from aggrieved persons against government agencies, officials and employees, or who acts on [his] own motion and who has the power to investigate, recommend corrective action and issue reports.

Therefore the term Ombudsman is used in Administrative and Constitutional Law. In India there was induction of this concept in the realm of Banking and Insurance Industry in their disputes with their Customers.

In the Staffing Industry this concept can be adapted .Normally the decision of a Staffing Entity has to be consistent and needs to provide reasons for an adverse employment action, such as the termination of the Temporary Employee’s employment. When informing an employee of the decision, Staffing Entity needs to be honest with the Temporary employee.

If a Temporary employee complains about the Staffing Entity’s action before a Labour Authority the Staffing Agency must provide reasons for the challenged action which are consistent with Law and the reasons provided to the Temporary employee and sustain the termination. Thereafter, if the employee pursues a judicial action Court or Shop Appeal the employer must provide reasons for the adverse employment action to the court and which are consistent with Labour Law and those provided to the employee and the administrative agency.

To avoid such complications whenever a termination or severance of temporary employment is done in case the Temporary Employee is aggrieved by the action he or she should be permitted to file a review motion to an Independent Authority who will review the decision of the Staffing Agency Management.[In many cases it will be the decision taken by the Staffing Agency Management at the instance of the Client].The Independent Authority which we will call as an “Employment Ombudsman” or “Reviewing Authority” who should be an Employment Law Expert or a Retired Labour or Industrial Court Judge who was not a part of or involved in the earlier decision making process.

The Authority can receive and consider complaint relating to the Staffing Entity discharging in any manner inclusive of Contract ending , dismissal, retrenchment or otherwise termination or discharge of the services of an individual Temporary Employee or any dispute or difference between that Temporary Employee and Staffing Entity connected with, or arising out of, such discharge inclusive of Contract ending, dismissal, retrenchment or termination shall be deemed to be a complaint for decision by the Authority.

The Scheme and Procedure to be followed by the Authority can be prescribed by the Staffing Entity Management

With Regards

V.Sounder Rajan

Advocates & Notaries & Legal Consultants

E-mail : rajanassociates@eth,net,

5th April 2011 From India, Bangalore
Dear All

In the previous posts in our opinion we had touched on the need to strive at cordial Management -Temporary Employee Relations .To recapitulate the following steps were suggested:

GRM -Grievance Redressal Machinery

Consequent to the Historic September 2010 amendments to the Industrial Disputes Act GRM has become Statutory.

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.

Temp Welfare Officers -TWO

Akin to Welfare Officers in the Factory scenario induct dedicated Zonal Temp Welfare Officers :

(a)to establish contacts and hold consultations with a view to maintaining harmonious relations between the Staffing Entity management and Temporary Employees ;

(b)to bring to the notice of the Staffing Entity management the grievances of Temporary Employees , individual as well as collective, with a view to securing their expeditious redress and to act as a liaison officer between the management and labour ;

( c) to study and understand the point of view of labour in order to help the Staffing Entity management to shape and formulate labour policies and to interpret these policies and to interpret these policies to the Temporary Employees in a language they can understand;

(d)to watch industrial relations with a view to using his influence in the event of a dispute between the Staffing Entity management and Temporary Employees and to help to bring about a settlement by persuasive effort;

(e)to advise on fulfillment by time management and the concerned departments of the Staffing Entity of obligations, statutory or otherwise, concerning regulation of working hours, maternity benefit, medical care, compensation for injuries and sickness and other welfare and social benefit measures;

(f)to advise and assist the management in the fulfillment of its obligations, statutory or otherwise, concerning prevention of personal injuries and maintaining a safe work environment,

(g)to promote relations between the concerned departments of the Staffing Entity and Temporary Employees which will bring about productive efficiency as well as amelioration in the working conditions and to help Temporary Employees to adjust and adapt themselves to their working environments;

(h)to encourage provision of amenities at the Clients place ,sickness and benevolent scheme payments, pension and superannuation funds, gratuity payments, and legal advice to Temporary Employees ;

(i)to help the Staffing Entity management in regulating the grant of leave with wages and explain to the Temporary Employees the provisions relating to leave with wages and other leave privileges and to guide the Temporary Employees in the matter of submission of application for grant of leave for regulating authorized absence;

(j) to advise on provision of welfare facilities, , social and recreational facilities, sanitation, advice on individual personnel problems and education of children;

(k)to suggest measures which will serve to raise the standard of living of Temporary Employees and in general promote their well-being.

“Reviewing Authority” or Ombudsman

The Ombudsperson should receive and consider complaint relating to the Staffing Entity discharging or terminating in any manner inclusive of Contract ending , dismissal, retrenchment or otherwise termination or discharge of the services of an individual Temporary Employee or any dispute or difference between that Temporary Employee and Staffing Entity connected with, or arising out of, such discharge inclusive of Contract ending, dismissal, retrenchment or termination shall be deemed to be a complaint for decision by the Authority.

The Staffing Entity management should endeavor to have all of them in place
.GRM is Statutory whereas TWO and Ombudsman are recommended. if all the three are there the Staffing Entity Management would be secure and insulated from Temp related disputes.The system of GRM-TWO & Ombudsman will take care of itself and a secure Internal Responsive Machinery created. In Staffing Industry glossary we can coin a new word "Temp Employee Relations " -TER.

With Regards

V.Sounder Rajan

Advocates & Notaries & Legal Consultants

E-mail : rajanassociates@eth,net,

9th April 2011 From India, Bangalore
Dear All
Pls see https://www.citehr.com/331279-esic-c...il-2011-a.html
A very important change on claiming the death benefits under the Act .
rajanassociates
12th April 2011 From India, Bangalore
Dear All

We had earlier posted an item on Gratuity payment to Contract workers and the response for its relevance is enormous considering the mails we are getting.This shows that the Staffing Industry Professionals are very sensitive to happenings around them .

One viewer has raised a point on the very relevancy of Gratuity to Temporary Employment -

When the Employment is temporary and sent to the Client why is that Staffing Company should pay Gratuity ?

Our simple answer is the liability to pay rests with the Staffing Company .But the Principal Employer needs to re-imburse it.

To understand this the definition of Employee in the Gratuity Act under Section 2 (e) needs to be seen::

e) "employee" means any person (other than an apprentice) employed on wages, in any establishment, factory, mine, oilfield, plantation, port, railway company or shop, to do any skilled, semi-skilled, or unskilled, manual, supervisory, technical or clerical work, whether the terms of such employment are express or implied,and whether or not such person is employed in a managerial or administrative capacity, but does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of gratuity.

The qualifying period is provided under Section 4:

Section: 4

Payment of gratuity.

(1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years, -

(a) on his superannuation, or

(b) on his retirement or resignation, or

(c) on his death or disablement due to accident or disease:

In the Industry one will find Clients requiring the same Temporary Workers being continuously requisitioned beyond the qualifying period of gratuity.The problem will crop up if the Temporary Worker's Contract is terminated say on the 65 th month without payment of Gratuity when post completion of the 60th month the Temporary Employee would have qualified for Gratuity.Then who is liable to pay the Gratuity.The Client will just say he or she is not their employee and the Staffing Company has to shell it out from their funds.

As the whole Staffing concept in India works on re-imbursement of CTC of the Temporary Employee by the Client the Staffing Company will not understand the issue and initially try to wash of its hands .Supposing there is a claim .In this context the earlier Bench Judgment of the Madras High Court cited becomes relevant with the attendant risks on Gratuity accumulation as a contingent liability which can boomerang on the Staffing Entity if settled by the Client as per the dictum of the cited Judgment.

Staffing Entities can launch an audit of Gratuity Compliance by getting the details of those Temporary Employees who have completed or in the process of completing 5 years and their Gratuity payment compliance. If they are not paid then they should immediately direct their Compliance Team to make payment in compliance of the Act and seek re-imbursement from Clients or vice-versa.

Managing Directors and CEO's being at the helm of affairs may need to call for Monthly Compliance reports from their Compliance Head so that they are not caught napping on this crucial compliance .Non compliance may lead to penalties under Section 9 of the Act and will also lead to making hefty payments without re-reimbursement from their respective Clients .

For the Staffing Industry Professionals whenever they are going in for a long term relationship say beyond five years with a Client it should be ensured they make this liability explicitly clear to the Client and make a provision for it in the CTC .This pay out has to be made to the Temporary Employee whenever there is a resignation or termination beyond 5 years.In the case of disablement the liability would arise earlier than that period. The best precaution is to make a provision for Gratuity as a part of the Standard Form Contract of the Staffing Company.

With Regards

V.Sounder Rajan

Advocates & Notaries & Legal Consultants

E-mail : rajanassociates@eth,net,


15th April 2011 From India, Bangalore
IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES
Is there any duty for the Contractor or the Staffing Agency to maintain any Statutory Record of persons employed by them ?
In accordance with Rule 75 of the CLRA Rules every contractor shall maintain in respect of such registered establishment where he employs contract labour a register in Form XIII.This means that the Register in Form XIII is to be in relation to such registered employment.
With Regards
V.Sounder Rajan
Advocates & Notaries -Legal Consultants-HR
E-mail : rajanassociates@eth,net,

18th April 2011 From India, Bangalore
Dear All,

You may remember the Historic September 2010 brought about changes to the industrial Disputes Act. One important change is the change made in the Section 11 –Enforcing the Awards of Labour Court which has been touched upon in an earlier post .

In section 11 of the principal Act, after sub-section eight , the following sub-sections shall be inserted, namely:

“(9) Every award made, order issued or settlement arrived at by or before Labour Court or Tribunal or National Tribunal shall be executed in accordance with the procedure laid down for execution of orders and decree of a Civil Court under order 21 of the Code of Civil Procedure, 1908

(10) The Labour Court or Tribunal or National Tribunal, as the case may be, shall transmit any award, order or settlement to a Civil Court having jurisdiction and such Civil Court shall execute the award, order or settlement as if it were a decree passed by it.”

The Execution provisions of CPC is :

51. Powers of Court to enforce execution: Subject to such conditions and limitations as may be prescribed, the Court may, on the application of the decree-holder, order execution of the decree :

(a) by delivery of any property specifically decreed;

(b) by attachment and sale or by the sale without attachment of any property;

(c) by arrest and detention in prison for such period not exceeding the period specified in section 58, where arrest and detention is permissible under that section;

(d) by appointing a receiver; or

(e) in such other manner as the nature of the relief granted may require:

Provided that, where the decree is for the payment of money, execution by detention in prison shall not be ordered unless, after giving the judgment-debtor an opportunity of showing cause why he should not be committed to prison, the Court, for reasons recorded in writing, is satisfied;

(a) that the judgment-debtor, with the object or effect of obstructing or delaying the execution of the decree,

(i) is likely to abscond or leave the local limits of the jurisdiction of the Court, or

(ii) has, after the institution of the suit in which the decree was passed, dishonestly transferred, concealed, or removed any part of his property, or committed any other act of bad faith in relation to his property, or

(b) that the judgment-debtor has, or has had since the date of the decree, the means to pay the amount of the decree or some substantial part thereof and refuses or neglects or has refused or neglected to pay the same, or

(c) that the decree is for a sum for which the judgment-debtor was bound in a fiduciary capacity to account.

Explanation :In the calculation of the means of the judgment-debtor for the purposes of clause (b), there shall be left out of account any property which, by or under any law or custom having the force of law for the time being in force, is exempt from attachment in execution of the decree.

ORDER XXIX- SUITS BY OR AGAINST CORPORATIONS

3 . Power to require personal attendance of officer of corporation— The Court may, at any stage of the suit, require the personal appearance of the secretary or of any director, or other principal officer of the corporation who may be able to answer material questions relating to the suit.

By introduction of the provision the award of Labour Court / Tribunals is now additionally executable by a Civil Court. After the Labour Court/Tribunal passes the award it shall be automatically transmitted to the Civil Court for execution. By this process both the moveable and immovable property of the Judgment Debtor i.e. the person/company against whom the award is passed can be attached. Also the Judgment Debtor can be arrested and put in prison. Earlier the awards were executed by the Revenue Recovery process alone.

The Top management of the Staffing Industry needs to take the legal Process initiated by any Temporary Employees seriously as otherwise ultimately the Directors can be required to be present in Court,in the Execution process and even be detained in a Civil prison on failure of compliance subject to the above legal provisions.

Managing Directors need to be very cautious and call for timely reports from their Compliance Team on the existence of Temporary Employee related litigation or disputes and direct their immediate resolution.Randomly they should directly test check such issues with their Legal counsel handling such cases and direct resolution by direct intervention as otherwise they will become answerable to the Courts of Law..This way the Staffing Company can ensure zero level of Litigation and keep sailing in smooth risk free Business.

With Regards

V.Sounder Rajan

Legal Consultants for Staffing & Recruiting Industry

E-mail : rajanassociates@eth,net,


21st April 2011 From India, Bangalore
Dear All
Immediate Legal questions for the Staffing & Recruiting Industry -The Sales Promotion Employees (Conditions of Service) Act, 1976 (No. 11 of 1976)
When the Staffing Agency is engaging Contract/Temporary Employees to work for Clients in Pharmaceutical Industry for their Sales promotion business ,is there any extra legal compliance to be done?
A:Yes.There is an Act called The Sales Promotion Employees (Conditions of Service) Act, 1976 (No. 11 of 1976) which is An Act to regulate certain conditions of service of sales promotion employees in certain Establishments . It applies to every establishment engaged in pharmaceutical industry.
With Regards
V.Sounder Rajan
Advocates & Notaries & Legal Consultants for Recruiting & Staffing Industry
E-mail : rajanassociates@eth,net,

25th April 2011 From India, Bangalore
Dear All

Bonus to Contract Employees

What is the primary liability and responsibility of the Principal Employer to pay Bonus to the Contractors Employee ?

The definition of Employee in the Act is wide :

(13) "Employee" means any person (other than an apprentice) employed on a salary or wage not exceeding [(Note: Subs. by Act No.67 of 1985, Sec.2, for the words "one thousand and six hundred rupees" (w.e.f. 7th November, (1985)) two thousand and five hundred rupees] per mensem in any industry to do any skilled or unskilled manual, supervisory, managerial, administrative, technical or clerical work for hire or reward, whether the terms of employment be express or implied;

(14) "Employer" includes -
(i) In relation to an establishment which is factory, the owner or occupier of the factory, including the agent of such owner or occupier, the legal representative of a deceased owner or occupier and where a person has been named as a manager of the factory under Cl. (f) of sub-section (1) of Sec.7 of the Factories Act, 1948, the person named; and

(ii) In relation to any other establishment, the person who, or the authority which, has the ultimate control over the affairs of the establishment and where the said affairs are entrusted to a manager, managing director or managing agent, such manager, managing director or managing agent ;

Therefore the Principal Employer will become liable in view of his having the ultimate control over the affairs of the establishment .

With Regards

V.Sounder Rajan

Advocates & Notaries & Legal Consultants for Recruiting & Staffing Industry

E-mail : rajanassociates@eth,net,

28th April 2011 From India, Bangalore
IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES

ESI PENAL PROVISIONS

What is the sanction i.e the punishment for non compliance of the ESI Act ?

The ESI Act contains adequate provisions to persons 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.

The salient features of the aforesaid sections are PROVIDED HEREIN :

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.

Failure to cover a coverable entity is punishable under this provision. Pendency of the employer’s application for exemption under sections 87, 88 and 90 of the Act does not grant any immunity to the employer from this provision, as has been held by the Kerala High Court in P. Renuka Vs. ESIC

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.

The complaint should be filed against right person. In Ranjit Kumar Nandy Vs ESIC, a complaint was filed against a person, with appropriate sanction, but subsequently, the real name of the suspect was fond to be different. On this fact, the Calcutta High Court dismissed the case

Section-86-A: If the person committing an offence under the ESI Act is a company (i.e. body corporate including a firm and other association of individual), every person who was in charge of the company shall be liable to be proceeded against and punished, unless it is proved that the offence was committed without his knowledge or despite exercise of due diligence to prevent the same. Thus, any director, manager, secretary etc. Who has consented, connived or was negligent in the matter of commission of any such offence is guilty of that offence.

With Regards

V.Sounder Rajan

Advocates & Notaries & Legal Consultants for Recruiting & Staffing Industry

E-mail : rajanassociates@eth,net,

6th May 2011 From India, Bangalore
IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES

What will be the risk if the Contractor engaged does not hold a valid CLRA licence?

In such a case the Principal Employer loses the opportunity to distinguish his direct employees from those of the Contractors .He will also run the risk of the Contractors employees claiming permanency.

The risk is compounded because of the definition of 'workman' in section 2(1)(b) of the Contract Labour (Regulation and Abolition) Act, 1970, implies that if the workman is not hired through contractor holding a valid license under the CLRA Act, he would be a treated as workman employed by the Principal Employer ..


It is always a safe bet to get a CLRA Licence.It is a Protective Shield ,

With Regards

V.Sounder Rajan

Advocates & Notaries & Legal Consultants for Recruiting & Staffing Industry

E-mail : rajanassociates@eth,net,

13th May 2011 From India, Bangalore
IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES

SUICIDE BY TEMPORARY EMPLOYEE

In the Staffing Industry there are caseS of suicide by the Temporary Employees for various reasons . In all cases it will happen outside the working Hours and the work place .How do we handle them?

Even if there is a Personal Accident Policy the Insurer will not honour it for Suicide.Therefore the dependents will be left high and dry ,The place of suicide being away from the work place the Staffing Company’s liability is excluded unless the cause is traced to specific employment issues like harassment in the work place [not being personal problems like Love affair etc] .

Full and final settlement to the dependents will comprise of unpaid salary till LWD , encashment of unavailed leave and other payments including gratuity to the dependents. For a married person wife and mother are legally entitled to get 50 % each of the F & F.

Apart from this there is a Social problem of the breadwinner dying. Staffing Companies need to address this social issue in the long run by providing some sort of Solatium Fund to meet such exigencies .

With Regards

V.Sounder Rajan

Advocates & Notaries & Legal Consultants for Recruiting & Staffing Industry

E-mail : rajanassociates@eth,net,

21st May 2011 From India, Bangalore
Dear Sir,
I would like to know which are the top contract staffing staffing companies in India. If you could give me statistic it will be of great help. And what are the terms and conditions that has to be followed for Contract staffing.
Regards,
Vinod
24th May 2011 From India, Pune
Subject: CLRA Compliance Assessment

Dear All

CLRA -Contract Labour [Regulation & Abolition ] Act- Registration Compliance Assessment by Staffing Companies

In relation to No of Contracts with Clients of Staffing Companies requiring CLRA compliance -

CLRA REGISTRATION-INDICATOR

5/5 Strong CLRA Compliance
4/5 Above average CLRA Compliance
3/5 Average CLRA Compliance
2/5 Below average CLRA Compliance
1/5 Poor CLRA Compliance

Managing Directors and CEO of Staffing Companies need to make a CLRA Compliance Assessment on a quarterly basis.The self rating will help them to asses the risk.A Higher CLRA compliance rating will also be a selling point to corner a higher market share for the Staffing Company.

Before the Enforcement Machinery of CLRA lands at your door step , the Staffing Company by self assessment can achieve the rating of Strong and claim "Excellence in Compliance".

With Regards

V.Sounder Rajan

Advocates & Notaries -Legal Consultants for the Indian Staffing and Recruiting Industry

E-mail : rajanassociates@eth,net,
.
26th May 2011 From India, Bangalore
Sub:Splitting of Minimum Wages for the purpose of PF contribution not permissible.

Dear All

Staffing Industry Professionals need to be aware that by Circular No.: Coord/4(6)2003/Clarification/Vol-II/ Dated: 23-05-2011of Mr K.C. Pandey Addl. Central P.F. Commissioner(Compliance) Employees Provident Fund Organization (Ministry of Labour & Employment, Govt. of India), Head Office, Bhavrshya Yidhr Bhawan, 14, Bhikaiji Cama Place. New Delhi - 110 066 splitting of Minimum Wages for the purpose of PF contribution is not permissible and all covered Establishments are to be directed to ensure that P.F. Contributions are not remitted on wages less than Minimum Wages since every employer is legally bound to pay at least minimum wages to his/her employees and minimum wages are not amenable to split up. It is one pay package.

Further it has been intimated and made abundantly clear by the Circular that basic wage in no case can be lesser than the minimum wage as the same is not only contrary to law of land but is also beyond logic and rationale that an establishment which can not pay even minimum wages to its employees, would be willing to pay allowances to them and if such instances exist, there is certainly a malafide motive which may be considered as knowingly making or causing to make false statement/representation punishable u/s 14(1) of EPF & MP Act,1952. It may also attract the provision of section 418 of IPC.

Staffing Companies need to address themselves to the compliance of the Circular to avoid prosecution under .u/s 14(1) of EPF & MP Act,1952. It may also attract the provision of section 418 of IPC

The Circular is reproduced below for easy reference .

With Regards

V.Sounder Rajan

Advocates & Notaries -Legal Consultants for the Indian Staffing and Recruiting Industry

E-mail : rajanassociates@eth,net,

EMPLOYEES’ PROVIDENT FUND ORGANISATION
EMPLOYEES’ PROVIDENT FUND ORGANISATION, (Ministry of Labour & Employment, Govt. of India), Head Office, Bhavrshya Yidhr Bhawan, 14, Bhikaiji Cama Place. New Delhi - 110 066.

No.: Coord/4(6)2003/Clarification/Vol-II/ Dated: 23-05-2011

Sub:Splitting of Minimum Wages for the purpose of PF contribution not permissible.

Sir,

Attention of all concerned is invited towards this office circular no. Coord./4(6)2003/Clarification/13633 dated 06.06.2008 vide which it was advised to ensure that P.F. Contributions on at least Minimum Wages are remitted by the establishments. It was also directed to review all such cases disposed of u/s 7A of the Act where determination of dues has taken place on wages lesser than Minimum Wages.

2. However, it has been observed that still uniform approach in this regard is not followed by all the field offices which is viewed seriously. It is also observed that the field offices are not duly defending the issue in spite of the fact that the Division Bench of Hon’ble High Court, Karnataka in the matter of Group 4 Securities Guarding Ltd Vs. RPFC has categorically upheld the view that RPFCs u/s 7A of the Act can examine and look into the nature of contract entered between the employer and its employees as well as the pay structure to decide whether the pay is being split up under several heads as a subterfuge to avoid PF Contribution.

3. The order of the Division Bench was challenged by the establishment before the Apex Court. While tentatively upholding the order of the Division Bench, the Hon’ble Supreme Court in its order dated 23.07.2004 again granted liberty to the authorities to decide the matter in accordance with law on its merits. As such the authorities have to consider the order of the Division Bench of Hon’ble High Court, Karnataka unless there is substantial evidence to lead otherwise.

4. Accordingly, the matter has been examined in view of the Apex Court’s direction and the following guidelines are issued which should be adhered to and followed by all strictly.

5. The EPF & MP Act, 1952 is a beneficial social security legislation. In construing the provisions of the Act, it has already been settled earlier* that where ever two views are reasonably possible, the view which helps the achievement of the object should be preferred and accordingly the assessing authority while determining dues under Section 7A should curb any attempt to curtail the legitimate social security benefits of the employees. It is needless to reiterate the impact of contribution on lesser wages by splitting the wages into different heads, which results in lesser accumulations in PF account and miniscule pension to the member/family.

[*The RPFC, Punjab Vs Shibu Metal Works — 1965 (1) LU.473].

6. As you are aware, section 2(b) of EPF & MP Act, 1952 defines the basic wage which excludes all kind of allowances from being considered as basic wage. As the term suggests, ‘basic wage’ or ‘basic salary’ is the base salary which is provided to a person in lieu of his services. It is without any allowances which may or may not be added to basic wages in terms of employment.

7. However, it appears that some confusion is prevailing among field offices as to whether basic wages can be lower than the minimum wages or whether an establishment paying minimum wages to its employees can be allowed to split up the wages into various allowances reducing the PF contribution by making it a part of ” terms of employment or Contract” .

8. It would be worth to see that the terms ‘basic’, ‘basic wage’and ‘minimum wage’ are defined in Oxford Dictionary as below:
(i). “basic. Adj.1. forming an essential foundation; fundamental. 2. consisting of the minimum required or offered”
(ii). “basic wage . n. 1 a minimum wage earned before additional payments such as overtime. 2. Austral/NZ/ the minimum living wage, as determined by industrial tribunal”
(iii). “minimum wage, n. the lowest wage permitted by law or by agreement.”

9. Thus, whereas the minimum wage is the lowest permitted wage ought to be paid to a worker as per law as upheld and revisited on various occasions by the Hon`ble Supreme Court *, basic wage is only relevant for allowing additional allowances by treating it (basic wage) as a basic/floor level.

(*Crown Aluminum Works Vs Workers Union, [1958 Vola LU,

Page I], Unichoyi Vs State of Kerala [1961 Voll LL.3 P. 631], Kaman’ Metals & Alloys Ltd. Vs. Their Work Men [1967 Vil.11- 55; (1967) 2 SCR Page 463]).

10. Another aspect of basic wage/salary i5 that it is provided to all classes of employees irrespective of quantum of their salary and its quantum varies with every class/post of an employee where as minimum wage is prescribed only for the lowest paid employee to whom any lesser payment of wages is not permitted by law.

11. From above, it is abundantly clear that basic wage in no case can be lesser than the minimum wage as the same is not only contrary to law of land but is also beyond logic and rationale that an establishment which can not pay even minimum wages to its employees, would be willing to pay allowances to them and if such instances exist, there is certainly a malafide motive which may be considered as knowingly making or causing to make false statement/representation punishable u/s 14(1) of EPF & MP Act, 1952. It may also attract the provision of section 418 of IPC.

12. Further, it also needs to be kept in mind that any agreement which negates any law of land is ab-initio-void and would have effect of non-existence. Therefore, any such terms of agreement for employment where minimum wages is splitted to reduce the liability under EPF & MP Act, 1952 would be governed by the same logic as it is against the provisions of Minimum Wages Act and hence illegal.

13. Also Minimum Wage being a state matter, clarifications were sought from various state Governments. The replies received reveal that minimum wage is a lump sum composite amount arrived at by following the permissible procedure of fixation as revised from time to time and it can not be segregated and reclassified. Thus the State governments have also observed that splitting of minimum wages is not permissible in the eye of law,

14. Accordingly, all concerned are directed to ensure that P.F. Contributions are not remitted on wages less than Minimum Wages since every employer is legally bound to pay at least minimum wages to his/her employees and minimum wages are not amenable to split up. It is one pay package.*

(*Civil Appeal 4259 of 1999 Air Freight Ltd. Vs State of Karnataka and Ors., 1999 Supp. (1) SCR 22]

15. It is needless to mention that wherever the matter regarding splitting of wages is challenged or pending in a court of law, the stand of department along with all rules and guidelines of Hon’ble Supreme Court should be effectively utilized to defend the case. It is also mentioned that nothing said above shall come in way of implementation/execution of any order of a court of law.

16. The assessing officers shall examine full facts about the wage structure, minimum wages prescribed by the appropriate govt. for the relevant class and provide reasonable opportunity to the establishment before deciding the subterfuge, if any.

All the concerned officials/officers are requested to strictly comply with above said guidelines in regard to subject matter.
Please acknowledge receipt.

(This issues with the approval of CPFC)

(K.C. Pandey)
Addl. Central P.F. Commissioner(Compliance)

----------------------------------------------------------------------------------------------------------------------------

Copy to:
• FA & CAO/ CVO
• All Add I. CPFC5, Head Office
• Director, NATRSS
• All RPFC-I ,Head Office
• All RPFC II, HO
• All DD (Vig.)/DD ( Audit)
• All RPFCs (ZTIs)
• Web Administrator for uploading the circular on the central website of EPFO.
• DD (OL.), Head Office – for release of Hindi Version
(Anita S. Dixit)
Regional P.F. Commissioner-I(Coordination)
30th May 2011 From India, Bangalore
Dear All

Mr Dinesh Shah by an E Mail sent to us has brought to our attention the extract of the following judgment decided on 01/02/2011 by the Punjab & Haryana High Court which is at variance to Circular No: Coord/4(6)2003/Clarification/Vol-II/ Dated: 23-05-2011 :

• Employees Provident Fund (Miscellaneous Provisions) Act, 1952 , Minimum Wages Act, 1948
Date: 2011.04.01:

ASST. PROVIDENT FUND COMMISSIONER vs. M/S G4S SECURITY SERVICES (INDIA) LTD & ANR [P &H] CWP NO. 15433 OF 2009 (O&M) MAHESH GROVER, J [DECIDED ON 01/02/2011]

Employees Provident Fund (Miscellaneous Provisions) Act, 1952 – basic wages excludes HRA etc – Minimum Wages Act, 1948- Basic wages includes HRA – company excluded HRA, and paid contribution accordingly – PF Commissioner contended that basic wages should be as defined under Minimum Wages Act – whether correct – held , no

Brief Facts: The respondent – company is an establishment which is amenable to the provisions of Employees Provident Fund & Misc. Provisions Act and for the purposes of determining its contribution was taking into consideration the basic wage as given to its employees. The petitioner’s grievance is that the respondents were splitting the wage structure of the employees as a subterfuge so as to dilute its liability and that this was contrary to the wage structure which is to be taken into consideration for the contributions to be made to the Fund under the Act. The precise grievance is that rates of minimum wages which ought to have been taken into consideration are not being done so by the respondents and by splitting up the wage structure there is an evasion of its liability. The Tribunal considered the matter and held that the respondents were right in taking into consideration the basic wage of the employee for determining the contribution to the Fund. The plea of the petitioner was negated which has prompted him to file the instant writ petition.

Decision: Petition dismissed

Reason: On due consideration it is to be noticed that Section 2(b) of the Employees Provident Fund and Miscellaneous Provisions Act, clearly provides that the basic wage means all emoluments which are earned by an employee while on duty or on leave or on holidays with wages in either case in accordance with the terms of the contract of employment and which may be paid or payable in cash to him but would not include the cash value of any food concession, any Dearness Allowance, House Rent Allowance, Over Time Allowance, Bonus, Commission or any other similar allowance payable to an employee in respect of his employment or work done in such an employment.

It is thus evident that under the provisions of the Employees Provident Fund Act, the definition of wage has an appended exclusion clause in which the various allowances which are quite broad in nature have been provided so as to enable the employee to determine its liability to make the contribution to the fund. The Minimum Wages Act on the other hand provides for a definition of wage which is distinct from that of the basic wage and that definition of wage includes within its ambit House Rent Allowance, but does not include certain other allowances which are being detailed therein. The object and reasons of both the statutes are manifestly distinct even thought they cover the beneficial aspect of the welfare of an employee. The laws of interpretation of statute also provides that nothing more is to be read into the language of a statute and words are to be read and interpreted as they exist to acknowledge the legislative intent. Having regard to the aforesaid, there is little hesitation to hold that the contention of the petitioner is misplaced and that the respondents have rightly excluded certain allowances such as House Rent Allowance, Washing Allowance and Conveyance Allowance while determining the basic wage, and it cannot be said to be unjustified unless they are totally at variance and in complete deviation of the concept of the allowances sought to be under the exclusion clause.

In the Circular there is no reference to the Judgment in ASST. PROVIDENT FUND COMMISSIONER vs. M/S G4S SECURITY SERVICES (INDIA) LTD & ANR [P &H] CWP NO. 15433 OF 2009 (O&M) MAHESH GROVER, J [DECIDED ON 01/02/2011]. It necessitates clarity on this issue.

With Regards

V.Sounder Rajan

Advocates & Notaries -Legal Consultants for the Indian Staffing and Recruiting Industry

E-mail : rajanassociates@eth,net,
.
1st June 2011 From India, Bangalore
Dear All
IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES
Can the Temporary Employee of a Staffing Agency question his/her termination,/ retrenchment by an Appeal under the State Shops and Establishments Act ?
A:Yes.It can be questioned.Because the termination under the Shops and Establishments Act has to be for reasonable cause after conducting enquiry In such Shop Act Appeals the Staffing Agency has to take a pro-active action for settling such disputes out of Court.
With Regards
V.Sounder Rajan
Advocates & Notaries -Legal Consultants for the Indian Staffing and Recruiting Industry
E-mail : rajanassociates@eth,net,
.
6th June 2011 From India, Bangalore
Dear All

IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES

In our earlier post the following question came up:

Can the Temporary Employee of a Staffing Agency question his/her termination,/ retrenchment by an Appeal under the State Shops and Establishments Act ?

Now let us see the Appeal provisions to question his/her termination,/ retrenchment in each State enactment starting with-

ANDHRA PRADESH SHOPS AND ESTABLISHMENTS ACT, 1988

First the termination provision -

47. Conditions for terminating the services of an employee, payment of service compensation for termination, retirement, resignation, disablement, etc., and payment of subsistence allowance for the period of suspension :- (1) No employer shall, without a reasonable cause terminate the service of an employee who has been in his employment continuously for a period of not less than six months without giving such employee at least one month s notice in writing or wages in lieu thereof and in respect of an employee who has been in his employment continuously for a period of not less than one year, a service compensation amounting to fifteen days average wages for each year of continuous employment:

Provided that every termination shall be made by the employer in writing and a copy of such termination order shall be furnished to the Inspector having jurisdiction over the area within three days of such termination.

(2) The services of an employee shall not be terminated by the employer when such employee made a complaint to the Inspector regarding the denial of any benefit accruing to him under any labour welfare enactment applicable to the establishment and during the pendency of such complaint before the Inspector. The services of an employee shall not also be terminated for misconduct except for such acts or omission and in such manner as may be prescribed.

(3) Every employee who has put in a continuous service of not less than one year shall be eligible for service compensation amounting to fifteen days average wages for each year of continuous employment, (i) on voluntary cessation of his work after completion of 60 years of age, (ii) on his resignation, or (iii) on physical or mental infirmity duly certified by Registered Medical Practitioner, or (iv) on his death or disablement due to accident or disease:

Provided that the completion of continuous service of one year shall not be necessary where the termination of the employment of an employee is due to death or disablement:

Provided further that in a case of death of an employee service compensation payable to him shall be paid to his nominee or if no nomination has been made to his legal heir.

(4) Where a service compensation is payable under this section to an employee, he shall be entitled to receive his wages from the date of termination or cessation of his services until the date on which the service compensation so payable is actually paid.

(5) The payment of service compensation under this section shall not apply in cases where the employee is entitled to gratuity under the Payment of Gratuity Act, 1972 (Central Act 39 of 1972) and gratuity has been paid accordingly consequent on the termination or cessation of service.

(6) Where an employee is placed under suspension pending enquiry into grave misconduct the employer shall pay a subsistance allowance equivalent to fifty per cent of the last drawn wage for the first six months and at seventy five per cent of the last drawn wage beyond six months during the period of suspension. The total period of suspension shall not however exceed one year in any case. If the misconduct is not established or the total period of suspension exceeds one year, the employee shall be entitled to full wages during suspension period and the period of suspension shall be treated as on duty.

Explanation :- (1) For the purpose of this section :

(a) the term employee shall include part time employee also;

(b) the expression average wages means the daily average of wages for the days an employee actually worked during the thirty days immediately preceding the date of termination or cessation of service;

(c) the expression wages does not include over time wages;

(d) an employee in an establishment shall be deemed to have been in continuous employment for a period of not less than six months if he has worked for not less than one hundred and twenty days in that establishment within a period of six months immediately preceding the date of termination or cessation of the service of that employee.

(e) where the total continuous employment is for a fraction of a year or extends over a fraction of a year in addition to one or more completed years of continuous employment, such fraction, if it is not less than a half year shall be counted as a year of continuous employment in calculating the total number of years for which the service compensation is to be given;

(f) the service compensation of an employee whose services have been terminated for any act, wilful omission or negligence causing any damage or loss to, or destruction of property belonging to the employer, shall be forfeited to the extent of the damage or loss caused;

(g) disablement means such disablement which incapacitates an employee for the work which he was capable of performing before the accident or disease resulting in such disablement.

(2) An employee who has completed the age of sixty years or who is physically or mentally unfit having been so declared by a Registered Medical Practitioner or who wants to retire on medical grounds or to resign his service may give up his employment after giving to his employer notice of atleast fifteen days and where no such notice is given, the service compensation payable to him shall be forfeited to the extent of fifteen days in lieu of the notice.

Now the Appeal section-

48. Appointment of authority to hear and decide appeals arising out of termination of services :- (1)(a) The Chief Inspector may, by notification, appoint for any area as may be specified therein, any authority to hear and decide appeals arising out of the termination of service of employees under Section 47:

Provided that the Chief Inspector may on administrative grounds transfer any appeal arising in the territorial jurisdiction of any authority to the file of another authority for disposal, and such authority to whom the appeal is transferred by the Chief Inspector shall dispose of the appeal so transferred.

(b) Any employee whose services have been terminated may, appeal to the authority concerned within such time and in such manner as may be prescribed.

(2) The appellate authority may, after inquiry in the prescribed manner, dismiss the appeal or direct the reinstatement of the employee with or without wages for period he was kept out of employment or direct payment of compensation without reinstatement or grant such other relief as it deems fit in the circumstances of the case:

Provided that the authority concerned shall, without delay, hear such appeal and pass such orders within a period of three months from the date of receipt of such appeal:

Provided further that where any such authority considers it necessary or expedient so to do, it may, for reasons to be recorded in writing, extend such period by such further period as it may think fit:

Provided also that no proceedings before such authority shall lapse merely on the grounds that any period specified in this sub section had expired without such proceedings being completed.

(3) Against any decision of the authority under sub section (2), a second appeal shall lie to such authority as may be notified by the Government within thirty days from the date of communication of the decision and the decision of such authority on such appeal shall be final and binding on both the employer and the employee and shall be given effect to within such time as may be specified in the order of that authority:

Provided that the second appeal shall not be entertained unless the employer deposits the entire amount of back wages as ordered by the appellate authority under sub section (2) or the amount of compensation ordered as the case may be:

Provided further that if the second appeal is against the order of reinstatement given by the appellate authority under sub section (2), the employee shall be entitled to wages last drawn by him during the pendency of the proceedings before appellate authority.

(4) Where in any case, an appellate authority by its award directs reinstatement of any employee and the employer challenges such award in any Court of Law, the employer shall be liable to pay such employee during the pendency of such proceedings, full wages last drawn by him, if the employee had not been employed in any establishment during such period and an affidavit by such employee had been filed to that effect in such Court:

Provided that where it is proved to the satisfaction of the Court that such employee has been employed and has been receiving remuneration during any such period or part thereof the Court shall order that no wage shall be payable under this section for such period or part, as the case may be.

(5) Any amount directed to be paid under this section may be recovered :

(a) if the authority appointed under sub section (1) 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.

Therefore the power under Section 48 is wide .Staffing Companies operating /employing Temporary Employees in the State of Andhra Pradesh need to take absolute precautions while firing their Temporary Employees.

With Regards

V.Sounder Rajan

Advocates & Notaries -Legal Consultants

E-mail : rajanassociates@eth,net,
.
10th June 2011 From India, Bangalore
Dear All

IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES

In our earlier post the following question came up:

Can the Temporary Employee of a Staffing Agency question his/her termination,/ retrenchment by an Appeal under the State Shops and Establishments Act ?

Now let us see the Appeal provisions to question his/her termination,/ retrenchment in each State enactment starting with-

TAMILNADU SHOPS AND ESTABLISHMENTS ACT

First the termination provision -

Section 41 of the Act reads as follows:

"41. Notice of dismissal: (1) No employer shall dispense with the

services of a person employed continuously for a period of not less

than six months, except for a reasonable cause and without giving

such person at least one month's notice or wages in lieu of such

notice, provided however, that such notice shall not be necessary

where the services of such person are dispensed with on a charge of

misconduct supported by satisfactory evidence recorded at an enquiry

held for the purpose.

(2) The person employed shall have a right to appeal to such

authority and within such time as may be prescribed either on the

ground that there was no reasonable cause for dispensing with his

services or on the ground that he had not been guilty of misconduct

as held by the employer.

(3) The decision of the Appellate Authority shall, be final and

binding on both the employer and the person employed".

The termination of a Temporary Employees in the State of Tamilnadu if it is on the ground of misconduct it is to supported by satisfactory evidence recorded at an enquiry held for the purpose.

Staffing Companies need to be careful when their clients make the request for termination.

With Regards

V.Sounder Rajan

Advocates & Notaries -Legal Consultants

E-mail : rajanassociates@eth,net,

.
18th June 2011 From India, Bangalore
Dear All

IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES

In our earlier post the following question came up:

Can the Temporary Employee of a Staffing Agency question his/her termination,/ retrenchment by an Appeal under the State Shops and Establishments Act ?

Now let us see the Appeal provisions to question his/her termination,/ retrenchment in Kerala State

KERALA SHOPS AND ESTABLISHMENTS ACT 1960

First the termination provision -

18. Notice of Dismissal.—(1) No employer shall dispense with the services of an employee employed continuously for a period of not less than six months, except for a reasonable cause and without giving such employee at least one month’s notice or wages in lieu of such notice; provided however that such notice shall not be necessary where the services of such employee are dispensed with on a charge of misconduct supported by satisfactory evidence recorded at an inquiry held for the purpose.

(2)Any employee whose services are dispensed with may appeal to such authority and within such time as may be prescribed either on the ground that there was no reasonable cause for dispensing which his services or on the ground that he has not been guilty of misconduct as held by the employer.

(3)The appellate authority may, after giving notice in the prescribed manner to the employer and the employee, dismiss the appeal or direct the reinstatement of the employee with or without wages for the period he was kept out of employment or direct payment of compensation without reinstatement or grant such other relief as it deems fit in the circumstances of the case.

(4)In directing the reinstatement of an employee the appellate authority shall also direct the payment of such amount of compensation as may be specified by him in case the employer fails to reinstate the employee in accordance with the directions.

(4A) In directing the payment of compensation under sub-section (3) or sub-section (4), the appellate authority may include as part of the compensation the wages of the employee for the period he was kept out of employment.

(5)The decision of the appellate authority shall be final and binding on both the parties, not be liable to be questioned in any Court of Law and be given effect to within such time as may be specified in the order of the appellate authority.

(6)Any compensation required to be paid by the employer under sub-sections (3) and (4) but not paid by him shall be recoverable as arrears of land revenue under the provisions of the Revenue Recovery Act for the time being in force.

The termination of a Temporary Employees in the State of Kerala if it is to be on the ground of misconduct it is to supported by satisfactory evidence recorded at an enquiry held for the purpose.

Staffing Companies need to be careful when their clients make the request for termination.

With Regards

V.Sounder Rajan

Advocates & Notaries -Legal Consultants

E-mail : rajanassociates@eth,net,
.
22nd June 2011 From India, Bangalore
Dear All

IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES

In our earlier post the following question came up:

Can the Temporary Employee of a Staffing Agency question his/her termination,/ retrenchment by an Appeal under the State Shops and Establishments Act ?

Now let us see the Appeal provisions to question his/her termination,/ retrenchment in each State enactment :

Goa, Daman, Diu Shops-Establishment Act1973

39. Conditions for terminating the service of an employee and payment of gratuity.— (7) No employer

shall without a reasonable cause and except for misconduct, terminate the service of an employee who has been in his employment continuously for a period of not less than six months without giving such employee, at least one month's notice in writing or wages in lieu thereof and a gratuity amounting to fifteen day's average wages for each year of continous

employment.

Explanation.— For the purpose of this sub-section:

(a) the expression "wages" does not include over time wages;

(b) the expression "wages" means the daily average of wages for the days an employee actually worked during the thirty days immediately preceding the date of termination of service;

(c) an employee in an establishment shall be deemed to have been in continuous employment for a period of not less than six months, if he has worked for not less than one hundred and twenty days in that establishment within a period of six months immediately preceding the date of termination of the service of that employee;

(d) where the total continuous employment is for a fraction of a year or extends over a fraction of a year in addition to one or more completed years of continuous employment, such fraction, if it is not less than half a year shall be counted as a year of continuous employment in calculating the total number of year for which the gratuity is to be given. (2) Where a gratuity is payable under sub-section (1) to an employee, he shall be entitled to receive his wages from the date of termination of his service until the date on which the gratuity so payable is actually paid subject to a maximum of wages for two months.

(3) An employee, who has completed the age of sixty years or who is physically or mentally unfit having been

so declared by a medical certificate or who wants to retire on medical grounds or to resign his service, may give up his employment after giving to his employer notice of at least one month and every such employee and the dependent of an employee who dies while in service, shall be entitled to receive a gratuity amounting to fifteen days' average wages for each year of continuous employment calculated in the manner provided in the Explanation to sub-section (1). He shall be entitled to receive the wages from the date giving up the employment until the date on which the gratuity so payable is actually paid, subject to a maximum of wages for two months.

(4) The services of an employee shall not be terminated for misconduct except, for such acts or omissions and in such manner, as may be prescribed.

Explanation.— For the purpose of this section, the term "employee" shall include part-time employee also.

Now the Appeal provision

40. Appointment of authority to hear and decide appeals arising out of termination of service.—

(a) The Government may, by notification, appoint an authority to hear and decide appeals arising out of the termination of service of employee under section 39.

(b) Any employee whose service has been terminated may appeal to the authority concerned within such time and in such manner as may be prescribed.

(2) The authority may, after inquiring in the prescribed manner, dismiss the appeal or direct the reinstatement of the employee with or without wages for the period he was kept out of employment or direct payment of compensation without

reinstatement or grant such other relief as it deems fit in the circumstances of the case.

(3) Against any decision of the authority under sub--section (2), a second appeal shall lie to Labour Court constituted under section 7 of the Industrial disputes Act, 1947 (Central Act 14 of 1947) within thirty days from the date of

communication of the decision and the decision of the Labour Court on such appeal shall be final and binding on both the employer and the employee and shall be given effect to within such time as may be specified in the order of that Court.

(4) 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.

Staffing Companies operating in Goa, Daman, Diu need to be careful when their clients make the request for termination.

With Regards

V.Sounder Rajan

VS Rajan Associates,

Advocates & Notaries -Legal Consultants

No.27, Ist Floor, Singapore Plaza,

No.164, Linghi Chetty Street,

Chennai - 600 001.

E-mail : rajanassociates@eth,net,

Off : 044-42620864, 044-65874684, .
29th June 2011 From India, Madras
Dear All

IMMEDIATE LEGAL QUESTIONS FOR PRINCIPAL EMPLOYERS / CLIENTS

The key risks in Staffing/Temping that need to be looked into by the Client are: -

(a) Strategic Risk – The Staffing/Temping organization may conduct business on its own behalf, which is inconsistent with the overall strategic goals of the Client

(b) Reputation Risk – Poor service from the service provider, its customer interaction not being consistent with the overall standards of the Client

(c) Compliance Risk – Privacy, consumer ,Statutory and Labour laws not adequately complied with.

(d) Operational Risk – Arising due to technology failure, fraud, error, inadequate financial capacity to fulfill obligations and/or provide remedies

(e) Exit Strategy Risk – This could arise from over–reliance on one firm, the loss of relevant skills in the Client itself preventing it from bringing the activity back in-house and contracts entered into wherein speedy exits would be prohibitively expensive

(f) Country Risk – Due to the political, social or legal climate creating added risk

(h) Contractual risk – arising from whether or not the Client has the ability to enforce the contract

I) Concentration and Systemic Risk – Due to lack of control of individual Client over a Staffing/Temping organization , more so when overall Client has considerable exposure to one Staffing/Temping organization .

With Regards

V.Sounder Rajan

Advocates & Notaries -Legal Consultants

E-mail : rajanassociates@eth,net,
.
10th July 2011 From India, Bangalore
hi all members
If an employee is appoint in an organisation and on the appointment letter it is mentioned that "you are appointed for post..... . And you will be on probation period for one year and after 1 year you wil be on regular bases." and with this they signed two year service bond. Now question is if person want to leave before one year then what wil the procedure, can he leave with 1 week notice(as he is on probation period for 1 year) or two year bond restrict hgm to do so.
10th July 2011 From India, Kanpur
Dear All

IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES

In our earlier post the following question came up:

Can the Temporary Employee of a Staffing Agency question his/her termination,/ retrenchment by an Appeal under the State Shops and Establishments Act ?

Now let us see the LEGAL REMEDY provisions to question his/her termination,/ retrenchment under The Punjab Shops and Commercial Establishments Act, 1958

22. Notice of removal. -- (1) No employee shall be removed from service unless and until
one month’s previous notice or pay in lieu thereof has been given to him:
Provided that –

(a) no employee shall be entitled to the notice or pay in lieu thereof if he is removed
on account of misconduct established on record;

(b) no employee shall be entitled to one month’s notice or notice pay unless and until
he has been in the service of the employee continuously for a period of three months.

(2) In any case instituted for a contravention of the provisions of sub-section (1), if a
Judicial Magistrate is satisfied that an employee has been removed without reasonable
cause, the Judicial Magistrate shall, for reason to be recorded in writing, award compensation to the employee equivalent to two month’s salary;

Provided that no such claim shall be entertained unless it is preferred by the employee
within six months from the date of his removal.

(3) The amount payable as compensation under this section shall be in addition to, and
recoverable and fine payable under section 26.

(4) No person who has been awarded compensation under this section shall be entitled to bring a civil suit in respect of the same claim.

23. Notice by employee. -- (1) No employee, who has been in the service of the employer continuously for a period of three months shall terminate his employment unless he has given to his employer seven days previous notice or pay in lieu thereof.

(2) Where an employee contravenes the provisions of sub-section (1) his employer may
forfeit his unpaid wages for a period not exceeding seven days.

The Punjab Act is balanced and provides notice period both for the Employer and Employee.

With Regards

V.Sounder Rajan

Advocates & Notaries -Legal Consultants

E-mail : rajanassociates@eth,net,
.
18th July 2011 From India, Bangalore

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