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IMMEDIATE LEGAL QUESTIONS HAUNTING INDIAN STAFFING COMPANIES

In continuation of our earlier post on the subject:

What is Sec 25 F of the Industrial Disputes Act 1947

It reads like this :

25F. CONDITIONS PRECEDENT TO RETRENCHMENT OF WORKMEN. - No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until - (a) the workman has been given one month's notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice;
(b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months; and
(c) notice in the prescribed manner is served on the appropriate Government or such authority as may be specified by the appropriate Government by notification in the Official Gazette.

Since the word “retrenchment is used in Section 25 F the definition of retrenchment has to be seen in Section 2 (OO) :

(oo) "retrenchment" means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include –
(a) voluntary retirement of the workman; or
(b) retirement of the workman on reaching the age of superannuating if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or
(bb) termination of the service of the workman as a result of the non-removal of the contract of employment between the employer and the workman concerned on its expiry or of such contract being terminated under a stipulation in that behalf contained therein; or
(c) termination of the service of a workman on the ground of continued ill-health;

For Compliance of Sec 25 F of the ID Act the following is to be done :

i. The employee of the Staffing Entity sent for work to the Client must be given a one month's notice in writing, indicating the reasons for retrenchment. The retrenchment can take effect only after the notice period has expired, or if the employee of the Staffing Entity sent for work to the Client has been paid wages in lieu of such notice.

ii. The employee of the Staffing Entity sent for work to the Client must be paid, at the time of retrenchment, compensation, which is equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months.

iii. A notice must be served in the prescribed manner, on the appropriate Government. (Section 25F of the ID Act)

With Regards

V.Sounder Rajan

Advocates & Notaries & Legal Consultants

E-mail : rajanassociates@eth,net,

-9025792684.

From India, Bangalore
IMMEDIATE LEGAL QUESTIONS HAUNTING INDIAN STAFFING COMPANIES

In continuation of our earlier post on the subject

A common question arises in the Staffing Industry is whether compliance of Sec 25(F) of the Industrial Disputes Act a correct process for termination of the Deputed candidate?

Absolutely it is a water tight process and a safeguard for avoidance of wrongful Termination litigation .In the field you will find Clients will hesitate to minimum provide the 15 days’ notice for terminating the candidate.

For Compliance of Sec 25 F of the ID Act the following is to be done :

i. The employee of the Staffing Entity sent for work to the Client must be given a one month's notice in writing, indicating the reasons for retrenchment. The retrenchment can take effect only after the notice period has expired, or if the employee of the Staffing Entity sent for work to the Client has been paid wages in lieu of such notice.

ii. The employee of the Staffing Entity sent for work to the Client must be paid, at the time of retrenchment, compensation, which is equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months.

iii. A notice must be served in the prescribed manner, on the appropriate Government. (Section 25F of the ID Act).It has become a practice in the Industry to dispense with this Notice.Government can take steps to delete this provision .

With Regards

V.Sounder Rajan

Advocates & Notaries & Legal Consultants

E-mail : rajanassociates@eth,net,

-9025792684.

From India, Bangalore
Dear All

Sub: Statistics of Enforcement of CLRA by the Central Govt

The enforcement of the provisions of various Labour laws has been prescribed under provisions of the relevant Acts and is secured through the officers of the Central Industrial Relations Machinery (CIRM) in the Central Sphere, and through the State enforcement machinery in the State Sphere.

In the Central sphere, the officer of Chief Labour Commissioner (Central)s organization conduct inspection regularly under the Contract Labour ( Regulation & Abolition) Act, 1970 and take action by filing prosecution cases against the defaulting employers and contractors.



Details of Inspection conducted and prosecution launched during the last three years and current year under Contract Labour Act, 1970 is found in the Attachment.Shri Harish Rawat, Minister of Labour and Employment gave this information in reply to a question in the Lok Sabha .

The attached data will give a picture on the realistic Enforcement scenario in respect of these two enactments .

Presently the level playing field available for the Indian Staffing Industry to operate in the present liberalised regime of the Central Government is again seen and is found to be quite adequate and is commendable and will be an invitation to International Staffing & Recruiting Companies to open shop in India

With Regards

V.Sounder Rajan

Advocates & Notaries & Legal Consultants

E-mail : rajanassociates@eth,net,

-9025792684-9025792634

From India, Bangalore

Attached Files
File Type: doc CLRA- Statistics -110111.doc (28.5 KB, 208 views)

IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES

Sub:Recovery for damage or loss to the Clients property.

A common question arises in Contractual Employment when Contract Employees sent for work with the Client cause damage or loss to the Clients property.

The Client then makes a claim on the Temping or Staffing Company and wants the loss to be adjusted in the Contract Employees salary. Can such a request be entertained?

The Temping or Staffing Contractor cannot adjust it without affording an opportunity to the Contract Employee. Apparently is for the period, the Contract Employee had worked. Recovery from salary has to be u/s.10 of the Payment Wages Act, 1936 is for a loss provided under clause ( c ) of sub-section (2) of section 7 extracted below:

Clause ( c ) of sub-section (2) of section 7:

(c ) deductions for damage to or loss of goods expressly entrusted to the employed person for custody, or for loss of money for which he is required to account, where such damage or loss is directly attributable to his neglect or default;

10. Deductions for damage or loss:- (1) A deduction under clause ( c ) or clause (o) of sub-section (2) of section 7 shall not exceed the amount of the damage or loss caused to the employer by the neglect or default of the employed person.
(1-A) A deduction shall not be made under clause ( c) or clause (m) or clause (n) or clause (o) of sub section (2) of section 7 until the employed person has been given opportunity of showing cause against the deduction, or otherwise than in accordance with such procedure as may be prescribed for the making of such deductions.
(2) All such deductions and all realizations thereof shall be recorded in a register to be kept by the person responsible for the payment of wages under section 3 in such form as may be prescribed.


Recovery from the salary can be done only after following the above procedure which is a due process of law as provided above;

First by issuing a show cause notice for salary adjustment and after receiving objection if any ;and

Second pass an order of Adjustment; and

Third record the proof of delivery of the Salary adjustment letter ;and

Lastly the adjustment request from the Clients claim can be entertained.

This procedure can be made part of the Code of Conduct issued by the Staffing or Temping Company to their Contract Employees.

With Regards

V.Sounder Rajan

Advocates & Notaries & Legal Consultants

E-mail : rajanassociates@eth,net,

-9025792684-9025792634

From India, Bangalore
Dear All

We send our Pongal & Maha Sankranti Greetings .

Significance of Pongal

Pongal is a harvest festival - the Tamil equivalent of Thanksgiving. It is held to honor the Sun, for a bountiful harvest. Families gather to rejoice and share their joy and their harvests with others. The Sun is offered a "Pongal" of rice and milk.

Literally meaning "Boiling over", Pongal, signifies the advent of prosperity. Pongal is normally celebrated over a period of four days, starting on the 13th January. Since the calculation to determine the day is based on the solar calendar, the date doesn't change. It is considered a very auspicious occasion when the Sun transits the Capricorn sign. A rich and abundant harvest of paddy and other crops depend on the availability of good rain, as most of the rivers in Tamil Nadu are not perennial. Hence, there is the invocation of the Sun God and the God of Rain at the time of Pongal.

The period is referred to as Uttarayan Punyakalam and is considered auspicious. Legend has it that the Devas wake up after a six-month long slumber during this period. And so it is believed that those pass away during Uttarayana attain salvation. In fact, Bheeshma is believed to have waited for the dawn of Uttarayana before he gave up his life.

As is customary, cleaning of every house a few days prior to the Pongal festival is an indispensable ritual. Not only every house is cleaned, but it is also dusted and whitewashed. Wearing new clothes on Pongal is also customary. Attired in a new "Lehanga" and half sari for young girls and lungi and angavastram, the men, women and children prepare themselves for celebrating the first day called Bhogi Pandigai. This day is dedicated to Indra, who is also called Bhogi. It is believed that on this day Lord Krishna had urged the people to neglect Indra and not worship him. People take oil bath on this day. Using rice paste "Kolam" is drawn and this represents the Sun. The items that are generally used to celebrate Pongal; Sandalwood paste, vermilion, mango saplings, coconut fronds, sugarcanes, banana leaves, ginger pieces, white flour, new vessels for cooking, tu

Pongal is a four-day affair. The first day, Bhogi, is celebrated on the last day of the month of Margazhi. Scholars have often compared Bhogi to the Indra Vizha celebrated by the Chola kings at Kaveripattinam, also known as Poompuhar. Indra Vizha was celebrated in honour of Lord Indra, also called Bhogi, the God of thunder and rain.

The second day is Surya Pongal also called Perum Pongal. It is the most important day and people worship Surya, the Sun God and his consorts, Chaya and Samgnya. There are several legends associated with Surya Pongal. A sage named Hema prayed to Lord Vishnu on the banks of the Pottramarai tank in Kumbakonam. On Surya Pongal day, the lord is believed to have taken the form of Sarangapani and blessed the sage. Yet another legend has it that Lord Shiva performed a miracle where a stone image of an elephant ate a piece of sugarcane.

The third day is Mattu Pongal, celebrated to glorify cattle that help farmers in a myriad ways. On this day, the cows are bathed and decorated with vermilion and garlands and fed. The last day is Kaanum Pongal. It is that part of the festival when families used to gather on the riverbanks and have a sumptuous meal (kootanchoru). It is also time for some traditional dances such as kummi and kolattam. In recent years, that day is celebrated as Uzhavar Tirunal in honor of farmers.

The dishes prepared during these days are "Sarkarai Pongal", "Ven Pongal", Dosai and Sambhar, Vadai and Payasam (a sweet rice pudding).

The sun itself stands for all the ideals of the Pongal festival. Its message is that of light, unity, equality and true selflessness. These are the ideals of Karma Yoga. Hence, the sun is the greatest Karma Yogi.

When we celebrate Pongal, our sense of value changes. We begin to understand that our real wealth is the goodwill and friendship of your relatives, friends, neighbors and other human beings and ESPECIALLY OUR VIEWERS IN CITEHR .

Our wealth is the land on which our food grows, the cattle which help us in agriculture, and the cow which gives us milk. We begin to have greater love and respect for them and for all living beings – the crows, the fish and all other creatures.

To the agriculturalist, Pongal is a day of triumph. He would have by then brought home the fruits of his patient toil. Symbolically, the first harvest is offered to the Almighty – and that is Pongal. To toil was his task, his duty, but the fruit is now offered to the Lord. This is the spirit of Karma Yoga.

Thanks & Regards

V.Sounder Rajan -
Advocates & Notaries -Legal Consultants

E-mail : rajanassociates@eth,net,

-9025792684-9025792634

From India, Bangalore
Dear All

We are back after the Pongal Break .

NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING COMPANIES

A common question arises in Contractual Employment whether the doctrine of equal pay for equal work incorporated in the CLRA and is there a need for Contractors and Principal Employers to adhere to this?

Yes .It is incorporated in Rule 25 of the CLRA Rules which is extracted below:

25. Form and terms and condition of licence,—{l) Every licence granted under sub-section (1) of Sec. 12

shall be in Form VI.

(2) Every licence granted under sub-rule (11) or renewed under 29 shall be subject to the following conditions, namely:

*******

(v) (a) In cases where the workmen employed by the contractor perform the same or similar kind of work as the workmen directly employed by the principal employer of the establishment, the wage rates, holidays, hours of work and other conditions of service of the workmen of the contractor shall be the same as applicable to the workman directly employed by the principal employer of the establishment on the same or similar kind of work

Provided that in the case of any disagreement with regard to the type of work the same shall be decided by the Labour Commissioner .

The effect of the rule is that wherever Contract Labour or Temporary Employees are appointed i.e where the workmen employed by the contractor perform the same or similar kind of work as the workmen directly employed by the principal employer of the establishment, the wage rates, holidays, hours of work and other conditions of service of the workmen of the contractor shall be the same as applicable to the workman directly employed by the principal employer of the establishment on the same or similar kind of work.

In a recent Judgment of the Madras High Court Madurai Bench decided by Mr Justice K..Chandru in the matter of A.Victor vs Executive Director BHEL it has been held that In case a contract workman is paid less than the wages payable to a similarly placed workman by the principal employer, the TN Contract Labour Rules, 1975, has a remedy under Rule 25(v)(a).Justice K.Chandru Quoting the rules, held that in such circumstances, it was for the registering authority to go into the question as to whether the workman employed by the contractor performed the same or similar kind of work, as the workman directly employed by the principal employer.But it was held that the High Court would not entertain the Writ Petition to implement the circular dated July 28, 2005, issued by R-1 (BHEL, Corporate Office, New Delhi 110 049) and to revise the wages to employees who were working as contract labour through the labour contract society.

Both the Principal Employer as well as the Staffing Agency has to ensure the above compliance.If there is violation the Contract Employee has the remedy under Rule 25(v)(a) of CLRA Rules.

Thanks & Regards

V.Sounder Rajan -
Advocates & Notaries -Legal Consultants

E-mail : rajanassociates@eth,net,

-9025792684-9025792634

From India, Bangalore
Dear All

NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES

A common question arises in Contractual Employment whether the Staffing or Temping Agency Employees sent for work to the Clients place are to be paid Minimum Wages Act ?

Yes .It is incorporated in Rule 25 of the CLRA Rules which is extracted below:

25. Form and terms and condition of licence,—{l) Every licence granted under sub-section (1) of Sec. 12

shall be in Form VI.

(2) Every licence granted under sub-rule (11) or renewed under the rules shall be subject to the following conditions, namely:

(IV) the rates of wages payable to the workmen by the contractor shall not be less than the rates prescribed under the Minimum Wages Act,1948 for such employment where applicable, and where the rates have been fixed by agreement, settlement or award, not less than the rates so fixed.

Consequently compliance of Minimum Wages is mandatory and not optional.

In fact the Inspecting Agencies under the Payment of Wages Act both Center and States keep this compliance as a priority issue for inspection and strict action is taken.

Next time when any Staffing or Temping Agency gets a Notice after inspection the issue is to be taken very seriously and proper reply is to be sent by the Staffing or Temping Agency

Thanks & Regards

V.Sounder Rajan -
Advocates & Notaries -Legal Consultants

E-mail : rajanassociates@eth,net,

-9025792684-9025792634

From India, Bangalore
Dear All

PUNISHMENT FOR NON COMPLIANCE OF MINIMUM WAGES ACT

NEXT IMMEDIATE LEGAL QUESTIONS FOR INDIAN STAFFING OR TEMPING COMPANIES

In continuation of our previous post on compliance of Minimum Wages Act the next question is the nature and type of penal action that can be taken by the authorities against the Staffing Entity or Contractor for non compliance of the Minimum Wages Act?

For non compliance Sec 20 (3) (i) of the Minimum Wages Act provides that in the case of a claim arising out of payment of less than the minimum rates of wages the payment to the employee of the amount by which the minimum wages payable to him exceed the amount actually paid together with the payment of such compensation as the authority may think fit not exceeding ten times the amount of such excess.

In short the violator may have to shell out upto 10 times compensation amount together with compliance of the Minimum Wages Act .

Apart from the above Section 22 provides for penalty to any employer who pays to any employee less than the minimum rates of wages fixed for that employee's class of work or less than the amount due to him under the provisions of the Minimum Wages Act shall be punishable with imprisonment for a term which may extend to six months or with fine which may extend to five hundred rupees or with both.While imposing the punishment of fine for an offence under Sec 22 the Court shall take into consideration the amount of any compensation already awarded against the violator in any proceedings taken under section 20.

Thanks & Regards

V.Sounder Rajan -
Advocates & Notaries -Legal Consultants

E-mail : rajanassociates@eth,net,

-9025792684-9025792634

From India, Bangalore
Can someone shed bit more light on the exclusion clauses above from the definition of workmen?
What is "managerial capacity" for the ID Act? We are living in a world of mammoth enterprises that are bigger than many governments and have more than 10 levels of reporting hieararchy. It is silly to think that the ID Act doesn't cover everyone except the board of directors and those directly appointed by the board of directors of a company. This has no relevance to the salary or the nature of the job since technically everyone else will not be in managerial capacity in true sense.
If we take the view that everyone except the board of directors and their direct appointee to be acting in non managerial capacity then everyone else would be included as workman for the purposes of the ID Act, is it not?

From India, Hyderabad
Dear

Please the amended definition of workman under the Id Act :

The recent ID Act amendments for the Staffing Industry has enhanced the wage ceiling .

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. Workman definition now reads like this:

(s) "workman" means any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such person –
(i) who is subject to the Air Force Act, 1950 (45 of 1950), or the Army Act, 1950 (46 of 1950), or the Navy Act, 1957 (62 of 1957); or
(ii) who is employed in the police service or as an officer or other employee of a prison; or
(iii) who is employed mainly in a managerial or administrative capacity; or
(iv) who, being employed in a supervisory capacity, draws wages exceeding ten thousand rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.

The exclusion is where the workmen employed in a supervisory capacity, draws wages exceeding ten thousand rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.

The Judgment of the Bombay High Court [attached ] .Specifically para 18 settles the issue. We are not having the information whether any SLP has been filed in the Supreme Court on the Bombay High Court decision .

You can refer to it and apply it on your facts.

rajanassociates

From India, Bangalore

Attached Files
File Type: pdf 54_54_bombay_hc_on_workman_id_act.pdf (168.8 KB, 133 views)


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