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
From India, Hyderabad
1Any 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
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
From India, Delhi
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
From India, Bangalore
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
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
From India, Bangalore
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
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
From India, Bangalore
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
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...
From India, Bangalore
Please suggest...
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
From India, Bangalore
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
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.
From India, Bangalore
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.
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
From India, Bangalore
rajanassociates
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
From India, Bangalore
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
From India, Bangalore
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LEGAL COMPLIANCES.doc
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