Natraj@sakthimanagement.com
Head - Outsourcing
JAWEDALAM
Ir & Contract Labour Management
Rajesh_kantubhukta
Human Resources
Sreeniknr
Administration Manager
Haipandi
Contract Employee
+4 Others

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Dear all,
please let me know, who are permanency - definition - shall we take casuals into permanent - after completion of 240 days shall we take into permanent rolls - please clarify.
thanks,
RAJESH KANTUBHUKTA
HUMAN RESOURCES

If you are a factory and covered by Standing Orders Act 1946, the model standing orders contain a direction to confer permanent status on a workman who completes 240 days of service or where you ahve any state Act gauranteeing such permanet status on workmen completing 240 days. Otherwise. the concept of contnuous servcie under Sec.25-B of the Industrial Disputes Act envisages a workman who completes 240 days to be on par with permanet workman and therefore imposes certain obligations which need to be discahrged by the employer in the case of permanent workman like giving notice and paying retrenchment compensation and right to re-employment etc, if the employer wants to terminate the servce of such workman. Mere completion of 240 days does not automatically confer any right on the workman to claim permanet employment in the establsihment(except as stated above) . It depends on various factors.
B.Saikumar
HR & Labour Law advsior
Mumbai

Dear..
Total Section 25 of ID Act deals with the Retrenchment related matters of workmen and calculation of 240 days is only for the purpose of asserting Continuous Service of a workman for retrenchment related issues.. ID Act does not deals with any matter related to Absorption of a Contract Labour in Permanent Payroll since as per ID Act "Workmen" definition does not differentiate between Permanent Workmen or Contract Workmen. So working of workman for 240 or more days does not guarantee Absorption in Permanent Payroll..
For the purpose of Absorption in Permanent Payroll is concerned, it will be dealt under the Section 10 of CL(R&A) Act and the process defined under your Employee's Standing Order...
Further for your information there is a Supreme Court judgment in our companies case that working of 240 or more days in a year does not give any right to claim Permanency under Principle Employer..
Thanks & Regards..
Jawed Alam..

Dear JAWADALAM Could you please give a reference of the Supreme Court judgment that you have mentioned. Of, course, if you could append a pdf copy, that would be even better! Regards, Raghav Rao
Jawed Alam
It is only under the Industrial Disputes Act, the issue of absorption can be raised but not under Sec.10 of the Contract Labour Act. Sec. 10 of CLRA deal with only abolition but not absorption of Contract Labour.
B.Saikumar
HR & Labour Law Advsior
Mumbai

dear sir,
It all depends on the nature of your activity. If you need floating manpower on a regular basis i.e. engaging them for more than 240 days in a year, then yoiu should think of engaging permanent workmen of the required strength to avoid any complications. You can chalk out a plan wherein you can engage permanent workforce in the core areas and for support activities or allied activities, such as material handling or packaging, you can engage contract labour.

Dear Rajesh,
There is a latest High court verdict in Tamilnadu regarding permanent status of an employee. As per this verdict any employee completed 480 days in two calender years will be treated as permanent employee. The case in between an employee and Tamilnadu Electricity board. More details not available with me.
Sreenivasan KP
Manager (Administration)
APT Global Marine Engineering

Dear B. Saikumar

As per ID Act, the following matters related to any dispute may be referred to Labour Court / Industrial Tribunal;

THE SECOND SCHEDULE : MATTERS WITHIN THE JURISDICTION OF LABOUR COURTS

(Section 7)


1. The propriety or legality of an order passed by an employer under the standing orders;

2. The application and interpretation of standing orders;

3. Discharge or dismissal of workmen including reinstatement of, or grant of relief to, workmen

wrongfully dismissed;

4. Withdrawal of any customary concession or privilege;

5. Illegality or otherwise of a strike or lock-out; and

6. All matters other than those specified in the Third Schedule.

THE THIRD SCHEDULE : MATTERS WITHIN THE JURISDICTION OF INDUSTRIAL TRIBUNALS

(Section 7A)


1. Wages, including the period and mode of payment;

2. Compensatory and other allowances;

3. Hours of work and rest intervals;

4. Leave with wages and holidays;

5. Bonus, profit sharing, provident fund and gratuity;

6. Shift working otherwise than in accordance with standing orders;

7. Classification by grades;

8. Rules of discipline;

9. Rationalisation;

10. Retrenchment of workmen and closure of establishment; and

11. Any other matter that may be prescribed.

The word “Absorption" is not there in the above list. However there are two types of conditions that may arise in case of Absorption:

1. Individual case of Absorption: In case of Individual Absorption case, the Workman has to file a civil suit directly in Court and ID Act has nothing to do with this case since as per Sec 2A: “Where any employer discharges, dismisses, retrenches or otherwise terminates the services of an individual workman, any dispute or difference between that workman and his employer connected with, or arising out of, such discharge, dismissal, retrenchment or termination shall be deemed to be an industrial dispute notwithstanding that no other workman nor any union of workmen is a party to the dispute.” And for absorption there is no provision.

2. Group Absorption case: In case of Group Absorption, although there should be similar type of treatment/process but since it is group dispute and the court generally refers this type of cases to the Conciliation Officer first then if the dispute is not settled with the help of Machineries available under ID Act, the Court decide the fate of the dispute.

Furthermore, you are correct that Sec 10 of CL(R&A), 1970 deals with Abolition but the judgement of Absorption can never be done under ID Act.

Thanks & regards

Jawed Alam

Jawed

Thanks for going through the Industrial Disputes Act to understand the issue. But you have not properly interpreted the provisions and teh issues. If the contract labour wants to claim absorption as employees of the company irresepctive of their abolition under Sec.10 of the CLRA, they need to prove employer-employee relationship first with the company( to be employees of the company) to assert their right to absorption. Unless that is not proved, the issue of absorption will not survive.. Thus it is a matter of dispute.The CLRA has not devised any machinery for settlemnt of industrial disputes and it is only the I.D Act that has provided for such machinery in the form of Conciliation and adjudication.There can not be any conciliation and adjudiucation that can be conducted under CLRA.Though there is no reference to the word"absorption" under Schedule II or scheduele -III, the Labour Court can assume jurisdiction to decide the issue since it falls under the residuary clause at point (6) under Schedule-II. This issue was settled as far back as 2001 by the hon' ble Supreme Court in Steel Authority of India's case in which the issue was the same.

Similarly, it is only the Indistrial Court that has exclusive jurisdiction to decide individual or collective disputes eithe runder Sec.2A or under Sec.2(k) and grant apprpriate relief of reinstatement. Though the Civil court can also entartain an application in case of individua dispute, it can not only declare a termination as bad but not grant releif of reinstatement as it can enforce specofic performance of personal servcie.This is also a decided legal postion.

B.Saikumar

HR & Labour Law Advsior

Mumbai

Dear B.Saikumar Thanks for the information. But as per ID Act, whether the word "Workmen" differentiat between Permanent Employee and Contract Labour? Thanks & Regards.

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