HR Consultant

We have enganed a contractor to built a compound wall at one of our company is having factory license.
Contractor is registered under Building and Other Construction Worker's Act.
We have practice to pay privilage leave( encash) to contract labour, every month and contractors are following the same.
The Contractor who got registerd under BOCW Act is denyibg to pay PL encashment saying... it is not applicable to him.
My query is whethet he is saying is right or wrong? please advise.
yr advise will help me to act accordingly to realese contractor due payment.

From India, Visnagar
[email protected]
Human Resource

The PL wht you expect contractor to pay should be included in payment what you are paying to contractor. Otherwise why contractor will pay from his kitty?? you calculate the PL on prorata basis, pay tom contracor and and inturn ask him to pay to his labours.
From India, Coimbatore
Partner - Risk Management

The query is vague
1. Is the plot a part of the factory ? Does the factory license cover that area ? If yes, bocw does not apply.
2. How long is the work ? If its very short, the you do not need to worry about leave wages. If it is long, them compliance with leave rules is important to your compliance status
However, giving leave encashment every month is a wrong practice and will get you into more trouble

From India, Mumbai
[email protected]
Legal, Legal, Legal

Dear Nrvyas,
Being Principle Employer you need ensure that PL dues are paid to all of your contract workers .
There is no bar to pay PL on every month to contract workers since their jobs are not permanent and Principle Employer's responsibly also over.
Check the contract of compound wall contract once again and confirm all the statutory payments are included or not?
Release the payment accordingly.

From India, Bangalore
Partner - Risk Management

While there is no specific legal provision preventing payment if PL dues every month, it is not a good legal practice. The law provides for allowing leave to workers not for payment of money in exchange if not giving leave.
By providing encashment of leave every month, you are ensuring that there is proof that leave is not given to the workers. You are ensuring that the leave is not given, as there is no credit of leave for the workers to use.
In case of the matter getting nasty, this would be used to show deliberate violation of law and exploitation of workers by denying them leave and adequate rest.

From India, Mumbai
V. Balaji

Privilege Leave (or alternatively called EL - Earned Leave) is the one is normally credited to an individual's leave account in the following year. This leave is normally earned (in Facotries Act, for every 20 days of working 1 leave he / she earns).

This leave is used by the employees while going on leave for more than 3 days. Encashment comes only when the leave balance in his/her credit goes beyond a certain limit, after which it cannot be accumulated.

Your company seems to be practicing something like "someone earns PL every month and immediately surrernders the same for enacshment???". He will be left with no leave to be enjoyed in the following months if at he wants to go on leave.

I do not think your company is following this system or this has been misunderstood.

while hiring security services for (y)our company, the security agencies insert a component called "reliever wages". This is the wage/salary for the one who is going to relieve the existing security guard in case he puts leave. In case he does not take any leave in the month, probably he may enjoy the same from his employer. I think this concept has been mis-practiced and being projected as if it is PL encashment.

To put it in a nutshell, there is no concept of "encashement of leave every month".

V. Balaji

encashed once in a year or at the time of leaving.

From India, Madras
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