Contract Workmen S Overtime Slip To Be Signed By Company Supervisor Is Legal Or Illegal - CiteHR
Madhu.T.K
Industrial Relations And Labour Laws
Saswatabanerjee
Partner - Risk Management
Dhrao
General Manager - Hr
Consultme
Agile Solutionist
Sundar_mpm
Man Management Functions
+3 Others

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Hello Everyone,
We have workmen working on Third Party Employment. We pay overtime (@ double Rate ) in case they work for extra hours as per instruction of our Supervisor. I have following queries:
1) If they stay for OT, can their Overtime Slip be signed by our Supervisor who is on our company's roll ?
2) Is it legal / illegal ?, If is it illegal then kindly suggest the process by which we can validate that the workmen who have done overtime, is instructed by our supervisors only. (As some of the cases have been found that workman stays back for overtime (not instructed by our supervisor), just to get OT payment.
Thanks in advance.
Arti
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dear arti,
You miust keep it clear in the mind and so also your production staff, that contractual workmen are indirect employees and have to report to their supervisor. Recommendation of OT payment by your supervisor is very grave and serious with regards to direct employment of such wworkmen as it will fail the test if put to judicial scrutiny. See that only the contractor manages his workmen and there is no documentary evidence which can plug the liability of his employees on you in any manner. If you have electronic attendance then in time and out time is recorded automatically, this will simplify the process. However if you have manual then a separate register of contractual employees for overtime be maintained by contractors supervisor to record the OT of his workmen. Again, you need to watch the spread over etc. as per Factories act.
Dear DMC,
Thanks for your valuable input... Firstly yes we have electonic attendance system which records in and out punching timings. However my concern is "how to validate that the workmen who have stayed back for overtime, is instructed by our Production supervisor/s only." As contract supervisor may also not verify whether the workmen who is doing overtime, is for extra work only but not for getting the Overtime Payment. (Pl note that we give the service charges to contractor on Total Bill hence if Figure of bill increase then services charges shall also increase).
Kindly suggest.
Thanks,
The earlier view was that if there existed any direct supervision of contract labour by the Foreman or Supervisor of the company (Principal employer) then the employer- employee relationship between the Principal employer and the contract labour would be established and the contract would become sham. But the recent trends show that reasonable supervision and control over the contract labour is inevitable and that will not make the contract sham. Engaging overtime work is routine and for that we cannot ask the labour to get sanction from his supervisor who may be sitting in the office of the contractor. Moreover, it will be the Principal Employer who will decide who should work overtime or what each and every worker should do. It is not like deciding the salary or sanctioning of leave or initiating disciplinary action against contract labour. Therefore, there is nothing illegal in asking the contract labour to route OT slip through the concerned supervisor on roll of the principal employer like any other employee.

Madhu.T.K
I am unable to appreciate the views of learned Moderator Madhu. While he is discussing the reality in a work situation, the principal employer giving day to day instructures on the job is not a proposition endrosed by law. When the contract employees are engaged, the supervisor of the contractor or a coordinator should take care of these aspects, including instruction on overtime. Of course, the Principal Employer can direct a policy on overtime and the standard of work and supervise the quality of service to ensure standards.
Vasudevan
Dear Seniors,
I have a query regarding overtime. Would overtime limit as per Factory act be applicable on staff employee? For example, we have an employee who is in staff category \"not in worker\". Can he work for more than 75 hours of overtime in a quarter or not? Please suggest...............
in the matter of signing the OT Voucher, it is the matter as per the Payment Policies of the Organization. The Finance/Accounts Management must have the procedure in the files/books of the organization., When the Works Manager or Plant Manager/Production Manager who assess the requirement of contract labourers for the execution of day to day functions, I do not think it is illegal on the part of the personnel officer/supervisor to confirm the payment to be made to the contract worker. If Audit Objection is not raised by the Internal or Concurrent or External Auditors, then such matters may be advised by the Auditors. Every HR Payments should be on a confirmation by an officer in the company, which is known to all. If the payment confirmation is not approved by a competent officer, then it is suspected as an unscrupulous transaction.
I would like to cite Hussain Bhai Vs Alath Factory Thozhilali Union(1978 SC AIR 1410), which I take as "earlier practice" as noted in my post that if the control and supervision are with Principal employer the contract would become sham. Though in absolute terms there is no difference of opinion but the intensity of control and supervision has been diluted as was ruled by the Apex Court in International Airport Authority of India Vs International Air Cargo Workers’ Union (2009-IV-LLJ-31-SC) in which it was said that "merely because the workers are under the supervision and control of the Principal Employer does not make the contract sham as some kind of supervision and control is inevitable in any kind of relationship". Asking the contract employees to do overtime is naturally within the scope of routine activities and within the meaning of "some kind of supervision and control".
Regards,
Madhu.T.K
arti,never sign for contract labour ot slip as you are not his employer.let it be signed by contractor and you verify it
I agree with Mr. Madhu. The primary concern in such cases is whether the principal employer is setting a precedent that allows the contract labour to claim direct employment because he's being supervised directly. The answer is no & there are multiple case laws supporting the same.
Basically, no right flows from the Act for contract labourers to be absorbed by the principal employer. As Mr. Madhu has stated rightly that there will always be an element of supervision by the principal employer & it is not illegal. However, it is always safe to minimise direct supervision in order to avoid unnecessary claims.
Regards
BJ
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