Senior Hr Executive
Hr & Compliance Incharge
Agm - Hro, Compensation & Benefit Mgt,
This is my view, let other seniors also give their views.
13th November 2013 From India, Ahmadabad
I am totally agree with the views of Mr. Saji.
As you have mentioned yourself that your company policy is that if a person attends the age of 58 years then he / she got retired. It clearly means that after that age, an employee cannot be a regular employee of the company, if he / she can, then what is the benefit of Retirement Policy..?? So, question of reappoint of a retired employee on regular rolls is not possible.
This is a general situation which basically faced in industry. So, the best solution of this is, you can appoint these type of employees on yearly contract basis and they should be paid accordingly. By this way, you can utilize their experience and services with your organization.
13th November 2013 From India, Delhi
1. cost of the employee is less.
2. workwise he will be same and you can get the work done
3. The company is not committed as anytime he can be discharged from the service.
4. Since he is an old employee you can expect the same loyalty, sincerity etc rather than a new employee.
5. Old employee knows very well about the company and you can rely on them.
13th November 2013 From India, Madras
Thanks for all your suggestions Seniors.
Am not contradicting i have just posted my query for suggestions, I know being HR & Compliance Incharge what is my responsibility i don't want to set a wrong example or contradict with any law,i have posted my query for advise from you seniors. Am not changing any policy or deviating from any policy.
14th November 2013 From India, Bangalore
Because as long as Employee is mentally and physically fit to perform you can continue him/her as an Employee.
14th November 2013 From India, Delhi
company hire a retired employee as retainer or consultant and give his support and expertise in running the business and for the servicws rendered he will submit bills and finance may deduct IT accordingly. As consultant he is not eligible for any statutory benefits.
14th November 2013 From India, Hyderabad
You can go with what fellow members have said, like appointing the retired employee as consultant or on contract, even you can also rehire him on your rolls as well, because there is no law for private companies where any age limit is mentioned for retirement, you can give that particular employee an extension of services, even you can do full & final settlement of that employee and then rehire him by changing the clause of retirement in the appointment letter, as generally most of the appointment letter carries a clause of retirement with mentioned age of retirement you may change that age in the appointment letter.
14th November 2013 From India, Kollam
15th November 2013 From India, Bokaro
Normally, companies when rehire the services of a retiring employee, treat him as a Consultant or employee on contract basis. The contract period may vary depending upon the company\'s requirement of his services, his performance/ contribution, health of the employee, etc. Generally, it is on an annual contract basis, renewable at the discretion of the company.
With regard to the advantages of re-employing a retired employee, while there are many advantage as mentioned by the contributing member \'Launchpad\', there is also one glaring disadvantage of not able to bring in newness in the workings /systems.
15th November 2013 From India, Bangalore
While others have responded to your query, let me add my thoughts as well.
The Policy of your Company is that employees must retire at the age of 58 years. However, it is the desire of the Company to re-employ the person after formal retirement takes place.
There is no statutory requirement for retirement, as far as private companies are concerned. You are free to decide either way (re-employ the person or retain the person as a consultant) and also change the age of retirement as is felt appropriate.
My suggestion is the following:
1. Let the retirement take place, followed by the full and final settlement in the normal course.
2. It is preferable (as suggested by several others already) to retain (not re-employ) the person as a consultant. This would provide continuity and benefit of knowledge that the individual brings to the table. I would not suggest that he be re-employed as an employee, since (apart from having to change the policy) this could be cited as a precedent by others who may retire later and seek re-employment. On the other hand a company is free to appoint anyone as a Consultant - it will not be possible to cite this as a precedent.
3. Regarding the allowances that would have been payable to the employee during his employment period (PF, EDLI, Gratuity etc), you could take a Cost to Company approach i.e., gross up all the allowances payable as a part of salary and pay the person the grossed up amount as consultancy fees. This would make sure that while the individual is no worse off financially but also retains the flexibility to invest the surplus funds in instruments of their choice. Since a consultant is not an employee, the benefits like PF / Gratuity etc would not be payable.
I hope this would help you in arriving at an appropriate decision.
15th November 2013 From India, Bangalore
Retired employees who are re-engaged are called Third Age Employees. If you think taking a third age employee has become necessary in the current circumstance, then consider the employee who has just retired. if he gives consent, then you can re-engage him on contract or part time basis. Note that third age employees are experienced and can push Companies ahead of their competitors.
15th November 2013 From Ghana
What will be the scale of PF,ESI for that said employee who has either joined back as consultant or re joined as a employee.
Will the old scale when he was employed continue in its calculations of PF, ESI
20th November 2013 From India, New Delhi
PF , ESI , Gratuity, Bonus need not be applied to consultants as they r have already received under regular employment.
while fixing their consultation fee his last CTC may be considered for fixing monthly fee ie CTC/12 , then his part of PF , Gratuity, Bonus are taken care in monthly fee. The IT for consultants would be 10% + service tax (if the contracts exceeds for more than 6 months).
20th November 2013 From India, Hyderabad
By reading all your conversations
1.The retired employee cant be enrolled on rolls.
2.As per the company policy he has to retire
3.You can appoint him as a consultant by deducting 10% as a professional fee.
4.He can utilise the company services and he is not eligible for EPF, EDIL
5.As retire employee you can give some facilities like medical,transport
Siva Sai Gopal.Komma
MosMetro India Pvt Ltd,
Chennai Metro Rail Project
22nd November 2013 From India, Chennai
There is no wrong in re-appointment of a retired person on tenure basis or on contract basis. Even Government is also appointing so many Retired senior Officers, even IAS and IPS to various posts in the Government utilizing their services in public interest. Yours is a company established under certain Law and Acts. You can modify your policy taking into account the need of the experts in your company, and re-appoint the experts after retirement in the interest of the company. But they cannot be given regular time scale of pay. They can be accommodated on consolidated salary on temporary basis.
23rd November 2013 From Canada, Calgary
Retired Employees can be retained as consultant / or as retainer. There is no hitch in engaging these assets to you organization.
An agreement between your company and the Consultant can be executed under the The Contract Act 1872.
This is safest way to reward good outgoing member, asset.
This will build strong bonding amongst your manpower professionals.
V K Sharma
4th February 2014 From India, Vasai
16th August 2014 From Canada, Calgary
Taking this discussion ahead... would like to get your ideas too pls...
The talk has been about how to extend the tenure of retired employees.... have them as consultants or re employ them?
On the other hand, what if we hire retirees(external) in our organisation as consultant / for that matter any employee hired in a particular function as a consultant at the time of inception in the co..., but no appointment letters issued to that effect..
In the above case, during increments, would it be logical to issue increment letters to them, as they have been given increment in accordance to the hike pattern followed in the company ? ( Have not issued any formal letter to them as yet)
Similarly,what about salary slips? Do we issue the same to them as the other employees?
8th July 2016