Saswatabanerjee
Partner - Risk Management
Pan Singh Dangwal
Joint Manager
9871103011
Private Consultant On Labour Laws
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Contract labour wanting to be a permanent labour ? How to handle it ?
Dear Parthagam,

Generally it is on discretion of the management, if you want to regularize the contract labour on roll or not. You have not mentioned whether they are being deployed through any contractor or they are working directly in your company on contract basis.

In first case they can't claim to be permanent, bcoz they are contractor's employees. But make sure the terms must be mentioned in the Agreement "Every personnel of 'contractor' shall continue to be an employee of 'contractor' and none of the personnel of 'contractor' shall have any claim or right of whatsoever nature against PE". Moreover the contractor should have issued Appointment letter in r/o the employment etc.

In the second case (directly working on contract basis), if the service period is contineous from long back (w/out any break) and they are getting remuneration as per permanent employee. In such case they can claim to be permanent employee.

You have to deeply check the involved docs and consult the same with any lawyer.

Hope this will help you to handle the case, senior members can put more focus on the issue.

You are in for a potential problem that needs to be solved with a lot of thinking and planning.
Every contract employee wants to be made permanent. That is natural.
If you don't accept you may have an industrial relation problem, and if you do, you will have higher head count and liabilities
Whether they are eligible depends on certain factors
- are you using them for core production ?
- are you using them for perineal jobs
- are they doing work that permanent employees are doing ?
- do you have direct supervision and control on the contract workers
They don't automatically become permanent workers but can approach labour Court for being made permanent on grounds above or if they have any grounds to show that the contract is a sham / fraud designed primarily to prevent paying of fair wages and benifits

Dear Partha,
I am sorry to say that I have not understood your query that "Contract labour wanting to be a permanent labour ? How to handle it ?".
Please furnish following information:- 1. whether the contract labour has been pressing you for being permanent or the employer is willing to absorb them as permanent labour ?
2.whether the contract labour is employed with the contractor or the owner of the company is engaging them directly ?
3.how long they have been working with you and whether they have been working in perennial nature of jobs.?
4.whether the contract labour has been doing same job/work which permanent workers are performing ?
BS Kalsi,
Member since August, 2011

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