Labour Law & Hr Consultant
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In our organisation, we employ daily wagers , many of them are working since many years, with a break in service of almost 2 months and 1 month. Does payment of gratuity applies to them ?
Dear Member,
Please consider some links to discussions on the current topic of interest to you:
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Best regards,
thanks for the reply..i could get a better picture from these links... but one query.. these employees are not on our payroll...we have permanent employees as per our authorization, over n above we have employed these daily wagers ..... who are working with the institute since many years... out of them few dont take any break throughout the year and few are sent on compulsory breaks of two months and one month...are these people eligible for gratuity
Dear friend,
Mode or periodicity of payment of wages does not alter the employer-employee relationship as long as regularity of employment is there. What is important is, to be eligible to claim gratuity from the employer the employee, irrespective of his status of employment such as permanent, temporary, casual etc., should have completed not less than five years of continuous service under the same employer and to be entitled to gratuity, he should have completed 240 days of continuous service in every year as defined u/s 2-A of the Payment of Gratuity Act,1972. The break in service repeatedly mentioned in your posts might not be due to the fault of the employees but would have been wantonly given by the management to show discontinuity in their services. Besides as these breaks range from only one to two months in every year, it can not reduce the 240 days of continuous service in such years. Therefore, if the PG Act,1972 is applicable to the establishment, daily wagers are eligible for gratuity on the termination of their employment.
Umakanthan Sir, Has rigthly said that it is 240 days of continuous services required for Five years in a row to be able to get entitled for Gratuity. If th employer has given breaks but even then if the days of services in a year is 240,for Five years in continuous then gratuity will be applicable.
Dear friend,
One should complete contineous service of 5 years. The contineous service nothing but 240 days working in a calender year. Any break in service can not be treated as contineous service.
Dear Umakanthan sir & all,
i'm working in construction company wherein we have to hired many casual labour to work at our different project/township, these workers doesn't work like permanent employee however as they demand wages per day or after two or four day Hence we have to made the payment accordingly usually per day basis,
Assume :- if we have hired one worker to work at our site in evening we have also made the payment to him but next day he will not come for duty. As per the EPF ESIC norms if any employee/workers has worked he/she will be entitled to be enroll in PF & ESIC from the very first days. It is difficult to comply the labour laws norms in such situation in term of casual labour. Pls clarify...1) whether the construction sites is also in the purview of shop & commercial establishment act. Or in factory act.
2) whether we have to comply the joining formalities for casual workers,
3) if we go strictly to the EPF & ESIC act. Is there any exception wherein the casual workers are not to get covered in ESIC & EPF, if any,
Pls reslov my above query....
Dear Ankur,
Before answering the three questions you've just raised, I would like to discuss certain aspects/ingredients of the concept of employment of labor so as to distinguish it from engagement of labor. Engagement of labor on a particular work implies a contract for service between the person engaging the services of the other and the other person who performs the service either himself or through some one else for some monetary consideration. When the work gets completed and the consideration paid, the contract is over. The relationship between the parties is just temporary or transitory and creates no more rights and obligations than those already agreed upon. On the contrary, the concept of employment involves the ingredients of employer, employee and the contract of employment. The contract of employment, either express or implied creates a substantially lasting relationship between the employer and employee by virtue of the various terms of the contract prescribing mutual obligations and rights among the parties. In a Welfare State, the policy of LAISSEZ- FAIRE stands replaced by the State's control over employment matters by means of appropriate Labor Legislations. These Labor Laws modify the terms of the existing contract of employment or even creates new ones by the regulatory powers vested in them. Now, in this back-drop, let me answer your questions as follows:
1) Your construction site will come under the purview of the Building and Other Construction Workers' ( Regulation of Employment and Conditions of Service ) Act,1996.
2) One of the literary meanings of the term "casual " is not regular or permanent. When used with the term as " casual labor " in a qualifying sense it means a worker employed on an irregular or temporary basis. Therefore, the emphasis is not on the nature of job but on the manner of employment. Since the very appointment is on temporary basis only the element of formality in joining or leaving the employment does not arise.
3) If you analyze the terms employee, wages and contribution defined in the ESI Act,1948 and the EPF Act,1952, no distinction as to the regularity of employment or otherwise. Just based on the wages earned, you have to simply calculate the amount of contributions and effect remittance periodically. Therefore, no exemptions to Casual Labor. When you are able to mark the attendance of the Casual Labor and calculate the wages payable on such days worked, the question of difficulty in compliance has to be just undermined. The Casual Employee becomes automatically eligible and entitled to the rights and benefits guaranteed under the respective Labor Laws applicable depending upon his fulfillment of the conditions stipulated therein.
Dear umakanthan sir,
If No joining formalities need to be process in case of casual labour. Whether any periodically employment is defined for casual labour, that casual workers will not work more than the days/month defined. Such as 10 days or 15 days if any workers worked more than 15 days he will be deemed to be regular workers,
Is there any such period stipulated...
Very nice explanation from learned member Mr.Umakantan about employer-employee relationship, engagement and employment.
Dear friend,
May I request you to re-read my reply on the concept of casual employment or temporary engagement of labor in contradistinction to the concept of regular employment? When the engagement of a labor is factually irregular or intermittent or occasional, how it can be defined precisely with reference to periodicity? Periodicity is essentially marked by the element of regularity in interval. That's why section 25-B(1) of the Industrial Disputes Act introduces a legal fiction in defining the term continuous service as a period of uninterrupted service that may be interrupted on account of certain happenings not due to the fault of the workman. When a workman is not in continuous service within the generality of the meaning of ss(1), ss(2) of sec.25-B demands the computation in absolute numbers of 240 days in a period of preceding 12 months or 120 days in a period of preceding six months. It is better you read the entire section 25-B for further details.
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